Consolidated Income Statements | |||||
Years Ended | |||||
(Dollars in thousands except per share amounts) | March 31, 1996 | March 31, 1995 | March 31, 1994 | ||
Sales | $1,193,846 | $786,904 | $775,329 | ||
Cost of sales | 971,618 | 679,982 | 651,060 | ||
Gross margin | 222,228 | 106,922 | 124,269 | ||
Operating expenses: | |||||
Research and development | 16,590 | 14,598 | 15,617 | ||
Selling | 41,414 | 38,659 | 36,079 | ||
General and administrative | 49,889 | 31,813 | 31,477 | ||
Restructuring charges (recovery) | (3,196) | 38,000 | | ||
Change of control charges | | 24,639 | | ||
Litigation settlement charges | | 15,000 | | ||
Total operating expenses | 104,697 | 162,709 | 83,173 | ||
Income (loss) from operations | 117,531 | (55,787) | 41,096 | ||
Other income (expense): | |||||
Interest expense | (45,148) | (11,407) | (8,209) | ||
Interest income | 1,853 | 843 | 2,109 | ||
Other, net | 2,133 | (843) | (1,122) | ||
Total other expense | (41,162) | (11,407) | (7,222) | ||
Income (loss) from continuing operations before income taxes | 76,369 | (67,194) | 33,874 | ||
Income tax provision | 16,801 | | | ||
Income (loss) from continuing operations | 59,568 | (67,194) | 33,874 | ||
Discontinued operations | |||||
Loss from discontinued operations, net of income taxes | (5,527) | (5,414) | (1,400) | ||
Loss on disposal of discontinued operations, net of income taxes | (6,240) | | | ||
Income (loss) before cumulative effect of accounting change | 47,801 | (72,608) | 32,474 | ||
Cumulative effect of accounting change net of income taxes | | (1,500) | | ||
Net income (loss) | $47,801 | $(74,108) | $32,474 | ||
Primary and fully diluted earnings (loss) per common and common equivalent share: | |||||
Continuing operations | $4.43 | $(6.68) | $3.35 | ||
Discontinued operations | (.87) | (.54) | (.14) | ||
Cumulative effect of accounting change | | (.15) | | ||
Net income (loss) | $3.56 | $(7.37) | $3.21 | ||
See Notes to Financial Statements. |
Consolidated Balance Sheets | ||||
(Dollars in thousands) | March 31, 1996 | March 31, 1995 | ||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $45,085 | $26,138 | ||
Marketable securities | 348 | 348 | ||
Receivables | 246,567 | 284,911 | ||
Net inventory | 100,246 | 103,886 | ||
Deferred income tax asset | 28,462 | 44,032 | ||
Other current assets | 4,723 | 4,996 | ||
Total current assets | 425,431 | 464,311 | ||
Net property, plant, and equipment | 413,541 | 517,373 | ||
Goodwill | 132,623 | 18,215 | ||
Deferred charges | 14,751 | 18,364 | ||
Other assets | 31,063 | 33,556 | ||
Total assets | $1,017,409 | $1,051,819 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Current portion of long-term debt | $45,000 | $30,000 | ||
Notes payable | 2,756 | 3,441 | ||
Accounts payable | 82,285 | 54,398 | ||
Advance payments from customers | 56,837 | 70,449 | ||
Accrued compensation | 31,908 | 28,523 | ||
Accrued income taxes | 9,310 | 9,417 | ||
Restructuring liability current | 24,782 | 31,403 | ||
Other accrued liabilities | 114,365 | 108,326 | ||
Total current liabilities | 367,243 | 335,957 | ||
Long-term debt | 350,000 | 395,000 | ||
Post-retirement and post-employment benefits liability | 88,930 | 93,844 | ||
Pension and other long-term liabilities | 43,219 | 44,229 | ||
Restructuring liability long-term | 2,040 | 26,740 | ||
Litigation settlement liability long-term | 8,500 | 11,500 | ||
Deferred income tax liability | | 4,179 | ||
Total liabilities | 859,932 | 911,449 | ||
Contingencies (see Note 15) | ||||
Stockholders' equity: | ||||
Common stock $.01 par value | ||||
Authorized 20,000,000 shares | ||||
Issued and outstanding 12,965,542 shares at March 31, 1996, and 13,849,452 at March 31, 1995 | 130 | 139 | ||
Additional paid-in-capital | 249,814 | 250,188 | ||
Retained earnings (deficit) | (54,798) | (102,599) | ||
Unearned compensation | (2,552) | (4,792) | ||
Pension liability adjustment | (1,189) | (2,566) | ||
Common stock in treasury, at cost (898,071 shares held at March 31, 1996) | (33,928) | | ||
Total stockholders' equity | 157,477 | 140,370 | ||
Total liabilities and stockholders' equity | $1,017,409 | $1,051,819 | ||
See Notes to Financial Statements. |
Consolidated Statements of Cash Flows | ||||||
Years Ended | ||||||
(Dollars in thousands) | March 31, 1996 | March 31, 1995 | March 31, 1994 | |||
Operating Activities | ||||||
Net income (loss) | $47,801 | $(74,108) | $32,474 | |||
Adjustments to net income (loss) to arrive at cash provided by (used for) operations: | ||||||
Restructuring charges non-cash portion | | 18,433 | | |||
Change of control charges non-cash portion | | 7,991 | | |||
Litigation settlement charges non-cash portion | | 15,000 | | |||
Cumulative effect of accounting change net of income taxes | | 1,500 | | |||
Depreciation | 53,341 | 22,524 | 20,514 | |||
Amortization of intangible assets and unearned compensation | 9,075 | 2,459 | 3,009 | |||
Loss on sale of marketable securities | | 1,562 | | |||
Loss (gain) on disposition of property | (148) | 1,005 | (1,213) | |||
Changes in assets and liabilities: | ||||||
Receivables | (6,614) | (29,918) | 19,954 | |||
Inventories | 24,057 | 1,266 | 24,648 | |||
Accounts payable | 23,314 | (11,322) | (8,204) | |||
Contract advances and allowances | (18,376) | 1,101 | 18,161 | |||
Accrued compensation | 3,367 | (6,465) | (1,947) | |||
Accrued income taxes | (115) | 1,127 | 7,212 | |||
Accrued restructure liability | (37,471) | (4,800) | (50,515) | |||
Other assets and liabilities | (9,540) | (4,815) | (4,589) | |||
Cash provided by (used for) operations | 88,691 | (57,460) | 59,504 | |||
Investing Activities | ||||||
Capital expenditures | (28,014) | (19,335) | (20,699) | |||
Acquisition of businesses | | (305,891) | (31,573) | |||
Purchase price finalization | 29,115 | | | |||
Accrued transaction fees paid | (6,000) | | | |||
Proceeds from the disposition of property | 1,044 | 149 | 2,411 | |||
Purchase of marketable securities | | | (11,883) | |||
Proceeds from sale of marketable securities | | 3,759 | 6,451 | |||
Other investing activities, net | 414 | (988) | | |||
Cash used for investing activities | (3,441) | (322,306) | (55,293) | |||
Financing Activities | ||||||
Proceeds from issuance of long-term debt | | 425,000 | | |||
Payments made on long-term debt and notes payable | (30,685) | (53,465) | (40,945) | |||
Payments made for debt issue costs | (534) | (12,997) | | |||
Purchase of treasury shares | (36,860) | | | |||
Proceeds from exercised stock options | 1,776 | 1,793 | 1,032 | |||
Other financing activities, net | | (11) | | |||
Cash provided by (used for) financing activities | (66,303) | 360,320 | (39,913) | |||
Increase (decrease) in cash and cash equivalents | 18,947 | (19,446) | (35,702) | |||
Cash and cash equivalents at beginning of period | 26,138 | 45,584 | 81,286 | |||
Cash and cash equivalents at end of period | $45,085 | $26,138 | $45,584 | |||
See Notes to Financial Statements. |
Notes to the Consolidated Financial Statements
1. Basis of Presentation and Significant Accounting PoliciesBasis of Presentation - The consolidated financial statements of the Company include all
wholly owned subsidiaries. Intercompany balances and transactions between entities
included in these financial statements have been eliminated. |
2. Receivables
Receivable balances are shown net of reductions of $379,732 and $384,545 as of March 31, 1996 and 1995, respectively, for progress payments received from customers relating to completed portions of contracts. Unbilled receivables represent the balance of recoverable costs and accrued profit comprised principally of revenue recognized on contracts for which billings have not been presented to the customer because the amounts were earned but not billable as of the balance sheet date under the contractual terms. These amounts include expected additional billable general overhead costs and fees on flexibly priced contracts awaiting final rate negotiations, and are generally billable and collectible within one year. |
3. InventoriesInventory balances are shown net of reductions of $87,362 and $97,244 as of March 31, 1996 and 1995, respectively, for progress payments received from customers relating to uncompleted portions of contracts. |
4. Property, Plant, and Equipment
The significant change in property, plant, and equipment reflects the finalization of purchase accounting for the Aerospace acquisition on March 15, 1995. |
5. Goodwill, Deferred Charges, and Other Long-Term Assets
The significant change in goodwill reflects the finalization of purchase accounting for the Aerospace acquisition, primarily due to completion of the detailed property, plant and equipment appraisal. |
6. Other Accrued Liabilities
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7. Long-Term Debt
In connection with the Aerospace acquisition, the Company entered into a six-year,
$500,000 bank credit facility which is comprised of a $275,000 term loan and a $225,000
revolving working capital and letter of credit facility. The interest rate charged for
borrowings under the bank credit facility is, at the option of the Company, either a floating
rate based on a defined prime rate or a fixed rate related to the London Interbank Offered
Rate (LIBOR) plus a margin based on the Company's debt rating. As of March 31, 1996,
the unhedged interest rate on outstanding borrowings under this facility was approximately
6.94 percent. Letters of credit totaling $75,550 reduced the available line of credit to
$149,450 at March 31, 1996. An adjustable fee, based on the Company's long-term debt
rating, is charged for outstanding letters of credit, in addition to an issuance fee, which
varies and is negotiated with each bank. The Company is required to pay a commitment fee
on the $225,000 revolving working capital and letter of credit facility. Such fee, one half of
one percent for fiscal 1996, is subject to adjustment based on the Company's long term
debt rating. Borrowings are secured by substantially all of the assets of the Company.
Amounts outstanding under this agreement at March 31, 1996, based on current rates for
similar instruments with the same maturities, approximate fair market value. There were no
outstanding borrowings against the revolving line of credit at March 31, 1996. The Company's weighted average interest rate on short-term borrowings during fiscal 1996
and 1995 was 7.27 percent and 7.30 percent, respectively. |
8. Employee Benefit PlansThe Company's noncontributory defined benefit pension plans cover substantially all employees. Plans provide either pension benefits of stated amounts for each year of credited service, or pension benefits based on employee yearly pay levels and years of credited service. The Company funds the plans in accordance with Federal requirements, calculated using appropriate actuarial methods. Plan assets for the Company are held in a trust and are invested in a diversified portfolio
principally of equity securities and fixed income investments.
The Company also sponsors a number of defined contribution plans. Participation in one of these plans is available to substantially all employees. The two principal defined contribution plans are Company-sponsored 401(K) plans to which employees may contribute up to 18 percent of their pay. The Company contributes in Company stock or cash amounts equal to 50 percent of employee contributions up to 4 or 6 percent of the employee's pay. The amount expensed for the Company match provision of the plans was $5,780, $3,606, and $2,799 in fiscal 1996, 1995, and 1994, respectively. The significant increase in fiscal 1996 reflects the addition of the Aerospace employees on March 15, 1995. The Company employs approximately 2,350 employees (30 percent of its total employees) covered by collective bargaining agreements, 550 of whom are covered under agreements expected to be renegotiated during fiscal 1997 due to current agreement expirations. |
9. Post-Retirement BenefitsGenerally, employees retiring from the Company after attaining age 55 who have had at least five years of service are entitled to post-retirement health care benefits and life insurance coverage until the retiree reaches age 65. The portion of the premium cost borne by the Company for such benefits is dependent on the employee's years of service. Further contributions from retirees are also required based on plan deductibles and co-payment provisions. Post-retirement benefit costs, other than those related to pensions, in the fiscal years ended March 31, 1996, 1995, and 1994, included the following components:
Curtailment gains were recognized in fiscal 1996 and 1994 as a result of the reduction in employment in connection with restructuring programs. The Company's post-retirement benefit obligations other than pensions are not prefunded. The following table sets forth the status of the retiree benefit obligations at March 31, 1996 and 1995:
An assumed discount rate of 7.5 percent was used to determine post-retirement benefit costs other than pensions for fiscal 1996. The 1996 weighted average annual assumed rate of increase in the per capita cost of covered benefits (health care cost trend rates) is 7 percent, decreasing gradually to 5 percent over a period of two to five years. Increasing this rate by one percentage point in each year would have increased the accumulated post-retirement benefit obligation as of March 31, 1996 by $15,479 and increased the aggregate of the service and interest cost components of post-retirement benefit costs for fiscal 1996 by $1,116. |
10. Post-Employment BenefitsThe Company provides certain disability and workers' compensation benefits to former or inactive employees. Effective April 1, 1994, the Company adopted SFAS No. 112, "Employers' Accounting for Post-Employment Benefits." This statement requires recognition of these benefits on an accrual basis. Prior to April 1, 1994, certain disability benefits were expensed as claims were reported. The effect of adopting SFAS No. 112 was recognized immediately in fiscal 1995 as the effect of a change in accounting principle and resulted in a charge of $1,500 or $0.15 per share against fiscal 1995 income. |
11. Income TaxesThe components of the Company's income tax provision consist of:
The items responsible for the differences between the federal statutory rate and the Company's effective rate are shown as follows:
Deferred income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts
used for income tax purposes, and operating loss and tax credit carryforwards. Significant
items comprising the net deferred tax asset shown on the statement of financial position are:
During fiscal 1996, the deferred tax asset valuation allowance increased by $16,193. This increase is due principally to the Company's analysis of the likelihood of realizing the future tax benefit of tax loss carryforwards and additional temporary differences arising from the Aerospace acquisition. Realization of the net deferred tax asset (net of recorded valuation allowance) is dependent upon profitable operations and future reversals of existing taxable temporary differences. Although realization is not assured, the Company believes it is more likely than not that such net benefits will be realized through the reduction of future taxable income. The amount of the net deferred tax assets considered realizable, however, could be reduced in the near term if actual future taxable income is lower than estimated, or if there are differences in the timing or amount of future reversals of existing taxable temporary differences. Federal and state carryforwards for tax purposes are $84,206 at March 31, 1996. These carryforwards expire in 2010. |
12. LeasesThe Company leases land, buildings, and equipment under various operating leases which generally have renewal options of one to five years. Rental expense for the years ended March 31, 1996, 1995, and 1994, was $12,100, $13,166, and $10,646, respectively. Minimum rental commitments payable under noncancellable lease commitments outstanding at March 31, 1996, are $12,421, $9,641, $5,609, $3,632, and $1,604, respectively, for the fiscal years ending March 31, 1997, 1998, 1999, 2000, and 2001. Approximately $3,500 of these lease commitments remain accrued at March 31, 1996, as part of the restructuring charges referred to in Note 13. |
13. Restructuring ChargesThe Company initiated a restructuring program in the quarter ending March 31, 1995, which resulted in a fourth-quarter pre-tax charge of $38.0 million. The program was designed to achieve greater efficiency and competitiveness, and to improve margins in the Defense and Marine Systems businesses. Cash expenditures under this restructuring program totaled approximately $12 million and $3.7 million in fiscal 1996 and fiscal 1995, respectively, primarily for employee-related costs. Approximately $12.2 million of the non-cash portion of the charge consists of accruals for certain pension-related liabilities in accordance with SFAS No. 88 "Employers' Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits." The Company experienced lower than expected severance costs in fiscal 1996, due to higher than expected employee attrition. As a result, the Company recorded a $3.2 million credit in the fourth quarter of fiscal 1996 to reduce the restructure accrual. In mid-fiscal 1996, various executive management changes were made within the Defense Systems Group. As a result of these changes, new management re-evaluated business strategies for the Group, including its restructure plans and, while the significant components of the restructure plan did not change, the anticipated timing of certain severance and facility closure costs was pushed to fiscal 1997. The balance of the reserve at March 31, 1996 represents specifically identified incremental employee severance and facility closure costs expected to be incurred in fiscal 1997. Amounts charged for restructuring reserves include estimates of costs related to facility closure and employee severance costs which are subject to change in the near term (although not currently anticipated) due to changes in assumptions and the period over which such costs are expected to be incurred. |
14. Stockholders' EquityChanges in stockholders' equity are summarized below:
The Company has authorized 5,000,000 shares of preferred stock, par value $1.00, none of which has been issued. The Company has authorized an additional 1,000,000 shares of common stock for a total of up to 2,620,679 shares to be granted under the 1990 Equity Incentive Plan of which 380,673 were available at March 31, 1996 for future grants. Stock options covering an aggregate of 387,000 shares were issued on March 15, 1995, at $30.00 per share, pursuant to agreements entered into on October 27, 1994. This plan also provides for the issuance of 250,000 stock appreciation rights which may be issued in tandem with stock options. Restricted stock issued to non-employee directors and certain key employees totaled 19,200, 67,600, and 16,000 for the fiscal years ended March 31, 1996, 1995, and 1994, respectively. All restricted stock granted before August 10, 1994 became fully vested as of that date due to the change of control (see Note 16). Shares issued subsequent to that date total 74,700 and vest over periods of one to four years from the date of award. A summary of the Company stock options issued and outstanding is as follows:
In fiscal 1995, limited stock appreciation rights (LSARs) were attached to 623,253 stock options, which became exercisable at the time of change of control (see Note 16). The Company offered to certain executive officers a note receivable and one stock option in exchange for deferring the LSAR payment through November 8, 1997. This offer was accepted for 152,371 LSARs and 282,767 LSARs were exercised. Non-executive officers were offered a Stock Value Guarantee (SVG) in exchange for their LSARs, in which the Company agreed to pay any holder the excess, if any, of the guaranteed minimum price of $34.75 over the amount that the holder receives upon the exercise of the stock option, and the simultaneous market transaction sale of the stock received upon such exercise, prior to the expiration date of June 30, 1997. SVGs were accepted on 188,115 shares of stock and 50,899 LSARs were exercised by non-executive officers. Options totaling 482,210 shares were exercisable at March 31, 1996, at prices ranging from $8.82-$34.75 per share. The Company initiated a $50 million share repurchase plan in fiscal 1996. In connection with that plan, the Company has repurchased 975,880 shares of the Company's stock in the open market as of March 31, 1996, at an average price of $37.79 per share, for an aggregate amount of $36.9 million. In accordance with SFAS No. 87, "Employer's Accounting for Pensions," the Company has recognized the minimum liability for underfunded pension plans equal to the excess of the accumulated benefit obligation over plan assets. A corresponding amount is recognized as an intangible asset to the extent of any unrecognized prior service cost, with the remaining balance recorded as reduction to equity. As of March 31, 1996, the minimum pension liability in excess of the unrecognized prior service cost was $1,189. |
15. ContingenciesAs a U.S. Government contractor, the Company is subject to defective pricing and cost
accounting standards noncompliance claims by the Government. Additionally, the
Company has substantial Government contracts and subcontracts, the prices of which are
subject to adjustment. The Company believes that resolution of such claims and price
adjustments made or to be made by the Government for open fiscal years (1987 through
1996) will not materially exceed the amount provided in the accompanying balance sheets. |
16. Change of ControlIn August 1994, six new directors nominated by Capstay Partners, L.P. were elected to
the Company's Board of Directors, resulting in a "change of control" as defined in the
Company's compensation and benefit plans and in agreements with certain employees.
These change of control agreements resulted in the Company incurring an "unusual charge"
totaling $24,639 in fiscal 1995. Except as described in the following paragraph, no
additional expenses are currently expected as a result of the "change of control." |
17. Litigation SettlementThe Company had been a defendant in a "qui tam" lawsuit by claimants, including present and former employees of Accudyne Corporation, alleging violations of the False Claims Act. The alleged violations occurred prior to the acquisition of Accudyne by the Company in October 1993. To avoid the expense and disruption of protracted litigation, on June 23, 1995, the Company and claimants reached a preliminary agreement to settle the lawsuit. Terms of the agreement include payment by the Company of $12,000, consisting of a payment of $500 in June 1995, and payments to be made of $3,000 in April 1996, $4,000 in April 1997, and $4,500 in June 1998, plus interest at the three-year Treasury Bill rate. Accordingly, the Company recorded an unusual charge of $15,000 as of the fourth quarter of fiscal 1995, which includes legal costs of approximately $3,000 which were agreed to be paid for by the Company. |
18. Discontinued OperationsDuring fiscal 1994, the Company entered into two joint ventures in Belarus and Ukraine, for the purpose of establishing demilitarization operations in those countries. In March 1996, Company management, after evaluating its strategic plans for the future, elected to discontinue the pursuit of its foreign demilitarization businesses ("Demilitarization operations"). Accordingly, in the fourth quarter of fiscal 1996, the Company estimated and recorded a $6,240 loss on disposal of discontinued operations (net of taxes of $4,160). Amounts charged for the estimated loss on disposal of these operations include significant assumptions made with regard to the timing of such a sale, the sales proceeds expected to be received, and selling costs currently expected to be incurred. These costs are subject to changes in the near term (although are not currently expected to) due to changes in assumptions. Those changes could have a material impact on the operating results in that period. The net assets of the Demilitarization operations at March 31, 1996 were approximately $13.1 million, which consisted primarily of net working capital. The Company has provided a letter of credit to support approximately $2.5 million of bank borrowings of the joint ventures. The disposition of the Demilitarization operations is expected to be completed by sale of the operations. Negotiations with prospective buyers are currently underway and are expected to be completed during fiscal 1997. The results of operations of the discontinued business during the disposal period is expected to be at an approximate break-even level. The consolidated income statements of the Company reflect the operating results and loss on disposal of discontinued operations separately from continuing operations. The components of the loss from discontinued operations are summarized as follows:
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19. Supplemental Cash Flow InformationIn fiscal 1995, the Company acquired the aerospace operations of Hercules Aerospace Company (Aerospace operations) from Hercules Incorporated for $305,891 in cash and $112,000 in stock. During fiscal 1996, the Company received a net amount of $29.1 million from Hercules as an adjustment to the purchase price. The adjustment was primarily the result of large receivables collections just prior to the closing of the acquisition, which reduced assets and lowered the final purchase price. In fiscal 1994, the Company acquired three Defense Systems operations for $31,573 in cash and $3,300 in short-term notes payable to sellers. Net income taxes paid (refunded) in the fiscal years ended March 31, 1996, 1995, and 1994, totaled $100, $(1,100), and $(5,562), respectively. Amounts paid for interest were $40,736, $8,715, and $7,345 for fiscal 1996, 1995, and 1994, respectively. Amounts received for interest in those same periods were $1,789, $564, and $2,057, respectively. The significant change in interest paid during fiscal 1996 reflects payments of interest on debt issued in connection with the March 15, 1995 acquisition of the Aerospace operations. |
20. AcquisitionOn March 15, 1995, the Company acquired the Aerospace operations (Aerospace acquisition) of Hercules Incorporated for $276,776 in cash (net of a $29,115 purchase price reimbursment received by the Company in fiscal 1996 from Hercules, reflecting finalization of the purchase price), and 3.86 million shares of Common Stock valued at $112,000, for an aggregate purchase price of approximately $388,776. Unaudited pro forma results of operations of the Company for the years ended March 31, 1995 and March 31, 1994 as if the acquisition had been completed at the beginning of the respective periods are:
The unaudited pro forma results of operations are not necessarily indicative of the results of operations that would have occurred had the businesses actually been combined during the periods presented nor is this information indicative of expected future results of operations. The Company used the purchase method of accounting to account for the Aerospace Systems acquisition. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on fair value. The excess of purchase price over the estimated fair value of the assets acquired, approximately $118 million, has been recorded as goodwill, and is being amortized over 40 years. The Company acquired three operations in fiscal 1994 which were accounted for as purchase business combinations. The excess of purchase price over the estimated fair values of the net assets acquired, in the amount of $10,973, has been recorded as goodwill. The acquisitions would have had no significant pro forma effect on the Company's operating revenues, net income, or earnings per share. |
21. Business Segment InformationThe Company operates one business segment which is involved in the production of various types of defense systems. The Aerospace Systems Group designs, develops, and manufactures launch vehicle systems, solid propulsion systems, munitions propellants, defense electronics systems, and composite structures. The Defense Systems Group designs, develops, and manufactures ammunition, fuzes, shoulder-fired weapons, smart weapons/munitions, antitank mines, warheads, air-delivered munition, artillery fire control, battlefield monitoring systems, and decoy flares. The Marine Systems Group designs, develops, manufactures, and provides after-market support for underseas weapon systems (primarily torpedoes), naval ship acoustic sensors and signal processing systems, underseas surveillance and range systems, and underseas mine countermeasure systems. The Emerging Business Group consists of three primary business units: Global Environmental Solutions, Power Sources Center, and Advanced Technology Applications. The Company's sales are predominantly derived from contracts with agencies of, and prime contractors to, the U.S. Government. The various U.S. Government customers exercise independent purchasing decisions, and sales to the U.S. Government generally are not regarded as constituting sales to one customer, but instead, each contracting entity is considered to be a separate customer. During fiscal 1996, approximately 87.0 percent of the Company's sales were derived from contracts with the U.S. Government or U.S. Government prime contractors. Export sales to customers were $121,161, $87,500, and $69,300 in fiscal years 1996, 1995, and 1994, respectively. The following summarizes the Company's sales to the U.S. Government and total sales by business group. Fiscal 1994 sales for Marine Systems have been adjusted to reclassify results of businesses which are now included in the Emerging Business Group.
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22. Quarterly Financial Data (Unaudited)Quarterly financial data is summarized for the years ended March 31, 1996, 1995, and 1994, as follows:
Losses from discontinued operations, net of income taxes were $(559), $(241), $(2,358), and $(2,369) for the first, second, third, and fourth quarters of fiscal 1996, respectively (see Note 18). The fourth quarter results for fiscal 1996 were additionally affected by an after-tax charge of $6,240 for the estimated loss on disposal of discontinued operations and a $3,196 reversal of restructure reserves, due to lower than expected severance costs. The adoption of SFAS No. 112 resulted in a $1,500 cumulative effect charge to income in the first quarter of fiscal 1995 (see Note 10). A restructuring charge of $38,000 was recorded in the fourth quarter of fiscal 1995 (see Note 13). Change of control charges, the majority of which occurred in the third quarter, of $24,639 were recorded in fiscal 1995 (see Note 16). A litigation settlement charge of $15,000 was recorded as of the fourth quarter of fiscal 1995 (see Note 17). In addition, $42,000 in sales and $400 in income from operations were recorded in the fourth quarter of fiscal 1995 due to the change to the cost-to-cost method of revenue recognition (see Note 1). This change had no cumulative effect on beginning retained earnings and did not materially affect sales or income for the previous three quarters, accordingly, such quarters' financial statements were not restated. Following is a summary of the Company's stock price for the past three years.
The Company does not currently pay dividends on its common stock. |