================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1996 Commission File No. 0-23742
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
North Carolina 22-1867386
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1030 Swabia Court, Research Triangle Park, North Carolina 27709-3585
(Address of principal executive offices and zip code)
(919) 941-5730
(Registrant's telephone number, including area code)
Not applicable
(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 [ ]
As of July 31, 1996, 5,169,052 shares of the Registrant's $0.01 par value common
stock were outstanding.
================================================================================
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
INDEX - FORM 10-Q
June 30, 1996
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
<S> <C>
Consolidated Balance Sheets................................................................................3
Consolidated Statements of Income..........................................................................4
Consolidated Statements of Cash Flows......................................................................5
Notes to Consolidated Financial Statements.................................................................6
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................................................8
PART II - OTHER INFORMATION......................................................................................12
SIGNATURE........................................................................................................13
</TABLE>
2
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
--------------------- ---------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,537 $ 5,374
Accounts receivable-
Nonaffiliates 6,509 5,378
Affiliates 5,760 3,934
Income tax receivable --- 1,464
Inventories 5,301 6,616
Deferred tax assets 1,995 1,946
Other current assets 362 395
--------------------- ---------------------
Total current assets 28,464 25,107
--------------------- ---------------------
Property and equipment, at cost:
Machinery and equipment 4,358 4,189
Furniture and fixtures 4,985 5,764
--------------------- ---------------------
9,343 9,953
Accumulated depreciation (5,882) (6,213)
--------------------- ---------------------
3,461 3,740
--------------------- ---------------------
Other assets 684 497
--------------------- ---------------------
$32,609 $29,344
===================== =====================
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Accounts payable-
Nonaffiliates $ 1,166 $ 1,579
Affiliates 920 258
Accrued compensation 1,719 1,683
Other accrued liabilities 1,972 1,470
---------------------- --------------------
Total current liabilities 5,777 4,990
--------------------- ---------------------
Shareholders' equity:
Preferred Stock, $0.01 par value, 2,000,000 shares authorized;
no shares issued and outstanding --- ---
Common stock, $0.01 par value
20,000,000 shares authorized;
issued and outstanding - 5,169,052 at June 30, 1996
and 5,218,430 at September 30, 1995 52 52
Additional paid-in capital 24,951 25,740
Retain earnings (accumulated deficit) 1,829 (1,438)
--------------------- ---------------------
26,832 24,354
--------------------- ---------------------
$32,609 $29,344
===================== =====================
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands except for per share amounts)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three Months Ended June 30, Nine Months Ended June 30,
------------------------------------------ -----------------------------------------
1996 1995 1996 1995
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Revenues:
Nonaffiliates $ 8,895 $ 5,278 $24,221 $ 17,433
Affiliates 6,528 5,106 19,161 16,383
------------------- ------------------- ------------------- -------------------
Total revenues 15,423 10,384 43,382 33,816
Cost of revenues 6,243 3,995 17,304 11,129
------------------- ------------------- ------------------- -------------------
Gross profit 9,180 6,389 26,078 22,687
Selling, general and
administrative expenses 4,528 3,717 13,826 11,318
Product development expenses 2,445 2,642 7,479 7,540
------------------- ------------------- ------------------- -------------------
Operating income 2,207 30 4,773 3,829
Interest income 79 68 192 241
Foreign currency gains (losses) (46) (24) (160) (279)
------------------- ------------------- ------------------- -------------------
Income from continuing
operations before income taxes 2,240 74 4,805 3,791
Provision for income taxes 719 23 1,538 1,212
------------------- ------------------- ------------------- -------------------
Net income $ 1,521 $ 51 $3,267 $ 2,579
=================== =================== =================== ===================
Earnings per share $ 0.29 $ 0.01 $ 0.63 $ 0.49
Weighted average number of common
shares outstanding 5,275 5,260 5,220 5,244
=================== =================== =================== ===================
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements
4
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended June 30,
------------------------------------------
1996 1995
-------------------- -------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,267 $ 2,579
Adjustments to reconcile net income to net cash provided by operating
activities-
Depreciation and amortization 1,436 1,219
Deferred tax provision (49) (500)
(Increase) decrease in accounts receivable -
Nonaffiliates (1,131) 566
Affiliates (1,826) 655
Decrease in income tax receivable 1,464 ---
(Increase) decrease in inventories 1,315 (691)
Increase (decrease) in accounts payable-
Nonaffiliates (413) (539)
Affiliates 662 449
Increase (decrease) in other current liabilities 538 (838)
Other, net 56 62
-------------------- -------------------
Net cash provided by operating activities 5,319 2,962
-------------------- -------------------
Cash flows from investing activities:
Purchases of marketable securities (12,000) (21,500)
Proceeds from the sale of marketable securities 12,000 21,500
Acquisitions of property and equipment (990) (2,445)
Acquisition of intangible assets (377) (183)
-------------------- -------------------
Net cash used in investing activities (1,367) (2,628)
-------------------- -------------------
Cash Flows From Financing:
Repurchase of common stock (1,287) ---
Proceeds from repayment of notes receivable from affiliates --- 38
Proceeds from issuance of common stock, net 498 205
Other net --- 126
-------------------- -------------------
Net cash provided by financing activities (789) 369
-------------------- -------------------
Increase in cash and cash equivalents 3,163 703
Cash and cash equivalents, beginning of period 5,374 6,624
-------------------- -------------------
Cash and cash equivalents, end of period $ 8,537 $ 7,327
==================== ===================
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Basis of Presentation
The accompanying consolidated financial statements include the accounts of
Wandel & Goltermann Technologies, Inc. and its wholly-owned subsidiaries,
collectively referred to herein as "the Company." All significant intercompany
accounts and transactions have been eliminated. Certain amounts presented in the
financial statements of prior periods have been reclassified to conform to the
method of presentation in the current period. These reclassifications are not
material.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission for interim financial
statements. Certain information and footnote disclosures required for complete
financial statements have been condensed or omitted.
In the opinion of management, the accompanying unaudited consolidated financial
statements include all adjustments (which consist of normal recurring
adjustments) necessary to present fairly the financial position as of June 30,
1996 and the results of operations and cash flows for the nine months ended June
30, 1996 and 1995. The results of operations for the three- and nine-month
periods ended June 30, 1996 are not necessarily indicative of the results to be
expected for the full fiscal year.
Note 2 - Inventories
Inventories are valued at the lower of cost (first-in, first-out) or market. The
components of inventories, which include materials, labor and manufacturing
overhead, consist of the following (in thousands);
<TABLE>
<CAPTION>
June 30, September 30,
1996 1995
------------------- ----------------
<S> <C> <C>
Raw materials and supplies $1,850 $1,767
Work in process 1,048 1,406
Finished goods 2,403 3,443
------------------- ----------------
$5,301 $6,616
=================== ================
</TABLE>
Note 3 - Foreign Currencies
Inventory purchases from affiliates, certain product sales to affiliates and
certain other transactions with affiliates are denominated in German Deutsche
Marks ("DMs") and are translated into U.S. dollars at the exchange rate in
effect at the transaction date. Gains or losses resulting from changes in the
exchange rate subsequent to the transaction date are reflected in the
consolidated statements of income in the period in which they occur.
From time to time, the Company has sought to reduce its exposure to increases in
the U.S. dollar relative to the DM by purchasing forward foreign currency
exchange contracts and collars relating to cash and accounts receivable
denominated in DMs. In addition, the Company purchases foreign currency exchange
contracts and collars relating to some of its future anticipated revenues
denominated in DMs. As of June 30, 1996, the Company had entered into foreign
currency exchange rate collars to limit its exposure to fluctuations in the
value of the U.S. dollar relative to the DM within defined ranges as follows:
6
<PAGE>
Maturity Date Notational Amount Collar Range
---------------------- -------------------- -------------
September 1996 DM 5,000,000 1.4266-1.5000
Cash and accounts receivable denominated in DMs are revalued at each balance
sheet date at the related exchange rates of outstanding foreign currency
exchange contracts. Amounts in excess of the foreign currency exchange contracts
outstanding at the balance sheet date are revalued at the then current exchange
rate, and any unrealized gain or loss is recognized in the combined and
consolidated statement of income. Any foreign currency exchange collars or any
contracts purchased for future anticipated revenues denominated in DMs are
revalued at each balance sheet date at the then current exchange rate, and any
unrealized gain or loss is recognized in the combined and consolidated statement
of income.
Note 4 - Major Customers and Consideration of Credit Risk
In the normal course of business, the Company extends credit to various
nonaffiliated companies, primarily developers and manufacturers of network
systems in the United States. The Company manages its exposure to credit risk
from nonaffiliated customers through credit approval and monitoring procedures.
The Company believes that its portfolio of receivables from nonaffiliated
customers is well diversified and the allowance for doubtful accounts ($120,000
at June 30, 1996 and $90,000 at September 30, 1995) is adequate. Accounts
receivable are not collateralized.
One nonaffiliated customer accounted for 15% of total revenues in the quarter
ended June 30, 1996. No nonaffiliated customer accounted for 10% or more of
total revenues in the quarter ended June 30, 1995 or in the nine months ended
June 30, 1996 and 1995.
7
<PAGE>
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table sets forth, for the periods indicated, the components of the
Consolidated Statements of Income expressed as a percentage of total revenues:
<TABLE>
<CAPTION>
Quarter Ended June 30, Nine Months Ended June 30,
------------------------------------ -------------------------------
1996 1995 1996 1995
--------------- -------------- ----------- ----------------
<S> <C> <C> <C> <C>
Revenues:
Nonaffiliates 57.7% 50.8% 55.8% 51.6%
Affiliates 42.3 49.2 44.2 48.4
---------------- ---------------- ------------- ----------------
Total revenues 100.0 100.0 100.0 100.0
Cost of revenues 40.5 38.5 39.9 32.9
---------------- ---------------- ------------- ----------------
Gross profit 59.5 61.5 60.1 67.1
Selling, general and administrative expenses 29.4 35.8 31.9 33.5
Product development expenses 15.8 25.4 17.2 22.3
---------------- ---------------- ------------- ----------------
Operating income 14.3 0.3 11.0 11.3
Interest income 0.5 0.6 0.4 0.7
Foreign currency gains (losses) (0.3) (0.2) (0.4) (0.8)
---------------- ---------------- ------------- ----------------
Income from continuing operations 14.5 0.7 11.0 11.2
Provision for income taxes 4.6 0.2 3.5 3.6
---------------- ---------------- ------------- ----------------
Net income 9.9% 0.5% 7.5% 7.6%
================ ================ ============= ================
</TABLE>
The following table presents, for the periods indicated, the Company's
revenues from the sale of internetwork analysis products and complementary
telecommunication products and such revenues as a percentage of total revenues:
<TABLE>
<CAPTION>
Quarter Ended June 30, Nine Months Ended June 30,
-------------------------------------------------- -----------------------------------------------
1996 1995 1996 1995
----------------------- ---------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Internetwork analysis products:
DA-3x $ 7,797 50.6 % $ 5,542 53.4 % $24,195 55.8 % $20,398 60.3 %
Domino 4,185 27.1 1,687 16.2 10,066 23.2 4,646 13.8
Other 663 4.3 428 4.1 2,252 5.2 2,033 6.0
----------- ---------- ---------- ---------- ----------- ----------- ----------- --------
Total internetwork
analysis products 12,645 82.0 7,657 73.7 36,513 84.2 27,077 80.1
Complementary telecom-
munication products 2,778 18.0 2,727 26.3 6,869 15.8 6,739 19.9
----------- ---------- ---------- ---------- ----------- ----------- ----------- --------
Total revenues $15,423 100.0 % $10,384 100.0 % $43,382 100.0 % $33,816 100.0 %
=========== ========== ========== ========== =========== =========== =========== ========
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Quarter Ended June 30, Nine Months Ended June 30,
-------------------------------------------------- -----------------------------------------------
1996 1995 1996 1995
----------------------- ---------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
United States $ 9,070 58.8 % $ 5,869 56.5 % $24,678 56.9 % $18,904 55.9 %
Europe 3,814 24.7 3,269 31.5 10,746 24.8 10,167 30.1
Pacific Rim 1,941 12.6 785 7.6 5,528 12.7 2,944 8.7
Canada 536 3.5 187 1.8 1,611 3.7 893 2.6
Other 62 0.4 274 2.6 819 1.9 908 2.7
---------- ---------- --------- ---------- ---------- ----------- ----------- --------
Total revenues $15,423 100.0 % $10,384 100.0 % $43,382 100.0 % $33,816 100.0 %
=========== ========== ========== ========== =========== =========== =========== ========
</TABLE>
Quarter Ended June 30, 1996 Compared to Quarter Ended June 30, 1995
Total Revenues. Total revenues increased $5.0 million, or 48.5%, to
$15.4 million in the quarter ended June 30, 1996 from $10.4 million in the
quarter ended June 30, 1995. Revenues from sales of the Company's internetwork
analysis products increased $4.9 million, or 65.1%, to $ 12.6 million in the
quarter ended June 30, 1996 from $7.7 million in the quarter ended June 30,
1995.
Revenues from sales of the Company's DA-3x product family increased
$2.3 million, or 40.7%, to $7.8 million in the quarter ended June 30, 1996 from
$5.5 million in the quarter ended June 30, 1995 primarily due to revenues
associated with the OC-3 and 100 BaseT modules for the DA-3x which were
introduced in September 1995.
Revenues from sales of the Company's Domino product family of
internetwork analyzers increased $2.5 million, or 148%, to $4.2 million in the
quarter ended June 30, 1996 from $1.7 million in the quarter ended June 30,
1995. Revenues have increased as the Company has continued to expand product
offerings and sales channels for this product family. In addition, the Company
recorded Domino revenues of $2.0 million related to sales to a major U.S.
manufacturer of network equipment which utilizes the Domino product line for
pre- and post-sales activities.
Gross Profit. Gross profit increased $2.8 million or 43.7%, to $9.2
million in the quarter ended June 30, 1996 from $6.4 million in the quarter
ended June 30, 1995. Gross margin decreased to 59.5% in the quarter ended June
30, 1996 from 61.5% in the quarter ended June 30, 1995. The decrease in gross
margin is primarily related to the DA-3x product family. DA-3x product revenues
in the quarter ended June 30, 1996 included a higher proportion of sales of
DA-30C units and basic modules which have lower margins than newer technology
modules. Furthermore, the Company incurred higher manufacturing costs on DA-30C
units and some basic older modules in order to meet the operating requirements
of the OC-3 module and new CE Mark requirements for products sold into the
European Common Market. Margins on international sales demoninated in DM's were
also negatively inpacted by the higher value of the U.S. dollar in the quarter
ended June 30, 1996 compared to the quarter ended June 30, 1995.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $811,000, or 21.8%, to $4.5 million in the
quarter ended June 30, 1996 from $3.7 million in the quarter ended June 30,
1995. Selling, general and administrative expenses, as a percentage of revenues,
decreased to 29.4% in the quarter ended June 30, 1996 from 35.8% in the quarter
ended June 30, 1995. The dollar amount of these expenses increased primarily as
a result of higher revenues and of rent and depreciation expenses related to the
expansion of the Company's facilities in 1995.
Product Development Expenses. Product development expenses decreased
$197,000, or 7.5%, to $2.4 million in the quarter ended June 30, 1996 from $2.6
million in the quarter ended June 30, 1995. Product development expenses, as a
percentage of revenues, decreased to 15.8% in the quarter ended June 30, 1996
from 25.4% in the quarter ended June 30, 1995. The Company's product development
activities are an important element of its growth strategy, and it will continue
to invest a significant portion of Company revenues in these areas.
Foreign Currency Losses. Foreign currency losses were $46,000 in the
quarter ended June 30, 1996 compared to $24,000 in quarter ended June 30, 1995.
The Company incurred gains and losses on foreign currency exchange contracts and
9
<PAGE>
collars, accounts receivable, accounts payable and cash denominated in DMs as
the U.S. dollar fluctuated slightly against the DM in both the quarter ended
June 30, 1996 and 1995.
Provision for Income Taxes. The provision for income taxes increased to
$719,000 in the quarter ended June 30, 1996 from $23,000 in the quarter ended
June 30, 1995. The Company's effective tax rate was 32% in the quarter ended
June 30, 1996 and 1995.
Nine Months Ended June 30, 1996 Compared to Nine Months Ended June 30, 1995
Total Revenues. Total revenues increased $9.6 million, or 28.3%, to
$43.4 million in the nine months ended June 30, 1996 from $33.8 million in the
nine months ended June 30, 1995. Revenues from sales of the Company's
internetwork analysis products increased $9.4 million, or 34.8%, to $36.5
million in the nine months ended June 30, 1996 from $27.1 million in the nine
months ended June 30, 1995.
Revenues from sales of the Company's DA-3x product family increased
$3.8 million, or 18.6%, to $24.2 million in the nine months ended June 30, 1996
from $20.4 million in the nine months ended June 30, 1995 primarily due to
revenues associated with the OC-3 and 100BaseT modules for the DA-3x which were
introduced in September 1995.
Revenues from sales of the Company's Domino product family increased
$5.4 million, or 116.7%, to $10.1 million in the nine months ended June 30, 1996
from $4.6 million in the nine months ended June 30, 1995. Revenues have
increased as the Company has continued to expand product offerings and sales
channels for this product family. In addition, the Company recorded Domino
revenues of $2.6 million related to sales to a major U.S. manufacturer of
network equipment which utilizes the Domino product line for pre- and post-sales
activities.
Gross Profit. Gross profit increased $3.4 million, or 14.9%, to $26.1
million in the nine months ended June 30, 1996 from $22.7 million in the nine
months ended June 30, 1995. Gross margin decreased to 60.1% in the nine months
ended June 30, 1996 from 67.1% in the nine months ended June 30, 1995 primarily
due to a higher proportion of sales of DA-30C units and basic modules which have
lower margins than newer technologies and higher manufacturing costs on DA-30C
units and some basic older modules in order to meet the operating requirements
of the OC-3 module and new CE Mark requirements for products sold into the
European Common Market.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $2.5 million, or 22.2%, to $13.8 million in
the nine months ended June 30, 1996 from $11.3 million in the nine months ended
June 30, 1995. Selling, general and administrative expenses, as a percentage of
revenues, decreased to 31.9% in the nine months ended June 30, 1996 from 33.5%
in the nine months ended June 30, 1995. The dollar amount of these expenses
increased primarily as a result of higher revenues and of rent and depreciation
related to the expansion of Company facilities in 1995.
Product Development Expenses. Product development expenses remained
steady at $7.5 million in the nine months ended June 30, 1996 and 1995. Product
development expenses, as a percentage of revenues, decreased to 17.2% in the
nine months ended June 30, 1996 from 22.3% in the nine months ended June 30,
1995. The Company's product development activities are an important element of
its growth strategy, and it will continue to invest a significant portion of
Company revenues in these areas.
Foreign Currency Gains (Losses). The Company recorded foreign currency
losses of $160,000 in the nine months ended June 30, 1996 compared to losses of
$279,000 in the nine months ended June 30, 1995. The Company incurred gains and
losses on foreign currency exchange contracts and collars, accounts receivable,
accounts payable and cash denominated in DMs as the U.S. dollar fluctuated
against the DM.
Provision for Income Taxes. The provision for income taxes increased to
$1.5 million in the nine months ended June 30, 1996 from $1.2 million in the
nine months ended June 30, 1995. The Company's effective tax rate was 32% in the
nine months ended June 30, 1996 and 1995.
10
<PAGE>
Quarterly Operating Results
The results of operations for the three and nine months ended June 30,
1996 are not necessarily indicative of the results to be expected for the full
fiscal year. Quarterly results have been affected by the timing of expenditures
for product development and marketing programs and by the hiring of product
development, marketing, sales and administrative personnel. Quarterly results
have also been affected by realized foreign currency gains or losses and by the
recording at the end of each period of unrealized foreign currency gains or
losses related to the revaluation of DM denominated receivables and payables,
and any forward foreign currency exchange contracts related to such receivables
and some anticipated sales to affiliates. Further, the Company's expense levels
have been based, in part, on its expectations of future revenues. If expected
revenue levels are not achieved in the future in a particular quarter, quarterly
results may be adversely affected.
Liquidity and Capital Resources
Cash and cash equivalents increased $3.2 million in the nine months
ended June 30, 1996 primarily due to net cash provided by operations partially
offset by the repurchase of Common Stock and the acquisition of equipment and
intangible assets.
Net cash generated from operations was $5.3 million in the nine months
ended June 30,1996. The primary source of these funds was net income before
depreciation and amortization. Accounts receivable at June 30, 1996 increased by
$3.0 million, or 31.8%, compared to September 30, 1995 primarily as a result of
a 34.7% increase in sales in the quarter ended June 30, 1996 compared to the
quarter ended September 30, 1995. Inventories decreased to $5.3 million at June
30, 1996 from $6.6 million at September 30, 1995 as a result of management
efforts to reduce inventory levels.
Net cash used in investing activities was $1.4 million in the nine
months ended June 30, 1996. All of the cash used in investing activities was the
result of acquisitions of property and equipment and intangible assets.
Acquisitions of property and equipment consist primarily of computer hardware
and test equipment. Acquisitions of intangible assets consist primarily of
financial, manufacturing, and product development software.
Net cash used in financing activities was $789,000 in the nine months
ended June 30, 1996. In December 1995, the Company repurchased 100,000 shares of
Common Stock at a cost of $1.3 million for the purpose of providing additional
shares to satisfy the needs of the Company's Omnibus Stock Plan. In January
1996, the Company received proceeds of $250,000 from the sale of 27,632 shares
of common stock under the Employee Stock Purchase Plan, and the Company has
received proceeds of $248,000 related to the exercise of options under the
Omnibus Stock Plan.
In March 1995, the Company entered into a $5.0 million line of credit
facility with a U.S. bank which expires in January 1998. Through June 30, 1996,
there have been no borrowings under this facility.
The Company believes that cash generated from operations, together with
existing cash balances and borrowings available under the Company's U.S. bank
line of credit facility, will be sufficient to satisfy the Company's
requirements for working capital and capital expenditures in fiscal 1996.
11
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
PART II - OTHER INFORMATION
June 30, 1996
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(b) Reports on Form 8-K:
No reports on Form 8-K were filed on behalf of the company for the
three month period ended June 30, 1996.
12
<PAGE>
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
SIGNATURE
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.
WANDEL & GOLTERMANN TECHNOLOGIES, INC.
(Registrant)
Date: August 9, 1996 By: /s/ ADELBERT KUTHE
___________________________________________
Adelbert Kuthe
Vice President, Finance and Secretary
(Principal Financial Officer)
13
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS
PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,537,000
<SECURITIES> 0
<RECEIVABLES> 12,269,000
<ALLOWANCES> 0
<INVENTORY> 5,301,000
<CURRENT-ASSETS> 28,464,000
<PP&E> 9,343,000
<DEPRECIATION> 5,882,000
<TOTAL-ASSETS> 32,609,000
<CURRENT-LIABILITIES> 5,777,000
<BONDS> 0
0
0
<COMMON> 52,000
<OTHER-SE> 26,780,000
<TOTAL-LIABILITY-AND-EQUITY> 32,609,000
<SALES> 43,382,000
<TOTAL-REVENUES> 43,382,000
<CGS> 17,304,000
<TOTAL-COSTS> 17,304,000
<OTHER-EXPENSES> 21,305,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,805,000
<INCOME-TAX> 1,538,000
<INCOME-CONTINUING> 3,267,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,267,000
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0.63
</TABLE>
