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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended Commission File Number
December 31, 1993 1-3985
EDO CORPORATION
Exact name of Registrant as specified in its charter.
State of Incorporation: IRS Employer Identification No.:
New York 11-0707740
Address of principal executive offices:
14-04 111th Street, College Point, New York 11356-1434
Telephone No.:
(718) 321-4000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: Name of each exchange on which registered:
Common Shares New York Stock Exchange
par value $1 per share
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 by delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the 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. [X]
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant as of March 8, 1994............... $32,257,162
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock as of March 8, 1994.................5,473,955
Documents Incorporated by Reference
Portions of the Registrant's Annual Report to Shareholders for the fiscal year
ended December 31, 1993 are incorporated by reference into Part I and Part II.
Portions of the Definitive Proxy Statement of the Registrant, dated March 23,
1994, are incorporated by reference into Part III.
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EDO Corporation
Table of Contents
PART I...................................................................... 1
ITEM 1. BUSINESS............................................................ 1
MILITARY SYSTEMS.......................................................... 1
Aircraft Stores Suspension and Ejection Systems......................... 1
Sonar Systems........................................................... 1
Airborne Mine Countermeasure Systems.................................... 1
Command, Control and Communications (C3) Systems........................ 1
COMMERCIAL AND OTHER PRODUCTS............................................. 1
Acoustic Instrument Systems............................................. 1
Ceramic Components...................................................... 1
Spaceflight Systems..................................................... 2
Infrared Instrumentation................................................ 2
Fiber-Reinforced Structures............................................. 2
Composite Sports Products............................................... 2
Compressed Natural Gas Vehicle Products................................. 2
RESEARCH AND DEVELOPMENT.................................................. 2
MARKETING AND INTERNATIONAL SALES......................................... 2
BACKLOG................................................................... 3
GOVERNMENT CONTRACTS...................................................... 3
COMPETITION AND OTHER FACTORS............................................. 3
EMPLOYEES................................................................. 4
EXECUTIVE OFFICERS OF THE REGISTRANT...................................... 4
ITEM 2. PROPERTIES.......................................................... 4
ITEM 3. LEGAL PROCEEDINGS................................................... 4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................. 5
PART II..................................................................... 5
ITEM 5. MARKET FOR REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.............................. 5
ITEM 6. SELECTED FINANCIAL DATA............................................. 5
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................... 5
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA......................... 5
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE.............................. 5
PART III.................................................................... 5
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT................. 5
ITEM 11. EXECUTIVE COMPENSATION............................................. 5
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..... 5
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..................... 5
PART IV..................................................................... 5
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K... 5
(a) Financial Statements And Financial Statement
Schedules And Exhibits.............................................. 5
1. Financial Statements............................................ 5
2. Financial Statement Schedules................................... 5
3. Exhibits........................................................ 6
(b) Reports on Form 8-K................................................. 7
SIGNATURES.................................................................. 8
INDEPENDENT AUDITORS' REPORT................................................ 9
Schedule V.................................................................. 9
Schedule VI................................................................. 10
Schedule X.................................................................. 10
PART I
ITEM 1. BUSINESS
The term "Registrant" as used in this Annual Report refers to EDO Corporation.
The term "Company" as used in this Annual Report, except where the context
otherwise requires, includes the Registrant and its subsidiaries.
EDO Corporation was incorporated in New York in 1925 by Earl Dodge Osborn, from
whose initials "EDO" is derived. In the early days of modern aviation, the
Company pioneered in the development of seaplane floats and continues to
manufacture floats for general aviation aircraft.
Presently, the Company designs and manufactures advanced electronic, acoustic,
aerodynamic and hydrodynamic equipment for military applications and for
marine, aviation and other commercial markets. In response to defense spending
reductions, the Company has been aggressively pursuing the application of its
sophisticated and diverse defense-related technologies to civilian and
commercial markets.
The Company organizes its business into two segments: Military Systems; and
Commercial and Other Products. A description of the principal products of the
Company within the two industry segments is set forth below. The Company
recently adopted a restructuring plan which consists of the discontinuance of
the Company's defense business in Canada, the relocation of some United States
production from New York to less costly locations, the related disposition of
non-productive assets (principally land and buildings), and work force
reductions. Additionally, information about the Company's restructuring plan is
contained on page 14 and Note 2 on page 21 of the Company's 1993 Annual Report
to Shareholders, and is incorporated by reference. Certain business segment
information on the Company's operations is set forth under Note 18 on pages 27
and 28 of the Company's 1993 Annual Report to Shareholders and is incorporated
by reference.
MILITARY SYSTEMS
The Company's operations in the Military Systems segment consist of the
development and production of sophisticated electronic, acoustic, hydrodynamic
and aerodynamic military systems. The Company additionally provides logistic
support for its products following initial hardware deliveries. Such support
consists of training operators and support personnel, supplying spare parts,
and providing repair and refurbishment services. The revenues from such support
services have been a significant portion of Military Systems' net sales.
AIRCRAFT STORES SUSPENSION AND EJECTION SYSTEMS
The Company developed and manufactures: bomb release units ("BRUs") for the
U.S. Air Force F-15E; ejection release units ("ERUs") used on Tornado
Multirole Combat Aircraft; and jettison release mechanisms ("JRMs") for the
U.S. Navy F-14.
The Company designed and is developing the Advanced Medium Range Air-to-Air
Missile ("AMRAAM") for the F-22 Advanced Tactical Fighter. Funded development
is expected to continue through 1994.
For 1993, 1992 and 1991, respectively, sales of aircraft stores suspension and
ejection systems represented 12%, 11% and 12% of consolidated net sales.
SONAR SYSTEMS
The Company develops and produces advanced sonar systems for use in a variety
of military applications. These sonar systems are an important element in
anti-submarine warfare. The Company's sonar products include active and
passive, and variable depth and hull-mounted systems, covering an extensive
range of size and capability.
The Company developed and produces "Flat-Pak" hydrophones and associated
electronics for a submarine-mounted passive listening sonar system.
The Company also produces the acoustic portion of the MK-39 "EMATT" training
target. This program is expected to be in production until late in the decade.
For 1993, 1992 and 1991, respectively, sales of military sonar systems and
acoustic products represented 21%, 25% and 32% of consolidated net sales.
AIRBORNE MINE COUNTERMEASURE SYSTEMS
The Company is the only manufacturer of the MK-105, a helicopter-towed magnetic
minesweeping system designed and developed by the Company in cooperation with
the U.S. Navy. During 1991 and early 1992, the Company received contracts to
develop a major upgrade of the MK-105. For 1993, 1992 and 1991, respectively,
sales of helicopter-towed mine countermeasure systems represented 13%, 13% and
9% of consolidated net sales.
COMMAND, CONTROL AND COMMUNICATIONS (C3) SYSTEMS
The Company manufactures Command, Control and Communications ("C3") systems and
develops software for these systems using commercial off-the-shelf hardware and
software components.
COMMERCIAL AND OTHER PRODUCTS
ACOUSTIC INSTRUMENT SYSTEMS
The Company manufactures data/voice communications, velocity measurement and
navigation sonar commercial undersea acoustic instruments. Although designed
for commercial markets, these products are also supplied to military markets
worldwide.
CERAMIC COMPONENTS
Piezoelectric materials transform acoustic or other mechanical energy into
electrical energy and vice versa. The
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Company designs and manufactures piezoelectric materials and components, which
have applications in sonar systems, medical instruments, ultrasonics, actuators
and other specialized products.
SPACEFLIGHT SYSTEMS
The Company designs and manufactures electro-optical products for space
including horizon sensors that provide the stabilization and orientation
signals for spacecraft. In addition, the Company manufactures scientific
payloads, which measure various characteristics of planets, their atmosphere
and other phenomena or events observable from orbiting satellites.
For 1993, 1992 and 1991, respectively, sales of spaceflight systems represented
13%, 14% and 12% of consolidated net sales.
INFRARED INSTRUMENTATION
The Company manufactures a line of microthermal imagers for design and
reliability analysis of semiconductors in commercial applications. This line
includes instrumentation used to identify thermal stresses in integrated
circuits, hybrids and printed circuit boards, and an emission microscope.
FIBER-REINFORCED STRUCTURES
The Company designs and manufactures fiber-reinforced composite structures,
including filament-wound and layup processes. The Company has applied its
filament-winding technology to produce stator rings for power turbines, VT-1
missile launch tubes, and water and waste-holding tanks for commercial
aircraft, as well as laid-up, autoclave cured, aerodynamic structures for
commercial aircraft and laid-up sonar dome structures for ships. The Company
maintains an active business in the supply of spare parts and repairs for water
and waste tanks for virtually every commercial airline in the world.
COMPOSITE SPORTS PRODUCTS
A wholly-owned subsidiary of the Registrant, EDO Sports was formed in 1991 to
commercialize advancements in composite sporting goods through the use of new,
proprietary fabrication techniques. EDO Sports designs, manufactures and
distributes premium-grade, high-performance golf club and sport bicycle
components.
COMPRESSED NATURAL GAS VEHICLE PRODUCTS
The Company designed, developed and manufactures all-composite fuel tanks for
vehicles operating on compressed natural gas. These tanks have been certified
for use in Canada and the U.S. In December 1993, the Company purchased the
assets of Automotive Natural Gas, Inc., a manufacturer of refueling stations
and conversion kits for compressed natural gas vehicles.
RESEARCH AND DEVELOPMENT
Research and development, performed both under development contracts with
customers and at Company expense, are important factors in the Company's
business. The Company's research and development efforts involve approximately
140 employees in the fields of acoustic, electronic, hydrodynamic, aerodynamic,
structural and material engineering. Research and development programs are
designed to develop technology for new products or to extend the capability of
existing products and to assess their commercial potential.
Customer-sponsored research and development programs are principally related to
military programs in the Military Systems segment. Major customer-sponsored
research and development programs include: continued development of
improvements to the AN/SQR-18A(V) TACTAS system; improvements to the MK-105
mine countermeasures system; development of a new surface ship sonar system;
development of a combat integration system; and development of new and improved
stores launchers.
Expenditures under development contracts with customers vary in amount from
year to year because of the timing of contract funding. During 1993,
expenditures for customer-sponsored research and development was down 13%
primarily as a result of less available funding consistent with the general
decline in military spending.
Company-sponsored research and development has contributed to a number of
advances in sonar systems, transducers, filament-wound structures, and a new
technique for manufacturing golf club shafts.
Principal current research and development involves image and signal processing
and other improvements for sonars, improvements to minesweeping technology;
continued development of its satellite-based sensors; new advancements in
sporting goods products; and new products for the compressed natural gas
market.
The following table sets forth research and development expenditures for the
periods presented.
Year Ended December 31,
1993 1992 1991
(in thousands)
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Customer-sponsored $14,100 $16,100 $20,700
Company-sponsored 6,000 5,300 3,800
Total $20,100 $21,400 $24,500
MARKETING AND INTERNATIONAL SALES
Military sales of the Company's products to both the U.S. and foreign
governments are usually made under negotiated long-term contracts or
subcontracts covering one or more years of production. The Company believes
that its long history of association with its military customers is an
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important factor in the Company's overall business, and that the experience
gained through this history has enhanced the Company's ability to anticipate
its customers' needs. The Company's approach to its military business is to
anticipate specific customer needs and to develop systems to meet those needs
either at its own expense or pursuant to research and development contracts.
The Company sells products in its Military Systems segment as a prime
contractor and through subcontracts with other military prime contractors. In
addition to military sales to the U.S. Department of Defense, the Company also
sells Military Systems segment equipment to the U.S. Government for resale to
foreign governments under the Foreign Military Sales program and, subject to
approval by the U.S. Department of State, directly to foreign governments.
Products within the Commercial and Other Products segment are sold in
industrial and commercial markets. In foreign markets piezoelectric and
electronic products are generally sold commercially through a network of sales
representatives. Fiber-reinforced composite products are sold, in certain
product areas, on a direct basis and, in other product areas, through sales
representatives. The Company's sports products are generally sold through
independent distributors, dealers, and original equipment manufacturers.
It is the Company's policy to denominate all foreign contracts from its U.S.
operations in U.S. dollars and to incur no significant costs in connection with
long-term foreign contracts until the Company has received advance payments or
letters of credit on amounts due under the contracts. The Company's only
significant asset outside the United States is its majority-owned subsidiary,
EDO (Canada) Limited, which represents approximately 5% of the Company's total
consolidated assets.
BACKLOG
A significant portion of the Company's sales are made to the U.S. armed
services and foreign governments pursuant to long-term contracts. Accordingly,
the Company's backlog of unfilled orders consists in large part of orders under
these government contracts. As of December 31, 1993, the Company's total
backlog was approximately $89.2 million, as compared with $94.2 million on
December 31, 1992. Of the total backlog as of December 31, 1993, approximately
66% was scheduled for delivery in 1994. Total backlog as of December 31, 1993,
divided between the Company's two industry segments, was Military Systems,
$64.2 million, and Commercial and Other Products, $25.0 million, as compared,
respectively, with $66.8 million and $27.4 million as of December 31, 1992.
GOVERNMENT CONTRACTS
Sales to the U.S. Government, as a prime contractor and through subcontracts
with other prime contractors, accounted for 56% of the Company's 1993 net sales
compared with 60% in 1992 and 61% in 1991, and consisted primarily of sales to
the Department of Defense. Such sales do not include sales of military
equipment to the U.S. Government for resale to foreign governments under the
Foreign Military Sales program.
The Company's military business can be and has been significantly affected by
changes in national defense policy and spending. The Company's U.S. Government
contracts and subcontracts and certain foreign government contracts contain the
usual required provisions permitting termination at any time for the
convenience of the government with payment for work completed and committed
along with associated profit at the time of termination.
The Company's contracts with the Department of Defense consist of fixed price
contracts, cost-reimbursable contracts and incentive contracts of both types.
Fixed-price contracts provide fixed compensation for specified work.
Cost-reimbursable contracts require the Company to perform specified work in
return for reimbursement of costs (to the extent allowable under government
regulations) and a specified fee. In general, while the risk of loss is greater
under fixed-price contracts than under cost-reimbursable contracts, the
potential for profit under such contracts is greater than under
cost-reimbursable contracts. Under both fixed-price incentive contracts and
cost-reimbursable incentive contracts, an incentive adjustment based on
attainment of scheduling, cost, quality or other goals is made in the Company's
fee. The distribution of the Company's government contracts among the
categories of contracts referred to above varies from time to time, although in
recent years only a small percentage of the Company's contracts have been on a
cost-reimbursable basis.
COMPETITION AND OTHER FACTORS
The Company's products are sold in competitive markets containing a number of
competitors substantially larger than the Company with greater financial
resources. Direct sales of military products to U.S. and foreign governments
are based principally on product performance and reliability. Such products are
generally sold in competition with products of other manufacturers which may
fulfill an equivalent function, but which are not direct substitutes.
The Company purchases certain materials and components used in its systems and
equipment from independent suppliers. These materials and components are
normally not purchased under long-term contracts unless the Company has
actually received a long-term sales contract requiring them. The Company
believes that most of the items it purchases are obtainable from a variety of
suppliers and it normally obtains alternative sources for major items, although
the Company is sometimes dependent on a single supplier or a few suppliers for
some items.
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It is difficult to state precisely the Company's market position in all of its
market segments because information as to the volume of sales of similar
products by its competitors is not generally available and the relevant markets
are often not precisely defined. However, the Company believes that it is a
significant factor in the markets for stores ejectors for military aircraft,
military sonar systems, helicopter-towed mine countermeasure systems,
piezoelectric ceramics, satellite horizon sensors, and natural gas vehicle
refueling stations.
Although the Company owns some patents and has filed applications for
additional patents, it does not believe that its operations depend upon its
patents. In addition, most of the Company's U.S. Government contracts license
it to use patents owned by others. Similar provisions in the U.S. Government
contracts awarded to other companies make it impossible for the Company to
prevent the use by other companies of its patents in most domestic defense
work. However, several patents recently granted to the Company and pending in
the areas of sports products and compressed natural gas vehicle products may
prove to be important to the Company's business in these areas.
EMPLOYEES
As of December 31, 1993, the Company employed 1,051 persons.
EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Position and Term of Office
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Gerald Albert 69 Chairman of the Board since November 1993, Chief
Executive Officer since 1984 and Director
since 1971.
Frank A. Fariello 59 President and Chief Operating Officer since November
1993, Executive Vice President from 1989 to 1993,
and Director since 1982.
Marvin D. Genzer 53 Vice President since 1990, General Counsel since
1988, and Assistant Secretary since 1987.
Michael J. Hegarty 54 Vice President-Finance since 1981, Treasurer since
1967, Secretary since 1985 and Director since 1982.
Each executive officer is appointed by the Board of Directors (the "Board"),
and holds office until the first meeting of the Board following the next
succeeding annual meeting of shareholders, and thereafter until a successor is
appointed and qualified, unless the executive officer dies, is disqualified,
resigns or is removed in accordance with the Company's By-Laws.
ITEM 2. PROPERTIES
All operating properties are leased facilities, except for the College Point
corporate headquarters and manufacturing facility. The Company's facilities are
adequate for present purposes. Although all facilities in the following listing
are suitable for expansion by using available but unused space, leasing
additional available space, or by physical expansion of leased or owned
buildings, the Company is offering for sale a material portion of its College
Point facility. The Company's obligations under the various leases are set
forth in Note 16 on page 27 of the Company's 1993 Annual Report to
Shareholders, which is incorporated by reference.
Set forth below is a listing of the Company's principal plants and other
materially important physical properties.
Approximate
Floor Area
Location (in sq. ft.)
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Military Systems:
Marine and Aircraft College Point, NY 318,000
Marine and Aircraft Systems Salt Lake City, UT 28,000
Command Systems Chesapeake, VA 17,000
Undersea Warfare Systems Salt Lake City, UT 70,000
Commercial and Other Products:
Acoustic Products Salt Lake City, UT 47,000
Electro-Optics Division Shelton, CT 71,000
Fiber Science Salt Lake City, UT 90,000
EDO (Canada) Limited Calgary, Alberta, Canada 65,000
ANGI Milton, WI 31,000
Sports Salt Lake City, UT 15,000
ITEM 3. LEGAL PROCEEDINGS
The information set forth under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 14, 15 and
16, and in Note 17 on page 27 of the Company's 1993 Annual Report to
Shareholders is incorporated by reference.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information set forth under the headings "Common Share Prices" and
"Dividends" on page 16, together with dividend information contained in the
"Consolidated Statements of Shareholders' Equity" table on page 19 and Notes 9
and 10 on pages 23 and 24 of the Company's 1993 Annual Report to Shareholders
are incorporated by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information set forth under the heading "Selected Financial Data" on page
13 of the Company's 1993 Annual Report to Shareholders is incorporated by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information set forth under the heading "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 14, 15 and
16 of the Company's 1993 Annual Report to Shareholders is incorporated by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Company, together with the
Independent Auditors' Report thereon of KPMG Peat Marwick and the unaudited
"Quarterly Financial Information" are set forth on pages 17 through 29 of the
Company's 1993 Annual Report to Shareholders, which are incorporated 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
Information regarding directors is set forth under "Election of Directors" on
pages 1 and 2 of the Company's Proxy Statement dated March 23, 1994, which is
incorporated by reference.
Information regarding executive officers is set forth in Part I of this Report
under "Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
Information regarding compensation of the Company's executive officers is set
forth under "Compensation of Executive Officers" on pages 4 through 7 of the
Company's Proxy Statement dated March 23, 1994, which is incorporated by
reference, except for such information required by Item 402(k) and (l) of
Regulation S-K, which shall not be deemed to be filed as part of this Report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding security ownership of certain beneficial owners and
management is set forth on pages 3 and 8 of the Company's Proxy Statement dated
March 23, 1994, which is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements And Financial Statement Schedules And Exhibits
1. Financial Statements.
The consolidated financial statements for the years ended December 31, 1993,
1992 and 1991, together with the report thereon of KPMG Peat Marwick,
independent auditors, dated March 4, 1994, appearing on pages 17 through 28 of
the Company's 1993 Annual Report to Shareholders, are attached as Exhibit 13 to
this Report.
2. Financial Statement Schedules.
Schedule V - Property, Plant and Equipment for the years ended December 31,
1993, 1992 and 1991.
Schedule VI - Accumulated Depreciation and Amortization of Property, Plant and
Equipment for the years ended December 31, 1993, 1992 and 1991.
Schedule X - Supplementary Income Statement Information for the years ended
December 31, 1993, 1992 and 1991.
The above schedules have been included elsewhere in this Report.
The Financial Statement Schedules should be read in conjunction with the
consolidated financial statements in the 1993 Annual Report to Shareholders.
The opinion of KPMG Peat Marwick, independent auditors, precedes the
aforementioned schedules. Schedules not included in these Financial Statement
Schedules have been omitted
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either because they are not applicable or the required information is shown in
the consolidated financial statements or notes thereto.
3. Exhibits.
Exhibits which are noted with an asterisk (*) are management contracts or
compensatory plans or arrangements.
3(i) Certificate of Incorporation of the Company and amendments thereto dated
June 14, 1984, July 18, 1988 and July 22, 1988. Incorporated by reference to
Exhibit 3(a) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989.
3(ii) By-Laws of the Company.
4(a) Indenture dated December 1, 1986 between Manufacturers Hanover Trust
Company, as Trustee, and EDO Corporation. Incorporated by reference to Exhibit
4(b) to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992.
4(b) Guarantee Agreement, dated as of July 22, 1988, as amended, made by the
Company in favor of National Westminster Bank USA as successor in interest to
Manufacturers Hanover Trust Company. Incorporated by reference to Exhibit 4(c)
to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992.
4(c) Term Loan Agreement, dated as of July 22, 1988, as amended, between The
Bank of New York, as trustee of the trust established under the EDO Corporation
Employee Stock Ownership Plan, and National Westminster Bank USA as successor
in interest to Manufacturers Hanover Trust Company. Incorporated by reference
to Exhibit 4(d) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992.
4(d) Term Note, dated July 22, 1988, as amended, between The Bank of New York,
as trustee of the trust established under the EDO Corporation Employee Stock
Ownership Plan, and National Westminster Bank USA as successor in interest to
Manufacturers Hanover Trust Company. Incorporated by reference to Exhibit 4(e)
to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992.
4(e) Pledge and Security Agreement, dated as of July 22, 1988, as amended,
between The Bank of New York, as trustee of the trust established under the EDO
Corporation Employee Stock Ownership Plan, and National Westminster Bank USA as
successor in interest to Manufacturers Hanover Trust Company. Incorporated by
reference to Exhibit 4(f) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992.
4(f) First Amended and Restated Credit Agreement, dated as of March 3, 1994,
amongst The Bank of New York, individually and as agent, Chemical Banking
Corporation, National Westminster Bank USA and EDO Corporation.
4(g) Amendment No. 6 to the Guarantee Agreement referred to in Exhibit 4(b)
above. Incorporated by reference to Exhibit 4(i) to the Company's Annual Report
on Form 10-Q for the fiscal year ended December 31, 1992.
4(h) Amendment No. 7 to the Guarantee Agreement referred to in Exhibit 4(b)
above, effective March 3, 1994.
10(a)* EDO Corporation 1980 Stock Option Plan, as amended through July 22,
1988. Incorporated by reference to Exhibit 10(a) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992.
10(b)* EDO Corporation 1985 Stock Option Plan, as amended through January 24,
1989. Incorporated by reference to Exhibit 10(c) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1989.
10(c)* EDO Corporation 1988 Stock Option Plan as amended through July 22,
1988.
10(d)* EDO Corporation 1983 Long-Term Incentive Plan as amended through July
22, 1988.
10(e)* EDO Corporation 1988 Long-Term Incentive Plan as amended through July
22, 1988.
10(f)* EDO Corporation Executive Termination Agreements, as amended through
November 24, 1989, between the Company and four employees. Incorporated by
reference to Exhibit 10(g) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
10(g)* Executive Life Insurance Plan Agreements, as amended through January
23, 1990, between the Company and thirty-four employees and retirees.
Incorporated by reference to Exhibit 10(h) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989.
10(h)* Form of Directors' and Officers' Indemnification Agreements between EDO
Corporation and twenty current or former Company directors and officers.
Incorporated by reference to Exhibit 10(i) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991.
10(i) Subscription Agreement, dated December 18, 1987, between EDO (Canada)
Limited and Her Majesty the Queen in right of the Province of Alberta, as
represented by the Minister of Economic Development
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and Trade. Incorporated by reference to Exhibit 10(i) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1992.
10(j) Consent Decree, entered on November 25, 1992, amongst the United States,
EDO Corporation, Plessey, Inc., Vernitron Corporation and Pitney Bowes, Inc.
Incorporated by reference to Exhibit 10(j) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992.
13 Annual Report to Shareholders of EDO Corporation for fiscal year ended
December 31, 1993. Such report is furnished for the information of the
Commission only and, except for those portions thereof which are expressly
incorporated by reference in this Annual Report on Form 10-K, is not to be
deemed filed as part of this Report (not filed electronically).
13(a) Pages 13-29 of the Registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1993.
21 List of Subsidiaries.
23 Accountants' Consent to the incorporation by reference in the Company's
Registration Statements on Form S-8 of their reports included in the 1993
Annual Report to Shareholders and in Item 14(a)2 hereto.
24 Powers of Attorney used in connection with the execution of this Annual
Report on Form 10-K.
(b) Reports on Form 8-K
A Current Report on Form 8-K was filed on December 2, 1993 reporting on the
acquisition by the Company of substantially all the assets of Automotive
Natural Gas, Inc. Financial statements associated with and required by such
Report were filed on February 14, 1994.
- 7 -
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.
EDO CORPORATION (Registrant)
Dated: March 28, 1994 By: Michael J. Hegarty
Michael J. Hegarty
Vice President-Finance
Pursuant to the requirements of Instruction D to Form 10-K under the Securities
Exchange Act of 1934, this Report has been signed below on March 28, 1994 by
the following persons on behalf of the Registrant and in the capacities
indicated.
Signature Title Date
- - -------------------------------------------------------------------------------
Michael J. Hegarty Vice President- March 28, 1994
(Michael J. Hegarty) Finance, Secretary,
Treasurer
and Director
Gerald Albert Chairman of the Board,
Chief Executive Officer
and Director
Frank A. Fariello President,
Chief Operating Officer
and Director
Marvin D. Genzer Vice President,
General Counsel and
Assistant Secretary
Kenneth A. Paladino Controller By: Michael J. Hegarty
Alfred Brittain III Director
Joseph F. Engelberger Director Michael J. Hegarty
Robert M. Hanisee Director Attorney-in-Fact
Robert A. Lapetina Director March 28, 1994
John H. Meyn Director
Richard Rachals Director
Ralph O. Romaine Director
William R. Ryan Director
- 8 -
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
EDO Corporation:
Under date of March 4, 1994, we reported on the consolidated balance sheets of
EDO Corporation and subsidiaries as of December 31, 1993 and 1992 and the
related consolidated statements of operations, shareholders' equity and cash
flows for each of the years in the three-year period ended December 31, 1993,
as contained in the 1993 annual report to shareholders. These consolidated
financial statements and our report thereon are incorporated by reference in
the annual report on Form 10-K for the year 1993. In connection with our audits
of the aforementioned consolidated financial statements, we also have audited
the related financial statement schedules as listed in item 14(a)2. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation
to the basic consolidated financial statements taken as a whole, present
fairly, in all material respects, the information set forth therein.
As discussed in the notes to the consolidated financial statements, the Company
changed its methods of accounting for income taxes and postretirement health
care and life insurance benefits in 1993.
KPMG PEAT MARWICK
Jericho, New York
March 4, 1994
SCHEDULE V
EDO CORPORATION AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 (IN THOUSANDS)
Balance Retirements,
at sales or Balance at
beginning Additions other end of
Classification of period at cost changes period
- - -------------------------------------------------------------------------------
Year ended December 31, 1993:
Land and land $2,014 -- -- 2,014
improvements
Buildings and 28,167 418 -- 28,585
building improvements
Machinery and 49,341 2,786 (341) 51,786
equipment
Leasehold 8,715 1,313 (24) 10,004
improvements -------- ------- ------- -------
$88,273 4,517 (365) 92,389
- - -------------------------------------------------------------------------------
Year ended December 31, 1992:
Land and land $2,014 -- -- 2,014
improvements
Buildings and 27,835 335 (3) 28,167
building improvements
Machinery and 45,906 4,093 (658) 49,341
equipment
Leasehold 8,621 138 (44) 8,715
improvements -------- ------- ------- -------
$84,376 4,566 (705) 88,237
- - -------------------------------------------------------------------------------
Year ended December 31, 1991:
Land and land $2,014 -- -- 2,014
improvements
Buildings and 27,523 312 -- 27,835
building improvements
Machinery and 41,177 5,388 (659) 45,906
equipment
Leasehold 8,850 (91) (138) 8,621
improvements -------- ------- ------- -------
$79,564 5,609 (797) 84,376
- - -------------------------------------------------------------------------------
- 9 -
SCHEDULE VI
EDO CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 (IN THOUSANDS)
Additions
Balance charged Retirements,
at to costs sales or Balance
beginning and other at end
Classification of period expenses changes of period
- - -------------------------------------------------------------------------------
Year ended December 31, 1993:
Land and land $267 29 -- 296
improvements
Buildings and 10,767 1,260 5,200 17,227
building improvements
Machinery and 31,220 4,318 594 36,132
equipment
Leasehold 3,605 844 408 4,857
improvements -------- ------- ------- -------
$45,859 6,451 6,202* 58,512
- - -------------------------------------------------------------------------------
Year ended December 31, 1992:
Land and land $238 29 -- 267
improvements
Buildings and 9,374 1,396 (3) 10,767
building improvements
Machinery and 27,437 4,440 (657) 31,220
equipment
Leasehold 3,055 595 (45) 3,605
improvements -------- ------- ------- -------
$40,104 6,460 (705) 45,859
- - -------------------------------------------------------------------------------
Year ended December 31, 1991:
Land and land $207 31 -- 238
improvements
Buildings and 7,929 1,438 7 9,374
building improvements
Machinery and 23,966 4,137 (666) 27,437
equipment
Leasehold 2,603 590 (138) 3,055
improvements -------- ------- ------- -------
$34,705 6,196 (797) 40,104
- - -------------------------------------------------------------------------------
* Includes $7,011 valuation allowance associated with restructuring.
SCHEDULE X
EDO CORPORATION AND SUBSIDIARIES
SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991 (IN THOUSANDS)
Charged to Costs and Expenses
Item 1993 1992 1991
- - ----------------------------------------------------------
Maintenance and repairs $2,653 $2,999 $3,380
Amounts for depreciation and amortization of intangible assets, pre-operating
costs and similar deferrals, taxes other than payroll and income taxes,
royalties and advertising costs are not presented as such amounts are less than
1% of total sales.
- 10 -
EXHIBIT INDEX
Exhibits which are noted with an asterisk (*) are management contracts or
compensatory plans or arrangements.
3(i) Certificate of Incorporation of the Company and amendments thereto dated
June 14, 1984, July 18, 1988 and July 22, 1988. Incorporated by reference to
Exhibit 3(a) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989.
3(ii) By-Laws of the Company.
4(a) Indenture dated December 1, 1986 between Manufacturers Hanover Trust
Company, as Trustee, and EDO Corporation. Incorporated by reference to Exhibit
4(b) to the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992.
4(b) Guarantee Agreement, dated as of July 22, 1988, as amended, made by the
Company in favor of National Westminster Bank USA as successor in interest to
Manufacturers Hanover Trust Company. Incorporated by reference to Exhibit 4(c)
to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992.
4(c) Term Loan Agreement, dated as of July 22, 1988, as amended, between The
Bank of New York, as trustee of the trust established under the EDO Corporation
Employee Stock Ownership Plan, and National Westminster Bank USA as successor
in interest to Manufacturers Hanover Trust Company. Incorporated by reference
to Exhibit 4(d) to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992.
4(d) Term Note, dated July 22, 1988, as amended, between The Bank of New York,
as trustee of the trust established under the EDO Corporation Employee Stock
Ownership Plan, and National Westminster Bank USA as successor in interest to
Manufacturers Hanover Trust Company. Incorporated by reference to Exhibit 4(e)
to the Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1992.
4(e) Pledge and Security Agreement, dated as of July 22, 1988, as amended,
between The Bank of New York, as trustee of the trust established under the EDO
Corporation Employee Stock Ownership Plan, and National Westminster Bank USA as
successor in interest to Manufacturers Hanover Trust Company. Incorporated by
reference to Exhibit 4(f) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992.
4(f) First Amended and Restated Credit Agreement, dated as of March 3, 1994,
amongst The Bank of New York, individually and as agent, Chemical Banking
Corporation, National Westminster Bank USA and EDO Corporation.
4(g) Amendment No. 6 to the Guarantee Agreement referred to in Exhibit 4(b)
above. Incorporated by reference to Exhibit 4(i) to the Company's Annual Report
on Form 10-Q for the fiscal year ended December 31, 1992.
4(h) Amendment No. 7 to the Guarantee Agreement referred to in Exhibit 4(b)
above, effective March 3, 1994.
10(a)* EDO Corporation 1980 Stock Option Plan, as amended through July 22,
1988. Incorporated by reference to Exhibit 10(a) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1992.
10(b)* EDO Corporation 1985 Stock Option Plan, as amended through January 24,
1989. Incorporated by reference to Exhibit 10(c) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1989.
10(c)* EDO Corporation 1988 Stock Option Plan as amended through July 22,
1988.
10(d)* EDO Corporation 1983 Long-Term Incentive Plan as amended through July
22, 1988.
10(e)* EDO Corporation 1988 Long-Term Incentive Plan as amended through July
22, 1988.
10(f)* EDO Corporation Executive Termination Agreements, as amended through
November 24, 1989, between the Company and four employees. Incorporated by
reference to Exhibit 10(g) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989.
10(g)* Executive Life Insurance Plan Agreements, as amended through January
23, 1990, between the Company and thirty-four employees and retirees.
Incorporated by reference to Exhibit 10(h) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1989.
10(h)* Form of Directors' and Officers' Indemnification Agreements between EDO
Corporation and twenty current or former Company directors and officers.
Incorporated by reference to Exhibit 10(i) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991.
10(i) Subscription Agreement, dated December 18, 1987, between EDO (Canada)
Limited and Her Majesty the Queen in right of the Province of Alberta, as
represented by the Minister of Economic Development and Trade. Incorporated by
reference to Exhibit 10(i) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992.
10(j) Consent Decree, entered on November 25, 1992, amongst the United States,
EDO Corporation, Plessey, Inc., Vernitron Corporation and Pitney Bowes, Inc.
Incorporated by reference to Exhibit 10(j) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992.
13 Annual Report to Shareholders of EDO Corporation for fiscal year ended
December 31, 1993. Such report is furnished for the information of the
Commission only and, except for those portions thereof which are expressly
incorporated by reference in this Annual Report on Form 10-K, is not to be
deemed filed as part of this Report (not filed electronically).
13(a) Pages 13-29 of the Registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1993.
21 List of Subsidiaries.
23 Accountants' Consent to the incorporation by reference in the Company's
Registration Statements on Form S-8 of their reports included in the 1993
Annual Report to Shareholders and in Item 14(a)2 hereto.
24 Powers of Attorney used in connection with the execution of this Annual
Report on Form 10-K.