AYDIN CORPORATION Announces First Quarter 1998 Results.HORSHAM, Pa.--(BUSINESS WIRE)--May 18, 1998-- Results Reflect Charges for Arbitration Award An arbitration award (or arbitral award) is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law. And Resultant Restructuring Focusing On Core Telemetry telemetry Highly automated communications process by which data are collected from instruments located at remote or inaccessible points and transmitted to receiving equipment for measurement, monitoring, display, and recording. and Communications Businesses AYDIN CORPORATION (NYSE NYSE See: New York Stock Exchange : AYD AYD Advancing Youth Development AYD American Youth for Democracy ) today announced results for the first quarter of 1998, in which the Company incurred a loss of $24.1 million, or $4.64 per share, compared to a first quarter 1997 loss of $4.3 million, or $.83 per share. First quarter 1998 results primarily reflect the impact of the following items: a $20.3 million increase in cost of sales related to the TMRC TMRC - /tmerk'/ The Tech Model Railroad Club at MIT, one of the wellsprings of hacker culture. The 1959 "Dictionary of the TMRC Language" compiled by Peter Samson included several terms that became basics of the hackish vocabulary (see especially foo, mung, and frob). contract with the Government of Turkey, consisting of the previously announced $17.2 million commercial arbitration award in favor of Lockheed Martin For the former company, see . Lockheed Martin (NYSE: LMT) is a leading multinational aerospace manufacturer and advanced technology company formed in 1995 by the merger of Lockheed Corporation with Martin Marietta. Tactical Systems, Inc., related interest expense, and an increase in other estimated completion costs on the TMRC contract; a $1.6 million reduction in net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight reflecting the Company's decision to relinquish its position regarding collectible revenues under a contract with the U.S. Government; $1.5 million in corporate restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , reflecting the Company's decision to shut down its unprofitable Raytor Division (sheet metal fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. ) and to reduce the corporate staff; the write-off of $.8 million of West Coast assets as described below; and a $.9 million increase in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. contingency reserves related to several outstanding claims against the Company. The Company also announced that its focus for the future will concentrate on its core businesses of Telemetry and Communications (which latter business includes, in addition to its core products and systems, the Company's operations in Turkey as well as AYDIN Electro Fab, which supplies key components to the Communications Division). Accordingly, plans are underway to sell the Company's Displays, West Coast Microwave Components, and Molded Devices Divisions. The Company has signed a letter of intent with the prospective pu will not be included with the sale, but which will have negligible value following that sale. The Company has filed an appeal of the arbitration award in favor of Lockheed Martin in federal court in the Eastern District of Penscribed above. Net sales of $26.1 millionales in the first quarter of 1998 was 75%, the same as in the year ago period. I. Gary Bard, chairman and chief executive officer of Aydin, stated, "While we are most disappointed in the first quarter results and the special charges therein, our Telemetry and Communications core businesses, which accounted for approximately 80% of ours our operations to better capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the oined not to proceed with the acquisition. ufactures, markets, distributes and installs technologically advanced communications products and systems, from basic components to turnkey systems A complete system of hardware and software delivered to the customer ready-to-run. In other words, just "turn the key" and go.  A Turnkey Video System for military, space, government and commercial organizations around the world. Except for the historical matters contained in this press release, statements made in this press release are forward-looking and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Investors are cautioned that these forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. reflect numerous assumptions and involve risks and uncertainties which may affect AYDIN's business and prospects and cause actual results to differ materially from these forward-looking statements, including loss of current customers, reductions in orders from current customers, or delays in ordering by current customers, failure to obtain anticipated contracts or orders from new customers, or expected volume from such customers, higher material or labor costs, unfavorable results in litigation against AYDIN, the availability of adequate sources of working capital, consummation of planned Division sales, and economic, competitive, technological, governmental, and other factors discussed in AYDIN's filings with the Securities and Exchange Commission. -0-
($000 omitted except for per share amounts) QUARTER ENDED
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04/04/98 03/29/97
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Net Sales $ 26,124 $ 26,914
Costs and Expenses
Costs of Sales
TMRC contract arbitration and other 20,343 -
Other costs of sales 21,917 20,247
Selling, general & administrative 6,981 6,212
Research & development 503 1,395
Restructuring costs 1,548 -
Environmental remediation - 2,612
Interest expense (income), net (242) (34)
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Total costs and expenses 51,050 30,432
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Loss before income taxes (24,926) (3,518)
Income tax provision (recovery) (780) 751
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Net loss $ (24,146) $ (4,269)
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Net loss per share $ (4.64) $ (0.83)
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NOTE:
(1) Earnings per share are based on the average number of
common shares outstanding.
CONTACT: Aydin Robert A. Clancy, Corporate Counsel 215/658-4502 E-mail: bclancy@aydin.com Web address: www.aydin.com |
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