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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended March 31, 1994
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 13, 1994 the aggregate market value of the Common Stock of the
registrant held by non-affiliates was $149,487,642.
At May 13, 1994 there were 9,297,009 shares of Common Stock of the
registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1994 Annual Report to Shareholders are incorporated by
reference in Parts I and II.
Portions of the proxy statement for the 1994 Annual Meeting of
Shareholders are incorporated by reference in Part III.
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PART I
Item 1. BUSINESS
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
sixteen states and two Western European countries.
As part of an ongoing management process of reviewing the contribution
of our businesses to strategic Corporate plans, the Company adopted a formal
plan which included a series of streamlining and restructuring actions and
discontinuance of certain nonstrategic business units. These actions resulted
in pretax charges of approximately $50 million recorded in the fourth quarter
ended March 31, 1994. Specific reference is made to the information contained
on the Section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Notes to Consolidated Financial
Statements in the Company's 1994 Annual Report.
These actions take the form of separating businesses into two business
segments: Information Support Products and Diversified Instrumentation. These
areas are described below.
INFORMATION SUPPORT PRODUCTS
The Information Support Products segment is focused on the support of
voice, data and video communications, with related product categories of
Transmission products, Generation products, and Presentation products.
Transmission Products
Telecommunications Techniques Corporation supplies innovative test and
measurement instruments used in the development, installation, and maintenance
of sophisticated telecommunications networks. The Telecom Test Division
manufactures a wide range of portable instruments and permanently located
systems which include the T-BERD(TM), CENTEST(TM) and FIBERSCAN(TM) product
lines. The CEPT Telecom Division, manufactures the INTERCEPTOR product line
of test instruments used primarily to support transmission standards specific
to certain international telecommunications networks. The Network Services
Group manufactures portable multi-function instruments, including the FIREBERD
product line of multi-functional digital communications analyzers.
The T-BERD product line was developed for testing needs related to the
T-Carrier, or North American digital telecommunications standard. This line
of portable test instruments contains a wide range of products designated by
three numbering series: 100,200 and 300. The 100 series primarily consists
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of handheld, battery operated instruments utilized by local and long distance
telephone company personnel to isolate and locate problems in the field. The
newly introduced T-BERD 107A has captured significant market share by
incorporating many features useful to technicians in a light weight package.
The 200 series products are used by personnel in the central offices of
the network services provider, closest to the end customer, often referred to
as the "digital loop" and provide more sophistication and a broader scope of
measurements than the 100 series. This broadened feature set allows central
office personnel the flexibility as to the number and types of measurements
available, as well as the capability to automate these measurements over time.
The newly introduced, Distributed Test Manager software (DTM), allows T-BERD
poducts to be remotely controlled from a network management center thereby
enabling enhanced coverage of multiple points in the network.
The 300 series is designed for the highest speed testing requirements.
These products enable the central office or long distance carrier technician
to pinpoint problems with networks typically running at speeds between 45
Mb/sec and 622 Mb/sec. The new T-BERD 310 SONET options enable the monitoring
and testing of SONET (Synchronous Optical Network) technology now being widely
deployed by network service providers.
The CENTEST product line consists of a family of rack-mounted systems
for use in the central office environment to test high speed communication
circuits remotely. The new CENTEST 650 allows monitoring and testing of DS3
signals for ongoing maintenance, so that network trouble spots can be quickly
identified and maintenance resources efficiently directed from a centralized
location.
The FIBERSCAN product line consists of an innovative, modular, portable
fiber optic test instrument which allows both central office and field
technicians to isolate fiber optic cable breaks and measure degradation caused
by aging connectors and related components. The instrument is based on a
modular concept, consisting of a flexible hardware and software platform and
multiple "modules" that enable the user to customize the instrument to
individual needs. 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 INTERCEPTOR(TM) products serve the international telecommunications
industry by providing portable digital testing capability for transmission
systems that operate in accordance with the CCITT standards. The INTERCEPTOR
1402 operates within a wide range of data rates.
The FIREBERD series of multi-function communications analyzers
typically test at the physical and logical levels of network organization, and
operate at rates between 50 b/sec and 52 Mb/sec. FIREBERD instruments perform
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as many as 60 simultaneous performance and error measurements on a wide range
of network transmission media equipment. The FIREBERD 4000 and 6000 are
portable instruments, built around a modular architecture accomodating a wide
range of interfaces and speeds. The new FIREBERD 500 Internetwork Analyzer
bridges the gap between LANS (Local Area Networks) and WANS (Wide Area
Networks) by providing the capability to simultaneously monitor and test
network traffic as it passes from LAN to WAN and back to the LAN. Dramatic
growth in the LAN marketplace has placed increasing burdens on the WANs that
connect them, along with an associated increase in reliance on the reliability
of the overall network.
Data communications products provide users of information networks with
the 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.
Packet switching, a communications protocol which breaks up data into
"packets" for efficient transmission over private or public data networks, has
become a cost-effective means for companies to transmit data over long
distances. Frame relay, a high-speed bandwidth on demand type of packet
switching, is being used to connect geographically dispersed local area
networks. Dynatech's CPX product family of high performance packet switching
equipment offer internetworking solutions that support frame relay and/or X.25
at T1 and E1 data rates and is being used to integrate multiple protocols by
large multinational companies building high speed global networks. These
products include the CPX 216FR, which provides multiprotocol (X.25,
asynchronous, and synchronous) access to Frame Relay or X.25 networks; the CPX
802x which allows dial in/out LAN access while concurrently supporting LAN
bridging/routing for the IP and IPX protocols; and the CPX FastBank which
integrates circuit switching (T1/E1) and packet switching and saves on
expenditures for recurring line charges and equipment costs.
Dynatech Communications products are designed to assist managers in
maintaining and optimizing diverse, heterogeneous data communications networks.
Historically, the functions include cable management, circuit performance
measurement, disaster recovery, and remote WAN diagnosis. These functions are
accomplished with a variety of tools which include basic digital patch panels to
electronic matrix switches.
Growth in local area networks has brought an increasingly complex task
of managing end-user system response times and overall network availability.
With distributed file servers and peer-to-peer networking requirements, the need
for cost effective management of remote servers from a centralized management
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point has skyrocketed. The Enterprise Access System (EAS) is a remotely
controlled switching product designed to manage the interconnection of remote
analyzers to various network interfaces. With EAS and the associated DN-190
control system, an organization can utilize the talents of highly trained
technicians at any communications site within reach of a telephone connection.
Fault testing, including very critical protocol-level monitoring, can be
performed without the need for dispatch of personnel to perform valid end-to-end
circuit analysis. Switching capabilities onboard EAS allow managers to spare
faulty ports or even substitute entire communication devices using simple point
and click commands from the DN-190 terminal. Networking options from DN-190 to
remote EAS sites include dial-up (async), X.25, and Frame Relay. The EAS
hardware platform is designed for management of very high speed data rates
across multiple vendor platforms and multiple interfaces including RS-449,
RS-530, Token Ring, Ethernet, RS-232, X.21, V.35, T1/E1 and ISDN, and can be
adapted to a mix of technology and vendor hardware.
Dynatech Tactical Communications is a manufacturer of audio accessories
for two-way handheld radios primarily for the government technical
surveillance/security market, as well as miniature audio/video and telemetry
transmitters for covert surveillance and intelligence operations.
Unex Corporation manufactures lightweight modular telephone headsets
under its PROTOCOL(TM), PROSET(TM) and ProBridge(TM) product lines.
Dynatech Wireless Technologies, Inc. manufactures electronic devices
used to enhance productivity in fast food restaurants. Its Integra wireless
communication system provides wireless communication between the menu board and
the order taken. Other applications include Voice Call, a two-way portable
radio system to improve communications between nurses and other healthcare
employees.
Trontech, Inc. specializes in the manufacture of RF and microwave
amplifiers used by military contractors and communications equipment suppliers.
Trontech has targeted its low-noise amplifier technology toward products used by
major manufacturers of cellular base stations and high power amplifiers used in
digital cellular radio base stations.
Dynatech Spectrum, Inc. manufactures wireless video transmitters
receivers sold primarily to the personal security market.
Industrial Computer Source, Inc. (ICS) is a worldwide supplier of
ruggedized personal computers and plug-in input and output boards for industrial
and scientific applications. ICS designs its products to operate in adverse
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environments and to withstand excessive vibration, noise, temperature, dust and
moisture.
Generation Products
Dynatech designs and sells products and systems worldwide through its
two business units, Distribution Products and Production Products and its two
product companies, Dynatech NewStar and DaVinci Systems, Inc., to television and
radio stations, video production facilities, cable television, and corporate and
industrial users of video equipment.
Distribution Products center on technologies used mainly by television
broadcast organizations and incorporate the product lines of Utah Scientific,
Alpha Image and Digistore. Utah Scientific manufactures routing switchers, and
machine control and master control systems for managing the flow of information
within a television station. Alpha Image Ltd. is a United Kingdom manufacturer
of digital routers, and protocol conversion video products. Digistore, an
electronically digital commercial playback system, is used to acquire, store and
play back commercials in a fully automated manner.
Production Products focus on post-production systems and technologies
which incorporates the product lines of ColorGraphics, Quanta, Cable Products,
Alpha Image's digital production switcher, and Editing Machines Corporation.
ColorGraphics Systems manufactures high end computer graphics systems used to
create images for broadcasting, production studios, and corporate users of
graphics and special effects systems. Products include D/P Animator, a digital
paint and animation system used to create electronic graphics and animations,
and D/P MAX(TM), a digital editing and layering system which takes multiple
video recordings and merges various segments to produce a new video. The D/P
MAX capabilities were used to help create the Diet Coke advertisements,
interacting with film of well known stars of the past. The DP/Mosiac digital
disk recorder permits storage and recall of digital images on a real-time basis.
Quanta Corporation manufactures video character and graphics generators
for displaying alphanumeric titles in a variety of fonts for broadcast and
nonbroadcast applications. Its high-end character generators, DELTA(TM) and
ORION(TM), combine the ability to create high-quality text on a video screen in
hundreds of different font styles with the ability to produce softly shaded,
intricate backgrounds and video painting. Quanta's systems also can be
configured to display many foreign languages, including Chinese, Japanese, and
Arabic. Quanta systems provided all of the host broadcaster on-air graphics at
the 1994 Winter Olympics.
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Dynatech Cable Products Group addresses specific opportunities in the
cable TV market. The "All Channel Message System", permits emergency alert
information to be broadcast over any combination of cable channels
automatically. Currently, Dynatech is shipping a local storage, switching and
control system for commercial and program insertion to StarNet, a unit of the
Lenfest Group. StarNet will enable cable operators to download and insert
national, regional, and local commercials and cross-channel promotion into cable
programming, and to automate the scheduling and billing of these insertions.
Editing Machines Corporation, acquired in January 1994, manufactures
non-linear editors for broadcast and post production based on standard computer
platforms.
DaVinci Systems, Inc. produces the Renaissance 8:8:8 digital color
correction system which is used to tint, enhance, and color-match television
commercials. It is sold to the postproduction and teleproduction market and to
commercial production facilities.
Dynatech NewStar produces a software-driven client/server PC networked
system used to computerize radio and television newsrooms, including the control
of robotic cameras. NEWSTAR allows writers to access newswire material, write
and edit late-breaking news on dedicated terminals and then transmit the stories
directly to the broadcast studio. NewStar's real-time election results system,
LEADER, automatically counts and displays votes to television viewers. This
instant-update product was used during the last presidential election at
stations throughout the country, and handled hundreds of local and national
races simultaneously.
Presentation Products
Presentation products aid the user in the display of video and graphic
images in a form that is useful and accessible.
Parallax Graphics offers products 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. Its primary product, XVideo, is a
live video windowing system for SUN Microsystems and Hewlett Packard Series 700
workstations.
V.I. Corporation supplies its DataViews software to developers to create
custom graphics for displaying real time data. Applications for this software
include manufacturing process control and communications network analysis. For
instance, V.I.'s products have been used to create interfaces to monitor
manufacturing robots in China.
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DIVERSIFIED INSTRUMENTATION
The Diversified Instrumentation segment consists of Dynatech's remaining
electronics and software businesses which include selected businesses in the
Diversified Products group offered for sale as they do not fit our long term
strategy.
Medical and Diagnostic Products
Medical and diagnostic products consist of laboratory, radiotherapy
planning and test and measurement products.
Dynatech Laboratories, Inc. (DLI) is a producer of Microtiter(R)
technology products for the diagnostic marketplace. DLI manufactures and sells
laboratory diagnostic equipment and supplies for research and clinical testing
in the fields of immunology, microbiology, serology, and cancer research. DLI'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.
DIAS(TM) (Dynatech Immuno - Assay System) modular microplate "walk-away"
system, which was recently introduced, is a fully configured system that
combines several elements, including a reader, multi-reagent dispenser,
multi-reagent washer, diluter/dispenser, and random access plate incubators.
DIAS incorporates process quantitative analysis and is sold to the research lab
market (universities and pharmaceutical companies) and the clinical laboratory
market.
Additionally, DLI makes and sells disposable plastic laboratory ware for
handling and transporting test specimens, including items specifically treated
to absorb or covalently bind proteins.
Computerized Medical Systems (CMS) markets software products used in
conjunction with radiation therapy treatment of oncology patients. CMS's newest
product, FOCUS(TM), a three dimensional (3-D) radiation therapy treatment
planning system (RTP), 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. CMS continues to
offer its two dimensional (2-D) RTP product during the market transition to
the 3-D RTP.
Dynatech Nevada, Inc. 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
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such as an electrocardiography (ECG) machine to determine whether or not the
equipment is functioning properly. A product to test non-invasive blood
pressure monitors, CuffLink, allows the selection of preprogrammed blood
pressures to simulate a human response to the monitor without using live
subjects. In addition to simulation capabilities, the CuffLink provides
diagnostic functions which can be used by a hospital biomedical technician or
product manufacturer as a test measurement and quality assurance device.
ComCoTec, Inc., a manufacturer of software solutions for the pharmacy
industry, has developed the 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 driving force
behind the administration of all health benefits is cost containment, and with
the RxCLAIM System, ComCoTec can efficiently process millions of prescriptions
for third-party payors. Its newest product, RX SERVER(TM), offers central
control over pharmacies via point-of-service checks including eligibility
checking and drug utilization review.
Diversified Products
Asinc, Incorporated pioneered and leads the world market for passenger
cabin video information systems. Its flagship product, AIRSHOW(R), displays
position defining maps, airport terminal charts and in-flight information.
XKD Corporation, d.b.a. Display Solutions, manufactures monitors for
aircraft and other training simulators as well as high-resolution and high-speed
industrial applications.
Piiceon, Inc. is a leading supplier of after-market computer products
for SUN Microsystems, Compaq, Alpha Micro Systems and IBM computer users.
Dynatech Microwave Technology is an industry leader of electromechanical
coaxial switches used in microwave transmission.
Qualimetrics, Inc. of Sacramento, California is a leading supplier of
atmospheric monitoring instrumentation.
Lightning Location & Protection, Inc. (LLP) is a manufacturer of
thunderstorm sensors and lightning tracking systems and is the exclusive
operator of the National Lightning Detection Network (NLDN), which allow
electric utilities and other industries impacted by severe weather to track
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lightning strike activity. In October 1993 Atmospheric Research Systems Inc.
(ARSI), a competing technology manufacturer was acquired, to supplement product
offerings.
Dynatech Precision Sampling Corporation 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.
LEA Dynatech, Inc. produces surge protection and line conditioning
products for commercial applications. These products prevent damage to
electronic equipment due to electrical surge and RF noise problems.
Innovative Electronics, Inc. manufactures software that provides
protocol conversion between a point-of-sale terminal and the mainframe computer,
allowing the exchange of information such as in-store data processing, record
keeping, and automated credit card verification.
Digital Technology, Inc. (DTI) provides analysis and simulation
instruments which focuses on emulation tools which support the MIL-STD-1553 and
the ARINC 429 local area networks (LAN) used in today's military and commercial
aircraft, respectively.
DISCONTINUED OPERATIONS
The Corporation 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 a manufacturer of police radar detectors and auto
security systems.
CUSTOMERS AND MARKETING
Dynatech markets its products to a diverse range of customers.
Transmission products are sold to telephone companies, cable television
operators, interexchange carriers, foreign telecommunications administrations
and Fortune 1000 private network users. The Company employs its own sales
engineering force for direct sale and has representative agreements with a
number of agents and distributors in the United States, Europe and Asia.
Customers for generation products and presentation products include
large industrial companies, computer manufacturers, government agencies, radio
and television stations, and other businesses which need to transmit and/or
process information in either digital or analog mode.
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Customers for the Company's medical diagnostic and treatment planning
products include pharmaceutical companies, research laboratories, hospitals and
clinical laboratories. The Company also has OEM agreements with several reagent
manufacturers to supply instruments tailored to their test systems for resale to
the clinical laboratory market, and has distribution arrangements with general
and specialized distributors and sales agents of laboratory equipment and
supplies. Automatic sampling systems are sold mainly to chromatograph
manufacturers for integration into their instruments.
COMPETITION
In the field of transmission products, the Company believes it is one of
the leading suppliers. In generation products, the Company believes it is one
of the largest suppliers of computerized graphics equipment to the television
industry, and is one of the leaders in newsroom automation and broadcast
switching products. The Company believes that the design and quality of its
products permit it to compete effectively in these markets. The Company has a
small share of the video character generator and specialty computer markets.
The Company has a number of competitors in the presentation products area.
Principal competitors are smaller specialized companies. Competitors in the
medical products markets include diagnostic instruments firms as well as
smaller, specialized manufacturers. The Company believes it holds a relatively
favorable position with respect to the relevant competitive factors in each of
these markets.
MAJOR CUSTOMER
The Company's sales of goods and services to various agencies of the
United States federal government were approximately $24,123,000, $25,273,000 and
$20,808,000 in fiscal years ended 1994, 1993 , and 1992, respectively. No
single customer accounted for more than 10% of sales in any of the three years.
DIVESTMENTS
In July 1993, the Company sold the business operations of Sensors, Inc.
and Dynatech Electro Optics Corp. In December 1993 the Company sold certain
assets of Threshold Corporation. In March 1994 the Company sold the Weather
Cental product line of Colorgraphics, Inc. These divestments did not have a
material effect on operating results or financial position of the Company.
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INTERNATIONAL
The Company maintains twenty four 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
35%, 37%, and 36% of consolidated net sales in fiscal years 1994, 1993, and
1992, 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 1994 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. Each business entity within the Company maintains its own
product development group. On a segment basis, product development expense in
the years ended March 31, 1994, 1993, and 1992 were as follows: Information
Support Products $37,619,000, $33,623,000 and $30,441,000, respectively;
Diversified Instrumentation $16,169,000, $17,486,000, $17,489,000, respectively.
Major new products developed during the 1994 fiscal year include:
T-BERD 310 SONET testing option for our communications analyzer, T-BERD 107A and
CENTEST 650 test instruments for the telecommunications market; video boards for
Hewlett Packard Series 700 workstations; FOCUS, a 3-D radiation therapy planning
system for the oncological market; DIAS modular microplate system for the
clinical laboratory market and AIRSHOW 400, a passenger cabin video information
system.
BACKLOG
The Company's backlog of orders believed to be firm at March 31, 1994
and 1993 were $93,981,000 and $91,578,000, respectively. All but $11,905,000 of
backlog at March 31, 1994 is expected to be delivered within the fiscal year
ended March 1995. On a segment basis, backlog at March 31, 1994 and 1993 was as
follows: Information Support Products $51,894,000 and $49,023,000,
respectively; Diversified Instrumentation $42,087,000 and $42,555,000,
respectively.
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EMPLOYEES
The Company employs approximately 3,200 people of which approximately
350 employees are with businesses that are classified as discontinued
operations. 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. 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.
Dyna-Test, Dyna-Net, Fireberd, T-Berd, Dynabus, NewStar, ArtStar,
Microtiter, Microelisa, Airshow, Whistler and Spectrum 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.
Many components and assemblies included in the Company's radar detectors
and components of other products 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.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Corporation are as follows:
Officer
Name Current Position Age Since
- - - ---- ---------------- --- -------
Warren M. Rohsenow Honorary Chairman of the 73 1959
Board of Directors
J. P. Barger Chairman of the Board of Directors 67 1959
John F. Reno President, and Chief Executive Officer 55 1979
Robert H. Hertz Treasurer and Chief Financial Officer, 51 1980
Clerk
Jack Shirman Group Vice President 59 1991
Venture Group
John R. Peeler Division Vice President 39 1992
Communications Test
John R. South Division Vice President 53 1993
Medical and Diagnostics
Roger C. Cady Corporate Vice President 55 1993
Business Development
John A. Mixon Corporate Vice President 48 1989
Human Resources
James R. Turner Corporate Vice President 65 1960
John C. Maag Corporate Controller 44 1987
Nancy J. Jenkins Assistant Secretary 48 1990
Edward T. O'Dell Secretary, Assistant Clerk, 58 1975
attorney whose professional
corporation is a partner of Goodwin,
Procter & Hoar, general counsel to
the Company
15
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 Mixon.
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. Mixon joined the Company in July 1989. From 1987 to 1989 he was
Vice President-Human Resources for Interturbine Corporation, which serves
industrial/aerospace markets.
16
Item 2. PROPERTIES The Company's policy is generally to lease real
property for its manufacturing and sales operations. It does however, own three
buildings used for manufacturing.
Segment Areas Square Lease
Location Utilizing Facilities Feet Termination
- - - -------- -------------------- ------ -----------
Owned Facilities:
- - - -----------------
Carson City, Nevada Diversified Instrumentation 22,000
Sacramento, California Diversified Instrumentation 50,000
Baton Rouge, Louisiana Diversified Instrumentation 13,000
Leased Facilities:
- - - ------------------
Burlington, Massachusetts Headquarters 22,200 1998
Germantown, Maryland Information Support Products 136,000 1998
Germantown, Maryland Information Support Products 30,000 2003
Woodbridge, Virginia Information Support Products 60,000 1997
Newington, Virginia Information Support Products 60,000 1997
San Diego, California Information Support Products 43,500 1994
Salt Lake City, Utah Information Support Products 41,700 1998
Guernsey, Channel Islands Information Support Products 40,000 2002
and Diversified Instrumentation
Madison, Wisconsin Information Support Products 26,700 1995
Hudson, New Hampshire Information Support Products 25,400 1996
Northampton, Massachusetts Information Support Products 22,600 1994
Salt Lake City, Utah Information Support Products 19,800 1995
St. Quentin En Yvelines, France Information Support Products 19,100 1996
Los Gatos, California Information Support Products 18,000 1996
Chelmsford, Massachusetts Information Support Products 15,000 1994
Chantilly, Virginia Diversified Instrumentation 50,500 1996
Calabasas, California Diversified Instrumentation 25,000 1997
Tustin, California Diversified Instrumentation 24,900 1999
Maryland Heights, Missouri Diversified Instrumentation 21,000 1994
San Jose, California Diversified Instrumentation 19,200 1995
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LEASED FACILITIES (continued):
- - - ------------------------------
Segment Areas Square Lease
Location Utilizing Facilities Feet Termination
- - - -------- -------------------- ------ -----------
Tampa, Florida Diversified Instrumentation 18,900 1995
Pomona, California Diversified Instrumentation 17,500 1996
Tucson, Arizona Diversified Instrumentation 18,200 1997
Dayton, Ohio Diversified Instrumentation 16,700 1994
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 leases
77,400 square feet for a discontinued operation. 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
18
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 Security Dealers National Market System and
published in The Wall Street Journal may be found in the Company's
1994 Annual Report which is incorporated herein by reference.
(b) There were approximately 1,130 common stockholders of record as of
May 13, 1994.
(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" in the Company's 1994 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 contained in the section in the
Company's 1994 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 in the Company's 1994 Annual Report together with the Report of
Independent Accountants dated May 23, 1994, 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.
19
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 1994 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, 1994 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 1994 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, 1994 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 1994 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, 1994 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 1994 Annual Meeting of Shareholders which will be filed with the U.S.
Securities and Exchange Commission within 120 days after the close of the
20
Company's fiscal year ended March 31, 1994 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
(a) Financial statements and financial statement schedules
The financial statements and financial statement schedules listed in the
accompanying Index to Financial Statements and Financial Statements Schedules
are filed as part of this Annual Report on Form 10-K.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31,
1994.
(c) Exhibits
Exhibit No.
- - - -----------
(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.
21
Exhibit No.
- - - -----------
(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.
(13) Dynatech Corporation 1994 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.
(d) Schedules
The schedules listed in the accompanying Index to Financial Statements and
Financial Statement Schedules are filed as part of this Annual Report on Form
10-K.
22
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 16, 1994 By: /S/ ROBERT H. HERTZ
-------------------------------------
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.
/S/ WARREN M. ROHSENOW Honorary Chairman of the Board, June 16, 1994
- - - ------------------------- Director
Warren M. Rohsenow
/S/ J. P. BARGER Chairman of the Board, Director June 16, 1994
- - - -------------------------
J. P. Barger
/S/ JOHN F. RENO President, Director June 16, 1994
- - - -------------------------
John F. Reno
/S/ JOHN C. MAAG Controller June 16, 1994
- - - -------------------------
John C. Maag
/S/ THEODORE COHN Director June 16, 1994
- - - -------------------------
Theodore Cohn
/S/ O. GENE GABBARD Director June 16, 1994
- - - -------------------------
O. Gene Gabbard
/S/ JAMES B. HANGSTEFER Director June 16, 1994
- - - -------------------------
James B. Hangstefer
/S/ WARREN A. LAW Director June 16, 1994
- - - -------------------------
Warren A. Law
/S/ RICHARD K. LOCHRIDGE Director June 16, 1994
- - - -------------------------
Richard K. Lochridge
/S/ PAULA STERN Director June 16, 1994
- - - -------------------------
Paula Stern