FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 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 000-21770
SIGNAL TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2758268
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
222 Rosewood Drive, Danvers, MA 01923-4502
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (978) 774-2281
--------------------
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: |_| No: |X|
Indicate the number of shares outstanding of each of the Registrant's classes of
Common Stock as of the latest practicable date.
Class of Common Stock Outstanding at October 22, 1998
$.01 Par Value 7,349,223 shares
<PAGE>
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1 Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6-10
Item 2 Management's Discussion and Analysis of Financial 11-13
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders 14
Item 6 Exhibits and Reports on Form 8-K 15
SIGNATURE 15
Page 2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SIGNAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
June 30, December 31,
1998 1997
Assets (As restated)
-------- --------
Cash $ 1,674 $ 1,127
Accounts receivable, net 12,802 15,901
Inventories 14,460 20,205
Deferred taxes 1,527 2,327
Other assets 4,040 3,110
-------- --------
Total current assets 34,503 42,670
-------- --------
Property, plant and equipment, net 15,501 16,400
Intangible assets, net 2,715 2,924
Other assets 841 846
-------- --------
Total assets $ 53,560 $ 62,840
======== ========
Liabilities
Current maturities of long-term debt $ 480 $ 480
Accounts payable 4,324 5,354
Accrued expenses 6,895 6,620
Customer advances 867 1,177
-------- --------
Total current liabilities 12,566 13,631
-------- --------
Deferred income taxes 1,527 1,527
Long-term debt, net of current maturities 13,408 13,408
Stockholders' Equity
Common stock 75 74
Additional paid-in capital 12,942 12,693
Retained earnings 13,909 21,538
-------- --------
26,926 34,305
Less treasury stock (867) (31)
-------- --------
Total stockholders' equity 26,059 34,274
-------- --------
Total liabilities and stockholders' equity $ 53,560 $ 62,840
======== ========
The accompanying notes are an integral part of the condensed consolidated
financial statements.
Page 3
<PAGE>
<TABLE>
SIGNAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands except per share amounts)
<CAPTION>
Quarter ended Six months ended
June 30 June 30
1998 1997 1998 1997
(As restated)(As restated) (As restated)
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $ 22,190 $ 25,713 $ 45,877 $ 52,594
Cost of sales 25,505 21,516 43,689 43,175
-------- -------- -------- --------
Gross profit (loss) (3,315) 4,197 2,188 9,419
Selling, general and administrative expense 4,652 4,475 9,516 8,940
Research and development expense 82 157 128 391
-------- -------- -------- --------
Operating income (loss) (8,049) (435) (7,456) 88
Interest expense 242 266 497 500
-------- -------- -------- --------
Loss before income taxes (8,291) (701) (7,953) (412)
Benefit from income taxes (459) (282) (324) (204)
-------- -------- -------- --------
Net loss $ (7,832) $ (419) $ (7,629) $ (208)
======== ======== ======== ========
Net loss per share $ (1.07) $ (0.06) $ (1.03) $ (0.03)
======== ======== ======== ========
Shares used in calculating net loss
per share (Basic and Diluted) 7,335 7,268 7,373 7,228
<FN>
The accompanying notes are an integral part of the condensed consolidated financial statements.
</FN>
</TABLE>
Page 4
<PAGE>
<TABLE>
SIGNAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
<CAPTION>
Six months ended June 30,
1998 1997
-------- --------
<S> <C> <C>
Net cash provided by operating activities $ 1,872 $ 121
-------- --------
Cash flows from investing activities:
Additions to property, plant and equipment (758) (2,176)
Proceeds from disposal of property, plant and equipment 14 2
Other assets 5 32
-------- --------
Net cash used by investing activities (739) (2,142)
-------- --------
Cash flows from financing activities:
Proceeds from exercise of stock options 67 234
Proceeds from Employee Stock Purchase Plan 183 --
Purchase of treasury stock (836) --
Borrowing under bank revolving credit facility 15,000 17,400
Repayments of borrowings under bank revolving credit
Facility (14,700) (15,900)
Payments of long-term debt (300) (679)
-------- --------
Net cash provided (used) by financing activities (586) 1,055
-------- --------
Net increase (decrease) in cash 547 (966)
Cash, beginning of period 1,127 1,870
-------- --------
Cash, end of period $ 1,674 $ 904
======== ========
<FN>
The accompanying notes are an integral part of the condensed consolidated
financial statements.
</FN>
</TABLE>
Page 5
<PAGE>
SIGNAL TECHNOLOGY CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
1. Restatement Adjustments
The Company is in the process of restating its consolidated financial
statements for fiscal years 1996 and 1997 and the first quarter of
1998. As announced in the Company's August 17, 1998 press release, the
adjustments were a result of an investigation by Corporate management
with the aid of its independent accountants at its Keltec Operations.
The restatements are required to record contract and inventory
adjustments in the correct periods.
<TABLE>
A summary of the impact of such restatements on the accompanying
financial statements is as follows:
Condensed Consolidated Statements of Operations
<CAPTION>
Quarter ended Six months ended
June 30, 1997 June 30, 1997
Previously As Previously As
Reported Restated Reported Restated
--------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Net sales $25,474 $25,713 $52,556 $52,594
Gross profit 4,734 4,197 10,875 9,419
Operating income (loss) 102 (435) 1,544 88
Income (loss) before income taxes (164) (701) 1,044 (412)
Net income (loss) (107) (419) 638 (208)
Net income (loss) per share
(Basic and diluted) $(0.01) $(0.06) $0.08 $(0.03)
</TABLE>
Quarter ended
March 31, 1998
Previously As
Reported Restated
--------------- ----------------
Net sales $23,412 $23,687
Gross profit 5,795 5,503
Operating income 885 593
Income before income taxes 630 338
Net income 370 203
Net income per share
(Basic and diluted) $0.05 $0.03
Page 6
<PAGE>
Condensed Consolidated Balance Sheets
- -------------------------------------
Year ended
December 31, 1997
Previously As
Reported Restated
--------------- ----------------
Net inventories $22,707 $20,205
Total current assets 44,212 42,670
Total assets 64,382 62,840
Retained earnings 23,080 21,538
Shareholders' equity 35,816 34,274
2. The condensed consolidated financial statements of the Company as of
June 30, 1998, and for the six months ended June 30, 1998 and 1997 are
unaudited. All adjustments (consisting only of normal recurring
adjustments) have been made, which in the opinion of management, are
necessary for a fair presentation. Results of operations for the six
months ended June 30, 1998, are not necessarily indicative of the
results that may be achieved for the full fiscal year or for any future
period. These financial statements should be read in conjunction with
the financial statements for the fiscal year ended December 31, 1997,
included in the Company's annual report on Form 10-K. The year end
condensed balance sheet data does not include all the disclosures
required by generally accepted accounting principles.
The Company's fiscal quarter consists of a thirteen week period ending
on the Saturday closest to June 30. For ease of presentation, interim
periods are designated to have ended on June 30.
3. Earnings Per Share
The Company has adopted the provisions of Statement of Financial
Accounting Standards No. 128, Earnings Per Share ("SFAS 128") effective
December 31, 1997. SFAS 128 requires the presentation of basic and
diluted earnings per share ("EPS"). Basic EPS is computed by dividing
income available to common stockholders by the weighted average number
of common shares outstanding for the period. Diluted EPS is computed
giving effect to all dilutive potential common shares that were
outstanding during the period. Dilutive potential common shares consist
of the incremental common shares issuable upon the exercise of stock
options and warrants for all periods using the treasury stock method.
All prior period earnings per share amounts have been restated to
comply with the provisions of SFAS 128.
Page 7
<PAGE>
<TABLE>
In accordance with the disclosure requirements of SFAS 128, a
reconciliation of the numerator and denominator of both basic and diluted
EPS is provided as follows:
<CAPTION>
Quarter ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
(As restated) (As restated) (As restated)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Numerator - Basic and Diluted EPS
Net loss $(7,832) $ (419) $(7,629) $ (208)
======= ======= ======= =======
Denominator - Basic EPS
Common shares outstanding 7,335 7,268 7,373 7,228
------- ------- ------- -------
Basic earnings per share $ (1.07) $ (0.06) $ (1.03) $ (0.03)
======= ======= ======= =======
Denominator - Diluted EPS
Denominator - Basic EPS 7,335 7,268 7,373 7,228
Effect of Diluted Securities
Common Stock Options -- -- -- --
------- ------- ------- -------
Denominator - Diluted EPS 7,335 7,268 7,373 7,228
------- -------
Diluted loss per share $ (1.07) $ (0.06) $ (1.03) $ (0.03)
======= ======= ======= =======
</TABLE>
4. Details of certain balance sheet accounts are as follows:
(In thousands)
----------------------------
June 30, December 31,
1998 1997
(As restated)
-------- --------
Net Inventories
Raw materials $ 4,488 $ 6,239
Work in progress 12,349 17,065
Finished goods 290 484
-------- --------
17,127 23,788
Less: unliquidated progress payments (2,667) (3,583)
======== ========
$ 14,460 $ 20,205
======== ========
Property, Plant and Equipment
Land $ 992 $ 992
Building and improvements 9,779 9,793
Machinery and equipment 25,823 25,636
Furniture and fixtures 2,932 2,753
-------- --------
39,526 39,174
Less accumulated depreciation (24,025) (22,774)
-------- --------
Net property, plant and equipment $ 15,501 $ 16,400
======== ========
Page 8
<PAGE>
5. Commitments and Contingencies
Weymouth Environmental Contamination:
In April 1996, the Company sold its facility in Weymouth, Massachusetts
but retained the environmental liability and responsibility associated
with groundwater contaminants present at the site. This facility has been
classified as a tier 1A disposal site by the Massachusetts Department of
Environmental Protection ("DEP"), as a result of past releases of
petroleum based solvents. Environmental assessment reports prepared by
independent consultants indicate that contaminants present in the Town of
Weymouth well field across the street from the facility are similar to
those reportedly released at the facility and still present in the
groundwater at the facility; however, these reports also indicate that
the contaminants do not exceed safe drinking water levels in the finished
water after normal treatment. Other contaminants which did not originate
at the facility have also been detected in the well field.
The Company is continuing to conduct investigations of the facility for
soil and groundwater contamination and operate a pilot remediation system
in cooperation with the DEP. It is not possible at this stage of the
proceedings to predict what additional remediation and the costs thereby,
if any, will be required. The Company has been informed by its insurers
that no recovery of costs incurred in the treatment of the ground water
at the facility is possible under existing insurance arrangements.
During 1997, the Company received funds from a third party in return for
a complete release from liability for any responsibility for the
contamination. This $350 thousand settlement has been included in the
Company's accrual for remediation.
Sunnyvale Indemnification Claim:A third party has filed a breach of
contract suit against the Company alleging that it has a contractual duty
to indemnify the third party for costs incurred as a result of
environmental contamination and subsequent remediation. The claim is
based upon allegations that the Company assumed certain liabilities when
it acquired one of the divisions of the third party. The Company believes
it has meritorious defenses with respect to this claim and intends to
vigorously defend its position in the suit. The Company also believes
that the ultimate disposition will not materially affect its financial
position or results of operations.
DeCoursey v. Signal Technology Corporation: This case was filed on August
25, 1998. The Complaint alleges that the Company and its former
president, Dale Peterson, violated Section 10(b) of the Exchange Act and
Rule 10b-5. The Complaint alleges that various public statements by the
Company during 1997 and 1998 were false or misleading arising from
alleged accounting irregularities that were unreported. The case is in
the initial stages, and the Court has not designated a lead plaintiff or
lead law firm as required by the Private Securities Litigation Reform
Act. Until it does so, the Company has no obligation to respond to the
Complaint. At present it is too early to evaluate the merits of the
action or to predict the likelihood of success. The Company intends to
defend the matter fully.
L3 Communications Corporation v. Signal Technology Corporation, et al:
This case was filed on September 3, 1998. The Complaint alleges that
certain former employees of L-3 Communications now working for the
Company unlawfully misappropriated confidential and trade secret
information on behalf of the Company and unlawfully induced other L-3
Communications employees to join the Company. L-3 Communications has
brought claims for civil conspiracy, tortious interference with
prospective and contractual relations, under both the Georgia Deceptive
Trade Practices Act and the Uniform Trade Secrets Act. The Company denies
the allegations. At present it is too early to evaluate the merits of the
action or to predict the likelihood of success. The Company intends to
defend the matter fully.
Page 9
<PAGE>
T-3 Contract:
The Company is currently committed to a long term contract at its Keltec
division (the T-3 contract) for amplifiers for Raytheon. If Raytheon
exercises all of its options within this contract, the total value could
be in excess of $19 million. The current contract value is $764 thousand.
If all options are exercised at current estimated costs and prices, the
company's loss could total up to $4 million.
The Company is currently negotiating with Raytheon for changes that would
reduce costs or increase prices and, therefore, any potential losses are
not currently estimable. The Company is not accepting options against
this contract until mutually agreeable terms are reached with Raytheon.
Page 10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
Results of Operations for the Three Months Ended June 30, 1998 and 1997
Net sales in the second quarter of 1998 decreased $3.5 million, or 13.7% as
compared to the second quarter of 1997. Backlog increased from $83.7 million at
March 31, 1998 to $85.8 million at June 30, 1998 on new orders of $24.3 million.
This compares to an increase in backlog from $87.8 million to $88.4 million on
new orders of $26.3 million in the second quarter of 1997.
The decrease in net sales for the second quarter of 1998 compared to the same
period in 1997 was due primarily to lower levels of new orders and also
engineering and production problems at the Company's Keltec Operation. New
orders have been moderately affected by the economic conditions in Asia with
lost or postponed orders from primarily our Korean customers. Government
sanctions placed on certain shipments to India and Pakistan have also delayed or
cancelled shipments on existing orders as well as postponing new orders. In July
the Company replaced the management of its Keltec Operation. Keltec's backlog
continued to grow in the second quarter with the most new orders of any of the
Company's operations.
Gross profit during the second quarter of 1998 decreased $7.5 million as
compared to the second quarter of 1997. Gross profit was adversely effected
primarily by contract adjustments and inventory write-downs at the Company's
Keltec Operation and to a lesser extent at its California Operation. The impact
of these adjustments on gross profit in the second quarter was approximately
$7.9 million. The adjustments were a result of an investigation by Corporate
management with the aid of its independent accountants into contract and
inventory accounting practices at its Keltec Operation. The investigation also
necessitates the restatement of fiscal years 1996, 1997 and the first quarter of
1998.
Selling, general and administrative expenses increased $177 thousand or 4.0% as
compared to the second quarter of 1997 and as a percentage of net sales
increased from 17.4% in 1997 to 21.0% in 1998.
Research and development activities decreased from $157 thousand in the second
quarter of 1997 to $82 thousand in the second quarter of 1998. The Company is
not currently engaged in any material Company-funded R & D projects, but
continues to participate in and to pursue customer-funded development projects
and opportunities.
Interest expense was slightly lower, $24 thousand, in the second quarter versus
the same period last year as a result of lower average levels of borrowings.
During the quarter the Company recorded a tax benefit of $459 thousand which
reflects loss carry backs to the extent available. No future tax benefit
resulting from the loss has been recorded because of the uncertainty of
realizability.
Results of Operations for the Six Months Ended June 30, 1998 and 1997
Net sales in the first six months of 1998 decreased $6.7 million, or 12.8% as
compared to the first six months of 1997. Backlog decreased from $88.7 million
at December 31, 1997 to $85.8 million at June 30, 1998 on new orders of $43.0
million. This compares to a decrease in backlog from $89.0 million to $88.3
million on new orders of $51.9 million in the first six months of 1997. The
Company believes it has adequate backlog to meet its short-term sales goals and
anticipates approximately the same level of orders for the second half of 1998.
Lower than expected new orders in the first half of 1998 has adversely impacted
shipment levels at all the Company's operations with the exception of its Keltec
Operation. Keltec's shipments were adversely affected by
Page 11
<PAGE>
both engineering and production problems. Keltec maintains a high backlog and
accounted for over one-third of the Company's new business. New orders
throughout the Company have been moderately affected by the economic conditions
in Asia with lost or postponed orders from primarily our Korean customers.
Government sanctions placed on certain shipments to India and Pakistan have also
delayed or cancelled shipments on existing orders as well as postponing new
orders.
Gross profit during the first six months of 1998 decreased $7.2 million as
compared to the first six months of 1997. Gross profit was adversely effected
primarily by contract adjustments and inventory write-downs at the Company's
Keltec Operation and to a lesser extent at its California Operation. The impact
of contract adjustments and inventory write-downs on gross profit in the first
six months was approximately $8.2 million.
Selling, general and administrative expenses increased $576 thousand or 6.4% as
compared to the first six months of 1997 and as a percentage of net sales
increased from 17.0% in 1997 to 20.8% in 1998.
Research and development activities decreased from $391 thousand in the first
six months of 1997 to $128 thousand in the first six months of 1998. The Company
is not currently engaged in any material Company-funded R & D projects, but
continues to participate in and to pursue customer-funded development projects
and opportunities.
Interest expense, $497 thousand, for the first six months of 1998 was
approximately the same as the comparable period last year.
Liquidity and Capital Resources
At June 30, 1998, the Company had working capital of $21.9 million as compared
to $29.0 million at December 31, 1997. The decrease in working capital resulted
primarily from the write-off of inventory at the Company's Keltec Operation and
California Operation in the second quarter. The Company's net cash/debt position
(loan balances less cash on hand) decreased slightly from $12.8 million at
December 31, 1997 to $12.2 million at June 30, 1998. Net cash provided by
operating activities during the first six months of 1998 totaled $1.9 million.
The primary non-operating uses of cash were add-ons to property, plant and
equipment, $758 thousand, and the repurchase of Company stock of $836 thousand
under the Company's stock repurchase program. The Company suspended its stock
repurchase program in July 1998.
As a result of the restatement of the financial statements discussed above, the
Company was in default of several of its loan covenants. The Company and its
bank have amended the loan agreement as of October 22, 1998. In the new
agreement the bank waives all defaults. Additionally, the amendment increases
the interest charged on the revolving credit facility and the real estate term
loans from the banks base rate to base rate plus 1/2 % . The amount available
for current borrowing is calculated on the Company's eligible receivables as
defined in the agreement but not to exceed $15 million. This provision is not
anticipated to have a material impact on the Company's cash requirements in the
foreseeable future.
As a result of the described above restatements the Company will amend its 1996
and 1997 tax returns and expects to be entitled to tax refunds totaling
approximately $2.4 million.
With the exception of the T-3 contract discussed under the Contingencies Note,
the Company has no other material potential contract losses or commitments for
any acquisitions, product requirements or for capital expenditures at June 30,
1998.
The Company believes it has adequate cash, working capital and available
financing facilities to meet its operating and capital requirements for the
foreseeable future and to continue its acquisition program.
Page 12
<PAGE>
Impact of Year 2000
Management is aware of the potential software and hardware anomalies associated
with the upcoming century change commonly known as the Year 2000 problem. The
Company is presently in the second phase of a five stage plan to bring about
complete compliance in all of its products, internal systems, and suppliers and
thus ensure that there is no disruption of the Company's business at the turn of
the century. The Company is evaluating all of its product lines and has so far
found no product with an embedded date function which would cause any Y2K
exposure.
A comprehensive review of the Company's computer systems, software and internal
embedded systems is presently underway and the Company is not aware at this time
of any significant year 2000 issues that will not be resolved prior to the year
2000. The Company is ahead of schedule in its corporate-wide plan to achieve
compliance by the third quarter of 1999. The projected costs associated with the
plan are not expected to have any material effect on the Company's operations or
financial position.
At this time, the Company has not developed a "worst case" scenario or an
overall year 2000 contingency plan and does not intend to do so unless, as a
result of its ongoing year 2000 review, Management believes such plans are
warranted. The only contingency planning that is currently set to be implemented
will come as a result of a comprehensive survey of the Company's suppliers in
order to learn which will be impacted by the Y2K problem. The Company's
suppliers are an important component of the Company's success and the Company is
undertaking the survey as part of its overall year 2000 plan.
Safe Harbor for Forward-Looking Statements
Forward-looking statements in this document involve known and unknown factors
and risks that may cause future period results to be materially different from
future performance suggested in this document.
The Company has experienced and expects to continue to experience significant
fluctuations in its results of operations. Factors that affect the Company's
results of operations include the volume and timing of orders received, changes
in the mix of products sold, competitive pricing pressures and the Company's
ability to meet or renegotiate customer demands. As a result of the foregoing or
other factors, there can be no assurance that the Company will not experience
material fluctuations in the future operating results on a quarterly or annual
basis, which would materially and adversely affect the Company's business,
financial condition and results of operations.
Recent Pronouncements
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130 (SFAS 130) "Reporting Comprehensive
Income." SFAS 130 establishes standards for reporting and display of financial
statements. The Company has adopted SFAS 130 for fiscal 1998. For all periods
presented there was no Comprehensive Income.
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 (SFAS 131) "Disclosures about Segments of
an Enterprise and Related Information." SFAS 131 requires publicly held
companies to report financial and other information about key revenue producing
segments of the entity for which such information is available and is utilized
by the chief operation decision maker. Specific information to be reported for
individual segments includes profit or loss, certain revenue and expense items
and total assets. A reconciliation of segment information to amounts reported in
the financial statements would be provided. The Company is evaluating the
disclosure requirements of SFAS 131.
Page 13
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of shareholders was held on May 5, 1998.
(b) Not required. See Instruction 3.
(c) Set forth below is a brief description of each matter voted upon at the
meeting, including the number of votes cast for, against or withheld, as
well as the number of abstentions and broker non-votes as to each matter,
and including a separate tabulation with respect to each nominee for
office.
(i) Election of Directors: Bernard P. O'Sullivan: 5,839,135 votes in
favor and 203,125 against Joseph Schneider: 5,829,572 votes in
favor and 212,908 against
(ii) Ratification of the selection of PricewaterhouseCoopers LLP as
independent accountants for the fiscal year 1998: 5,949,115 votes
in favor, 13,902 votes abstaining and 79,463 against.
Page 14
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit Index
27. Financial Data Schedule.
(b) Reports on Form 8-K.
1) Filed August 17, 1998. Company's press release dated August 17,
1998. Charge to earnings and pending restatement.
2) Filed September 25, 1998. Company's press release dated September
25, 1998. Timing of SEC filings and operational changes.
SIGNATURES
Pursuant to the requirement 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.
SIGNAL TECHNOLOGY CORPORATION
/s/ Robert Nelsen
------------------------------------
Chief Financial Officer
DATE: October 23, 1998
Page 15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,674
<SECURITIES> 0
<RECEIVABLES> 12,802
<ALLOWANCES> 0
<INVENTORY> 14,460
<CURRENT-ASSETS> 34,503
<PP&E> 39,526
<DEPRECIATION> 24,025
<TOTAL-ASSETS> 53,560
<CURRENT-LIABILITIES> 12,566
<BONDS> 13,408
0
0
<COMMON> 75
<OTHER-SE> 25,984
<TOTAL-LIABILITY-AND-EQUITY> 53,560
<SALES> 45,877
<TOTAL-REVENUES> 45,877
<CGS> 43,689
<TOTAL-COSTS> 53,333
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 497
<INCOME-PRETAX> (7,953)
<INCOME-TAX> (324)
<INCOME-CONTINUING> (7,629)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,629)
<EPS-PRIMARY> (1.03)
<EPS-DILUTED> (1.03)
</TABLE>
