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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-9514
ANDREW CORPORATION
(exact name of registrant as specified in its charter)
DELAWARE 36-2092797
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
10500 W. 153RD STREET, ORLAND PARK, ILLINOIS 60462
(Address of principal executive offices and zip code)
(708) 349-3300
(Registrant's telephone number, including area code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS
Common Stock, $.01 par value
Common Stock Purchase Rights
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 as 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 of
this Form 10-K. ( )
The aggregate market value of voting stock held by non-affiliates of the
Registrant as of November 30, 1996 was $3,501,110,729. The number of
outstanding shares of the Registrant's common stock as of that date was
60,489,128.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of the Registrant's Annual Report to Stockholders for the year ended
September 30, 1996 are incorporated by reference into Parts I and II.
Portions of the Proxy Statement for the annual stockholders' meeting to be
held February 11, 1997 are incorporated by reference into Part III.
PART I
ITEM 1-BUSINESS
GENERAL
All figures presented in this Form 10-K as well as any documents
incorporated by reference have been restated to reflect the recent acquisition
by Andrew Corporation ("Andrew" or the "Company") of The Antenna Company, which
was accounted for as a pooling of interests.
Andrew was reincorporated in Delaware in 1987. The Company previously was
incorporated in Illinois in 1947 as the successor to a partnership founded in
1937. Its executive offices are located at 10500 West 153rd Street, Orland Park,
Illinois, 60462, which is approximately 25 miles southwest of Chicago's loop.
Unless otherwise indicated by the context, all references herein to Andrew
include Andrew Corporation and its subsidiaries.
Andrew is a multinational supplier of communications products and systems
to worldwide commercial, industrial, governmental and military customers. Its
principal products include coaxial cables, microwave antennas for point-to-point
communication systems, special purpose antennas for commercial, government and
military end use, antennas and complete earth stations for satellite
communication systems, electronic radar systems, communication reconnaissance
systems, connectivity devices for use in communication systems, and related
ancillary items and services. These products are frequently sold as integrated
systems rather than as separate components. In addition, the Company sells
cellular antenna products and cellular telephone accessories. Andrew conducts
manufacturing operations, primarily from thirteen locations in the United States
and from four locations in other countries. Sales by non-U.S. operations and
export sales from U.S. operations accounted for approximately 47% of Andrew's
net sales in fiscal 1996, 44% in 1995, and 43% in 1994.
During fiscal 1996, Andrew completed three acquisitions which provided new
products and improved accessibility to expanding markets. In December 1995, the
Company purchased a 51% interest in Mapra Industria e Comerico Ltda. and Gerbo
Telecommunicacoes e Servicos Ltda., located in Brazil. Mapra and Gerbo
manufacture, distribute, and sell antennas, waveguides and towers and provide
installation services. Andrew also formed a cable manufacturing company with
Mapra and Gerbo in which Andrew holds a 70% interest. In March 1996, the Company
completed its acquisition of The Antenna Company, a manufacturer and distributor
of wireless telephone antennas and accessories for mobile applications. In June
1996, the company purchased an 80% interest in the Satcom Group of Companies, a
distributor of commercial products, located in South Africa.
During the year the Company operated in three strategic business areas,
Commercial, Government and Network. The Commercial business supplies coaxial
cable and antenna system equipment to telecommunications companies and agencies
and cellular antenna products and cellular phone accessories through retail
distribution channels of cellular service providers. The Government business
supplies specialized antenna systems, electronic radar systems, communication
reconnaissance systems, coaxial cable, standard antennas, and fully integrated
systems to various United States government agencies and friendly foreign
governments. The Network business supplies products and services through value
added and other resellers to data processing organizations that support the
interconnectivity needs of computer networks.
Information concerning Andrew's net sales (intersegment sales are
insignificant), operating profit and assets employed attributable to each
business area for fiscal 1996, 1995, and 1994 is included in the "Industry
Segment Information" note to Consolidated Financial Statements on page 31 of the
1996 Annual Report to Stockholders and is incorporated herein by reference.
PRODUCTS AND SERVICES
The following table sets forth net sales and percentages of total net sales
represented by Andrew's principal products during the last three years:
Year Ended September 30
1996 1995 1994
--------------------------------------------------------
(Dollars in thousands)
Coaxial Cable Systems and Bulk
Cables $415,633 52% $324,790 49% $248,613 42%
Microwave Antenna Systems 153,231 19 122,576 19 107,455 18
Special Antennas and Other 88,922 11 84,663 13 107,620 19
Wireless Accessories 63,498 8 48,355 7 34,065 6
Earth Station Antennas 32,830 4 28,840 4 19,246 3
Network Products 27,569 4 39,217 6 52,208 9
Defense Electronics 11,892 2 15,519 2 19,026 3
-------- ---- --------- ---- --------- -----
$793,575 100% $663,960 100% $588,233 100%
======== ==== ======== ==== ======== ====
Sales for the Company's business areas during the last three years were as
follows:
Year Ended September 30
1996 1995 1994
-------------------------------------
(Dollars in thousands)
Commercial $731,347 $579,984 $487,579
Government 34,063 41,455 43,611
Network 27,568 39,217 52,208
Other 597 3,304 4,835
-------- -------- --------
$793,575 $663,960 $588,233
======== ======== ========
PRINCIPAL PRODUCTS
COMMERCIAL BUSINESS
Coaxial Cable Systems and Bulk Cables:
Coaxial cable is a two-conductor, radio frequency transmission line with
the smaller of the two conductors centrally located inside the larger, tubular
conductor. It is principally used to carry radio frequency signals at
frequencies up to 2 GHz.
Waveguides are tubular conductors, the dimensions and manufacturing
tolerances of which are related to operating frequency. Waveguides find greatest
application at frequencies above 2 GHz, although they are also used in UHF-TV
broadcasting at frequencies in hundreds of megahertz. Andrew manufactures
waveguides with rectangular, circular and elliptical cross-sections. Most of
Andrew's waveguides are sold as part of its antenna systems.
Andrew sells its semi-flexible cables and waveguides under the trademark
HELIAX(R).
Microwave Antenna Systems:
A "microwave antenna system," as this term is used by Andrew, consists of
one or more microwave antennas, waveguides or coaxial cables connecting antennas
to transmitters or receivers, a tower to support the antennas, an equipment
shelter to house transmitters and receivers, various ancillary items, and field
installation services. If sold without a supporting tower, equipment shelter or
field installation, microwave antennas with their connecting cables or
waveguides are still considered by Andrew to be "microwave antenna systems."
Land-based microwave radio networks are commonly used by telecommunications
companies for intercity telephone, telex, video and data transmission. They are
also used for more specialized purposes by pipeline companies, electric
utilities and railroads.
Special Antennas and Other:
Andrew also manufactures and sells several types and configurations of
special application antennas. Applications include cellular systems, navigation,
FM and television broadcasting, multipoint distribution services and
instructional television. As with microwave antennas, Andrew considers sales of
special antennas and other various components used in the cellular market
(shelters and towers) and the installation of these components to be part of a
"cellular system."
The Company also designs and installs its proprietary distributed
communication systems. These systems permit in-building and enclosed area access
for all types of wireless communications. These systems utilize the Company's
semi-flexible coaxial cable sold under the tradename RADIAX(R).
Wireless Accessories:
Andrew manufactures and distributes accessories for personal communication
systems, cellular handsets and paging devices. Portable antennas, batteries,
battery chargers, paging accessories, hands free kits, and various other
wireless accessories are all included in this group. The recent acquisition of
The Antenna Company increased Andrew's product offering and opened domestic
distribution channels.
Earth Station Antennas:
Earth station antenna systems manufactured by Andrew are used at earth
terminals to receive signals from, and transmit signals to, communication
satellites in equatorial orbit. System elements include an antenna, from 6 to 40
feet in diameter, and may also include electronic controllers, waveguides,
polarizers, combiners, special mounting features, motor drives, position
indicators, transmitters and receivers. Andrew earth station antenna systems in
all sizes are used in various countries to broadcast and transmit programs, both
to CATV operators and to VHF or UHF broadcast stations, as well as for the long
distance transmission of conventional telecommunications traffic.
GOVERNMENT BUSINESS
Defense Electronics:
Andrew manufactures electronic scanning and communication receiver systems,
which are designed to search and monitor the electromagnetic spectrum from 20
MHz to 40 GHz. These systems are purchased primarily for intelligence gathering
in strategic surveillance operations which emphasize highly sensitive reception
of weak signals as well as accuracy of signal analysis data. The Company's
highly automated receiver systems are subsystems that are incorporated into
fully-integrated systems which, in addition to the Company's receiving and
analyzing equipment, include antennas and other equipment necessary to carry out
the overall electronic reconnaissance operation.
The Company is also engaged in the supply of fully integrated electronic
surveillance systems, both for military radar reconnaissance and for
non-military communications monitoring. These surveillance systems are custom
designed by the Company's engineering staff to meet customer requirements.
Other Products:
The Company also supplies specialized microwave antenna systems to
governmental agencies and the military. In addition, coaxial cables are used in
military countermeasure devices, radar and specialized instrumentation
applications.
Earth station antenna systems and special application antennas are used for
broadcasting programs and operational traffic to military bases and telemetry
traffic associated with widely dispersed environmental monitoring stations.
Andrew also manufactures pedestals and electronic controls for radio
frequency and optical systems used in military and defense markets.
NETWORK BUSINESS
Andrew designs, manufactures and markets advanced connectivity solutions
for IBM mainframe, and token ring systems. Products include protocol convertors,
local area network (LAN) gateways, terminal emulators, file transfer software,
multistation access units, adapter cards, repeaters, bridges and routers. In
addition, Andrew supplies channel interface products which provide direct
channel links between IBM or plug-compatible host computers and non-IBM devices
and networks, terminal to mainframe computer adapters and emulators for PCs and
printers, emulation for Macintosh devices and wiring products such as baluns and
star panels that provide cost-effective wiring connections for network
communications equipment.
INTERNATIONAL ACTIVITIES
Andrew's international operations represent a substantial portion of its
overall operating results and asset base. Manufacturing facilities are located
in Canada, Australia, the United Kingdom, and Brazil. Andrew's plants in the
United States also ship significant amounts of manufactured goods to export
markets. In Russia, Andrew participates in joint ventures that operate fiber
optic telecommunication networks.
During fiscal 1996, sales of products exported from the United States or
manufactured abroad were $376,743,000 (47% of total sales) compared with
$287,662,000 (44% of total sales) in fiscal 1995 and $250,067,000 (43% of total
sales) in fiscal 1994. Exports from the United States amounted to $112,648,000
in fiscal 1996, $103,090,000 in fiscal 1995, and $101,829,000 in fiscal 1994.
Sales and income before income taxes on a country-by-country basis may vary
considerably year to year. Further information on Andrew's international
operations is contained in the note "Geographic Area Information" to
Consolidated Financial Statements included on page 30 of the 1996 Annual Report
to Stockholders, incorporated herein by reference.
Andrew's international operations are subject to a number of risks,
including currency fluctuations, changes in foreign governments and their
policies, and expropriation or requirements of local or shared ownership. Andrew
believes that the geographic dispersion of its sales and assets generally
mitigates these risks.
MARKETING AND DISTRIBUTION
COMMERCIAL BUSINESS
Sales engineering functions, including product application assistance, are
performed by a staff of highly trained applications engineers located at each
manufacturing facility. In addition, field sales engineers are located in or
near Atlanta, Dallas, Los Angeles, New York, San Francisco, Washington, D.C.,
Essen and Munich (Germany), Hong Kong, Johannesburg (South Africa), London
(England), Madrid (Spain), Mexico City (Mexico), Milan (Italy), Moscow (Russia),
Paris (France), Sorocaba (Brazil), Tokyo (Japan), and Zurich (Switzerland).
Unlike most of its competitors, Andrew uses its own sales and sales engineering
staffs to service its principal markets, but follows the traditional practice of
using commissioned sales agents in countries with modest sales potential.
Approximately one-half of Andrew's products are sold directly to end users.
Most of the remainder is sold to radio equipment companies which install
Andrew's products as part of a total system, with the balance being sold through
dealers and jobbers. Small or medium-size orders are normally shipped from
inventory; delivery schedules on larger orders are negotiated, but seldom exceed
five months. Andrew's sales are principally standard, proprietary items although
unique specifications or features are incorporated for special order situations.
Because most of Andrew's business is derived from large telecommunications
system operators and the radio equipment manufacturers who supply this industry,
Andrew has tailored its business strategy to serve the needs of technically
sophisticated buyers. In particular, Andrew has emphasized the compatibility of
antennas, transmission lines and related components in order to optimize their
performance as an integrated subsystem.
The commercial business also includes mobile cellular products such as
antennas and cellular telephone accessories. These products are sold primarily
through the retail distribution channels of cellular service providers. In
addition, mobile cellular products are sold to distributors who then resell
these products to dealers and cellular carriers.
GOVERNMENT BUSINESS
The specialized needs of the Company's customers and the technology
required to meet those needs change constantly. Accordingly, the Company
stresses its engineering, installation, service and other support capabilities
to its government and military customers. To provide close communication with
these customers and to discern developments and trends in procurement
requirements, the Company has established a team of sales engineers located in
five offices in the United States and one office in the United Kingdom. The
Company also utilizes sales representatives in the United Kingdom, Germany and
the Middle East. In addition, technical program support and direct sales
engineering are performed at each location. The Company places great emphasis in
its marketing on extensive personal contact and continuous consultation with its
customers in an attempt to meet current technical requirements and anticipated
future technical requirements and to learn of upcoming procurement programs in
which its products may have application.
NETWORK BUSINESS
The Company's Network business emphasizes support of three major computer
connectivity market segments: mainframe interface, microcomputer to IBM midrange
access, and token ring local area networking (LAN). Due to the specialized
customer needs within these markets, each area has distinct marketing and
distribution channels. Mainframe products are sold to Original Equipment
Manufacturers (OEMs) and to a select group of specialized system integrators
whose focus is on the mainframe computer user. In the midrange area, the Company
concentrates on a large group of highly specialized midrange computer dealers
and Value-Added Resellers (VARs). LAN products are sold through a distribution
network of VARs, resellers and telesales. In addition, Andrew maintains business
partner relationships with a select group of systems integrators in order to
provide strong high-end product support channels for customers. Service and
technical support is an integral part of the Company's sales program for all
product groups and is provided either by the VAR or directly by the factory.
MAJOR CUSTOMERS
Andrew serves more than 6,000 customers in more than 130 countries. In the
last three years, aggregate sales to the ten largest customers averaged
approximately 26% of aggregate consolidated sales. No single customer has
accounted for over 10% of consolidated annual sales in any of the last three
years.
In fiscal 1996, 1995 and 1994, direct and indirect sales to U.S.
governmental agencies amounted to $18,250,000, $22,337,000, and $27,840,000,
respectively.
MANUFACTURING AND RAW MATERIALS
Andrew generally develops, designs, fabricates, manufactures and assembles
its products. In the Commercial business, cable and waveguide products are
produced at its plants in Illinois, Brazil, and the United Kingdom. Microwave
and earth station antennas are manufactured in Texas and Australia.
Self-supporting and guyed towers are also manufactured in Texas. Equipment
shelters are manufactured in Georgia and California. Wireless antennas and
accessories for mobile applications are manufactured in Illinois.
Andrew's defense electronic products are manufactured in plants located in
Texas. The Company's products are manufactured from both standard components and
parts that are built to the Company's specifications by other manufacturers. A
large number of the Company's products contain multiple microprocessors for
which proprietary machine readable software is designed by the Company's
engineers and technicians.
Network products are produced at plants in California. The production
process principally entails the assembly of electronic components.
Andrew considers its sources of supply for all raw materials to be adequate
and is not dependent upon any single supplier for any significant portion of
materials used in its products.
RESEARCH AND DEVELOPMENT
Andrew believes that the successful marketing of its products depends upon
its research, engineering and production skills. Research and development
activities are undertaken for new product development and for product and
manufacturing process improvement. In fiscal 1996, 1995 and 1994 Andrew spent
$33,003,000, $25,124,000, and $26,611,000, respectively, on research and
development activities.
Andrew holds approximately 273 active patents relating to its products
expiring at various times between 1998 and 2004, and attempts to obtain patent
protection for significant developments whenever possible. The Company does not
consider patents to be material to its operations nor would the loss of any
patents have a material adverse effect on operations.
COMPETITION
COMMERCIAL
Many large manufacturers of electrical or radio equipment, some of which
have substantially greater financial resources than Andrew, compete with some of
Andrew's antenna systems equipment, wireless products, and coaxial cable product
lines. In addition, there are a number of small independent companies that
compete with portions of these product lines. Andrew has traditionally focused
on specific specialized fields within the marketplace which require
sophisticated technology and support services. Andrew competes principally on
the basis of product quality, service, and continual technological enhancement
of its products.
GOVERNMENT
There are numerous manufacturers of electronic radar systems, communication
reconnaissance systems and specialized antenna systems that supply their
equipment to United States government agencies and friendly foreign governments.
There is substantial competition within the market and the Company is not a
major competitor. Due to fixed-price contracts and pre-defined contract
specifications prevalent within this market, the Company competes primarily on
the basis of its ability to provide state-of-the-art solutions in this
technologically demanding marketplace while maintaining its competitive pricing.
NETWORK
Within the corporate network communications market, Andrew's principal
competitor is IBM which provides similar products across Andrew's product line.
There are also numerous other manufacturers that compete with portions of
Andrew's product line. Andrew's principal bases of competition within this
market are product quality and reliability and product support.
BACKLOG AND SEASONALITY
The following table sets forth the backlog of orders believed to be firm in
each of Andrew's businesses (government orders included herein are funded
orders):
Orders to be Shipped as of September 30
1996 1995
--------------------- ----------------------
(Dollars in thousands)
Within After Within After
12 Months 12 Months 12 Months 12 Months
-------- --------- --------- ---------
Commercial $144,700 $14,700 $115,600 $18,500
Government 7,500 --- 9,800 --
Network 1,200 --- 800 --
-------- -------- --------- --------
$153,400 $14,700 $126,200 $18,500
======== ======== ========= ========
Due to variability of shipments under large contracts, customers' seasonal
installation considerations, variations in product mix and in profitability of
individual orders, the Company may experience wide quarterly fluctuations in net
sales and income. These variations can be expected to continue in the future.
Consequently, it is more meaningful to focus on annual rather than interim
results.
ENVIRONMENT
The Company engages in a variety of activities to comply with various
federal, state and local laws and regulations involving the protection of the
environment. Compliance with such laws and regulations does not currently have a
significant effect on the Company's capital expenditures, earnings, or
competitive position. In addition, the Company has no knowledge of any
environmental condition(s) which might individually or in the aggregate have a
material adverse effect on the Company's financial condition.
EMPLOYEES
At September 30, l996, Andrew had 4,622 employees, 3,460 of whom were
located in the United States. None of Andrew's employees are subject to
collective bargaining agreements. As a matter of policy, Andrew seeks to
maintain good relations with employees at all locations and believes that such
relations are good.
REGULATION
Andrew is not directly regulated by any governmental agency in the United
States. Most of its customers, and the telecommunications industry generally,
are subject to regulation by the Federal Communications Commission (the "FCC").
The FCC controls the allocation of transmission frequencies and the performance
characteristics of earth station antennas. As a result of these controls,
Andrew's antenna design specifications must be conformed on an ongoing basis to
meet FCC requirements. This regulation has not adversely affected Andrew's
operations.
Outside of the United States, where many of Andrew's customers are
government owned and operated entities, changes in government economic policy
and communications regulation have affected in the past, and may be expected to
affect in the future, the volume of Andrew's non-U.S. business. However, the
effect of regulation in countries other than the U.S. in which Andrew does
business has generally not been detrimental to Andrew's non-U.S. operations
taken as a whole.
GOVERNMENT CONTRACTS
Andrew performs work for the United States Government primarily under
fixed-price prime contracts and subcontracts. Under fixed-price contracts,
Andrew realizes any benefit or detriment occasioned by lower or higher costs of
performance. Total direct and indirect sales to agencies of the United States
Government, which are generally fixed-price contracts, were $18,250,000 in
fiscal 1996, $22,337,000 in 1995, and $27,840,000 in 1994. These contracts are
typically less than 12 months in duration.
Andrew, in common with other companies which derive a portion of their
revenues from the United States Government, is subject to certain basic risks,
including rapidly changing technologies, changes in levels of defense spending,
and possible cost overruns. Recognition of profits is based upon estimates of
final performance which may change as contracts progress. Contract prices and
costs incurred are subject to Government Procurement Regulations. In addition,
costs may be questioned by the Government and are subject to disallowance.
All United States Government contracts contain a provision that they may be
terminated at any time for the convenience of the Government. In such event, the
contractor is entitled to recover allowable costs plus any profits earned to the
date of termination.
ITEM 2-PROPERTIES
Andrew has seventeen manufacturing facilities, thirty-nine engineering and
sales administration locations and seven distribution facilities. All are
equipped with appropriate office space. Andrew's executive offices are located
at the facility in Orland Park, Illinois. The following table sets forth certain
information regarding significant facilities:
Approximate
floor area in
Location square feet Principal Use Owned/Leased
- -------- ------------ ------------- ------------
Orland Park, Illinois 551,000 Commercial and Government Owned
Denton, Texas 244,000 Commercial and Government Owned
Newnan, Georgia 109,000 Commercial Owned
Garland, Texas 89,000 Government Owned
Itasca, Illinois 78,000 Commercial Leased
Richardson, Texas 68,000 Commercial Leased
Dolton, Illinois 55,000 Commercial Leased
Addison, Illinois 54,000 Commercial Leased
Tinley Park, Illinois 54,000 Commercial Leased
Sacramento, California 54,000 Commercial Leased
----------
U.S. sub-total 1,356,000
Sorocaba, Sao Paulo, Brazil 143,000 Commercial Owned
Lochgelly, Fife, United Kingdom 132,000 Commercial and Government Owned
Campbellfield, Victoria, Australia 115,000 Commercial and Government Owned
Whitby, Ontario, Canada 92,000 Commercial and Government Owned
----------
Non U.S. sub-total 482,000
----------
TOTAL 1,838,000
==========
The Company's properties are in good condition and are suitable for the purposes
for which they are used.
Andrew owns a total of 664 acres of land. Of this total, 565 acres are
unimproved, including 181 acres in Orland Park, Illinois, 137 acres in Floyd,
Texas, l43 acres in Denton, Texas, and 98 acres in Ashburn, Ontario, Canada.
Andrew also leases sales offices and facilities in the United States and in
thirteen countries outside the United States.
ITEM 3-LEGAL PROCEEDINGS
Andrew is not involved in any pending legal proceedings which are
expected to have a materially adverse effect on its financial position, nor
is it aware of any proceedings of this nature or relating to the protection
of the environment contemplated by governmental authorities.
ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters which required a vote of security holders during
the three months ended September 30, l996.
PART II
ITEM 5-MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Company's Common Stock is traded over-the-counter on the Nasdaq
National Market.
The Company had 3,734 holders of Common Stock of record at December 18,
1996.
Information concerning the Company's stock price during the years
ended September 30, l996 and 1995 is incorporated herein by reference from
Andrew's l996 Annual Report to Stockholders, page 32. All prices represent
high and low sales prices as reported by the Nasdaq National Market.
It is the present practice of Andrew's Board of Directors to retain
earnings in the business to finance the Company's operations and investments
and the Company does not anticipate payment of cash dividends in the foreseeable
future.
Long-term debt agreements include restrictive covenants which, among
other things, provide restrictions on dividend payments. At September 30, l996,
$307,812,000 was not restricted for purposes of such payments.
ITEM 6-SELECTED FINANCIAL DATA
Selected financial data for the last five fiscal years is incorporated
herein by reference to the l996 Annual Report to Stockholders, pages 34 and 35.
ITEM 7-MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information concerning this item is incorporated herein by reference from
the l996 Annual Report to Stockholders, pages 14 through 18.
ITEM 8-FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements of the Company, Notes to Consolidated
Financial Statements, Selected Quarterly Financial Information, and the
report thereon of the independent auditors are incorporated herein by
reference to the 1996 Annual Report to Stockholders, pages 19 through 33.
ITEM 9-CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
None
PART III
ITEM 10-DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning directors and executive officers of the Registrant
is incorporated herein by reference from the Company's l996 Proxy Statement
under the captions "Election of Directors" and "Executive Officers" and
"Section 16(a) Beneficial Ownership Reporting Compliance."
ITEM 11-EXECUTIVE COMPENSATION
Information concerning management compensation is incorporated herein
by reference from the Company's l996 Proxy Statement under the captions
"Executive Compensation", "Director Compensation," "Report of the
Compensation Committee of the Board of Directors" and "Company Performance."
ITEM 12-SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning security ownership of certain beneficial owners
and management is incorporated herein by reference from the Company's l996 Proxy
Statement under the caption "Security Ownership."
ITEM 13-CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions is
incorporated herein by reference from the Company's 1996 Proxy Statement
under the caption "Security Ownership."
PART IV
ITEM 14-EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following consolidated financial statements of Andrew Corporation and
subsidiaries, included in the l996 Annual Report to Stockholders, are
incorporated by reference in Item 8:
Consolidated Statements of Income
years ended September 30, l996, 1995 and l994.........................page 19
Consolidated Balance Sheets
September 30, l996 and 1995...................................pages 20 and 21
Consolidated Statements of Cash Flows
years ended September 30, l996, l995 and l994.........................page 22
Consolidated Statements of Stockholders' Equity
years ended September 30, l996, 1995 and l994.........................page 23
Notes to Consolidated Financial Statements................pages 24 through 31
Selected Quarterly Financial Information..............................page 32
Report of Independent Auditors........................................page 33
ITEM 14 CONT.
(3) EXHIBIT INDEX:
Exhibit No. Description Reference
----------- ----------- ---------
3.1(i) Certificate of Incorporation Filed as Exhibit 3.1(i) to Form 10-K for fiscal year ended
September 30, 1994 and incorporated herein by reference.
3.1(ii) By-Laws of Registrant Filed as Exhibit 3.1(ii) to Form 10-K for fiscal year ended
September 30, 1994 and incorporated herin by reference.
4.(a) Note Agreement dated Filed as Exhibit 4(a) to Form 10-K for fiscal year ended
September 1, 1990 September 30, 1990 and incorporated herein by reference.
4.(a)a First Amendment to Note Filed as Exhibit 4(a)a to Form 10-K for fiscal year ended
Agreement dated September 30, 1992 and incorporated herein by reference.
September 1, 1990
4.(b) Stockholder Rights Agreement Filed as Exhibit 4 to Form 8-A dated November 18, 1996
dated November 14, 1996 and incorporated herein by reference.
10.(a) Executive Severance Benefit Plan Filed as Exhibit 10(a) to Form 10-Q for fiscal quarter ended
(i) Agreement with Floyd L. English June 30, 1996 and incorporated herein by reference.
(ii) Agreement with Charles R. Nicholas
10.(a)a Executive Severance Benefit Plan Filed as Exhibit 10(a)a to Form 10-K for fiscal year ended
(i) Agreement with Thomas E. Charlton September 30, 1993 and incorporated herein by reference.
(ii) Agreement with John B. Scott
10.(a)b Executive Severance Benefit Plan Filed as Exhibit 10(a)b to Form 10-Q for fiscal quarter ended
(i) Agreement with William B. Currer June 30, 1996 and incorporated herein by reference.
10.(b) Management Incentive Plan Filed as Exhibit 10(c) to Form 10-K for fiscal year ended
dated February 4, 1988. September 30, 1993 and incorporated herein by reference.
10.(c) Non-employee Directors' Filed as Exhibit 10(d) to Form 10-K for fiscal year ended
Stock Option Plan dated September 30, 1993 and incorporated herein by reference.
February 4, 1988.
10.(d) Credit Agreement dated as of Filed as Exhibit 10(e) to Form 10-K for fiscal year ended
June 16, 1993. September 30, 1993 and incorporated herein by reference.
10.(d)a First Amendment to Credit Filed as Exhibit 10(d)a to Form 10-K for fiscal year ended
Agreement dated June 16, 1993. September 30, 1995 and incorporated herein by reference.
10.(d)b Second Amendment to Credit Filed as Exhibit 10(d)b to Form 10-K for fiscal year ended
Agreement dated June 16, 1993. September 30, 1995 and incorporated herein by reference.
10.(d)c Third Amendment to Credit Filed as Exhibit 10(d)c to Form 10-Q for fiscal quarter ended
Agreement dated June 16, 1993. June 30, 1996 and incorporated herein by reference.
10.(d)d Guaranty dated as of Filed as Exhibit 10(d)d to Form 10-Q for fiscal quarter ended
April 11, 1996. June 30, 1996 and incorporated herein by reference.
10.(d)e Replacement Note dated as of Filed as Exhibit 10(d)e to Form 10-Q for fiscal quarter ended
April 8, 1996. June 30, 1996 and incorporated herein by reference.
10.(e) 1994 Employee Stock Purchase Filed with Proxy statement in connection with
Plan Annual Meeting held February 2, 1994.
11 Computation of Earnings
per Share
l3 l996 Annual Report to Those portions of the 1996 Annual Report to Shareholders
Stockholders expressly incorporated herein by reference.
21 List of Significant Subsidiaries
22 Proxy Statement in connection
with Annual Meeting to be held
on February 11, 1997 (To be
filed within 120 days of the
Registrant's fiscal year end.)
23 Consent of Independent Auditors
27 Financial Data Schedules
(b) Reports on Form 8-K
On September 20, 1996, the Company filed a restated 1995 Annual Report
under Item 5 of Form 8-K. Andrew restated the 1995 Annual Report due to the
acquisition of The Antenna Company which was accounted for as a pooling of
interests. In compliance with the accounting for a pooling of interests all
prior financial data has been restated to include the results of operations of
The Antenna Company.
REPORT OF INDEPENDENT AUDITORS
To the Stockholders and Board of Directors
Andrew Corporation
We have audited the consolidated financial statements of Andrew Corporation
and subsidiaries listed in Item 14 (a) of the annual report on Form 10-K of
Andrew Corporation for the year ended September 30, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Andrew Corporation and subsidiaries at September 30, 1996 and 1995, and
the consolidated results of their operations and their cash flows for each of
the three years in the period ended September 30, 1996 in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
October 25, 1996
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, on December 20,
1996.
Andrew Corporation
By \s\ Floyd L. English
--------------------------
Floyd L. English
Chairman, President, and
Chief Executive Officer
By \s\ Charles R. Nicholas
---------------------------
Charles R. Nicholas
Executive Vice President and
Chief Financial Officer
By \s\ Gregory F. Maruszak
---------------------------
Gregory F. Maruszak
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below on December 20,1996, by the following
persons on behalf of the Registrant in the capacities indicated.
\s\ John G. Bollinger \s\ Jere D. Fluno
---------------------- ------------------------
John G. Bollinger Jere D. Fluno
Director Director
\s\ Jon L. Boyes \s\ Carole M. Howard
---------------------- ------------------------
Jon L. Boyes Carole M. Howard
Director Director
\s\ George N. Butzow \s\ Ormand J. Wade
--------------------- ------------------------
George N. Butzow Ormand J. Wade
Director Director
\s\ Kenneth J. Douglas
-----------------------
Kenneth J. Douglas
Director
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
11 Computation of Earnings per Share
13 Portions of 1996 Annual Report to Shareholders
Incorporated by Reference
21 List of Significant Subsidiaries
23 Consent of Independent Auditors
27 Financial Data Schedule