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 QUARTERLY PERIOD ENDED MARCH 31, 2000
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 1-4371
TECH-SYM CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 74-1509818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10500 WESTOFFICE DRIVE, SUITE 200, HOUSTON, TEXAS 77042
(Address of principal executive offices) Zip Code
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 785-7790
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, 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.
COMMON OUTSTANDING AT APRIL 24, 2000
- ---------------------------- -----------------------------
Common Stock, $.10 par value 5,795,951
<PAGE>
FORM 10-Q
TECH-SYM CORPORATION
TABLE OF CONTENTS
PAGE NO.
--------
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet March 31, 2000 (unaudited)
and December 31, 1999 ........................................ 1
Consolidated Statement of Income for the quarter ended
March 31, 2000 and 1999 (unaudited) .......................... 2
Consolidated Statement of Cash Flows for the quarter ended
March 31, 2000 and 1999 (unaudited) .......................... 3
Consolidated Statement of Changes in Shareholders' Investment
for the quarter ended March 31, 2000 and 1999 (unaudited) .... 4
Notes to Consolidated Financial Statements ..................... 5-8
Item 2. Management's Discussion and Analysis of Financial Condition
and results of operations ................................ 9-10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K ............................ 11
Signatures ............................................................. 11
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TECH-SYM CORPORATION
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT PAR VALUE AND NUMBER OF SHARES)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------------------------------
(unaudited)
--------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents ............................. $ 30,846 $ 27,399
Short-term investments ................................ 1,818 1,804
Receivables, net ...................................... 30,948 30,371
Unbilled revenue ...................................... 36,767 34,150
Inventories, net ...................................... 20,069 20,648
Deferred income taxes ................................. 3,745 3,771
Net assets of discontinued operations (Note 2) ........ 10,392 11,992
Other ................................................. 695 566
--------------------------------
Total current assets ............................. 135,280 130,701
Property, plant and equipment, net ......................... 30,966 31,439
Long-term deferred tax asset ............................... 5,202 3,631
Other assets ............................................... 5,541 9,832
--------------------------------
Total assets ..................................... $ 176,989 $ 175,603
================================
LIABILITIES
Current liabilities
Notes payable ......................................... $ 50 $ 1,630
Current maturities of long-term debt................... 856 861
Accounts payable....................................... 8,275 8,074
Billings in excess of cost and estimated earnings
on uncompleted contracts............................ 6,479 6,906
Other accrued liabilities ............................. 14,837 12,924
--------------------------------
Total current liabilities ........................ 30,497 30,395
Long-term debt ............................................. 1,233 1,450
Other liabilities and deferred
credits .................................................... 22 26
--------------------------------
Total liabilities ................................ 31,752 31,871
SHAREHOLDERS' INVESTMENT
Preferred stock-authorized 2,000,000 shares, without
par value; none issued
Common stock-authorized 20,000,000 shares,
$.10 par value; issued 8,150,231 and 8,118,831 shares ... 815 811
Additional capital ......................................... 42,602 42,290
Accumulated earnings ....................................... 138,980 134,255
Accumulated other comprehensive loss, net .................. (1,222) (919)
Common stock held in treasury at cost
(2,354,280 and 2,183,050 shares) ........................ (35,938) (32,705)
--------------------------------
Total shareholders' investment ................... 145,237 143,732
--------------------------------
Total liabilities and
shareholders' investment ...................... $ 176,989 $ 175,603
================================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
1
<PAGE>
TECH-SYM CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER
ENDED MARCH 31,
--------------------
2000 1999
--------------------
<S> <C> <C>
Revenue .................................................. $ 42,593 $ 37,996
Cost of revenue .......................................... 30,277 26,974
--------------------
Gross margin .................................... 12,316 11,022
Company-sponsored product development .................... 743 982
Selling, general and administrative expense .............. 9,273 8,370
Interest expense ......................................... 67 367
Other income, net ........................................ (5,409) (213)
--------------------
Income from continuing operations before income taxes 7,642 1,516
Provision for income taxes ............................... 2,917 485
--------------------
Income from continuing operations ................... 4,725 1,031
Discontinued operations (Note 2)
--------------------
Net income .......................................... $ 4,725 $ 1,031
====================
Earnings per common share
Continuing operations
Basic and diluted................................. $ .81 $ .17
Discontinued operations
Basic and diluted
Net income
Basic and diluted................................. .81 .17
Weighted average common shares outstanding
Basic ............................................... 5,842 6,071
Diluted ............................................. 5,864 6,176
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
2
<PAGE>
TECH-SYM CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER ENDED
MARCH 31,
--------------------
2000 1999
--------------------
<S> <C> <C>
Cash flows from operating activities
Net income ............................................................ $ 4,725 $ 1,031
Adjustments to reconcile income from continuing operations
to net cash provided by continuing operations
Gain on sale of equity investment ................................ (2,966)
Depreciation and amortization .................................... 1,883 1,191
Change in operating assets and liabilities
Receivables ...................................................... (577) (2,082)
Unbilled revenue ................................................. (2,617) 926
Inventories ...................................................... 579 988
Other assets ..................................................... (269) (4,377)
Accounts payable and taxes on income ............................. 201 (1,441)
Billing in excess and other accrued liabilities .................. (1,848) 4,622
Other liabilities and deferred credits ........................... (319) 26
--------------------
Net cash (used for) provided by operating activities of
continuing operations ........................................ (1,208) 884
--------------------
Cash flows from investing activities of continuing operations
Capital expenditures .................................................. (796) (1,585)
Capital expenditures on equipment manufactured for lease .............. (940)
Purchase of investment securities ..................................... (14) (137)
Proceeds from sale of equity investment ............................... 9,500
Other ................................................................. 72 4
--------------------
Net cash provided by (used for) investing activities of
continuing operations ........................................ 7,822 (1,718)
--------------------
Cash flows from financing activities of continuing operations
Net (payments) borrowings under bank line of credit agreements ........ (1,591) 1,012
Payments on long-term debt ............................................ (209) (346)
Proceeds from exercise of stock options ............................... 316 136
Acquisition of treasury shares ........................................ (3,233)
--------------------
Net cash (used for) provided by financing activities
of continuing operations ..................................... (4,717) 802
--------------------
Net cash provided by discontinued operations ............................ 1,550 3,449
--------------------
Net increase in cash and cash equivalents ............................... 3,447 3,417
Cash and cash equivalents at beginning of period ........................ 27,399 3,417
--------------------
Cash and cash equivalents at end of period .............................. $ 30,846 $ 6,834
====================
</TABLE>
The accompanying notes are an integral part of
these consolidated financial statements.
3
<PAGE>
TECH-SYM CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' INVESTMENT
FOR THE QUARTER ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK OTHER TREASURY STOCK TOTAL
------------------- ADDITIONAL ACCUMULATED COMPREHENSIVE ------------------ SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS LOSS SHARES AMOUNT INVESTMENT
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1999 ...... 8,119 $ 811 $ 42,290 $134,255 $ (919) $ 2,183 $(32,705) $143,732
Comprehensive income for 2000
Net income ...................... 4,725
Other comprehensive
loss, net of tax
Foreign currency
translation adjustments ... (303)
Total comprehensive income 4,422
Acquisition of treasury shares .... 171 (3,233) (3,233)
Issuance of common stock
for stock options .............. 31 4 312 316
------------------------------------------------------------------------------------------
Balance at March 31, 2000 ......... 8,150 $ 815 $ 42,602 $138,980 $ (1,222) 2,354 $(35,938) $145,237
==========================================================================================
<CAPTION>
ACCUMULATED
COMMON STOCK OTHER TREASURY STOCK TOTAL
------------------- ADDITIONAL ACCUMULATED COMPREHENSIVE ------------------ SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS LOSS SHARES AMOUNT INVESTMENT
----------------------------------------------------------------------------------------------
Balance at December 31, 1998 ...... 8,045 $ 804 $ 41,361 $157,739 $ (3,489) 1,980 $(28,684) $167,731
Comprehensive income for 1999
Net income ...................... 1,031
Other comprehensive
loss, net of tax
Foreign currency
translation adjustments ... (768)
Total comprehensive income 263
Issuance of common stock
for stock options .............. 8 1 135 136
------------------------------------------------------------------------------------------
Balance at March 31, 1999 ......... 8,053 $ 805 $ 41,496 $158,770 $ (4,257) 1,980 $(28,684) $168,130
==========================================================================================
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
TECH-SYM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Tech-Sym
Corporation and its subsidiaries (the "Company") have been prepared in
accordance with the instructions to Form 10-Q. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements and should be read in conjunction
with the financial statements and notes thereto appearing in the Company's Form
10-K for the year ended December 31, 1999.
In the opinion of the Company's management ("Management") all
adjustments necessary for a fair presentation of the results of operations for
all periods reported have been included. Such adjustments consist only of normal
recurring items.
The Consolidated Statement of Income for the quarter ended March 31,
2000, are not necessarily indicative of the results expected for the full year
ending December 31, 2000.
Certain prior year amounts have been reclassified to conform to the
current year presentation.
NOTE 2 - DISCONTINUED OPERATIONS
Effective June 30, 1998, the Company adopted a plan to sell its
businesses involved in the manufacture of air monitoring products (Anarad, Inc.
or "Anarad") and the manufacture of radio and television broadcast equipment
(Continental Electronics Corporation or "Continental"), and effective December
31, 1998, the Company adopted a plan to sell its majority owned subsidiary,
GeoScience Corporation ("GeoScience"), involved in the manufacture of seismic
equipment used in the exploration for hydro-carbons. The effective dates of June
30, 1998, and December 31, 1998, are the respective measurement dates referred
to when discussing the results of operations of these businesses.
The presentation of the discontinued operations includes segregation of
the operating results in the Consolidated Statement of Income for the quarter
ended March 31, 2000, and 1999. The net assets of the discontinued operations
are segregated at March 31, 2000, and December 31, 1999, in the Consolidated
Balance Sheet and at March 31, 2000, and 1999 in the Consolidated Statement of
Cash Flows. Accordingly, the revenue, costs and expenses, assets and liabilities
and cash flows of these discontinued operations have been excluded from the
respective captions in the Consolidated Statement of Income, Consolidated
Balance Sheet and Consolidated Statement of Cash Flows and have been reported as
"Income (loss) from discontinued operations, net of applicable income taxes
(benefits)", as "Net assets of discontinued operations" and as "Net cash
provided by discontinued operations" for all periods listed above. The results
of discontinued operations do not reflect any interest expense or management
fees allocated by the Company. Data presented for earnings per share reflect the
reclassification of the discontinued operations.
On March 15, 1999, the Company sold substantially all of the assets of
Anarad and on December 13, 1999, the Company sold GeoScience.
In October 1999, Continental entered into a plan of liquidation of its
German subsidiary. In February 2000, Continental entered into a letter of intent
to sell the assets of its digital television product line ("DTV"). On April 26,
2000, Continental completed the sale of the DTV product line for $2,687,000 in
cash, net of assumed liabilities, and $1,163,000 receivable due in six months.
Continental is conducting discussions with other parties interested in its
remaining product lines and real estate.
5
<PAGE>
TECH-SYM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Continental incurred after-tax operating losses of $1,140,000 during the
quarter ended March 31, 2000, which were previously provided for in the
estimated loss on disposal of discontinued operations during the year ended
December 31, 1999. The revenue related to Continental for the quarter ended
March 31, 2000, was $4,471,000. Revenue related to discontinued operations for
the quarter ended March 31, 1999, was $7,615,000, $30,142,000 and $348,000 for
Continental, GeoScience and Anarad, respectively.
For financial reporting purposes, the assets and liabilities of
Continental at March 31, 2000, are classified in the consolidated balance sheet
as net assets of discontinued operations, which consist of the following (in
thousands):
Current assets $20,611
Total assets 31,472
Current liabilities 13,038
Total liabilities 21,080
Net assets of discontinued
operations 10,392
NOTE 3 - INVENTORIES
Inventories, which consist principally of electronic components, are
summarized as follows (in thousands):
MARCH 31, 2000 DECEMBER 31, 1999
-------------- -----------------
Raw materials $ 13,162 $ 13,204
Work in progress 6,916 6,782
Finished goods 2,002 2,579
-------- --------
22,080 22,565
Less reserve (2,011) (1,917)
-------- --------
$ 20,069 $ 20,648
======== ========
NOTE 4 - PER SHARE DATA
Basic per share amounts are computed based on the average number of
common shares outstanding. Diluted per share amounts reflect the increase in
average common shares outstanding that would result from the exercise of
outstanding stock options computed using the treasury stock method. Stock
options are the only potentially dilutive shares the Company has outstanding.
Outstanding stock options of 691,370 and 46,000 were anti-dilutive and were
excluded from the computation of diluted earnings per share for the quarters
ended March 31, 2000, and 1999, respectively.
During the first quarter of 2000, the Company repurchased 171,230 shares
of its common stock under a previously approved repurchase program.
6
<PAGE>
TECH-SYM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
NOTE 5 - SEGMENT INFORMATION
The Company's reportable segments are business units that design,
manufacture and distribute distinct products, with distinct customer bases and
are each managed separately. The Company's reportable segments are
communications, defense systems and weather information systems. The reportable
segments provide products as described in the Company's Form 10-K for the year
ended December 31, 1999. The accounting policies of the segments are those
described in Note 1 to the Notes to the Consolidated Financial Statements
included in that Form 10-K.
The Company evaluates the performance of its segments and allocates
resources to them based on revenue and income from continuing operations,
however, there is a charge to allocate corporate headquarters' cost to each of
its operating segments.
The table below presents selected information as of and for the quarter
ended March 31, 2000, (in thousands):
<TABLE>
<CAPTION>
WEATHER
COMMUNI- DEFENSE INFORMATION RECONCILING
CATIONS SYSTEMS SYSTEMS OTHER ITEMS TOTAL
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue from unaffiliated customers ..................... $ 20,669 $ 15,019 $ 4,958 $ 1,947 $ $ 42,593
Operating income (loss) ................................. 1,470 1,225 1,311 (337) 3,669
Corporate centralized general and administrative expenses 423 394 91 461 (1) 1,369
Interest expense ........................................ 57 10 67
Other expense and (income), net ......................... 617 (240) (50) 5 (5,741) (5,409)
Income (loss) before income
taxes (benefits) ..................................... 373(2) 1,061(2) 1,270(2) (342) 5,280 7,642
Depreciation and amortization ........................... 715 1,009 64 36 59(3) 1,883
Capital expenditures .................................... 470 1,040(4) 106 118 2 1,736
</TABLE>
Notes for the quarter ended March 31, 2000.
(1) Corporate expenses not allocated to subsidiaries for financial reporting.
(2) Includes the allocated corporate expenses.
(3) Corporate depreciation and amortization, which is included in the
allocated and unallocated corporate expenses above.
(4) Includes expenditures of $940,000 for equipment manufactured for lease.
7
<PAGE>
TECH-SYM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The table below presents selected information as of and for the quarter
ended March 31, 1999, (in thousands):
<TABLE>
<CAPTION>
WEATHER
COMMUNI- DEFENSE INFORMATION RECONCILING
CATIONS SYSTEMS SYSTEMS ITEMS TOTAL
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue from unaffiliated customers ..................... $ 20,498 $ 12,639 $ 4,859 $ $ 37,996
Operating income ........................................ 869 1,166 1,142 3,177
Corporate centralized general and
administrative expenses ............................... 400 325 86 696(1) 1,507
Interest expense ........................................ 169 1 197 367
Other expense and (income), net ......................... 340 (5) (70) (478) (213)
Income (loss) before income
taxes (benefits) ..................................... (40)(2) 845(2) 1,126(2) (415) 1,516
Depreciation and amortization ........................... 749 328 60 54(3) 1,191
Capital expenditures .................................... 1,001 419 160 5 1,585
</TABLE>
Notes for the quarters ended March 31, 1999.
(1) Corporate expenses not allocated to subsidiaries for financial reporting.
(2) Includes the allocated corporate expenses.
(3) Corporate depreciation and amortization, which is included in the
allocated and unallocated corporate expenses above.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As discussed in Note 2 to the Notes to Consolidated Financial
Statements, the Company has discontinued certain businesses, therefore
Management's discussion and analysis of financial condition and results of
operations below relates only to the Company's continuing businesses.
RESULTS OF OPERATIONS - QUARTER ENDED MARCH 31, 2000 COMPARED TO THE QUARTER
ENDED MARCH 31, 1999
Revenue for the quarter ended March 31, 2000, increased $4,597,000 or
12% to $42,593,000 compared to $37,996,000 for the quarter ended March 31, 1999.
The increase occurred primarily in the defense systems segment, which was
$2,380,000 or 19%, over the prior year period. The increase was due to (1) new
programs currently under contract that were not in process in the first quarter
of 1999 and (2) the movement of other programs from the developmental phase to
production. Additionally, the current period consolidated revenue included
$1,947,000 from CrossLink, Inc. ("CrossLink"), in which a majority equity
interest was acquired in July 1999. Revenue from the communication and weather
information systems segments increased slightly over the prior year comparative
period.
Consolidated gross margin as a percentage of sales was 29% for the
quarter ended March 31, 2000, and 1999. The percentage for the defense systems
segment improved to 29% from 25%, primarily as a result of increased
manufacturing volume. The gross margin percentage for the weather information
systems segment decreased to 46% from 49%, primarily as a result of the volume
mix and stage of completion of projects in process between the two periods. The
communications segment gross margin was unchanged at 27% for both periods.
Company-sponsored product development expenditures for the current
quarter were $239,000 less than in the quarter ended March 31, 1999. The
decreased expenditures within each reportable segment reflect the completion of
major projects in 1999. Company-sponsored product development expenditures were
$238,000 for CrossLink during the period.
Selling, general and administrative expenses increased $903,000 or 11%
to $9,273,000 for the quarter ended March 31, 2000, compared to the same quarter
in the prior year. The increase primarily occurred within the defense systems
segment relating to increased proposal activity and greater general and
administrative expenses associated with the growth of that business. The
inclusion of CrossLink's general and administrative expenses in the current
period contributed $302,000 to the consolidated general and administrative
expenses. General and administrative expenses within the communications segment
decreased $488,000 as compared to prior year period, which included additional
costs related to the restructuring efforts that began in the latter part of
1998. Selling costs within the weather information systems segment were $117,000
less than the comparative period due to lower selling commissions.
Interest expense for the current quarter decreased $300,000 to $67,000
from $367,000 in the prior year quarter, reflecting the reduction of debt during
the fourth quarter of 1999 and first quarter of 2000 as a result of cash
received from the sale of GeoScience. Other income increased $5,196,000 to
$5,409,000 for the quarter compared to $213,000 for the quarter ended March 31,
1999, reflecting a pre-tax gain of $4,894,000 on the sale of the Company's
equity investment in Scientific Research Corporation ("SRC") and increased
interest earnings due to greater cash on deposit during the first quarter of
2000.
The Company expects its effective tax rate to be 36% for fiscal 2000.
The effective tax rate for the first quarter of 2000 was 38% due primarily to
the gain recognized on the sale of SRC.
Income from continuing operations and net income for the quarter ended
March 31, 2000 was $4,725,000 or $.81 per diluted share as compared to income of
$1,031,000 or $.17 per diluted share for the quarter ended March 31, 1999. There
were no reportable results from discontinued operations included in net income
for the quarters ended March 31, 2000, and 1999, respectively.
9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
During the current period the Company satisfied its working capital and
capital expenditure requirements through cash on hand, from the sale of
GeoScience Corporation in December 1999 and cash received from the sale of SRC
in January 2000. At March 31, 2000, $7,061,000 of cash and cash equivalents and
short-term investments are subject to restrictions related to letters of credit
with various financial institutions. At March 31, 2000, the Company's working
capital balance, net of assets of discontinued operations, was $94,391,000,
compared to $88,314,000 at December 31, 1999. At March 31, 2000, the Company's
continuing operations had short-term line of credit facilities aggregating
$5,450,000, of which $5,411,000 was available for additional short-term
borrowings. The Company had a working capital ratio of 4.10 to 1.0 and debt to
total capitalization of 1%.
Purchases of property, plant and equipment for continuing operations
during the quarter ended March 31, 2000, totaled $1,736,000, including $940,000
relating to the capitalization of costs associated with equipment manufactured
for lease, compared to $1,585,000 for the same period in the prior year. The
Company believes that its cash on hand, cash from results of operations and
available line of credit facilities will provide adequate funds to meet
foreseeable requirements.
Net cash provided by the discontinued operations of Continental was
$1,550,000 for the quarter ended March 31, 2000, primarily as a result of cash
provided from the collection of accounts receivable with a major customer, which
exceeded other operating, investing and financing net cash requirements. In
October 1999, Continental entered into a plan of liquidation of its German
subsidiary. Under the terms of the plan, Continental is required to fund the
cash flow requirements of operating the German subsidiary during the liquidation
phase, which is expected to conclude during the year 2000. At March 31, 2000,
Continental's estimated future commitment is reported in the balance sheet as a
reduction of net assets of discontinued operations. The Company has guaranteed
Continental's commitment under the plan of liquidation.
YEAR 2000 COMPLIANCE
The Company is currently not aware of any Year 2000 problems in any of
its products or critical systems and continues to monitor for any Year 2000
related issues. The Company expects no future material expenditures relating to
Year 2000 issues.
Forward-looking statements in this document are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, including, without limitation, risks associated with the
uncertainty of market acceptance of the Company's products, limited number of
customers, as well as risks of downturns in economic conditions generally, risks
associated with competition and competitive pricing pressures, risks that the
interest third parties may have in acquiring all or part of the Company may not
mature into offers with acceptable terms and the related risks of diversions of
attention from normal operating activities during the related period and other
risks detailed in the Company's filings with the Securities and Exchange
Commission.
10
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits to this report except for Exhibit 27 -
Financial Data Schedule which is deemed not to be filed for
purposes of liability under the federal securities laws.
(b) Reports on Form 8-K.
None.
No financial statements were filed as a part of this report.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TECH-SYM CORPORATION
Registrant
Date: May 1, 2000 /s/ J. MICHAEL CAMP
J. Michael Camp, President
and Chief Executive Officer
Date: May 1, 2000 /s/ PAUL L. HARP
Paul L. Harp, Chief Financial Officer,
Treasurer and Controller
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM TECH-SYM CORPORATION FORM 10-Q FIRST QUARTER 2000 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 30,846
<SECURITIES> 1,818
<RECEIVABLES> 31,284
<ALLOWANCES> 336
<INVENTORY> 20,069
<CURRENT-ASSETS> 135,280
<PP&E> 85,628
<DEPRECIATION> 54,662
<TOTAL-ASSETS> 176,989
<CURRENT-LIABILITIES> 30,497
<BONDS> 0
0
0
<COMMON> 815
<OTHER-SE> 146,052
<TOTAL-LIABILITY-AND-EQUITY> 176,989
<SALES> 42,593
<TOTAL-REVENUES> 42,593
<CGS> 30,277
<TOTAL-COSTS> 40,293
<OTHER-EXPENSES> (5,409)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 67
<INCOME-PRETAX> 7,642
<INCOME-TAX> 2,917
<INCOME-CONTINUING> 4,725
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,725
<EPS-BASIC> .81
<EPS-DILUTED> .81
</TABLE>
