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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
X THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended March 31, 1995
Commission file number 0-7438
Dynatech Corporation
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2258582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3 New England Executive Park
Burlington, Massachusetts 01803-5087
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code: (617) 272-6100
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.20 per share
(Title of class)
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 .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. {X}
At May 9, 1995 the aggregate market value of the Common Stock of the registrant
held by non-affiliates was $330,928,130.
At May 9, 1995 there were 17,584,338 shares of Common Stock of the registrant
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1995 Annual Report to Shareholders are incorporated by reference
in Parts I and II.
Portions of the proxy statement for the 1995 Annual Meeting of Shareholders are
incorporated by reference in Part III.
PART I
Item 1. BUSINESS
Products and Services
Incorporated in Massachusetts in 1959, Dynatech Corporation (the
"Company") has its principal offices at 3 New England Executive Park,
Burlington, Massachusetts 01803. Production facilities are located in fifteen
states and two Western European countries.
The Company operates in two business segments: Information Support Products
and Diversified Instrumentation. Information support products include
instruments, equipment, and software which is used by a wide customer base to
support voice, data, and video communications. Diversified instrumentation
comprises primarily medical-related equipment and software, and nonstrategic
businesses held for sale. A summary of the Company's sales, earnings, and
identifiable assets by business segment is found in the 1995 Annual Report which
is incorporated herein by reference.
The following table sets forth the approximate
percentage of revenue attributable to each of the Company's business segments
for the past three fiscal years:
1995 1994 1993
---- ---- ----
Information Support Products 75% 72% 70%
Diversified Instrumentation 25% 28% 30%
These segments are described in detail below.
INFORMATION SUPPORT PRODUCTS
The Information Support Products segment is focused on the support of
voice, data and video communications. Products sold within this segment may be
grouped in the following categories: communications test, data transmission,
industrial connectivity, and display.
Communications Test Products
The Company's communications test products encompass a wide range of
portable instruments and test systems designed, manufactured, and marketed by
Telecommunications Techniques Corporation. These products are sold to: i)
service providers including the Regional Bell Operating Companies, long-distance
companies, competitive access providers, cable television operators, and PTTs;
ii) service users including large corporate and government network operators;
and iii) manufacturers of communications equipment and systems.
Since the breakup of the AT&T system in 1984, the amount of digital
traffic transmitted through the worldwide telecommunications system has
increased dramatically, in part due to the proliferation of computers and
networks, and the increased desire to communicate electronically. The increasing
volume of digital communications traffic is leading to the adoption of new
high-speed transmission technologies such as Synchronous Optical Network
(SONET), a high-speed, fiber-based technology now being widely deployed by
network service providers. The Company believes that the test products are
critical to the smooth functioning of a wide range of communications networks.
The market for test products is driven in part by the rapid deployment of new
technologies and new communications standards, as well as efforts on the part of
communication service providers and users to improve service quality and to
reduce costs. These factors have led to demand for communications test products
which integrate more test functionality and intelligence.
The Company's test products are sold under the following brand names:
T-BERD(Registered Trademark), FIREBERD(Registered Trademark), CENTEST
(Registered Trademark), INTERCEPTOR(Registered Trademark) and FIBERSCAN
(Registered Trademark).
The Company's digital loop test products test the link between a
service provider's central office and the customer premises. Technicians use
these products to perform fault location and data quality testing of voice or
data circuits, whether carried on copper wire pairs or fiber optic cable.
Digital transport test products test high-speed ATM, SONET, DS3, DS1, DS0
transmission circuits and measure multiple performance parameters. The products
are used by service providers to determine the quality of newly installed
high-speed circuits by performing various measurements over a timed test period.
The Company introduced in fiscal 1995 a version of its T-BERD 310 analyzer which
integrates SONET test functions with capabilities for testing and monitoring
DS1, DS3, and DS0 circuits.
The Company's data communications analyzers perform up to 60
simultaneous performance and error measurements on a wide range of network
transmission equipment. For its family of FIREBERD 4000 and 6000 products, the
Company offers a wide range of test interfaces, including Euro-ISDN, an emerging
communications protocol used in Europe, which enable users to tailor the
instrument to specific test requirements.
Internetwork protocol analyzers bridge the gap between local area
networks (LAN) and wide area networks (WAN) by providing the capability to
monitor and test network traffic as it passes from a LAN to a WAN and back to a
LAN. The FIREBERD 500, a new test platform introduced in fiscal 1995, is capable
of analyzing ATM, frame relay, FDDI and SMDS communications architectures. The
FIREBERD 500 enables network managers to monitor network behavior and quickly
pinpoint problems anywhere within the internetwork. The Company anticipates
strong market demand for these products as a result of growth of
interconnections between LANs and WANs and demands for network reliability.
The Company's rack-mounted centralized test systems are used in the
service provider central office environment to test high-speed communication
circuits remotely. The CENTEST 650 allows monitoring and testing of DS3 signals
for ongoing maintenance, so that network trouble spots can be quickly identified
and mobile repair crews can be efficiently directed from a centralized location.
The FIBERSCAN product line consists of modular, portable fiber optic
test instruments which allow both central office and field technicians to
isolate fiber optic cable breaks and measure degradation caused by aging
connectors and related components. The instrument includes an optical time
domain reflectometer used to locate cable breaks and damage, an optical power
meter used to determine the signal levels on optical fibers, and a stable
optical source.
The Company serves the international telecommunications industry by
providing portable digital testing capability for transmission systems that
operate in accordance with the CCITT standards. These products comply with
International Telecommunications Union standards, which are used everywhere that
North American standards are not. The Company introduced in fiscal 1995 the
INTERCEPTOR 1402S which allows technicians to maintain existing PDH networks as
well as higher speed SDH service and equipment. Data Transmission Products
Dynatech's data transmission products provide users of information
networks with management tools to ensure reliable network operation and products
to condition the data for transmission via private or public networks. The
Company's equipment is designed primarily to manage data transmission and
communication networks in a computer environment.
A significant portion of the legacy network that most corporations
retain consists of private "leased line" networks constructed during the 1970s
and 1980s. Network operators found constructing private networks cost effective
since carrier services were geared more to carrying telephone traffic than data
traffic. Following the breakup of the AT&T system, additional service providers
began to offer services geared for high-speed data networking. The deployment of
local area networks and distributed network systems, combined with the evolution
of new high-speed transmission technologies such as ATM and frame relay, offer
large corporate users advantages in speed and throughput. The challenge facing
many network operators is to integrate new technologies into existing legacy
network systems to take advantage of lower cost and higher throughput.
To address this market, the Company announced the development of its
DynaStar(Registered Trademark) family of branch access products in fiscal 1995.
These products provide a wide range of access, feeder, and concentration
functions for supporting both legacy and newly emerging applications. The
DynaStar product line facilitates the interconnection between geographically
dispersed branch locations and central computing sites via wide area
technologies including ISDN, frame relay, and ATM. A version of the product can
aggregate traffic from legacy WAN sources such as SNA and X.25 and combine this
traffic with local LAN traffic on an ATM or frame relay link for integrated
network access and service.
The Company markets a line of X.25 packet switching products which
include PADs (packet assemblers/dissassemblers), switches, bridges/routers, and
dial-in/out LAN access equipment. These products support both public and private
networks, with scalability up to 40 ports. Packet switching, a communications
protocol which breaks data into "packets" for efficient transmission over
private or public data networks, is a cost-effective means for companies to
transmit data over long distances.
Other data transmission products include electronic matrix switches and
network availability products designed to manage the interconnection of remote
analyzers to various network interfaces. The network availability product is
used for fault testing, including very critical protocol-level monitoring,
without the need for dispatch of personnel to perform valid end-to-end circuit
analysis.
In addition, the Company provides analysis and simulation instruments
which focus on emulation tools that support the MIL-STD-1553 and the ARINC 429
local area networks (LAN) used in today's military and commercial aircraft,
respectively.
The Company also manufactures a series of wireless communications
components and systems. These include lightweight modular telephone headsets and
miniaturized two-way communications devices for government covert surveillance
and intelligence operations. Other wireless products include portable radio
systems used to improve communications and productivity at hospitals, and
wireless video transmitters/receivers sold primarily to the personal security
market. Industrial Connectivity Products
Dynatech supplies ruggedized personal computers and compatible input and
output boards under the name of Industrial Computer Source for industrial and
scientific applications. The Company designs its products to operate in adverse
environments and to withstand excessive vibration, noise, temperature, dust and
moisture.
Display Products
- ----------------
Dynatech's display products consist primarily of professional video
equipment and interactive graphics hardware and software.
Several technological and market trends are expected to have a profound
effect on the broadcast and cable-TV industry which is the cornerstone of the
professional video equipment market. The entry of new video service providers
such as direct satellite broadcasters and telephone service providers is
expanding the available distribution channels for the delivery of video content.
Increased competition in the broadcast industry may consequently lead to the
development and introduction of complex two-way, video-based information
services. Technological advancements, such as new video compression standards
and upgraded high-speed, high-bandwidth delivery systems over fiber optics, are
expected to increase capacity and reliability, and facilitate two-way
interactive video services to business and residential users. The Company
believes these developments are pushing the conversion within the professional
video industry from analog to digital systems used for the generation, handling,
storage, and transmission of video content. Concurrent developments are making
possible the increased integration of video in computer networks, such as ATM
technology for high-speed handling of multimedia traffic.
The Company's professional video products are sold worldwide to
television and radio stations, video production facilities, cable television,
and corporate and educational users through three business units, Distribution
and Production Products, NewStar newsroom automation products, and DaVinci color
correction systems.
Distribution products center on transmission and management
technologies used mainly by television broadcasters. The products include
routing switchers, and machine control and master control systems for managing
the flow of information within a television station, and an electronically
digital commercial playback system, sold under the Digistore name, which is used
to acquire, store and play back commercials in a fully automated manner.
Production products are used to create images for broadcasting,
production studios, and corporate users of graphics and special effects systems.
These products are used to create many of the unique special effects that
distinguish television commercials and film productions. Products include:
digital paint and animation systems for creating electronic graphics; digital
editing and layering systems which merge multiple video recordings to produce a
new video; and digital disk recorders for storage and recall of digital images
on a real-time basis.
Other production products include video character and graphics
generators for displaying alphanumeric titles in a variety of fonts for
broadcast and nonbroadcast applications. The Company's high-end character
generators are able to create high-quality text on a video screen in hundreds of
different font styles, colors, and backgrounds, as well as in many foreign
languages, including Chinese, Japanese, and Arabic.
Dynatech also develops, markets, and manufactures products which are
specific to the cable television industry. These products include equipment for
broadcasting emergency alert information over any combination of cable channels
automatically, and commercial and program insertion systems which download and
insert national, regional, and local commercials and cross-channel promotion
into cable programming.
DaVinci Systems produces the Rennaissance 8:8:8 line of digital color
correction systems which are used to tint, enhance, and color-match television
commercials. It is sold to the postproduction and teleproduction market and to
commercial production facilities. The NewStar business unit produces a
software-driven client/server PC-networked system used to computerize radio and
television newsrooms, including the control of robotic cameras.
Interactive products include computer hardware and software which
combine full-color live video using real-time digital video compression with
computer graphics and text for such applications as product training, display of
financial market information, geographic display, and information systems. These
UNIX-based products, developed and sold by Parallax Graphics, include a live
video windowing system for SUN Microsystems and Hewlett Packard Series 700
workstations.
Included in interactive product offerings is software sold under the
DataViews name, used in the development of custom graphic user interfaces for
various UNIX-based computer systems. Applications for this software include the
creation of custom graphics for displaying real time data such as found in
manufacturing process control and communications network analysis.
AIRSHOW pioneered and leads the world market for passenger cabin video
information systems. Its flagship product displays position defining maps,
airport terminal charts, and in-flight information.
Dynatech offers software solutions for the pharmacy industry, via
ComCoTec's RxCLAIM On-Line Transaction Processing System, an on-line
prescription claims adjudication system. The third-party prescription claims
industry is growing rapidly as prescription drug plans become an increasingly
important part of an employee benefit program. The RxCLAIM System assists in the
administration of health benefits by efficiently processing prescriptions for
third-party payors.
DIVERSIFIED INSTRUMENTATION
The Diversified Instrumentation segment consists of two divisions: 1)
medical and diagnostic products, which do not relate to information support, and
2) selected nonstrategic businesses held for sale.
Medical and Diagnostic Products
The Company's medical and diagnostic products consist of laboratory,
radiation therapy planning, and test and measurement products, and are sold
under the name of Dynatech Laboratories, Computerized Medical Systems, Dynatech
Nevada, and Dynatech Precision Sampling.
Dynatech manufactures and sells laboratory diagnostic equipment and
supplies for research and clinical testing in the fields of immunology,
microbiology, serology, and cancer research. The Company's instruments are
designed around a microplate format and employ enzyme-linked immunosorbent assay
(ELISA) techniques for testing antigens and antibodies in blood serum and other
body fluids. These techniques use enzymes, chemiluminescent or fluorescing
reagents as labels that give off color or light at the completion of tests.
Results can be read and recorded by the Company's sensitive reading instruments.
Among the Company's products is a modular microplate system which
combines several elements, including a reader, multi-reagent dispenser,
multi-reagent washer, diluter/dispenser, and random access plate incubators. The
system incorporates process quantitative analysis and is sold to the research
lab market (universities and pharmaceutical companies) and the clinical
laboratory market. Additionally, the Company makes and sells disposable plastic
laboratory ware for handling and transporting test specimens, including items
specifically treated to adsorb or covalently bind proteins.
The Company also markets software products used in conjunction with
radiation therapy treatment of cancer patients. Our newest product, FOCUS, a
three dimensional (3-D) radiation therapy treatment planning system (RTP), was
approved for sale by the Federal Drug Administration in February 1995. This
product allows oncologists and medical physicists to develop a treatment plan
which delivers the maximum radiation dose to the tumor while minimizing
radiation dose to surrounding healthy tissue. The Company continues to offer its
two dimensional (2-D) RTP product during the market transition to the 3-D RTP.
Dynatech supplies the hospital market with sophisticated instruments
for checking the electrical safety and performance of instruments such as
defibrillators. It also markets patient simulators. These instruments produce
simulated patient outputs which are fed into patient monitoring devices such as
an electrocardiography (ECG) machines and non-invasive blood pressure monitors.
The Company also manufactures a comprehensive line of state-of-the-art,
fully automated systems for use in the analysis of volatile organic contaminates
in drinking water, wastewater, and soils.
Diversified Instrumentation Businesses Held for Sale
The Company is presently in process of divesting four standalone
and unrelated business units. Their product offerings consist of microwave
amplifiers, simulator monitors, after-market computer enhancements, and surge
suppression and line conditioning products.
DISCONTINUED OPERATIONS AND DIVESTED BUSINESSES
The Company adopted a formal plan to discontinue certain
nonstrategic business units and to sell these operations during fiscal 1995.
These operations include Micro Processor Systems, Inc., which was sold in April
1994, and Whistler Corporation, which was sold in June 1994.
In addition, the Company announced a plan to sell at least 11 product
lines and businesses as part of its 1994 restructuring plan. As of May 15, 1995,
the Company has sold or otherwise disposed of eight businesses and product lines
for approximately $32.3 million in cash and promissory notes.
CUSTOMERS AND MARKETING
Dynatech markets its products to a diverse customer base. The Company's
information support products are sold to a broad range of communications service
providers, including telephone companies, broadcasters, cable television
operations, and a wide array of computer and data communication users, corporate
and industrial customers, and scientific and educational organizations.
Customers for the Company's diversified instrumentation products
include pharmaceutical companies, research and testing laboratories, hospitals
and clinical laboratories. The Company also has OEM agreements with several
reagent manufacturers.
Most of the Company's revenues are generated through a direct sales force.
The Company also uses distributorships and representative relationships to sell
its products for certain products in areas of the United States and the rest of
the world with relatively low sales volume.
COMPETITION
The markets in which the Company competes are highly competitive and are
characterized by rapidly changing technology. Principal competitors within the
Information Support Products segment include businesses with significant
financial, development, marketing, and manufacturing resources, as well as
numerous small specialized companies. The Company believes it holds a relatively
favorable position with respect to the important competitive factors in each of
its markets. The Company considers rapid product development, product
functionality and features, and highly trained technical sales and support staff
to be key competitive factors.
MAJOR CUSTOMERS
The Company's sales of goods and services to various agencies of the United
States federal government were approximately $25,741,000, $24,123,000, and
$25,273,000 in fiscal years ended 1995, 1994, and 1993, respectively. No single
customer accounted for more than 10% of sales in any of the three years.
INTERNATIONAL
The Company maintains marketing subsidiaries or branches in major
countries in Western Europe and Asia and has distribution agreements in many
other countries where sales volume does not warrant a direct sales organization.
The Company's foreign sales from continuing operations (including exports from
the United States directly to foreign customers) were approximately 37%, 35%,
and 37% of consolidated net sales in fiscal years 1995, 1994, and 1993,
respectively. The Company maintains production facilities in England and the
Channel Islands which manufacture information support products and medical
instrumentation.
The Company's international business is subject to risks customarily
found in foreign operations, such as fluctuations in currency exchange rates,
import and export controls, and regulatory policies of foreign governments. A
summary of the Company's sales, earnings and identifiable assets by geographic
area is found in the 1995 Annual Report which is incorporated herein by
reference.
PRODUCT DEVELOPMENT
As the technologies in the Company's markets are continually changing,
the Company's success depends on its ability to develop new products and improve
existing ones. All businesses within the Company maintain product development
capability focused on and experienced in the technologies important to the
specific business. On a segment basis, product development expense in the years
ended March 31, 1995, 1994, and 1993 were as follows: Information Support
Products, $42,356,000, $41,792,000, and $37,977,000, respectively; Diversified
Instrumentation, $10,689,000, $11,996,000, and $13,132,000, respectively.
BACKLOG
The Company's backlog of orders believed to be firm at March 31, 1995
and 1994 were $74,272,000 and $93,981,000, respectively. Of the decrease,
$10,565,000 related to companies divested in fiscal 1995. All but $1,795,000 of
backlog at March 31, 1995 is expected to be delivered within the fiscal year
ended March 1996. On a segment basis, backlog at March 31, 1995 and 1994 was as
follows: Information Support Products $53,898,000 and $50,791,000, respectively;
Diversified Instrumentation $20,374,000, of which $18,169,000 relates to medical
and diagnostic products, and $43,190,000, of which $22,964,000 relates to
medical and diagnostic products, respectively.
EMPLOYEES
The Company employs approximately 2,600 people of which approximately
175 employees are with businesses that are held for sale. Employees having
requisite skills for the Company's purposes are generally available in the areas
where its facilities are located. The Company considers its labor relations to
be excellent.
PATENTS AND TRADEMARKS
The Company generally seeks patent protection for inventions and
improvements to its products, which it believes to be patentable. It holds
numerous United States and foreign patents and patent applications covering many
products. While the Company considers its patent position important, it believes
its technical marketing and manufacturing capabilities are of greater
competitive significance.
FIREBERD, T-BERD, Centest, Interceptor, Fiberscan, DynaStar, NewStar,
ArtStar, Microtiter, Microelisa, and Airshow are among registered trademarks
which the Company considers valuable assets.
Dynatech is a registered service mark in the United States and a
registered trade or service mark (issued or applied for) in most other major
industrialized countries of the world.
SUPPLIERS
Materials and components used in the Company's products are normally
available stock items or can be obtained to Company specifications from more
than one potential supplier. The Company's plasticware is molded by
subcontractors using molds owned by the Company.
Some components and assemblies are purchased in Asia under volume
contracts.
ENVIRONMENTAL FACTORS
Federal, state and local laws or regulations which have been enacted or
adopted regulating the discharge of materials into the environment have not had,
and under present conditions the Company does not foresee that it will have, a
material adverse effect on capital expenditures, earnings, or competitive
position of the Company.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company are as follows:
Officer
Name Current Position Age Since
John F. Reno President and Chief Executive Officer 56 1979
Robert H. Hertz Treasurer and Chief Financial Officer, 52 1980
Clerk
John R. Peeler Corporate Vice President 40 1992
Communications Test Business
John R. South Corporate Vice President 54 1993
Medical and Diagnostics Products Business
George A. Merrick Corporate Vice President 47 1994
Display Business
Roger C. Cady Corporate Vice President 56 1993
Business Development
John A. Mixon Corporate Vice President 49 1989
Human Resources
James R. Turner Corporate Vice President 66 1960
John C. Maag Corporate Controller 45 1987
Nancy J. Jenkins Assistant Treasurer 49 1990
Edward T. O'Dell Secretary, Assistant Clerk, 59 1975
attorney whose professional corporation
is a partner of Goodwin, Procter & Hoar,
general counsel to the Company
Officers are elected annually by the Board of Directors at its meeting
following the Annual Meeting of Shareholders and serve until the next annual
election or until their successors have been elected at any other Director's
meeting. There are no arrangements or understandings between any of the
Directors or Officers and any other person regarding election as a Director or
Officer of the Company.
Each of the Company's officers has served in various capacities with
the Company for more than five years, except Messrs. South, Cady and Merrick.
Mr. South joined the Company in July 1990. From 1987 to 1990 he was a Vice
President for SmithKline Beecham Clinical Laboratories, a provider of laboratory
testing services.
Mr. Cady joined the Company in March 1993. From 1986 to 1993 he was
President and founder of Arcadia Consulting, a management consulting firm which
assisted high technology companies.
Mr. Merrick joined the Company in September 1994. From 1990 to 1994 he
served as Executive Vice President of Worldwide Sales and Marketing at Ampex
Systems Corp., a supplier of professional video, broadcasting, and recording
products.
Item 2. PROPERTIES
-------------------
The Company's policy is generally to lease real property for its
manufacturing and sales operations. It does however, own two buildings used for
manufacturing.
Segment Areas Square Lease
Location Utilizing Facilities Feet Termination
Owned Facilities:
Carson City, Nevada Diversified Instrumentation 22,000
Baton Rouge, Louisiana Diversified Instrumentation 13,000
Leased Facilities:
Burlington, Massachusetts Headquarters 22,200 1998
Germantown, Maryland Information Support Products 68,000 2001
Germantown, Maryland Information Support Products 98,000 2003
Germantown, Maryland Information Support Products 14,700 1997
San Diego, California Information Support Products 62,400 1999
Nashua, New Hampshire Information Support Products 57,600 1999
Salt Lake City, Utah Information Support Products 48,100 1997
Guernsey, Channel Islands Information Support Products 40,000 2002
and Diversified Instrumentation
Woodbridge, Virginia Information Support Products 30,000 1997
Northampton, Massachusetts Information Support Products 22,500 1995
St. Quentin En Yvelines,
France Information Support Products 19,100 1998
Los Gatos, California Information Support Products 18,000 1996
Chantilly, Virginia Diversified Instrumentation 50,000 2001
St. Louis, Missouri Diversified Instrumentation 25,000 1999
Tustin, California Diversified Instrumentation 24,300 1999
San Jose, California Diversified Instrumentation 19,200 1995
Tampa, Florida Diversified Instrumentation 18,900 1995
Lombard, Illinois Diversified Instrumentation 16,100 1998
The Company has other leases for manufacturing space, but in each case
the total footage is under 15,000 square feet.
The Company also leases several sales and service offices in the United
States, Western Europe, Japan, and Hong Kong. In addition the Company is liable
for certain leased premises that are not being utilized due to consolidation and
centralization efforts of facilities. It considers its facilities adequate and
suitable for its foreseeable needs and believes that similar facilities will
continue to be available at comparable prices after adjusting for inflation. The
Company owns a substantial portion of the machines, tools and equipment required
for its operations and considers this property to be in good condition. The
Company also leases equipment and machines on terms which allow the Company the
flexibility it desires related to such machinery and equipment.
Item 3. LEGAL PROCEEDINGS
- -------------------------
The Company is party to several pending legal proceedings and claims,
none of which, in the opinion of management or counsel primarily responsible for
such matters, is considered to be material.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- -----------------------------------------------------------
None
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK
- ---------------------------------------------
AND RELATED SECURITY HOLDER MATTERS
-----------------------------------
(a) The Company's common stock is traded in the over-the-counter NASDAQ
National Market System. The quarterly range of high and low prices for the past
two years as reported by the National Association of Securities Dealers
Automated Quotations National Market System and published in The Wall Street
Journal may be found in the Company's 1995 Annual Report on page 32, which is
incorporated herein by reference.
(b) There were approximately 1,050 common stockholders of record as of May
15, 1995.
(c) The Company has never paid a cash dividend on its common stock and does
not intend to make such a payment in the foreseeable future.
Item 6. SELECTED FINANCIAL DATA
- -------------------------------
Reference is made to information contained in the section entitled
"Five-Year Summary" on page 16 in the Company's 1995 Annual Report, copies of
which have been filed with the U.S. Securities and Exchange Commission pursuant
to Rule 14a-3(c) under the Securities Exchange Act of 1934, as amended, which
information is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
- -----------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
Reference is made to the information on pages 17 - 19 in the Company's
1995 Annual Report, copies of which have been filed with the U.S. Securities and
Exchange Commission pursuant to Rule 14a-3(c) under the Securities Exchange Act
of 1934, as amended, which information is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ---------------------------------------------------
Reference is made to the Company's consolidated financial statements
and notes thereto on pages 20 - 31 in the Company's 1995 Annual Report together
with the Report of Independent Accountants dated May 15, 1995 on page 32 and
"Summary of Operations by Quarter" on page 32, copies of which have been filed
with the U.S. Securities and Exchange Commission pursuant to Rule 14a-3(c) under
the Securities Exchange Act of 1934, as amended, which information is
incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
- -------------------------------------------------------------------
AND FINANCIAL DISCLOSURE
------------------------
None
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -----------------------------------------------------------
Reference is made to the information responsive to Items 401 and 405 of
Regulation S-K contained in the Company's definitive Proxy Statement relating to
its 1995 Annual Meeting of Shareholders which will be filed with the U.S.
Securities and Exchange Commission within 120 days after the close of the
Company's fiscal year ended March 31, 1995 pursuant to Rule 14a-6(b) under the
Securities and Exchange Act of 1934, as amended; said information is
incorporated herein by reference.
Item 11. EXECUTIVE COMPENSATION
- -------------------------------
Reference is made to the information responsive to Item 402 of
Regulation S-K contained in the Company's definitive Proxy Statement relating to
its 1995 Annual Meeting of Shareholders which will be filed with the U.S.
Securities and Exchange Commission within 120 days after the close of the
Company's fiscal year ended March 31, 1995 pursuant to Rule 14a-6(b) under the
Securities Exchange Act of 1934, as amended; said information is incorporated
herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- ----------------------------------------------------------------------------
Reference is made to the information responsive to Item 403 of
Regulation S-K contained in the Company's definitive Proxy Statement relating to
its 1995 Annual Meeting of Shareholders which will be filed with the U.S.
Securities and Exchange Commission within 120 days after the close of the
Company's fiscal year ended March 31, 1995 pursuant to Rule 14a-6(b) under the
Securities Exchange Act of 1934, as amended; said information is incorporated
herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------
Reference is made to the information responsive to Item 404 of
Regulation S-K contained in the Company's definitive Proxy Statement relating to
its 1995 Annual Meeting of Shareholders which will be filed with the U.S.
Securities and Exchange Commission within 120 days after the close of the
Company's fiscal year ended March 31, 1995 pursuant to Rule 14a-6(b) under the
Securities Exchange Act of 1934, as amended; said information is incorporated
herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K
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(a) Documents filed as part of this report
(1) Financial statements
No financial statements have been filed with this Form 10-K other than
those incorporated by reference in Item 8.
(2) Financial statement schedules Page
----
II. Valuation and Qualifying Accounts 26
Schedules other than those listed above have been omitted because they
are either not required or not applicable or because the required
information has been included elsewhere in the financial statements or
notes thereto.
Individual financial statements of the Company have been omitted
because it is primarily an operating Company and no subsidiaries have
material minority equity interests, nor are any indebted to any person
other than the parent or consolidated subsidiaries, in amounts which are
material in relation to total consolidated assets at the date of the March
31, 1995 balance sheet, except indebtedness incurred in the ordinary course
of business which is not overdue.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 1995.
(c) Exhibits
Exhibit No.
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(3) Articles of Organization and By-Laws -
(1) The Registrant's Restated Articles of Organization, as amended, and
By-Laws, as amended, were filed as Exhibit 3 to Form 10-K for the year
ended March 31, 1992, and are incorporated herein by reference.
(2) Shareholder Rights Agreement, dated as of February 16, 1989, between
Dynatech Corporation and The First National Bank of Boston, as Rights
Agent, was filed as an Exhibit to a Current Report on Form 8-K filed on
February 27, 1990, and is incorporated herein by reference.
(3) Shareholder Rights Agreement, as amended and restated as of March 12,
1990, was filed as an Exhibit to a Current Report on Form 8-K filed on
April 11, 1990, and is incorporated herein by reference.
(4) Instruments defining the rights of security holders -
(1) Multicurrency Revolving Credit and Term Loan Agreement, as amended,
dated December 22, 1992 between Dynatech and The First National Bank of
Boston and others is incorporated by reference to Exhibit 4(a) on Form 10-Q
for the quarter ended December 31, 1992.
Exhibit No.
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(2) Note Agreement dated as of December 15, 1990 between Dynatech and
Nationwide Life Insurance Company is incorporated by reference to Exhibit
4(b) on Form 10-Q for the quarter ended December 31, 1990.
(10) Material Contracts -
(1) 1982 Incentive Stock Option Plan, as amended, incorporated by reference
to Exhibit 10(2) to Form 10-K for the year ended March 31, 1990.
(2) Form of Special Termination Agreement between Dynatech Corporation and
each of Messrs. Barger, Reno and Hertz incorporated by reference to Exhibit
10(5) to Form 10-K for the year ended March 31, 1990.
(3) Form of Special Termination Agreement between Dynatech Corporation and
each of its other Executive Officers incorporated by reference to Exhibit
10(6) to Form 10-K for the year ended March 31, 1990.
(4) 1992 Stock Option Plan incorporated by reference to Exhibit 3 to Form
10-Q for the quarter ended June 30, 1992.
(5) Letter Agreement dated March 24, 1993 by and between JP Barger and
Dynatech Corporation incorporated by reference to Exhibit 10(5) to Form
10-K of the year ended March 31, 1993.
(6) 1994 Stock Option and Incentive Plan incorporated by reference to
Exhibit 4.1 to Form S-8 filed on January 30, 1995.
(13) Dynatech Corporation 1995 Annual Report to Stockholders which, except
for those portions expressly incorporated herein by reference, is furnished only
for the information of the Securities Exchange Commission and is not deemed to
be filed.
(21) Subsidiaries of the Registrant.
(23) Consent of Independent Accountants.
(27) Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
DYNATECH CORPORATION
-----------------------
June 1, 1995 By: ROBERT H. HERTZ
-----------------------
Treasurer and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
RICHARD K. LOCHRIDGE Chairman of the Board, Director June 1, 1995
- --------------------
JOHN F. RENO President, and Chief Executive
- ------------ Officer, Director June 1, 1995
ROBERT H. HERTZ Treasurer and Chief Financial Officer June 1, 1995
- ---------------
JOHN C. MAAG Controller, Principal Accounting
- ------------ Officer June 1, 1995
RONALD L. BITTNER Director June 1, 1995
- -----------------
THEODORE COHN Director June 1, 1995
- -------------
WILLIAM R. COOK Director June 1, 1995
- ---------------
O. GENE GABBARD Director June 1, 1995
- ---------------
JAMES B. HANGSTEFER Director June 1, 1995
- -------------------
ROBERT G. PAUL Director June 1, 1995
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Dynatech Corporation:
Our report on the consolidated financial statements of Dynatech Corporation has
been incorporated by reference in this Form 10-K from the 1995 Annual Report to
Shareholders of Dynatech Corporation. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule on page 26 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
May 15, 1995
DYNATECH CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED MARCH 31, 1995, 1994 AND 1993
RESERVE FOR DOUBTFUL ACCOUNTS (In thousands)
BALANCE, March 31, 1992 $3,540
Additions charged to income 1,985
Write-off of uncollectible accounts, net (1,891)
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BALANCE, March 31, 1993 3,634
Additions charged to income 1,232
Write-off of uncollectible accounts, net (961)
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BALANCE, March 31, 1994 3,905
Additions charged to income 2,685
Write-off of uncollectible accounts, net (1,293)
Allowances of divisions sold (220)
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BALANCE, March 31, 1995 $5,077
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