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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from Not Applicable to __________________
Commission file number 1-6016
ALLEN TELECOM INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 38-0290950
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
25101 Chagrin Boulevard, Suite 350, Beachwood, Ohio 44122
(Address of Principal Executive Offices) (Zip Code)
(Registrant's Telephone Number, Including Area Code) (216) 765-5800
NOT APPLICABLE
Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report
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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock:
Outstanding at
Class of Common Stock August 1, 2002
--------------------- --------------
Par value $1.00 per share 30,504,381
ALLEN TELECOM INC.
TABLE OF CONTENTS
Page
No.
---
PART I. FINANCIAL INFORMATION:
ITEM 1 - Financial Statements:
Condensed Consolidated Balance Sheets -
June 30, 2002 and December 31, 2001 3
Condensed Consolidated Statements of Income (Loss) -
Three and Six Months Ended June 30, 2002 and 2001 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2002 and 2001 5
Condensed Consolidated Statements of Stockholders'
Equity - Six Months Ended June 30, 2002 and 2001 6
Notes to the Condensed Consolidated Financial Statements 7 - 12
ITEM 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 13 - 20
ITEM 3 - Quantitative and Qualitative Disclosures About
Market Risks 21
PART II. OTHER INFORMATION:
ITEM 1 - Legal Proceedings 21
ITEM 4 - Submission of Matters to a Vote of Security Holders 21 - 22
ITEM 6 - Exhibits and Reports on Form 8-K 22 - 23
Signatures 24
Exhibit Index 25
2
ALLEN TELECOM INC.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands, Except Share and Per Share Data)
June 30, December 31,
2002 2001
-------- --------
(Unaudited)
ASSETS
Current Assets:
Cash and equivalents $ 22,351 $ 16,368
Accounts receivable (less allowance for doubtful
accounts of $3,798 and $3,338, respectively) 92,569 92,291
Inventories: Raw materials 63,450 66,957
Work in process 28,652 23,639
Finished goods 25,966 33,430
-------- --------
Total inventories (net of reserves) 118,068 124,026
-------- --------
Deferred income taxes 1,856 2,660
Recoverable income taxes 15,380 20,169
Other current assets 2,949 2,416
-------- --------
Total current assets 253,173 257,930
Property, plant and equipment, net 39,990 41,290
Goodwill (Note 5) 141,367 140,995
Deferred income taxes 45,915 39,401
Other assets 30,307 32,340
-------- --------
TOTAL ASSETS $510,752 $511,956
======== ========
LIABILITIES
Current Liabilities:
Notes payable and current maturities of long-term
obligations $ 12,645 $ 12,318
Accounts payable 44,804 40,355
Accrued expenses 27,548 27,827
Income taxes payable 3,061 4,781
Deferred income taxes 12,744 9,852
-------- --------
Total current liabilities 100,802 95,133
Long-term debt 74,339 140,530
Deferred income taxes 226 2,164
Other liabilities 16,720 15,772
-------- --------
TOTAL LIABILITIES 192,087 253,599
-------- --------
REDEEMABLE CONVERTIBLE PREFERRED STOCK
1,000,000 shares at redemption value (liquidation
preference of $50.00 per share) (Note 3) 50,000 -
-------- --------
STOCKHOLDERS' EQUITY
Common stock 32,500 32,500
Paid-in capital 203,444 203,548
Retained earnings 64,567 69,676
Accumulated other comprehensive loss (15,678) (30,671)
Less: Treasury stock (common shares, at cost) (15,036) (15,440)
Unearned compensation (1,132) (1,256)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 268,665 258,357
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $510,752 $511,956
======== ========
See accompanying Notes to the Condensed Consolidated Financial Statements.
3
ALLEN TELECOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Amounts in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- -------------------------
2002 2001 2002 2001
--------- ----------- --------- ----------
SALES $ 91,850 $105,094 $ 181,719 $ 213,637
Cost of sales (69,803) (77,983) (138,505) (156,622)
--------- ----------- --------- ----------
Gross profit 22,047 27,111 43,214 57,015
Operating expenses:
Selling, general and administrative
expenses (Note 2) (14,819) (13,988) (27,973) (28,353)
Research and development and product
engineering costs (6,483) (7,170) (13,092) (14,070)
Amortization of goodwill (Note 5) - (1,987) - (3,967)
--------- ----------- --------- ----------
Operating income 745 3,966 2,149 10,625
Interest expense (1,972) (2,702) (4,472) (5,618)
Interest Income 199 192 333 513
--------- ----------- --------- ----------
(Loss) income before taxes and minority
interest (1,028) 1,456 (1,990) 5,520
Benefit (provision) for income taxes 357 (565) 697 (2,150)
--------- ----------- --------- ----------
(Loss) income before minority interest (671) 891 (1,293) 3,370
Minority interest 9 (45) (11) (87)
--------- ----------- --------- ----------
NET (LOSS) INCOME (662) 846 (1,304) 3,283
Dividends on Preferred Stock (603) - (603) -
--------- ----------- --------- ----------
(LOSS) INCOME APPLICABLE TO
COMMON SHAREHOLDERS $ (1,265) $ 846 $ (1,907) $ 3,283
========= =========== ========= ==========
NET (LOSS) INCOME PER COMMON
SHARE, basic and diluted $ (.04) $ .03 $ (.06) $ .12
========= =========== ========= ==========
Weighted average common shares outstanding:
Basic 30,390 27,980 30,370 27,950
Assumed exercise of stock options - 240 - 330
--------- ----------- --------- ----------
Diluted 30,390 28,220 30,370 28,280
========= =========== ========= ==========
See accompanying Notes to the Condensed Consolidated Financial Statements.
4
ALLEN TELECOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
(Unaudited)
Six Months Ended
June 30,
-------------------------------
2002 2001
-------- --------
CASH FLOW FROM OPERATIONS:
Net (loss) income $ (1,304) $ 3,283
Adjustments to reconcile income to operating cash flow:
Depreciation 5,950 7,680
Amortization of goodwill - 3,967
Amortization of capitalized software 1,753 1,321
Other amortization 350 155
Changes in operating assets and liabilities:
Receivables 5,606 (16,991)
Inventories 13,661 (31,162)
Accounts payable and accrued expenses (620) (1,809)
Income taxes (1,003) 6,116
Other, net 3,426 (5,333)
-------- --------
CASH PROVIDED (USED) BY OPERATING ACTIVITIES 27,819 (32,773)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (2,963) (6,858)
Capitalized software product costs (854) (1,384)
Investments in subsidiaries (325) -
Sales and retirements of fixed assets 409 5,867
-------- --------
CASH USED BY INVESTING ACTIVITIES (3,733) (2,375)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayment of) proceeds from borrowings (67,575) 4,556
Preferred stock dividend (603) -
Acquisition of treasury shares (167) (1,111)
Proceeds from sale and leaseback transaction - 4,884
Issuance of preferred stock, net 46,798 -
Collection on installment note receivable 1,100 1,000
Treasury stock sold to employee benefit plan 467 481
Exercise of stock options - 807
-------- --------
CASH (USED) PROVIDED BY FINANCING ACTIVITIES (19,980) 10,617
-------- --------
NET CASH PROVIDED (USED) 4,106 (24,531)
Effect of foreign currency exchange rate changes on cash 1,877 1,160
Net cash flow from change in year-end of subsidiaries (Note 1) - 20,431
Cash and equivalents at beginning of year 16,368 10,539
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD $ 22,351 $ 7,599
======== ========
Supplemental cash flow data:
Cash (paid) received during the period for:
Interest $ (4,174) $ (5,161)
Income taxes 1,041 302
See accompanying Notes to the Condensed Consolidated Financial Statements.
5
ALLEN TELECOM INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Amounts in Thousands)
(Unaudited)
Comprehensive
Common Paid-In Income
FOR THE SIX MONTHS ENDED JUNE 30, 2002: Total Stock Capital (Loss)
--------- -------- --------- --------------
Beginning Balance, January 1, 2002 $ 258,357 $ 32,500 $ 203,548
Preferred stock issuance costs (3,202)
Preferred stock dividend (603)
Comprehensive income (loss):
Net loss (1,304) $(1,304)
Adjustment for derivative instruments (51) (51)
Foreign currency translation adjustments 15,044 15,044
-------
Comprehensive income $13,689
=======
Treasury stock reissued 467 (104)
Acquisition of treasury stock (167)
Amortization of unearned compensation 124
--------- -------- ---------
Ending Balance, June 30, 2002 $ 268,665 $ 32,500 $ 203,444
========= ======== =========
FOR THE SIX MONTHS ENDED JUNE 30, 2001:
Beginning Balance, January 1, 2001 $ 234,981 $ 30,092 $ 184,066
Net income from change in fiscal year-end of
subsidiaries (Note 1) 2,432
Comprehensive income (loss):
Net income 3,283 $ 3,283
Foreign currency translation adjustments (379) (379)
-------
Comprehensive income $ 2,904
=======
Treasury stock reissued 481 204
Acquisition of treasury shares (1,111)
Exercise of stock options 807 118 689
Amortization of unearned compensation 155
--------- -------- ---------
Ending Balance, June 30, 2001 $ 240,649 $ 30,210 $ 184,959
========= ======== =========
Accumulated
Other
Comprehensive
Retained Income Treasury Unearned
FOR THE SIX MONTHS ENDED JUNE 30, 2002: Earnings (Loss) Stock Compensation
--------- -------- -------- ------------
Beginning Balance, January 1, 2002 $ 69,676 $(30,671) $(15,440) $(1,256)
Preferred stock issuance costs (3,202)
Preferred stock dividend (603)
Comprehensive income (loss):
Net loss (1,304)
Adjustment for derivative instruments (51)
Foreign currency translation adjustments 15,044
Comprehensive income
Treasury stock reissued 571
Acquisition of treasury stock (167)
Amortization of unearned compensation 124
--------- -------- -------- -------
Ending Balance, June 30, 2002 $ 64,567 $(15,678) $(15,036) $(1,132)
========= ======== ======== =======
FOR THE SIX MONTHS ENDED JUNE 30, 2001:
Beginning Balance, January 1, 2001 $ 69,067 $(31,948) $(14,730) $(1,566)
Net income from change in fiscal year-end of
subsidiaries (Note 1) 2,432
Comprehensive income (loss):
Net income 3,283
Foreign currency translation adjustments (379)
Comprehensive income
Treasury stock reissued 277
Acquisition of treasury shares (1, 111)
Exercise of stock options
Amortization of unearned compensation 155
--------- -------- -------- -------
Ending Balance, June 30, 2001 $ 74,782 $(32,327) $(15,564) $(1,411)
========= ======== ======== =======
See accompanying Notes to the Condensed Consolidated Financial Statements.
6
ALLEN TELECOM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Significant Accounting Policies:
General
In the opinion of the management of Allen Telecom Inc. (the "Company"),
the accompanying unaudited condensed consolidated interim financial
statements reflect all adjustments necessary to present fairly the
financial position of the Company as of June 30, 2002 and the
consolidated results of its operations, cash flows and changes in
stockholders' equity for the periods ended June 30, 2002 and 2001. The
results of operations for such interim periods are not necessarily
indicative of the results for the full year. The year-end 2001
condensed consolidated balance sheet was derived from audited financial
statements, but does not include all disclosures required by accounting
principles generally accepted in the United States of America. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K
for the year ended December 31, 2001.
Consolidation Policy
The Company's consolidated financial statements include the accounts of
all wholly owned and majority owned subsidiaries. Intercompany accounts
and transactions have been eliminated. To facilitate preparation of
financial statements, the Company's principal European operations, for
periods on or prior to December 31, 2000, were included in the
consolidated financial statements on a two-month delayed basis.
Effective January 1, 2001, such European operations changed their
fiscal year-end from October 31 to December 31, consistent with the
balance of the Company's operations. The results of operations (net
income of $2,432,000) for these European subsidiaries for the period
November and December 2000, were recorded directly to retained earnings
in the first quarter of 2001 and the results of operations for the
period January 1, 2001 through June 30, 2001 were included in the 2001
reported results of operations.
Cash flow of such European operations for the two month period November
and December 2000 is summarized as follows (amounts in millions):
Net income from operations $ 2.4
Increase in inventories (8.5)
Decrease in receivables 3.1
Increase in accounts payable 13.9
Decrease in taxes payable (5.9)
Net increase in fixed assets (1.2)
Borrowings 16.8
Other (0.2)
-----
Increase in cash and equivalents $20.4
=====
7
ALLEN TELECOM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
2. Special Charges:
During the second quarter 2002, the Company recorded pretax charges of
$968,000, or $.02 per common share (basic and diluted), after related
income tax effect, in connection with workforce reductions at certain
operations. These charges are included in selling, general, and
administrative expenses. In the fourth quarter 2001, the Company
incurred incremental pretax charges of $2,305,000, or $.05 per common
share (basic and diluted), after related income tax effect, with
respect to the planned closing of the Company's U.S. base station
subsystem and components manufacturing facility in Nevada and
consolidation into the newly acquired manufacturing facility in
Massachusetts. These costs included termination costs of substantially
all employees at the Nevada manufacturing facility of $570,000,
closedown costs of the manufacturing facility of $744,000, a loss on
assets, principally relating to disposal of equipment, of $591,000 and
inventory related charges of $400,000. The following is a summary of
the status of exit costs remaining (amounts in thousands, except
employee data):
SEVERANCE
--------------------- DISPOSITION
NUMBER OF OF BUILDING
ACCRUAL EMPLOYEES AND EQUIPMENT OTHER
----- ----- ----- -----
Balance, December 31, 2001.................. $ 570 76 $ 601 $ 338
Charged against accrual..................... (164) (61) (101) (61)
----- ----- ----- -----
Balance, March 31, 2002..................... 406 15 500 277
Addition to the accrual..................... 968 72 - -
Charged against accrual..................... (705) (87) (31) (150)
----- ----- ----- -----
Balance, June 30, 2002...................... $ 669 - $ 469 $ 127
===== ===== ===== =====
The term of severance is based on years of service or determined by
contractual obligation, and is payable over a period of time. Severance will
be paid out in its entirety by June 2003.
3. Redeemable Convertible Preferred Stock
On March 20, 2002, the Company issued 1,000,000 shares of Series D 7.75%
Convertible Preferred Stock (liquidation preference of $50.00 per share).
Dividends on the Convertible Preferred Stock may be paid in cash, common
stock, or a combination thereof. Unpaid and/or undeclared dividends do not
accumulate, but the number of common shares that Convertible Preferred Stock
holders are entitled to receive upon conversion of the Convertible Preferred
Stock will automatically increase, as specified in the Company's Certificate
of Incorporation.
8
ALLEN TELECOM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
3. Redeemable Convertible Preferred Stock (continued):
Each share of Convertible Preferred Stock is convertible at the option of the
holder at any time into shares of common stock of the Company, par value $1
per share, at an initial conversion rate of $7.70 per share (equivalent to a
conversion rate of 6.4935 shares of common stock at a liquidation preference
of $50.00), subject to adjustment under certain conditions (including the
occurrence of certain change of control transactions). On or after February
20, 2005, the Company may, at its option, as discussed below, cause all of
the outstanding shares of Convertible Preferred Stock to be automatically
converted into common stock at the then prevailing conversion ratio. The
Company may exercise that conversion right if, for at least 20 trading days
within any consecutive 30-day trading period (including the last trading
day), the closing price of its common stock equals or exceeds 125% of the
then prevailing conversion price of the Convertible Preferred Stock.
Subject to legal availability of funds, the shares of Convertible Preferred
Stock are mandatorily redeemable by the Company for cash at their liquidation
preference on or after February 15, 2014 (unless previously converted into
common shares of the Company) and are not redeemable by the Company before
that date.
The net proceeds from the issuance of $46,798,000, after deducting the
underwriters discount and issuance costs, was used to repay a portion of the
Company's outstanding indebtedness under its domestic revolving credit
facility. The underwriting discount and expenses of the offering, aggregating
$3,202,000, were charged directly to retained earnings.
9
ALLEN TELECOM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
4. Segment Disclosures:
The following table shows sales to external customers, results of
operations and asset positions for the Company's two operating segments
(amounts in thousands):
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Sales to external customers:
Wireless communications equipment:
Base station subsystems and components $ 35,664 $ 54,610 $ 69,388 $ 114,033
Repeater and in-building coverage products 26,310 20,635 48,763 43,455
Base station and mobile antennas 18,630 23,169 35,256 43,689
Geolocation products 7,703 - 20,193 -
--------- --------- --------- ---------
Total wireless communications equipment 88,307 98,414 173,600 201,177
Wireless engineering and consulting services 3,543 6,680 8,119 12,460
--------- --------- --------- ---------
Total sales $ 91,850 $ 105,094 $ 181,719 $ 213,637
--------- --------- --------- ---------
Results of operations:
Wireless communications equipment $ 3,477 $ 6,533 $ 6,766 $ 16,795
Wireless engineering and consulting services (1,134) 1,336 (1,151) 1,494
--------- --------- --------- ---------
2,343 7,869 5,615 18,289
Goodwill amortization - (1,987) - (3,967)
General corporate expenses (1,598) (1,916) (3,466) (3,697)
--------- --------- --------- ---------
Operating income $ 745 $ 3,966 $ 2,149 $ 10,625
========= ========= ========= =========
As of
June 30, 2002 December 31, 2001
----------------------- ----------------------
Segment Assets:
Wireless communications equipment $ 289,039 $ 293,084
Wireless engineering and consulting services 10,770 12,360
--------- ---------
Total segment assets 299,809 305,444
Goodwill 141,367 140,995
Deferred income taxes 47,771 42,061
Other general corporate assets 21,805 23,456
--------- ---------
Total assets $ 510,752 $ 511,956
========= =========
10
ALLEN TELECOM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
5. Impact of New Accounting Pronouncements:
Effective January 1, 2002, the Company implemented the provisions of
Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and
Other Intangible Assets". This statement changed the accounting for goodwill
from an amortization method to an impairment-only approach. Accordingly, the
Company ceased amortizing goodwill (including goodwill reported in past
business combinations) beginning in 2002. This change improved the reported
Net (Loss) Income Per Common Share by approximately $.07 and $.14 per common
share (basic and diluted), for the three and six months ended June 30, 2002,
respectively; as compared with the comparable prior year periods.
The following supplemental information is presented, on a pro forma basis,
for the consolidated results of operations for 2001, as compared with 2002,
adjusted to exclude amortization of goodwill in the 2001 periods (amounts in
thousands):
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- -------------------------
2002 2001 2002 2001
-------- --------- --------- ---------
Reported net (loss) income $ (662) $ 846 $ (1,304) $ 3,283
Add back goodwill amortization
(net of related income taxes) -- 1,982 -- 3,957
-------- --------- --------- ---------
Pro forma net (loss) income $ (662) $ 2,828 $ (1,304) $ 7,240
-------- --------- --------- ---------
Reported net (loss) income per common share
(basic and diluted) $ (.04) $ .03 $ (.06) $ .12
Effect of add back of goodwill amortization -- .07 -- .14
-------- --------- --------- ---------
Pro forma net (loss) income per common
share $ (.04) $ .10 $ (.06) $ .26
-------- --------- --------- ---------
In the second quarter of 2002, the Company completed its initial evaluation
of goodwill pursuant to the impairment requirements of the aforementioned
SFAS No. 142. As a result of this evaluation, the Company has determined that
there may be impairment with respect to a portion of its $32,663,000 of
goodwill related to the Decibel Products portion of its base station and
mobile antennas product line. The Company will complete the valuation
necessary to determine the actual amount of impairment loss, if any, in the
second half of 2002; however, based on its current information the Company
estimates that such loss could range between zero and $5,000,000. Impairment
charges, if any, from this initial evaluation would be reported as a
"Cumulative Effect of an Accounting Change" in the Company's consolidated
statement of operations.
11
ALLEN TELECOM INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Continued)
5. Impact of New Accounting Pronouncements (continued):
In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No.
143, "Accounting for Asset Retirement Obligations", which addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long lived assets and associated asset retirement costs. The new
rules apply to legal obligations associated with the retirement of long-lived
assets that result from the acquisition, construction, development and (or)
normal operation of a long-lived asset. SFAS No. 143 is effective for the
Company beginning January 1, 2003. The Company believes the adoption of SFAS
No. 143 will not, at this time, have a material impact on its consolidated
financial position or results of operations.
In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets". SFAS No. 144 supersedes FASB No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of," and the accounting and reporting provisions of Accounting
Principles Board Opinion No. 30, "Reporting the Results of Operations -
Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions",
for the disposal of a segment of a business (as previously defined in that
opinion). SFAS No. 144 requires that one accounting model be used for
long-lived assets to be disposed of by sale, whether previously held and used
or newly acquired, and broadens the presentation of discontinued operations
to include more disposal transactions than were included under the previous
standards. The Company implemented SFAS No. 144 on January 1, 2002, as
required, and the adoption of this statement did not have a material impact
on the Company's financial position or results of operations.
6. Acquisition:
On December 18, 2001, the Company acquired substantially all of the assets
and certain liabilities of Bartley R.F. Systems, Inc. ("Bartley"). The
results of Bartley's operations are included in the consolidated financial
statements for the three and six months periods ended June 30, 2002. In the
second quarter of 2002, the Company completed the necessary third party
valuations of acquired intangible assets and, as a result, allocated $126,000
of purchase price to patent technology which will be amortized over a period
of five to ten years.
7. Reclassifications:
Certain prior year balances have been reclassified to conform to the current
year presentation.
12
ALLEN TELECOM INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
We design, manufacture, and market wireless communications infrastructure
equipment and provide wireless engineering and consulting services for the
global wireless communications markets. Our products and services improve the
capacity, coverage and performance of wireless networks, including emerging 3G
networks. As part of our commitment to our customers' evolving needs, we have
also developed new products for E 911 geolocation and other emerging wireless
equipment markets such as next generation power amplifiers. Our products and
services serve all major wireless standards and frequencies.
RESULTS OF OPERATIONS
Summary:
We reported a net loss of $0.7 million, or $0.04 per common share, (all per
common share amounts included herein refer to both basic and diluted) in the
second quarter 2002, which includes a pretax restructuring charge for severance
costs related to headcount reductions at several operations of $1.0 million
($0.02 per common share). This compares with net income of $0.8 million ($0.03
per common share) for the second quarter of 2001. Total sales decreased 13% from
$105.1 million in the second quarter 2001 to $91.9 million in the second quarter
2002.
For the six months ended June 30, 2002, we reported a net loss of $1.3 million
($0.06 per common share), which includes the above mentioned pretax
restructuring charge of $1.0 million ($0.02 per common share). This compares to
net income of $3.3 million ($0.12 per common share) for the six months
ended June 30, 2001. Total sales decreased by 15% from $213.6 million for the
six months ended June 30, 2001 to $181.7 million for the comparable 2002
period.
The strong Euro currency relative to the U.S. dollar positively impacted
reported sales in the second quarter of 2002 as compared to the second quarter
of 2001. As a result of foreign currency rate differences, reported sales in the
second quarter 2002 were $2.0 million higher, as compared with the corresponding
prior year period, assuming the exchange rate had stayed the same as 2001. The
foreign currency impact on sales for the six months ending June 30, 2002, as
compared with the 2001 period, was not significant. The impact on operating
earnings for both three and six month periods was also not significant.
13
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
The weighted average common shares outstanding for the Basic Earnings Per Common
Share computation increased for both the second quarter and six month periods of
2002, as compared with the comparable 2001 periods, due primarily to shares
issued in connection with our fourth quarter 2001 acquisition of Bartley R.F.
Systems, Inc. In computing Basic Earnings Per Common share for the 2002 periods,
earnings are reduced by dividends declared on the Convertible Preferred Stock
issued in the first quarter of 2002. The dividend declared in the second quarter
of 2002 amounted to $603,000 and reflects the partial period for which the
Convertible Preferred Stock was outstanding prior to the dividend payment date.
Such dividends would amount to $3,875,000 on an annual basis when, and if,
declared. For purposes of computing Diluted Earnings Per Common Share, and
only if such calculation results in dilution, Preferred Stock dividends will
not reduce earnings; however, the weighted average shares outstanding would
increase by 6,493,500 common shares representing the amount of common shares
into which the Preferred Stock is currently convertible.
Wireless Communications Equipment:
Wireless communications equipment sales were down 10% from $98.4 million in the
second quarter 2001 to $88.3 million in the second quarter 2002. The sales
changes by product line within the wireless communications segment were as
follows: Sales for the new geolocation product line were $7.7 million in second
quarter 2002 as compared with no sales in 2001. Sales for the repeaters and
in-building coverage product line increased 28% from $20.6 million in second
quarter 2001 to $26.3 million in second quarter 2002. This is due to an increase
in sales of test and measurement equipment and repeaters. Sales decreased
for the base station subsystems and components and base station and mobile
antenna product lines from $54.6 million to $35.7 million, or 35%, and from
$23.2 million to $18.6 million, or 20%, respectively. These sales declines
are due to reduced spending by wireless communications carriers and OEM's in
most world markets. Geographically, sales were down in all parts of the world
with the exception of the United States, where sales increased 22% due to sales
of the new geolocation products and an increase in sales of our repeater and
in-building coverage product lines.
Sales declined 14% from $201.2 million for the six months ended June 30, 2001 to
$173.6 for the six months ended June 30, 2002. Sales decreased 39% and 19% in
the base station subsystems and components and base station and mobile antenna
product lines, respectively. Sales increased 12% in the repeater and in-building
coverage products. Sales of geolocation products were $20.2 million with no
sales in the prior comparable 2001 period. Sales changes for the six months
ended June 30, 2001 and 2002 were consistent with those outlined in the second
quarter.
14
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
The following table sets forth our wireless communications equipment segment
sales by product line:
SALES BY PRODUCT LINE SECOND QUARTER YEAR TO DATE
-------------- ------------
($ MILLIONS) 2002 2001 2002 2001
------- ------- ------- -------
Base Station Subsystems and Components $ 35.7 $ 54.6 $ 69.4 $ 114.0
Repeater and In-Building Coverage Products 26.3 20.6 48.8 43.5
Base Station and Mobile Antennas 18.6 23.2 35.2 43.7
Geolocation Products 7.7 -- 20.2 --
------- ------- ------- -------
Total Wireless Communications Equipment $ 88.3 $ 98.4 $ 173.6 $ 201.2
======= ======= ======= =======
Backlog for this segment increased 24% from $94.8 million at March 31, 2002 to
$117.6 million at June 30, 2002. Backlog increased along all product lines
excluding repeaters and in-building coverage products. The largest percentage
increase in backlog was in the base station and mobile antenna product line that
increased 115% from the March 31, 2002 level. Geolocation products backlog
increased $14.5 million, which accounted for the single largest dollar increase.
Gross profit margins were essentially flat at 24.8% in the second quarter 2002,
as compared with 24.9% in the second quarter 2001. Lower gross margins caused by
lower pricing and higher costs were offset by stronger margins in the test and
measurement and geolocation product lines. For the six months ended June 30,
2002 and 2001, the gross profit margins were 24.3% and 26.2%, respectively. The
lower gross margins were caused by lower pricing and lower manufacturing
efficiencies due to lower sales in comparison with the prior year.
Selling, general, and administrative expenses (excluding 2002 restructuring
charges) were $11.3 million, or 12.8% of sales, in the second quarter 2002, and
increased slightly, from operating expenses in the second quarter 2001 of $10.8
million, or 11.0% of sales, due to higher compensation costs. Selling, general
and administrative expenses (excluding 2002 restructuring charges) as a
percentage of sales for the six months ended June 30, 2002 and 2001 were 12.5%
and 10.8%, respectively, due to the spreading of fixed costs over lower sales
volumes.
Research and development spending declined from $7.2 million, or 7.3% of sales,
in the second quarter 2001 to $6.5 million, or 7.4% of sales, in the second
quarter 2002, principally due to lower design development and field testing of
geolocation products. For the six months ended June 30, 2002, research and
development spending declined from $14.1 million in 2001 to $13.1 million in
2002 for similar reasons. We believe that product development costs will remain
fairly consistent in dollars throughout the year.
15
ALLEN TELECOM INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
Wireless Engineering and Consulting Services:
Wireless engineering and consulting services sales were down $3.2 million, or
47%, from $6.7 million in second quarter 2001 to $3.5 million in second quarter
2002. Sales were down $4.3 million, or 35%, for the six months ended June 30,
2002 in comparison with the prior year period. Sales for the quarter and six
month periods decreased in 2002 compared with prior year due to the low level of
software sales and a decline in engineering consulting services in the Company's
markets.
Gross profit margins for this segment were 3.7% in the second quarter 2002
(13.2% for the six months ended June 30, 2002), as compared with 38.9% in the
second quarter 2001 (35.1% for the six months ended June 30, 2001). This
decrease in margins is primarily attributable to lower software sales, which
contribute higher margins than other products and services, as well as less than
full deployment of engineers.
Selling, general and administrative expenses (excluding 2002 restructuring
charges) increased to 26.2% of sales for the second quarter of 2002 compared to
19.0% for the second quarter of 2001. This higher ratio was attributable to the
lower sales as the amount of selling, general and administrative expenses
decreased $0.3 million from period to period. Selling, general and
administrative expenses (excluding 2002 restructuring charges) as a percentage
of sales were essentially flat at 23.2% for the six months ended June 30, 2002
compared with 23.1% for the six months ended June 30, 2001. The consistent ratio
was due to lower sales for the six months ended June 30, 2002 as the amount of
selling, general, and administrative expenses decreased $1.0 million from the
prior year period. The lower spending was due to lower bad debt expense, as well
as cost savings from various restructuring actions.
Interest and Financing Expenses:
Net interest expense decreased to $1.8 million from $2.5 million and to $4.1
million from $5.1 million for the three and six months ended June 30, 2002 and
2001, respectively. The decreases are due to lower interest rates for both
periods of 2002 and lower borrowing levels (primarily in the second quarter of
2002). On March 20, 2002, we issued $50.0 million of Convertible Preferred Stock
that generated cash proceeds, net of fees and expenses, of $46.8 million, which
was used to pay down domestic bank borrowings. We estimate interest savings, as
a result of using the preferred stock proceeds to reduce debt, would approximate
$2.3 million on an annual basis based on our current average interest rate of
approximately 5.0%.
16
ALLEN TELECOM INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
Provision for Income Taxes:
Our effective income tax rate was 35.0% and 39.0% for the quarter and six month
periods ended June 30, 2002 and 2001, respectively. The principal reason for the
decrease is due to the change in accounting for goodwill amortization that was
almost entirely non-deductible for income tax purposes in 2001. The 2002 tax
rate is in line with our current expectation for the full year.
We have recorded net deferred tax assets pertaining to the recognition of net
operating loss carryforwards, net deductible temporary differences and tax
credits, in the amount of approximately $49.8 million at June 30, 2002 as
compared to $41.8 million (then solely related to the Company's U.S. operations)
as of December 31, 2001. The increase is primarily due to recognition of tax
benefits on operating loss carryforwards at certain of our European operations.
We have provided a valuation allowance relating to a portion of the European
asset in the amount of $1.2 million. We believe it is more likely than not that
we will realize the net value of these assets. This determination is primarily
based upon our expectation that future operations will be sufficiently
profitable to utilize the operating loss carryforwards, as well as
various tax, business and other planning strategies available to us. We cannot
provide assurance that we will be able to realize these assets or that future
valuation allowances will not be required. The failure to utilize such assets
would adversely effect our results of operations and financial position.
New Goodwill Accounting Standard:
Effective January 1, 2002, we implemented Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" (SFAS No. 142).
Accordingly, amortization of goodwill, including goodwill recorded in past
business combinations, ceased upon adoption of this Statement. Earnings per
common share for the three and six month periods ending June 30, 2001 would have
increased by $.07 and $.14 per common share, respectively, excluding the
amortization of goodwill, which was eliminated in 2002 when this new standard
went into effect.
In the second quarter of 2002, we completed our initial evaluation of goodwill
pursuant to the impairment requirements of SFAS No. 142. As a result of this
evaluation, we have determined that there may be impairment with respect to a
portion of the $32.7 million of goodwill related to the Decibel Products portion
of our base station and mobile antennas product line. We will complete the
valuation necessary to determine the actual amount of impairment loss, if any,
in the second half of 2002. However, based on current information we estimate
that such loss could range between zero and $5.0 million. Impairment charges, if
any, from this initial evaluation would be reported as a "Cumulative Effect of
an Accounting Change" in our consolidated statement of operations. See Note 5 of
the Condensed Consolidated Financial Statements for additional information.
17
ALLEN TELECOM INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
We consider the required impairment test for goodwill to be a "Critical
Accounting Policy". In computing the fair value of goodwill, we primarily used a
discounted present value of future cash flow technique; however, we also used a
market based approach in valuing one of our reporting units because we had
valid points for comparison. The discounted cash flow methodology involves the
use of two key assumptions: 1) estimated future income and resulting cash flows
and 2) an estimated discount rate, both of which are highly subjective and
likely to change in the future. The estimated future cash flows rely upon our
management's estimate of future profitability over an extended period of time.
The discount rate is based upon externally sourced information. These estimates
will likely change in the future and, if such changes are adverse, could impact
the recorded value of goodwill on our consolidated balance sheet. Accordingly,
we may be required to record a non-cash charge to operations for goodwill
impairment in the future, which would adversely affect reported earnings and,
consequently, our stockholders' equity.
We have allocated goodwill among each of our reporting units, which includes
$132.7 million allocated to our wireless communication equipment segment and
$8.7 million to our wireless engineering and consulting services segment.
Because goodwill is allocated among many reporting units, the sensitivity of
changes in assumptions regarding the calculation of the present value of cash
flows would be different for each unit. This is due to the varying degree of
differences between the net asset value, including goodwill, for a reporting
unit and its respective fair value as we have calculated it. In some cases, the
difference between the net asset value and fair value is large, which is not the
case for other reporting units. As a result, specific adverse changes in
assumptions would not necessarily result in goodwill impairment charges across
all reporting units equally. If the estimated future cash flows used in our
assumptions were reduced by 10%, it would have resulted in an estimated
preliminary impairment charge in the range of approximately $7.0 million to
$12.0 million. Further, if the assumed discount rate used were to be increased
by 1% (independent of the aforementioned change in cash flow), it would have
resulted in an estimated preliminary impairment charge in the range of
approximately $10.0 million to $15.0 million. Such amounts are only preliminary,
since upon identifying any possible impairment charge we would then be required
to perform a secondary step to determine the fair value of all assets and
liabilities of the applicable reporting units in order to determine the actual
impairment charge, if any. If the cash flow and discount rate were to favorably
change, there would be no resulting impairment charge. While an impairment
charge is a non-cash charge to earnings, the severity of any charge and its
impact on stockholders' equity could adversely affect our cost of capital and
our ability to raise external capital.
We are primarily a communications infrastructure equipment provider to the
wireless telecommunications industry, which has recently experienced a severe
economic downturn. The failure of this industry to rebound and/or our failure to
maintain or improve sales and operating results could result in future goodwill
impairment charges. Our senior management has reviewed this Critical Accounting
Policy with the Audit Committee of our Board of Directors and, in general,
reviewed the methodology, assumptions and results of our goodwill analysis.
18
ALLEN TELECOM INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
LIQUIDITY AND CAPITAL RESOURCES:
As set forth in the Condensed Consolidated Statements of Cash Flows, $27.8
million of cash was generated by operations for the six months ended June 30,
2002, as compared to $32.8 million of cash used in the comparable 2001 period.
This improvement of cash generation is due primarily to a reduction of inventory
and receivables. From March 31, 2001 to June 30, 2002, our consolidated
inventory decreased $24.6 million to $118.1 million.
We used $3.7 million of cash in investing activities in the first six months of
2002, due principally to $3.0 million for capital expenditures. For the first
six months of 2001, $2.4 million was used in investing activities, including
$6.9 million for capital expenditures, which was partially offset by proceeds
from the sale of an unused facility.
Cash used by financing activities for the six months ended June 30, 2002 was
$20.0 million. On March 20, 2002, we issued $50.0 million of Redeemable
Convertible Preferred Stock, which netted $46.8 million of cash after deduction
of certain fees and expenses (see Note 3 of the Condensed Consolidated Financial
Statements for additional information). Cash proceeds from this offering, as
well as cash generated by operations, were used to repay borrowings of $49.5
million in the first quarter 2002 and an additional $18.1 million in the second
quarter of 2002. Cash generated by financing activities for the six months ended
June 30, 2001 was $10.6 million and resulted primarily from borrowings and a
sale and leaseback transaction in the second quarter of 2001.
As a result of our Convertible Preferred Stock offering and the resulting
pay-down of domestic debt, we permanently reduced our domestic revolving credit
agreement commitment on March 20, 2002 from $105.0 million to $76.9 million. On
a worldwide basis, at June 30, 2002, we had $130.5 million of lines of credit,
of which $116.4 million were unused and available. At March 31, 2002, and
December 31, 2001, we had available unused lines of credit of $92.3 and $71.4
million, respectively.
The strong Euro currency, relative to the U.S. dollar has positively impacted
the translated value of our European subsidiaries, whose assets and liabilities
are denominated principally in Euros. Our "Accumulated Other Comprehensive Loss"
(representing primarily the net impact on the translated net asset investment of
foreign subsidiaries) declined $16.6 million to $15.7 million at June 30, 2002
from $32.2 million at March 31, 2002. This increase in the translated value of
our net foreign asset position is the principal reason for the increase in
Stockholders' Equity at June 30, 2002 as compared with December 31, 2001.
19
ALLEN TELECOM INC.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Continued)
LEGAL DISCLAIMER:
Statements included in this Form 10-Q, which are not historical in nature, are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
regarding the Company's future performance and financial results are subject to
a number of risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Factors that
could cause the Company's actual results to materially differ from
forward-looking statements made by the Company, include, among others, the cost
incurred, savings realized and timing of the integration of acquisitions; the
cost, success and timetable for new product development including, for example,
products for 3G, E 911 and power amplification; the health, economic stability
and relative currency valuations in world and national markets; the cost and
outcome of litigation, including, for example, a lawsuit filed by a competitor
in the E 911 geolocation business claiming infringement by the Company of
intellectual property rights; the cost and availability of capital and financing
to the Company and its customers; the uncertain timing and level of purchases by
the limited number of the Company's customers of both current products and
services, and those under development; the effective realization of inventory,
receivables and other working capital assets to cash; the impact of competitive
products and pricing in the Company's markets; the ability of the Company to
generate future U.S. and foreign profits or to implement other tax planning
strategies needed to utilize the Company's tax loss carry forwards; the changes
in business conditions and/or changes in assumptions, which could result in
goodwill impairment charges; the impact of U.S. and foreign government
legislative/regulatory actions, including, for example, the scope and timing of
E 911 geolocation requirements in the U.S. markets and spectrum availability and
licensing for new wireless applications; the impact of future business
conditions on the Company's ability to meet terms and conditions of the
Company's borrowing agreements; the cost, timing and availability of personnel,
facilities, materials and vendors required for the Company's current and future
products; and whether and when backlog will be converted to customer sales.
Allen Telecom Inc.'s Annual Report on Form 10-K and Quarterly Reports on Form
10-Q may contain additional factors.
20
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" under Item 7 of the Company's Annual Report on Form 10-K for the
year ended December 31, 2001. There has been no material change from the end of
the previous fiscal year to June 30, 2002.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
On December 11, 2001, a competitor, TruePosition, Inc., and its subsidiary, KSI,
Inc., filed a lawsuit against Allen Telecom Inc. in the United States District
Court for the District of Delaware. The plaintiffs alleged in their complaint
that we, through our Grayson Wireless Division, have infringed three patents in
connection with our GEOMETRIX wireless geolocation business. On July 16, 2002,
the plaintiffs amended their complaint to add four additional patents to the
lawsuit. In our answer filed on July 30, 2002, to the amended complaint, we
denied all the plaintiffs' allegations and asserted counterclaims against the
plaintiffs for infringement of one of our patents and for tortious interference
with our business relationships. We believe that we have meritorious defenses
against all of the claims asserted by the plaintiffs, and intend to vigorously
defend the lawsuit.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Annual Meeting of Stockholders of the Company held on April 26, 2002
three proposals were voted upon by the Company's stockholders. A brief
description of each proposal voted upon at the Annual Meeting and the number of
votes cast for, against and withheld are set forth below.
A vote by ballot was taken at the Annual Meeting for the election of 8 Directors
of the Company to hold office until the next Annual Meeting of Stockholders of
the Company and until their respective successors shall have been duly elected
and qualified. The aggregate numbers of shares of common stock (a) voted in
person or by proxy for each nominee, or (b) with respect to which proxies were
withheld for each nominee, were as follows:
Nominee For Withheld
------- --- --------
Philip Wm. Colburn 23,363,975 2,057,089
J. Chisholm Lyons 23,357,197 2,063,867
Sheldon I. Ausman 23,598,700 1,822,364
Robert G. Paul 23,598,976 1,822,088
Charles W. Robinson 23,524,441 1,896,623
Martyn F. Roetter 23,600,744 1,820,320
Gary B. Smith 23,575,458 1,845,606
Kathleen M. H. Wallman 23,590,818 1,830,246
21
PART II - OTHER INFORMATION
(Continued)
A vote by ballot was taken at the Annual Meeting on the proposal to ratify the
appointment of Deloitte & Touche LLP as auditors for the Company for the fiscal
year ending December 31, 2002. The aggregate numbers of shares of Common Stock
in person or by proxy which: (a) voted for, (b) voted against or (c) abstained
from the vote on such proposal were as follows:
For Against Abstain
--- ------- -------
24,969,093 369,027 82,943
That (a) a vote by ballot was taken at the meeting on the proposal to approve
the adoption of the Amended and Restated 1992 Stock Plan, and (b) the aggregate
numbers of shares of Common Stock in person or by proxy (i) voted for, (ii)
voted against or (iii) abstaining from the vote on such proposal were as
follows:
For Against Abstain
--- ------- -------
21,486,603 2,992,238 942,222
The foregoing proposals are described more fully in the Company's definitive
proxy statement dated March 17, 2002, filed with the Securities and Exchange
Commission pursuant to Section 14(a) of the Securities Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(3.1) Third Restated Certificate of Incorporation (filed as Exhibit Number
4(a) to Registrant's Registration Statement of Form S-8,
Registration No. 333-96805, filed July 19, 2002 (Commission file
number 1-6016) and incorporated herein by reference).
(10.1) Allen Telecom Inc. Amended and Restated 1992 Stock Plan (filed as
Exhibit A to Registrant's Proxy Statement dated March 17, 2002
(Commission file number 1-6016) and incorporated herein by
reference).
(10.2) Form of Incentive Stock Option to Purchase Stock pursuant to the
Allen Telecom Inc. Amended and Restated 1992 Stock Plan.
(10.3) Form of Non-Qualified Option to Purchase Stock pursuant to the Allen
Telecom Inc. Amended and Restated 1992 Stock Plan.
(99.1) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(99.2) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
22
PART II - OTHER INFORMATION
(Continued)
(b) Reports on Form 8-K
On April 23, 2002, the Company filed a Current Report on Form 8-K, under
Item 5 "Other Events", whereby it filed a press release dated April 22,
2002, reporting Allen Telecom's first quarter 2002 earnings results.
On June 12, 2002, the Company filed a Current Report on Form 8-K under Item
5 "Other Events", whereby it filed a press release dated June 11, 2002,
updating Allen Telecom's expected second quarter 2002 sales and earnings
results.
23
SIGNATURES
Pursuant to the requirements 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.
Allen Telecom Inc.
------------------
(Registrant)
Date: August 13, 2002 By: /s/ Robert A. Youdelman
-----------------------------------
Robert A. Youdelman
Executive Vice President
(Chief Financial Officer)
Date: August 13, 2002 By: /s/ James L. LePorte, III
-----------------------------------
James L. LePorte, III
Vice President Finance
(Principal Accounting Officer)
24
EXHIBIT INDEX
ALLEN TELECOM INC.
Exhibit Number:
- ---------------
(3.1) Third Restated Certificate of Incorporation (filed as Exhibit
Number (a) to Registrant's Registration Statement of Form S-8,
Registration No. 333-96805, filed July 19, 2002 (Commission
file number 1-6016) and incorporated herein by reference).
(10.1) Allen Telecom Inc. Amended and Restated 1992 Stock Plan (filed
as Exhibit A to Registrant's Proxy Statement dated March 17,
2002 (Commission file number 1-6016) and incorporated herein
by reference).
(10.2) Form of Incentive Stock Option to Purchase Stock pursuant to
the Allen Telecom Inc. Amended and Restated 1992 Stock Plan.
(10.3) Form of Non-Qualified Option to Purchase Stock pursuant to the
Allen Telecom Inc. Amended and Restated 1992 Stock Plan.
(99.1) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(99.2) Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
25