SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
__X__ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended __September 26, 1998___
OR
_____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to __________
Commission file number 1-7203
AYDIN CORPORATION
- -----------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 23-1686808
- -----------------------------------------------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
700 DRESHER ROAD, HORSHAM, PA 19044
___________________________________________________________
(Address of principal executive offices) (Zip Code)
(215) 657-7510
___________________________________________________________
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES _____X_____ NO ___________
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. Shares of common stock, $1.00 par value, outstanding as of
November 1, 1998.
______5,219,800__________
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE INCOME
($000 omitted except per share amounts)
<TABLE>
3 Months Ended 9 Months Ended
Sept 26, 1998 Sept 27, 1997 Sept 26,1998 Sept 27, 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
NET SALES $ 20,803 $ 21,006 $ 65,211 $ 69,640
COST AND EXPENSES
Cost of Sales
Contract arbitration and related 0 0 20,343 0
Other 14,596 12,910 48,016 50,347
Selling, general and administrative 4,460 4,842 15,193 14,888
Research and development 426 394 1,130 2,278
Restructuring costs 0 0 1,548 0
Environmental remediation 0 0 0 2,612
Gain on sale of facilities 0 (1,800) 0 (1,800)
Interest expense (income), net (149) (195) (478) (375)
__________ _________ ________ ________
Total 19,333 18,151 85,752 67,950
__________ _________ ________ ________
INCOME (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES 1,470 2,855 (20,541) 1,690
INCOME TAX PROVISION (RECOVERY) 0 147 (750) 1,315
__________ _________ ________ ________
INCOME (LOSS) FROM
CONTINUING OPERATIONS $ 1,470 $ 2,708 $ (19,791) $ 375
__________ _________ ________ ________
DISCONTINUED OPERATIONS (Note A)
Loss from operations of
Discontinued Displays Division (1,400) (814) (4,069) (3,564)
Gain (loss) on disposal of Displays
Division (including provision of
$1.2 million of operating losses
during phase out period) (2,590) - (2,590) 1,074
__________ _________ ________ ________
Total loss from discontinued
operation (3,990) (814) (6,659) (2,490)
__________ _________ ________ ________
__________ _________ ________ ________
NET INCOME (LOSS) $ (2,520) $ 1,894 $ (26,450) $ (2,115)
__________ _________ ________ ________
__________ _________ ________ ________
INCOME (LOSS) PER SHARE
INCOME (LOSS) FROM CONTINUING
OPERATIONS $ 0.28 $ 0.52 $ (3.80) $ 0.07
__________ _________ ________ ________
__________ _________ ________ ________
NET INCOME (LOSS) $ (0.48) $ 0.36 $ (5.07) $ (0.41)
__________ _________ ________ ________
__________ _________ ________ ________
Number of shares used for per share
amounts 5,220,936 5,210,984 5,213,463 5,149,461
COMPREHENSIVE NET INCOME (LOSS)
Net income (loss) as above $ (2,520) $ 1,894 $ (26,450) $ (2,115)
Foreign currency translation
income (loss) 4 (334) 6 (105)
__________ _________ ________ ________
Comprehensive net income (loss) $ (2,516) $ 1,560 $ (26,444) $ (2,220)
__________ _________ ________ ________
__________ _________ ________ ________
</TABLE>
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($000 omitted)
ASSETS
<TABLE>
Sept 26, 1998 Dec. 31, 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash, including cash equivalents-
1998, $ 5,103; 1997, $ 3,883 $ 5,103 $ 3,883
Restricted cash 3,513 6,102
Accounts receivable 19,996 21,511
Unbilled revenue, after progress billings 35,371 39,079
Inventories:
Raw materials 5,361 6,711
Work-in-process 5,187 5,716
Finished product 1,152 694
Prepaid expenses and other 1,281 5,472
Net current assets of discontinued
Operation (note A) 5,168 7,255
__________ ___________
Total current assets 82,132 96,423
PROPERTY, PLANT AND EQUIPMENT
net of accumulated depreciation:
1998, $ 33,228; 1997, $ 42,099 13,351 13,857
Net equipment of discontinued
Operation (note A) 492 712
OTHER ASSETS 38 89
__________ ___________
TOTAL ASSETS $ 96,013 $ 111,081
__________ ___________
__________ ___________
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
Sept 26, 1998 Dec. 31, 1997
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Short-term borrowings $ - $ 200
Accounts payable 4,820 7,662
Accrued contract arbitration and related 15,359 -
Accrued liabilities, other 6,891 5,718
Contract billings in excess of
recognized revenue 3,289 2,462
Accrued and deferred income taxes 980 3,869
_________ _________
Total current liabilities 31,339 19,911
DEFERRED INCOME TAXES 461 461
OTHER LIABILITIES 788 948
STOCKHOLDERS' EQUITY:
Common stock, par value $1-
7,500,000 shares authorized;issued
1998 - 5,219,800 shares;
1997 - 5,208,800 shares; 5,220 5,209
Additional paid-in capital 3,244 3,141
Retained earnings 54,961 81,411
_________ _________
Total stockholders' equity 63,425 89,761
_________ _________
TOTAL LIABILITIES AND EQUITY $ 96,013 $ 111,081
_________ _________
_________ _________
</TABLE>
AYDIN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
($000 omitted)
<TABLE>
Nine Months Ended
Sept 26, 1998 Sept 27, 1997
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (26,450) $ (2,115)
Items not affecting cash:
Loss from discontinued operations
(note A) 4,069 3,564
Loss on disposal of discontinued
Operations (note A) 2,590 -
Environmental remediation 0 2,612
Depreciation and amortization 1,792 2,037
Gain on sale of facility 0 (1,800)
Other (109) (229)
Changes in certain working capital items:
Accounts Receivable 1,515 6,101
Unbilled Revenue 3,708 (4,283)
Contract billings in excess of
recognized revenue 827 330
Inventories 1,421 (3,005)
Prepaid expenses and other 4,191 (2,725)
Accrued contract arbitration and related 15,359 0
Accounts payable and other
accrued liabilities (1,669) (5,136)
Accrued and deferred income taxes (2,889) 2,444
_________ _________
Total from Continuing operations 4,355 (2,205)
Net cash used by discontinued operations (4,572) (3,143)
_________ _________
Cash Used by Operating Activities (217) (5,348)
INVESTING ACTIVITIES
Net property, plant and equipment
additions (1,066) (1,589)
Equipment purchases of discontinued
operations 0 (307)
Proceeds from sale of facilities 0 8,886
_________ _________
Cash Provided (Used) by
Investing Activities (1,066) 6,990
FINANCING ACTIVITIES
Repayments of short-term borrowings (200) (2,600)
Proceeds from issuance of stock 114 223
_________ _________
Cash Used By Financing Activities (86) (2,377)
DECREASE IN CASH, CASH EQUIVALENTS
AND RESTRICTED CASH (1,369) (735)
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH AT BEGINNING OF YEAR 9,985 13,066
_________ _________
CASH, CASH EQUIVALENTS AND
RESTRICTED CASH AT END OF PERIOD $ 8,616 $ 12,331
_________ _________
_________ _________
</TABLE>
NOTES TO FINANCIAL STATEMENTS:
Note A
The Company's Displays Division is expected to be sold before
December 31, 1998. Accordingly, the Division's operating results
are treated as a discontinued operation in the accompanying
financial statements. Net sales of the discontinued operation for
1998 were $4.1 million for the third quarter and $13.3 million for
the nine months, and for 1997, $5.0 million and $15.6 million, for
the quarter and nine months, respectively. The net assets of the
discontinued operation at September 26, 1998 consisted of the
following:
<TABLE>
$ in 000's
----------
<S> <C>
Cash $ 336
Accounts receivable 3,320
Unbilled revenue 936
Inventories 4,356
Net fixed assets 492
Accounts payable and accrued liabilities (1,766)
Provision for disposal loss (2,590)
All other, net 576
----------
Net assets $ 5,660
----------
----------
</TABLE>
The accompanying balance sheet at December 31, 1997 and the
related cash flow statements have been restated to reflect the
treatment of the Displays Division as a discontinued operation.
Note B
Interim financial statements reflect all adjustments which are, in
the opinion of management, necessary to a fair statement of the
results for the periods. The December 31, 1997 balance sheet has
been derived from the audited financial statements contained in
the 1997 Annual Report to Stockholders. These interim financial
statements conform with the requirements for interim financial
statements and consequently do not include all the disclosures
normally required by generally accepted accounting principles.
Reporting developments have been updated where appropriate. In
this connection, there were two significant changes in contingency
disclosures. First, on April 10, 1998 an arbitration panel ruled
in favor of a subcontractor's claim on the TMRC contract with the
Government of Turkey. The impact of this ruling (a $20.3 million
charge) was included in the 1998 First Quarter Statement of
Operations and is reflected herein in the 1998 Nine Months
Statement of Operations. Second, the Company re-evaluated its
position regarding contingencies on certain US Government
contracts resulting in a $2.4 million charge against income in the
1998 first quarter. Pretax results for the nine month periods
included foreign currency translation gains and losses relating to
the Turkish subsidiary of a $148,000 gain for 1998 and a $449,000
loss for 1997.
INDEPENDENT ACOUNTANTS' REPORT ON REVIEW OF INTERIM FINANCIAL
INFORMATION
Board of Directors and Stockholders
Aydin Corporation
We have reviewed the accompanying condensed consolidated
balance sheets of Aydin Corporation and subsidiaries as of
September 26, 1998 and September 27, 1997 and related statements
of cash flows for the nine month periods ended September 26, 1998
and September 27, 1997, and the related condensed consolidated
statements of operations and comprehensive income for the three
and nine month periods ended September 26, 1998 and September 27,
1997. These financial statements are the responsibility of the
management of Aydin Corporation and subsidiaries.
We conducted the review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data
and making inquires of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements as a whole. Accordingly, we do
not express such an opinion.
Based on our reviews, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements for them to be in conformity with generally
accepted accounting principles.
We have previously audited, in accordance with generally
accepted auditing standards, the consolidated balance sheet as of
December 31, 1997, and the related consolidated statements of
operations and cash flows for the year then ended (not presented
herein) and in our report dated February 2, 1998, we expressed an
unqualified opinion on those consolidated financial statements.
In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1997 is
fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
/s/ Grant Thornton LLP
GRANT THORNTON LLP
Philadelphia, Pennsylvania
October 29, 1998
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
For the third quarter of 1998, the Company reported income from
continuing operations of $1.5 million, or $.28 per share, compared
to 1997 third quarter income from continuing operations--which
quarter included a gain of $1.8 million from the sale of real
estate--of $2.7 million, or $.52 per share. Including a loss of
$4.0 million from discontinued operations related to the Company's
Displays Division, the Company reported a 1998 third quarter net
loss of $2.5 million, or $.48 per share, compared to net income,
including a $.8 million loss from the Displays Division, of $1.9
million, or $.36 per share, for the 1997 third quarter. Revenues
for the 1998 third quarter were $20.8 million compared to $21.0
million in the third quarter of 1997. Results for 1998 and 1997
have been restated to reflect the Displays Division as a
discontinued operation.
The loss from continuing operations for the 1998 nine month
period was $19.8 million, or $3.80 per share, compared to 1997
nine month income from continuing operations of $.4 million, or
$.07 per share. The nine month period net loss for 1998 was $26.5
million, or $5.07 per share, compared to a 1997 nine month net
loss of $2.1 million, or $.41 per share. Revenues for the nine-
month periods were $65.2 million in 1998 compared to $69.6 million
in 1997. The net loss for the 1998 nine month period primarily
reflects the previously reported $20.3 million cost of sales
related to the Company's TMRC contract with the Government of
Turkey (consisting of a $17.2 million commercial arbitration award
in favor of Lockheed Martin Corporation, related interest and an
increase in other estimated completion costs) and $3.1 million of
other charges taken in the first quarter, and a $6.7 million loss
from discontinued operations.
1998 net sales declined by $.2 million (1%) from the year ago
quarter and by $4.4 million (6%) from last year's first nine
months. The decline for the nine months was primarily a result of
lower sales on the TMRC contract with the Government of Turkey.
The year ago TMRC sales reflected significant activity on a
subcontract which was completed last year.
"Cost of sales, contract arbitration and related" of $20.3
million for the 1998 nine month period represents the first
quarter 1998 charge from the arbitration award to Lockheed Martin
Corporation, related interest and an increase in other estimated
completion costs on the TMRC contract. "Cost of sales - other" as
a percentage of sales for the 1998 third quarter and nine month
periods remained relatively constant compared to last year despite
$3.1 million of first quarter 1998 charges described below. These
charges were offset by a higher proportion of more profitable
sales and lower overhead in 1998. The $3.1 million of first
quarter 1998 charges consisted of: (a) the Company's decision to
write off certain accounts receivable under a contract with the
U.S. Government ($1.6 million); (b) an increase in litigation
contingency reserves related to several outstanding claims against
the Company ($.9 million); and (c) the write-off of certain West
Coast assets which were not to be included with the sale of the
West Coast Microwave Components Division but which were expected
to have negligible value after the sale ($.6 million).
As reported in the Report on Form 10-Q for the first quarter of
1998, the Company is concentrating its focus on its core
businesses of Telemetry and Communications. Accordingly, first
quarter 1998 results included a $1.5 million restructuring charge
related to the planned shut-down of the Raytor Division
(approximately $1 million) and a reduction in corporate expenses
($.6 million). The restructuring was completed during the third
quarter.
The Company has made substantial progress in its previously
announced divestitures of certain Divisions. During the third
quarter of 1998, the Company consummated the sale of its Molded
Devices Division for a small gain. More significantly, after the
close of the third quarter the West Coast Microwave Components
Division was sold. The Company currently anticipates the sale of
the Displays Division (which is accounted for as a discontinued
operation) in the fourth quarter. The Company will report a net
gain of $5.7 million on the fourth quarter sale of the West Coast
Microwave Components Division.
On September 18, 1998, the Company entered into a Settlement and
Standstill Agreement (the "Settlement Agreement") with certain
parties, which Settlement Agreement is described in an Information
Statement filed on September 25, 1998 with the Securities and
Exchange Commission (the "SEC") pursuant to Section 14(f) of the
Securities Exchange Act of 1934 and Rule 14f-1 thereunder. As
contemplated by the Settlement Agreement, on October 5, 1998 three
new directors--Warren Lichtenstein, Keith Lane-Zucker and Mark
Schwarz--were elected to the Company's Board of Directors, and Ira
Brind and Nev Gokcen ceased to serve as directors of the Company.
At the time the Settlement Agreement was publicly disclosed, Mr.
Lichtenstein stated his intention, as a member of the Board of
Directors, to actively pursue the sale of the Company as an
entirety or in parts in a manner which will provide the Company's
stockholders with the greatest return on their investment.
On October 20, 1998, the Company announced that its Board of
Directors had removed I. Gary Bard as the Company's Chairman and
Chief Executive Officer. The Board elected Warren Lichtenstein as
Chairman of the Board and James R. Henderson, the Company's Chief
Financial Officer, as President and Chief Operating Officer.
The Company also announced on October 20, 1998 that the
president of the Company's Telemetry Division and certain other
managers of that Division had voluntarily resigned as the result
of a dispute with the Company. The dispute related to the desire
on the part of this group of individuals to pursue a purchase of
the Telemetry Division from the Company, in a manner that the
Company's Board of Directors did not believe to be in the best
interest of the Company and its shareholders. The Company does
not anticipate that the departure of these employees will
materially impair either the Company's ability to service the
Telemetry Division's customers or the Board's efforts to maximize
shareholder value.
The Company is currently in the process of evaluating the impact
of the "Year 2000" issue on the Company's operations, suppliers
and customers in preparation for its intended issuance of "Year
2000 Compliance Statements" to its customers. The Company's
various Divisions are testing their respective systems (both
information technology and non-information technology systems) and
products, and they are communicating with their key suppliers to
obtain appropriate assurances and/or Compliance Statements, as may
apply, with respect to the suppliers being Year 2000 prepared and
their products being Year 2000 compliant. To date, nothing has
come to the attention of the Company that would materially impact
the results of operations of the Company. The costs of addressing
the Year 2000 issue have not been material to date, and at present
the Company does not anticipate that they will be material. The
Company has not yet developed a contingency plan with respect to
possible Year 2000 problems and has not yet determined whether
such a contingency plan is necessary.
Environmental remediation expense of $2.6 million in last year's
first quarter resulted from the write-off of an anticipated
insurance recovery of money previously spent ($1.5 million) and to
be spent over a 30 year period on an environmental clean-up at a
site leased by the Company prior to 1984. The write-off resulted
from an unfavorable appellate court ruling in April 1997, which
reversed a trial court decision in the Company's favor. The
Company appealed this ruling to the California Supreme Court,
which upheld the decision of the appellate court during the third
quarter.
Gain on sale of facility for 1997 relates to the sale of
Company-owned buildings in that year. The operations housed in
these facilities were relocated to other Company-owned buildings.
The income tax recovery for 1998 reflects the available U.S.
carryback of a portion of the 1998 net operating loss. The income
tax provision for 1997 represents foreign taxes on the income of
foreign operations.
Financial Condition
As previously reported in the Company's Report on Form 8-K dated
April 10, 1998, on that date the arbitration panel in the
Company's dispute with Lockheed Martin Corporation ("Lockheed"), a
subcontractor on the Company's TMRC contract with the Government
of Turkey, awarded Lockheed $17.2 million. On June 8, 1998, the
Company announced that it had reached agreement with Lockheed
regarding payment of the arbitration award. Under the terms of
the agreement, the Company has withdrawn its appeal of the
arbitration award and Lockheed withdrew its motion seeking
judgment on the award. The award including anticipated interest
is recorded as a $15.4 million current liability on the third
quarter period end balance sheet. The net proceeds from the sale
of the West Coast Microwave Components Division after the close of
the quarter were paid to Lockheed, and as of the date of filing
this Report on Form 10-Q, less than $6 million is owed to
Lockheed. The agreement provides for payment in full of all
obligations to Lockheed by December 15, 1998. The proceeds from
the sale of the Displays Division must be used to pay Lockheed in
accordance with the agreement with Lockheed. The Company
anticipates that the sale of the Displays Division will be
sufficient to liquidate the remaining balance. If this sale is
not consummated by December 15, 1998, the Company would either
require other sources of funds to meet the obligation or an
extension of the time period to make the required payment to
Lockheed. There can be no assurance that either other funding
sources or an extension of time could be obtained.
As a result of the arbitration award, the Company was in default
under a credit agreement with AT&T Commercial Finance Corporation
("AT&T"). During the first quarter of 1998, the Company borrowed
$2 million on a two-year term loan under this credit agreement.
During the third quarter this loan was repaid in full. Also under
this agreement, the Company has provided cash collateral for the
full amount of a letter of credit issued pursuant to the original
AT&T credit agreement, which letter of credit has a balance
outstanding of approximately $1 million as of the date of filing
this Report.
Backlog at 1998 third quarter end was $48 million, compared to
$64 million at year end 1997. The decrease is primarily due to
reduced backlog on programs related to the Company's Turkish
subsidiary, including the TMRC program which is nearing
completion, and delays in the receipt of anticipated telemetry and
telecommunications orders.
Unbilled revenue (after progress billings) declined by $3.7
million from year end 1997 through the end of the 1998 third
quarter. Of this amount, $1.9 million relates to the impact of
the first quarter 1998 increase in estimated costs to complete the
TMRC contract, and $1.6 million relates to the Company's decision
in the first quarter of 1998 to write off certain accounts
receivable under a contract with the U.S. Government, as described
above under Results of Operations.
Prepaid expenses and other declined by $4.2 million during the
1998 nine month period primarily as the result of the refund of
U.S. income taxes which were included in prepaid expenses at year
end 1997.
Net assets of discontinued operation represents the net assets
of the Displays Division. The decrease of $2.3 million during the
1998 nine month period is primarily the result of the anticipated
loss on the sale of this Division.
Accounts payable declined by $2.8 million during the 1998 nine
month period primarily due to (1) the cancellation of a vendor
subcontract, and (2) pursuant to a contract negotiation, the
reclassification of royalties payable against contract
receivables.
"Accrued liabilities, other" increased by $1.2 million from year
end 1997 to 1998 third quarter end primarily due to $1.1 million
of increases in litigation contingency reserves (of which $.9
million was recorded in the first quarter).
Accrued and deferred income taxes decreased by $2.9 million from
year end 1997 to 1998 third quarter end primarily because of the
carryback of U.S. taxes resulting from the 1998 loss and foreign
tax payments and translation gains.
Except for the historical matters contained in this Report on
Form 10-Q, statements made herein are forward-looking and are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned that these
forward-looking statements reflect numerous assumptions and
involve risks and uncertainties which may affect the Company's
business and prospects and cause actual results to differ
materially from these forward-looking statements, including loss
of current customers, reductions in orders from current customers
or expected volume from such customers, higher material or labor
costs, unfavorable results in litigation against the Company, the
availability of adequate sources of working capital, consummation
of planned Division sales, and economic, competitive,
technological, governmental, and other factors discussed in the
Company's previous filings with the Securities and Exchange
Commission.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following is a list of Exhibits filed as part
of this report:
Exhibit 2 - Inapplicable
Exhibit 3(i) - Restated Certificate of
Incorporation (incorporated herein
by reference to Exhibit 3(i) to
Registrant's Annual Report on
Form 10-K for the year ended
December 31, 1994).
Exhibit 3(ii)- By-Laws (incorporated herein
by reference to Exhibit 3(ii) to
Registrant's Annual Report on Form
10-K for the year ended December
31, 1996).
Exhibit 4 - Inapplicable
Exhibit 10 - Standstill and Settlement
Agreement dated September 18, 1998
(filed herewith)
Exhibit 11 - Inapplicable
Exhibit 15 - Letter re unaudited interim
financial information (filed
herewith)
Exhibit 18 - Inapplicable
Exhibit 19 - Inapplicable
Exhibit 22 - Inapplicable
Exhibit 23 - Inapplicable
Exhibit 24 - Inapplicable
Exhibit 27 - Financial Data Schedule (electronic
filing only)
Exhibit 99 - Inapplicable
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter
for which this Report is being filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AYDIN CORPORATION
DATE November 9, 1998 /s/ James R. Henderson
James R. Henderson
President, Treasurer and
Chief Financial Officer
DATE November 9, 1998 /s/ Gene S. Schneyer
Gene S. Schneyer
Vice President, Secretary
and General Counsel
<PAGE>
EXHIBIT 10
STANDSTILL AND SETTLEMENT AGREEMENT
THIS STANDSTILL AND SETTLEMENT AGREEMENT (this
"Agreement") is made and entered into effective as of September
18, 1998 by and among Aydin Corporation, a Delaware corporation
("Aydin"), Steel Partners II, L.P., a Delaware limited partnership
("Steel"), Warren G. Lichtenstein ("Lichtenstein"), Sandera
Partners, L.P., a Texas limited partnership ("Sandera"), Newcastle
Partners, L.P., a Texas limited partnership ("Newcastle"), Mark E.
Schwarz ("Schwarz") and Robert Frankfurt ("Frankfurt") (herein,
Steel, Lichtenstein, Sandera, Newcastle, Schwarz and Frankfurt
are sometimes collectively referred to as the "Stockholders" or
"The Full Value Committee" and individually as a "Stockholder").
RECITALS
WHEREAS, the Stockholders own, either jointly or
severally, "Aydin Securities" as described in the Amendment (as
defined below).
WHEREAS, on September 9, 1998, the Stockholders filed
Amendment No. 1 (the "Amendment") to Schedule 13D under the
Securities Exchange Act of 1934, as amended, amending the Schedule
13D filed on August 10, 1998 by Steel and Lichtenstein. As stated
in Item 4 of the Amendment, the Reporting Persons (as defined in
the Amendment):
"...entered into a Joint Filing and Solicitation Agreement,
reflecting their agreement to form The Full Value Committee
and to seek to remove certain members of the board of
directors of the Issuer, including Ira Brind, Dr. Nev A.
Gokcen and Harry D. Train, II, and to elect Warren G.
Lichtenstein, Robert Frankfurt and Mark E. Schwarz in their
place. On or about September 9, 1998, Steel Partners II
served the Issuer with a request for a consent copy of a list
of stockholders and related information. On September 9,
1998, Steel Partners II also delivered its written consent to
the Issuer's Corporate Secretary. On September 9, 1998, The
Full Value Committee filed a Preliminary Consent Solicitation
Statement with the Securities and Exchange Commission in
order to solicit consents from the stockholders of the Issuer
in order to effectuate such actions."
WHEREAS, Aydin and the Stockholders, individually and as
the members of The Full Value Committee, who constitute all of
the Reporting Persons in the Amendment, have agreed to enter into
this Agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing
recitals, and the covenants, payments of money or other
consideration, and agreements set forth below, the receipt and
sufficiency of which are hereby acknowledged and agreed to, the
parties hereto agree as follows:
1. DEFINITIONS. Capitalized terms used in this
Agreement shall have the meanings set forth below:
a. "Effective Date" means the date upon which this
Agreement has been fully signed by all of the parties
hereto as noted below under the parties' respective
signatures.
b. "Exchange Act" means the Securities Exchange Act of
1934, as amended, and all rules promulgated thereunder
as in effect on the Effective Date.
c. "Group" has the same meaning as the term "group"
set forth in Section 13(d)(3) of the Exchange Act.
d. "Person" means any individual, firm, corporation,
partnership or other entity, including without
limitation, any "person" or "group" within the meaning
of Section 13(d) under the Exchange Act.
e. "Aydin Affiliate" means each "affiliate" or
"associate" of Aydin (as such terms are defined in Rule
12b-2 under the Exchange Act), whether or not such
person is such an Aydin Affiliate as of the Effective
Date, and each officer, director, employee, shareholder,
consultant, agent, representative, successor and assign,
of either Aydin or any Aydin Affiliate; excluding,
however, the Stockholders and any Stockholder Affiliate.
f. "Aydin Securities" means all common stock,
preferred stock, options, warrants, notes and debentures
(whether senior or subordinated, secured or unsecured,
convertible or nonconvertible), and any other
securities, which have been issued prior to the
Effective Date or which are issued during the Standstill
Period, by Aydin.
g. "Standstill Period" means the period of time
beginning with the Effective Date and ending on April
30, 1999.
h. "Stockholder Affiliate" means each "affiliate" or
"associate" of a Stockholder (as such terms are defined
in Rule 12b-2 under the Exchange Act), whether or not
such Person is such a Stockholder Affiliate as of the
Effective Date, and each officer, director, employee,
shareholder, successor and assign, of either a
Stockholder or any Stockholder Affiliate; excluding,
however Aydin and any Aydin Affiliate.
2. STANDSTILL COVENANTS OF STOCKHOLDERS. During the
Standstill Period, each of the Stockholders, severally but not
jointly, covenants that such Stockholder shall not, and such
Stockholder shall cause each of his or its Stockholder Affiliates
(and each such Stockholder Affiliate's own affiliates and
associates), not to:
a. No Proxy Solicitation: except as a director of
Aydin and in connection with, and in support of, any
action approved by the Board of Directors of Aydin
during the Standstill Period (i) make, or in any way
participate in, directly or indirectly, along or in
concert with others, any "solicitation of proxies" (as
such terms are defined or used in Regulation 14A under
the Exchange Act) or become a "participant" in any
"election contest" (as such terms are defined or used in
Rule 14a-11 under the Exchange Act) with respect to
Aydin or any Aydin Affiliate; or (ii) seek to advise or
influence any Person with respect to the voting of any
Aydin Securities, or (iii) initiate, propose or
otherwise solicit holders of Aydin Securities for the
approval of one or more stockholder proposals or induce
or attempt to induce any other person to initiate any
stockholder proposal.
b. No Formation of a Group; No Influence: except for
the continued existence of The Full Value Committee (as
defined in the Amendment), which committee will take no
action during the Standstill Period in breach of this
Agreement, take any action, alone or in concert with
any other Person, to (i) form, join or in any way
participate in a Group with respect to any of the Aydin
Securities; (ii) acquire or affect the control of Aydin
or any Aydin Affiliate; (iii) except as a director of
Aydin, control or influence the management, Board of
Directors, policies or affairs of Aydin or any Aydin
Affiliate; or (iv) participate in or encourage any
Person to take any action which is prohibited to be
taken by the Stockholders or any Stockholder Affiliate
pursuant to this Agreement.
c. No Statements: except (i) with respect to the press
release referred to in Section 4(c) hereof and as
required by law, and (ii) for Stockholder(s) referring
people to Aydin or the press release, make any statement
or proposal, whether written or oral, alone or in
concert with any other Person, to the Board of Directors
of Aydin (other than in a Stockholder's capacity as a
director) or any Affiliate, to any director or officer
of Aydin or any Aydin Affiliate, to any shareholder,
note holder, securities holder or creditor of Aydin or
any Aydin Affiliate, or otherwise make any public
announcement or proposal whatsoever with respect to
Aydin or any Aydin Affiliate, including but not limited
to a merger or other business combination, sale or
transfer or assets, liquidation or other corporate
transaction by Aydin or any Aydin Affiliate.
d. No Tender Offers: make, solicit, encourage, discuss
or participate in, alone or in concert with any other
person, a tender offer for or exchange for any Aydin
Securities.
e. No Asset Acquisition Offers: acquire, offer to
acquire or agree to acquire, directly or indirectly,
alone or in concert with other Person, by purchase,
exchange or otherwise (i) all or a substantial portion
of the assets, tangible or intangible, of Aydin or any
Aydin Affiliate, or (ii) direct or indirect rights,
warrants or options to acquire any assets of Aydin or
any Aydin Affiliate.
f. No Call of Meeting: except as a member of the Board
of Directors of Aydin and as part of an action taken by
the Board, alone or in concert with any other Person (i)
call, or seek to call, any meeting of Aydin's
stockholders, note holders, securities holders and/or
other creditors, or (ii) except as a member of the Board
of Directors of Aydin, make a request to examine, copy
or make extracts from any of Aydin's books, records, or
list of Shareholders.
g. No Announcement: announce an intention to do, or
enter into any agreement, arrangement or understanding
with any other Person to do, any of the actions
restricted or prohibited under this Section during the
Standstill Period..
3. COVENANT NOT TO SUE. During the Standstill Period,
and except for a lawsuit alleging a breach of any covenant or
agreement of Aydin contained in this Agreement, each of the
Stockholders, severally and not jointly, covenants that such
Stockholder shall not, and such Stockholder shall cause each his
or its Stockholder Affiliates (and each such Affiliate's own
affiliates and associates), not to, encourage, commence or
participate in any action, lawsuit, or any other legal proceeding
against Aydin or any Aydin Affiliates; provided, however, nothing
contained herein shall limit the right of Aydin (except as
expressly provided in Section 8 hereof) to commence any lawsuit or
other legal proceeding against any Person.
4. NO PUBLIC STATEMENTS.
a. By Stockholders. During the Standstill Period,
each of the Stockholders severally but not jointly
covenants that such Stockholder shall not, and each
Stockholder shall use his or its best efforts to cause
each of his or its Stockholder Affiliates (and each such
Affiliate's own affiliates and associates) not to, make
any public statements about Aydin or any Aydin Affiliate
excluding any statement or filing required by law.
b. By Aydin. During the Standstill Period, Aydin
covenants that Aydin shall not, and Aydin shall cause
each Aydin Affiliate (and each such Affiliate's own
affiliates and associates) not to, make any public
statements about the Stockholders or any Stockholder
Affiliate.
c. Joint Press Release. Notwithstanding the
foregoing, promptly upon the execution of this
Agreement, Aydin and the Stockholders will release a
joint press release substantially in the form attached
hereto as Exhibit A.
5. SPECIFIC PERFORMANCE. Each of the Parties will be
entitled to an injunction to prevent a breach of the provisions of
this Agreement and to specific enforcement of its terms. Aydin and
the Stockholders consent, and shall use their best efforts to
cause the Stockholder Affiliates to consent, to personal
jurisdiction in any action brought in any court in the State of
Delaware having subject matter jurisdiction and to service of
process upon them.
6. COVENANTS REGARDING BOARD REPRESENTATION
a. Aydin shall promptly file an Information Statement
pursuant to Section 14(f) of the Exchange Act (the
"14(f) Statement") and Rule 14f-1 thereunder, and
transmit the 14(f) Statement to the stockholders of
Aydin as required by the Exchange Act, but in no event
shall such actions by Aydin take place later than the
close of business on September 25, 1998. On the tenth
(10th) day after the filing of the 14(f) Statement (the
"Board Reconstitution Date"), the Board of Directors of
Aydin will expand to five and will consist of the
following persons:
a. Of the existing four directors, two of such
directors ( Mr. Ira Brind and Dr. Nev A. Gokcen)
will resign from the Board of Directors in
accordance with written resignations dated the
Effective Date which provide for their
effectiveness as of the Board Reconstitution Date,
and the remaining two directors (Messrs. Bard and
Train) (the "Carryover Directors") shall continue
as directors;
b. The Carryover Directors will elect the
following persons as new directors:
(x) Lichtenstein and Schwarz (who are herein
referred to as the "Committee Designated
Directors"); and
(y) Keith Lane Zucker (herein referred to as
the "Independent Director").
If the Board Reconstitution Date has not occurred prior
to the close of business on October 9, 1998, then
notwithstanding anything else herein to the contrary,
this Agreement shall terminate and be of no force and
effect. On or after the Effective Date and prior to the
Board Reconstitution Date, the Committee Designated
Directors and the Independent Director shall be required
to execute confidentiality agreements in form and
substance satisfactory to counsel for Aydin as a
condition to receiving information about Aydin in
anticipation of serving as directors of Aydin.
b. If any vacancy should arise during the Standstill
Period with respect to any of the Carryover Directors,
the Committee Designated Directors or the Independent
Director, such vacancy shall be filled as follows (and
Lichtenstein and Schwarz, together with the initial
Carryover Directors, and their respective successor
directors, shall vote together as directors to cause
such vacancy to be filled as herein set forth):
(1) In the case of a successor to a Carryover
Director, by a person designated by the
remaining Carryover Directors or their
successors;
(2) In the case of a successor to a Committee
Designated Director, by a person
designated by the remaining Committee
Designated Directors or their successors;
and
(3) In the case of the successor to the
Independent Director, by the mutual
agreement of the Carryover Directors and
the Committee Designated Directors;
provided, however, if the Carryover
Directors and the Committee Designated
Directors cannot reach agreement on the
selection of the successor to the
Independent Director within ten days
after the resignation, retirement or
death of the Independent Director, then
the Stockholders may designate a person
to serve as the Independent Director who
shall be representative of a significant
stockholder of Aydin for approval by the
Carryover Directors, which approval may
not be unreasonably withheld or delayed.
c. At the time of any designation as a director
pursuant to this Section 6, each such person will (i)
affirm his or her duty of confidentiality to Aydin with
regard to any non-public, confidential information
through a confidentiality agreement reasonably
satisfactory to the parties and (ii) agree to the terms
of this Section 6(b) with respect to the election of
successor directors.
d. Aydin will furnish to the Committee Designated
Directors and the Independent Director all information
that is provided to the other directors of Aydin and
any other information reasonably requested by the
Committee Designated Directors for use in their capacity
as directors or which is required by law.
e. In the event at any time the Stockholders
beneficially own in the aggregate less than 5% of the
outstanding common stock of Aydin, the Committee
Designated Directors shall resign and the rights of the
Stockholders under this Section 6 shall terminate and be
of no further force and effect. The termination of the
rights of the Stockholders under this Section 6 pursuant
to the immediately preceding sentence shall not affect
the restrictions imposed on the Stockholders under other
Sections of this Agreement.
f. Subject to early termination in accordance with
Section 6(e), above, the composition of the Board of
Directors of Aydin shall be as set forth in this
Section 6 until the earlier of (i) the 1999 Annual
Meeting of Stockholders of Aydin and (ii) June 30, 1999.
g. The Stockholders shall cause the withdrawal of the
recently filed preliminary consent solicitation
statement which is described in the Amendment..
7. 1999 ANNUAL MEETING OF STOCKHOLDERS. The parties
hereto agree that Aydin will hold an annual meeting of
stockholders for 1999 no sooner than June 20, 1999, and no later
than June 30, 1999, unless four or more of the directors of Aydin
approve an earlier date for such annual meeting of stockholders.
The slate for the annual meeting of stockholders for 1999 will be
nominated by the Board of Directors of Aydin who hold office on
April 30, 1999, unless four or more directors of Aydin approve an
earlier date to establish the slate of directors for the 1999
annual meeting of stockholders of Aydin. Notwithstanding anything
to the contrary contained herein, the Committee Designated
Directors, or their designees as successors, hereby reserve the
right after April 30, 1999, to make any proposal or take any other
action deemed necessary by them at Aydin's 1999 annual meeting of
stockholders or in preparation thereof.
8. COVENANTS OF AYDIN. In addition to the covenants
and agreements of Aydin contained elsewhere in this Agreement,
Aydin covenants and agrees as follows:
a. Aydin will not call any meeting of stockholders
without the approval of the Board of Directors of Aydin;
b. During the Standstill Period, and except for any
lawsuit alleging a breach by a Stockholder or a
Stockholder Affiliate of any covenant or agreement
contained herein, Aydin covenants that it shall not
encourage, commence or participate in any action,
lawsuit, or any other legal proceeding against any
Stockholder or any Stockholder Affiliate; and
c. From and after the Effective Date and prior to the
Board Reconstitution Date, Aydin and its Board of
Directors shall take no Board action with respect to any
matter which may be presented to the Board of Directors,
including without limitation any matter relating to the
sale or disposition of all or any material part of the
assets of Aydin or relating to a merger or other form of
transaction involving the business and assets of Aydin
except for the approval and implementation of this
Agreement and the following transactions which have
previously been announced by Aydin and approved at least
in principle by the Board of Directors of Aydin: (i) the
sale of the Microwave Division to Communications and
Power Industries, Inc., and (ii) the sale of the
Displays Division to H.I.G. Capital Management, Inc. or
one or more of its affiliates. Nothing contained herein
shall affect, and not included within the foregoing
covenant are, the resolutions adopted by the Board of
Directors of Aydin relating to an executive retention
program, a copy of which is attached hereto as Exhibit
B.
9. NO ASSIGNMENT. Since the Amendment and prior to the
Effective Date, the Stockholders represent and warrant that they
have not sold, gifted or transferred in any other manner any Aydin
Securities.
10. CHOICE OF LAW. Aydin and Stockholders agree that
this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
11. PARTIAL INVALIDITY. Should any of the parts,
terms, clauses or provisions of this Agreement be declared or
determined by any court of competent jurisdiction to be illegal or
invalid, the validity of the remaining parts, terms, clauses and
provisions shall not be affected thereby and said invalid or
illegal part, term, clause or provision shall be deemed not to be
a part of this Agreement.
12. MERGER. This Agreement supersedes all previous
negotiations, representations and discussions by the parties
hereto concerning the subject matter hereof, and integrates the
whole of all of their agreements and understanding concerning the
subject matter hereof. No oral representations or undertakings
concerning the subject matter hereof shall operate to amend,
supersede, or replace any of the terms or conditions set forth in
this Agreement.
13. EARLY TERMINATION; TERM OF CERTAIN PROVISIONS.
a. If the Board Reconstitution Date has not occurred
by Friday, October 9, 1998, then notwithstanding
anything else herein to the contrary, this Agreement and
the rights and obligations of the parties hereunder
shall terminate and be of no further force and effect;
provided, however, no such termination shall affect any
confidentiality agreements entered into by the Committee
Designated Directors or the Independent Director prior
to such date.
b. Notwithstanding anything else herein to the
contrary, the provisions of Sections 2, 3, 4 and 8 of
this Agreement shall expire as of the close of business
on April 30, 1999, and the provisions of Section 6 of
this Agreement shall expire as of the close of business
on June 30, 1999, unless extended by unanimous agreement
of all of the Parties.
14. AMENDMENT. This Agreement may only be amended in
writing signed by authorized representatives of all the parties
hereto. This Agreement cannot be changed or terminated orally.
15. HEADINGS. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction
of any provision of this Agreement.
16. COUNTERPARTS. For the convenience of the parties,
any number of counterparts of this Agreement may be executed by
the parties hereto and each such executed counterpart shall be
deemed to be an original instrument.
17. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
given if delivered personally or mailed by certified or registered
mail, postage prepaid, return receipt requested, or delivered to a
nationally recognized next business day courier for delivery on
the next business day, or by facsimile, with a copy sent as
aforesaid and in any instance addressed as follows:
IF TO AYDIN:
Aydin Corporation
700 Dresher Road
P.O. Box 349
Horsham, PA 19044
Attention: I. Gary Bard
WITH A COPY TO:
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103
Attention: Richard J. Braemer, Esq.
IF TO THE STOCKHOLDERS:
c/o The Full Value Committee
150 East 52nd Street, 21st Floor
New York, NY 10022
Attention: Warren G. Lichtenstein
WITH A COPY TO:
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, NY 10022
Attention: Steven Wolosky, Esq.
or such other address as shall be furnished in writing by any of
the parties, and any such notice or communication shall be deemed
to have been given as of the date so delivered personally, so
mailed, so delivered to the courier service, or so transmitted by
telecopy (except that a notice of change of address shall not be
deemed to have been given until received by the addressee).
18. EFFECT OF TERMINATION. From and after the end of
the Standstill Period, the covenants of the parties set forth
herein shall be of no further force or effect and the parties
shall be under no further obligation with respect thereto.
19. BINDING ON SUCCESSORS. This Agreement shall be
binding upon and shall inure to the benefit of the parties and
their representatives, heirs, successors, and assigns.
20. PERMITTED COMMUNICATIONS: Notwithstanding any of
the foregoing, the Stockholders may (i) file any documents
required by the Securities and Exchange Commission, provided that
the content of any document(s) so filed does not violate any of
the other terms and conditions of this Agreement; and (ii) respond
to any legal subpoena, after notice to Aydin immediately following
service of such subpoena.
21. EXPENSES. Promptly after the execution of this
Agreement, Aydin agrees to reimburse the Stockholders for their
out-of-pocket legal and proxy solicitation fees and expenses
incurred in connection with this Agreement, provided that such
reimbursement shall not exceed $75,000.00.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement on the date set forth below their
respective signatures.
AYDIN CORPORATION
/s/ ___I. Gary Bard____
By: I. Gary Bard
Title: CEO
Date of Execution: 9/18/98
STEEL PARTNERS II, L.P.
/s/ ___Warren Lichtenstein____
By: Warren Lichtenstein
Title: CEO
Date of Execution: 9/18/98
/s/ ___Warren Lichtenstein____
Warren G. Lichtenstein
Date of Execution:9/18/98
SANDERA PARTNERS, L.P.
/s/ ___Mark Schwarz____
By: Mark E. Schwarz
Title: Vice President
Date of Execution: 9-18-98
NEWCASTLE PARTNERS, L.P.
/s/ ___Mark Schwarz____
By: Mark E. Schwarz
Title: Vice President
Date of Execution: 9-18-98
/s/ ___Mark Schwarz____
Mark E. Schwarz
Date of Execution: 9-18-98
<PAGE>
EXHIBIT 15
Securities and Exchange Commission
Washington, D.C. 20549
We have made a review of the condensed consolidated financial
statements of Aydin Corporation and subsidiaries as of September
26, 1998 and September 27, 1997 and for the three-month and nine-
month periods ended September 26, 1998 and September 27, 1997 in
accordance with standards established by the American Institute of
Certified Public Accountants and issued our report thereon dated
October 29, 1998. We are aware that such financial statements and
our above-mentioned report appearing in the Form 10-Q of Aydin
Corporation for the quarter ended September 26, 1998 are being
incorporated by reference in the Registration Statement Nos. 333-
31263; 33-61537; 33-53549; 33-34863; 33-22016; 33-14284; 2-97645;
2-93603; 2-77623; 2-64093 and that such report pursuant to Rule
436(c) of the Securities Act of 1933 is not considered a part of a
registration prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of
Paragraphs 7 and 11 of that Act.
/s/ Grant Thornton LLP
Philadelphia, Pennsylvania
October 29, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the financial statements in the Quarterly Report on Form 10-Q
for the period ended September 26, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER>1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-26-1998
<CASH> 5,103
<SECURITIES> 3,513
<RECEIVABLES> 19,996
<ALLOWANCES> 0
<INVENTORY> 11,700
<CURRENT-ASSETS> 82,132
<PP&E> 47,071
<DEPRECIATION> 33,228
<TOTAL-ASSETS> 96,013
<CURRENT-LIABILITIES> 31,339
<BONDS> 0
<COMMON> 5,220
0
0
<OTHER-SE> 58,205
<TOTAL-LIABILITY-AND-EQUITY> 96,013
<SALES> 65,211
<TOTAL-REVENUES> 65,211
<CGS> 68,359
<TOTAL-COSTS> 86,230
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (478)
<INCOME-PRETAX> (20,541)
<INCOME-TAX> (750)
<INCOME-CONTINUING> (19,791)
<DISCONTINUED> (6,659)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,450)
<EPS-PRIMARY> (5.07)
<EPS-DILUTED> (5.07)
</TABLE>
