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BDM International Inc/DE · 10-Q · For 6/30/96

Filed On 8/6/96   ·   Accession Number 870763-96-7   ·   SEC File 0-23966

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  As Of                Filer                Filing    For/On/As Docs:Size

 8/06/96  BDM International Inc/DE          10-Q        6/30/96    3:35K

Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      16     67K 
 2: EX-11.1     Statement re: Computation of Earnings Per Share        1      6K 
 3: EX-27       Financial Data Schedule                                1      6K 


10-Q   —   Quarterly Report
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
3Item 1. Financial Statements
9Item 2. Managements' Discussion and Analysis
14Item 4. Submission of Matters to a Vote of Security Holders
"Item 6. Exhibits and Reports on Form 8-K
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SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF EXCHANGE ACT OF 1934 For the quarter Commission File ended: June 30, 1996 Number: 000-23966 BDM International, Inc. (Exact name of registrant as specified in its charter) Delaware 4-1561881 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1501 BDM Way, McLean, Virginia 22102-3204 (Address of principal executive office) (Zip Code) Registrant's telephone number including area code: 703-848-5000 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 (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 As of the close of business on July 31, 1996, the registrant had outstanding 14,174,031 shares of Common Stock, par value $.01 per share.
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CONTENTS Part I. Financial Information Item 1. Financial Statements............................................2 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.................................8 Part II. Other Information Item 4. Submission of Matters to a Vote of Securities Holders..........13 Item 6. Exhibits and Reports on Form 8-K...............................13
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PART I Item 1. Financial Statements. ------- --------------------- INDEX TO CONSOLIDATED FINANCIAL STATEMENTS BDM International, Inc.: Consolidated Balance Sheets as of June 30, 1996 (Unaudited) and December 31, 1995.....................3 Consolidated Statements of Operations for the Three and Six Months Ended June 30, 1996 and 1995 (Unaudited) ......4 Condensed Consolidated Statements of Cash Flow for the Six Months Ended June 30, 1996 and 1995 (Unaudited) ................5 Notes to Consolidated Financial Statements (Unaudited) ......................6
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[Enlarge/Download Table] BDM INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, December 31, 1996 1995 ----------------- ---------------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 58,817 $ 69,143 Accounts receivable, net 215,782 219,354 Prepaid expenses and other 7,135 6,157 ----------------- ---------------- Total current assets 281,734 294,654 Property and equipment, net 46,670 45,722 Intangible assets, net 25,036 9,615 Deposits and other 6,856 8,580 Equity in and advances to affiliates 6,009 5,222 ----------------- ---------------- Total assets $ 366,305 $ 363,793 ================= ================ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 148,009 $ 168,253 Debt currently payable 2,992 449 Income taxes payable 4,624 3,465 Deferred tax liability 4,243 6,363 ----------------- ---------------- Total current liabilities 159,868 178,530 Deferred tax liability 3,402 3,638 Long term debt 8,009 25,900 Severance and other 9,440 12,099 Minority interest 30,412 28,157 ----------------- ---------------- Total liabilities 211,131 248,324 ----------------- ---------------- Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value; 500,000 shares authorized, none issued - - Common stock, $.01 par value; 14,126,973 and 12,962,342 shares issued and outstanding at June 30, 1996 and December 31, 1995, respectively 141 130 Additional paid in capital 97,039 68,535 Retained earnings 58,852 46,790 Deferred compensation (1,697) (395) Cumulative translation adjustment 839 409 ----------------- ---------------- Total stockholders' equity 155,174 115,469 ----------------- ---------------- Total liabilities and stockholders' equity $ 366,305 $ 363,793 ================= ================ The accompanying notes are an integral part of these consolidated financial statements.
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[Enlarge/Download Table] BDM INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except earnings per share data) (unaudited) For the three months For the six months ended June 30, ended June 30, ------------- ------------- 1996 1995 1996 1995 --------- --------- --------- --------- Revenue $251,854 $ 213,064 $ 476,961 $ 404,965 --------- --------- --------- --------- Cost of sales 211,334 178,744 400,226 335,734 Selling, general and administrative 23,328 20,854 43,769 40,239 Depreciation, amortization and other 4,536 4,676 8,594 10,298 --------- --------- --------- --------- Operating profit 12,656 8,790 24,372 18,694 Interest (income) expense, net (765) 1,364 (1,013) 2,485 Equity in earnings of affiliates (465) (503) (916) (835) Minority interest 2,258 786 5,179 3,012 --------- --------- --------- --------- Income before income taxes 11,628 7,143 21,122 14,032 Provision for income taxes 4,973 3,273 9,060 6,828 --------- --------- --------- --------- Net income $6,655 $ 3,870 $ 12,062 $ 7,204 ========= ========= ========= ========= Earnings per common and common equivalent share: Net income per common share $0.45 $ 0.38 $0.84 $ 0.71 ========= ========= ========= ========= Weighted average common shares outstanding 14,908 10,237 14,324 10,113 ========= ========= ========= ========= The accompanying notes are an integral part of these consolidated financial statements.
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[Enlarge/Download Table] BDM INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW For the six months ended June 30, 1996 and 1995 (unaudited, in thousands) For the six months ended June 30, 1996 1995 ------------- -------------- Cash flow from operating activities: Net cash provided by operating activities $ 11,084 $ 7,220 ------------- -------------- Cash flow from investing activities: Additions to property and equipment (8,037) (5,235) Purchase of businesses, net of cash acquired (8,695) -- Reimbursement of acquisition costs -- 1,143 Contributions from minority owners -- 1,862 Distributions from unconsolidated affiliates 990 800 Investment in unconsolidated affiliates (1,358) (799) ------------- -------------- Net cash used in investing activities (17,100) (2,229) ------------- -------------- Cash flow from financing activities: Net repayments of revolving borrowings (24,950) (21,573) Repayment of acquisition debt (1,954) -- Proceeds from issuance of common stock 25,448 1,274 Acquisition of treasury stock -- (1,088) ------------- -------------- Net cash used in financing activities (1,456) (21,387) ------------- -------------- Effect of exchange rate changes on cash and cash equivalents (2,854) 4,242 ------------- -------------- Net decrease in cash and cash equivalents (10,326) (12,154) Cash and cash equivalents, beginning of period 69,143 45,314 ------------- -------------- Cash and cash equivalents, end of period $ 58,817 $ 33,160 ============= ============== The accompanying notes are in integral part of these consolidated financial statements.
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BDM INTERNATIONAL, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (1) General ------- The accompanying financial statements of BDM International, Inc. and subsidiaries (BDM or the Company) as of June 30, 1996 and for interim periods ended June 30, 1996 and 1995, are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. The balance sheet data as of December 31, 1995, was derived from the Company's audited consolidated financial statements, but does not include all disclosures required by generally accepted accounting principles. Certain other information and disclosures included in the Company's annual consolidated financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the above referenced rules and regulations. It is suggested that these financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's latest annual report to the Securities and Exchange Commission on Form 10-K. The accompanying consolidated financial statements reflect all adjustments and reclassifications that, in the opinion of management, are necessary for a fair presentation. All such adjustments and reclassifications have been deemed to be of recurring nature, except for the write-off of goodwill in March 1995, as discussed below. (2) Income Taxes ------------ The Company uses the estimated annual effective rate method for interim income tax purposes. The Company also recognizes an expense for U.S. income taxes on undistributed earnings of its foreign subsidiaries as though the earnings had been distributed. The difference between the combined statutory federal and state income tax rate of 42% and the Company's actual effective income tax rate of 43% for the six months ended June 30, 1996, is primarily attributable to goodwill amortization which is not deductible for federal income tax purposes. The difference between the combined statutory federal and state income tax rate of 41% and the Company's actual effective income tax rate of 49% for the six months ended June 30, 1995, is primarily attributable to a charge of $1.6 million recognized in the first quarter of 1995 to reflect management's estimate of the recoverability of unamortized goodwill generated in an earlier business acquisition. This charge, as well as the majority of the Company's other goodwill, is not deductible for federal income tax purposes, thus resulting in the higher effective tax rate. (3) Earnings Per Share ------------------ Net income per common share is net income divided by the weighted average number of common shares and common share equivalents outstanding during the period. The Company's common share equivalents consist entirely of stock options.
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BDM INTERNATIONAL, INC. NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (4) Capital stock transactions -------------------------- On March 27, 1996, the Company completed a secondary offering of common stock to the public in which 3,220,000 shares of Common Stock were sold at $36.50 per share. Of the total 3,220,000 shares sold, 450,000 were primary shares and the remaining 2,770,000 shares were sold by certain of the Company's shareholders, including 400,000 of Class B shares, which were converted to Common Stock immediately prior to the offering. The net proceeds of $15.3 million was used for general corporate purposes and to finance future acquisitions. The remaining shares of stock available under the 1995 Employee Stock Purchase Program were purchased by employees during the months January to April 1996. In May a successor plan (the 1996 Plan) was established which made available 1,000,000 shares of BDM common stock, with a maximum of 500,000 shares available for purchase in any 12-month period. During the offering period of May 1, 1996 to October 31, 1996, the purchase price is 85% of the closing price of BDM common stock on May 1, 1996 (the base price), or 85% of the closing price at the end of each month, whichever is less. The base price will be reset every six months to 85% of the closing price on the first trading day of the next offering period. The new 1996 Plan includes a 90-day holding period during which employees may not sell shares purchased under the 1996 Plan. (5) Acquisition ----------- On February 20, 1996, the Company completed the acquisition of three affiliated companies - CW Systems, Inc., IG Systems, Inc. and Melco Systems, Inc. - for $18.5 million. The acquired companies specialize in providing information technology systems and services to large commercial organizations in various industries, as well as to various state agencies. The acquisition of these companies has been accounted for as a purchase, and the results of their operations have been included in the Company's consolidated statement of income since the date of acquisition. Of the total purchase price, $8.8 million was paid out of existing cash balances and $9.7 million was financed through the issuance of notes payable to the previous owners. The notes are payable over two years and bear an interest rate equal to the prevailing yield rate on twenty-six week United States Treasury Bills, determined every six months (4.71 % as of June 30, 1996). Interest is payable on a quarterly basis. Resulting goodwill totaled $16 million, and will be amortized on a straight-line basis over 15 years. Other intangible assets, relating to non-compete agreements, totaled $1.4 million and will be amortized over two years.
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Item 2. Managements' Discussion and Analysis ------- ------------------------------------ OVERVIEW The Company achieved strong increases in revenue and profitability for the second quarter of 1996. For the three months ended June 30, 1996, revenue grew 18%, net income grew 72%, and earnings per share increased 18% compared to the same period in 1995. For the six months ended June 30, 1996, the Company experienced growth in revenue of 18%, net income of 67%, and earnings per share of 18% compared to the same period in 1995. Proposal activity has been robust resulting in proposal backlog of $2.3 billion as of June 30, 1996. Contract backlog of $1.6 billion as of June 30, 1996, will increase significantly in the third quarter as a result of a large contract award in early July. REVENUE [Enlarge/Download Table] Three months ended June 30, Six months ended June 30, (in millions, except percentages) (in millions, except percentages) 1996 % 1995 % 1996 % 1995 % ---- - ---- - ---- - ---- - Client Category --------------- U.S. Department of Defense $103.7 41% $ 77.2 36% $ 186.5 39% $ 144.2 36% International Defense 57.6 23% 50.6 24% 116.5 25% 101.6 25% Civil Government 55.5 22% 54.6 26% 101.0 21% 99.0 24% Commercial 35.1 14% 30.7 14% 73.0 15% 60.2 15% ---- --- ---- --- ---- --- ---- --- Total $ 251.9 100% $ 213.1 100% $ 477.0 100% $ 405.0 100% ======= ==== ======= ==== ======= ==== ======= ==== Services Provided ----------------- Systems & Software Integration $ 85.5 34% $ 69.5 33% $ 169.4 36% $ 123.9 31% Computer & Technical Services 130.1 52% 114.4 53% 250.0 52% 231.2 57% Enterprise Management & Operations 36.3 14% 29.2 14% 57.6 12% 49.9 12% ---- --- ---- --- ---- --- ---- --- Total $ 251.9 100% $ 213.1 100% $ 477.0 100% $ 405.0 100% ======= ==== ======= ==== ======= ==== ======= ==== Subsidiary ---------- BDM Federal $ 139.0 55% $ 116.2 55% $ 258.0 54% $ 213.7 53% BDM Technologies 21.5 9% 14.6 7% 38.6 8% 26.8 7% BDM Europe 48.2 19% 46.7 22% 100.4 21% 95.5 23% Vinnell Corporation 43.2 17% 35.6 16% 80.0 17% 69.0 17% ---- --- ---- --- ---- --- ---- --- Total $ 251.9 100% $ 213.1 100% $ 477.0 100% $ 405.0 100% ======= ==== ======= ==== ======= ==== ======= ==== Revenue by Client Category -------------------------- U.S. Department of Defense (DOD): Revenue derived from the U.S. Department of Defense (DOD) increased 34% and 29% for the three and six month periods ended June 30, 1996, compared to the same periods in 1995. Particularly noteworthy was the strong growth in the Company's systems and software integration work for the DOD (primarily the Defense Enterprise Integration Services contract), as well as growth in defense test and evaluation and technical support for ballistic missile defense and other military programs.
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International Defense: Revenue from international defense business increased 14% and 15% for the three and six month periods ended June 30, 1996, compared to the same periods in 1995 due to higher revenue earned on BDM Federal's contract with the Royal Saudi Air Force and higher revenue on Vinnell's contract with the Royal Saudi Land Forces. This was somewhat offset by a decrease in revenue on Vinnell's contract with the Saudi Arabian National Guard. The real growth in the Company's German defense business was masked by exchange rate fluctuations as the U.S. dollar strengthened roughly 6% against the German mark in 1996 compared to 1995. Excluding the impact of changes in the exchange rate, international defense business would have increased by 16% and 15% for the three and six month periods ended June 30, 1996, compared to the same periods in 1995. Certain 1995 amounts have been reclassified between the International Defense and the Civil Government categories to conform with the 1996 presentation. Civil Government: The increase of 2% in civil government revenue for the three and six month periods ended June 30, 1996, reflects growth in Vinnell's Job Corps Center contracts and BDM Federal's work for local school districts. This growth was offset by a decline in revenue from BDM's environmental restoration and waste management programs for the Department of Energy, as well as a slight decline in revenue generated from state governments. The Federal government's decision to delay by two years the deadline by which states must have federally certified information systems in place to manage and track their child support enforcement programs has contributed to a flattening of revenue growth for BDM Technologies' state government business. The Company has recently won two substantial state government contracts, one in Arkansas and the other in Montana. Work on the Arkansas contract began in the third quarter of 1996. The Company is currently providing a broad array of information services support to the State of Montana. The new Montana contract, which will commence in early 1997, will expand upon the Company's current work. Commercial: The increase of 14% and 21% in commercial revenue for the three and six month periods ended June 30, 1996, reflects growth of information technology work for various clients, principally generated from the companies acquired in late February. International commercial revenue, which is roughly half of the Company's total commercial business, was impacted by the aforementioned fluctuations in the German mark to U.S. dollar exchange rate. Excluding the impact of the currency fluctuations, commercial revenue would have increased by 18% for the three months ended June 30, 1996, compared to the same period in 1995. Timing issues related to the installation of the Company's warehouse automation and distribution product, MARC(TM) Systems, resulted in slower than expected growth for the quarter in BDM Technologies' domestic commercial business, excluding the effect of the acquisitions. Revenue by Services Provided ---------------------------- Systems and software integration revenue increased 23% and 37% for the three and six months ended June 30, 1996, compared to the same periods in 1995. This increase was driven by growth in BDM Federal's DEIS contract with the Defense Information Systems Agency, as well as work for a variety of commercial clients primarily related to the acquisitions completed in February. The increase in computer and technical services revenue of 14% and 8% for the three and six month periods is a result of growth in a number of contracts including the expansion of work for the Royal Saudi Land Forces, test and evaluation programs, and technical support for ballistic missile defense and other military programs. Vinnell's Job Corps contracts were a major driver of the increase in enterprise management and operations revenue.
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Revenue by Subsidiary --------------------- Revenue at BDM Federal grew 20% and 21% for the three and six months ended June 30, 1996, compared to the same periods in 1995. This increase reflects expanded work for a wide variety of clients, most notably involving information technology services on the DEIS contract, and also increased services and support in defense test and evaluation, ballistic missile defense, and other military program areas. The 47% and 44% revenue increases at BDM Technologies for the three and six month periods ended June 30, 1996, were largely due to growth in its commercial information technology work, primarily resulting from the acquisitions completed in February. BDM Europe's higher revenue reflected additional work performed for the German Ministry of Defense and commercial clients. In local currency, BDM Europe's revenue increased approximately 13% and 9% for the three and six month periods. This real growth was masked by changes in the exchange rate. Finally, Vinnell's revenue increased 21% and 16% for the three and six month periods ended June 30, 1996. This increase was driven by its Job Corps Center contracts and work for the Royal Saudi Land Forces, although this growth was partially offset by a decrease in revenue for its contract with the Saudi Arabian National Guard. The following table sets forth selected financial data, expressed as a percentage of revenue: [Enlarge/Download Table] Three Months Ended June 30, Six Months Ended June 30, 1996 1995 1996 1995 ---- ---- ---- ---- Revenue 100.0% 100.0% 100.0% 100.0% Cost of Sales 83.9 83.9 83.9 82.9 Selling, general and administrative 9.3 9.8 9.2 9.9 Depreciation, amortization and other 1.8 2.2 1.8 2.6 ------- ------- -------- --------- Operating profit 5.0 4.1 5.1 4.6 Interest (income) expense, net (0.3) 0.6 (0.2) 0.7 Equity in earnings of affiliates (0.2) (0.2) (0.2) (0.2) Minority interest 0.9 0.4 1.1 0.7 ------- ------- -------- --------- Income before taxes 4.6 3.3 4.4 3.5 Provision for income taxes 2.0 1.5 1.9 1.7 ------- ------- -------- --------- Net income 2.6% 1.8% 2.5% 1.8% ======== ======== ========= ========== COST OF SALES Cost of sales, which includes salaries, benefits, subcontractor expenses, materials and overhead costs, was stable as a percentage of revenue for the second quarter of 1996 compared to the same period in 1995, reflecting a similar mix of services and materials in the two periods. The increase in cost of sales as a percentage of revenue for the first six months of 1996 compared to the same period in 1995 reflects a one-time profit recognition in March 1995 from a Vinnell contract, which was applicable to services provided since the inception of the contract in May 1994. This lowered the 1995 cost of sales percentage. SELLING, GENERAL AND ADMINISTRATIVE The decrease in selling, general and administrative (SG&A) expense as a percentage of revenue for the three and six months ended June 30, 1996, compared to the prior year periods reflects revenue growth which has outpaced the dollar increase in SG&A costs. The dollar increase in SG&A costs reflects the inclusion of the companies acquired in February 1996, as well as an increase in expenditures for marketing, product development, recruiting, and training. These increases were partially offset by lower SG&A costs at BDM Europe.
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DEPRECIATION, AMORTIZATION AND OTHER Depreciation, amortization and other costs decreased as a percentage of revenue for the three months ended June 30, 1996, compared to the same period in 1995. This decrease reflects the Company's higher revenue base which has been accompanied by relatively flat costs. Amortization expense for the second quarter included amounts related to the acquisitions completed in 1996, offset by a decrease from other intangibles that have become fully amortized. For the six months ended June 30, 1996, these costs decreased as a percentage of revenue largely due to a $1.6 million write-off of goodwill in the first quarter of 1995 related to the FACE acquisition. INTEREST (INCOME) EXPENSE, NET The Company had net interest income of $0.8 million and $1.0 million for the three and six months ended June 30, 1996, compared to net interest expense of $1.4 million and $2.5 million for the same periods in 1995. This resulted from applying $49.4 million of net proceeds in July 1995 from the initial public stock offering and $15.3 million of net proceeds in March 1996 from the secondary stock offering to reduce outstanding borrowings. EQUITY IN EARNINGS OF AFFILIATES Equity in earnings of affiliates represents the Company's share of earnings from Vinnell's unconsolidated joint ventures. These amounts have remained fairly stable compared to the prior year periods. MINORITY INTEREST The minority interest share of earnings increased as a percentage of revenue for the three and six months ended June 30, 1996, compared to the same periods in 1995. This increase reflects improved profitability of BDM Europe and the expansion of Vinnell's joint ventures in the Middle East. Vinnell's contract with the Saudi Arabian National Guard was performed under a joint venture, in which Vinnell is a 51% partner, beginning in July 1995. The results of this operation are included in the Company's consolidated financial statements, with the other partner's 49% ownership interest reflected as minority interest. This contract was performed solely by Vinnell in the first half of 1995, and thus, the Company reported no minority interest for that contract at that time. These increases were partially offset by a reduction in minority interest from 1995 to 1996 due to a one-time profit recognition in March 1995 from a Vinnell joint venture in Saudi Arabia. PROVISION FOR INCOME TAXES The provision for income taxes decreased as a percentage of income before income taxes for the three and six months ended June 30, 1996, over the same periods in 1995. The effective rate decrease was related to the write-off of $1.6 million in goodwill from the FACE acquisition in the first quarter of 1995. This write-off was not deductible for income tax purposes. Offsetting this somewhat was an increase in the Company's statutory tax rate from 41% in 1995 to 42% in 1996, reflecting the impact of the Company's international expansion into countries with higher income tax rates than the United States. This higher income tax rate considers foreign tax credits which may expire prior to their use.
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LIQUIDITY AND CAPITAL RESOURCES ------------------------------- The Company's principal sources of liquidity continue to be cash from operations, as well as available credit under the Company's $150 million revolving credit agreement. For the six months ended June 30, 1996, the Company had cash flow of $11 million from operating activities. This positive cash flow was achieved despite a delay in funding for one of Vinnell's contracts in the Middle East. This funding was approved subsequent to quarter end, and collection is expected during the third quarter of 1996. If the cash had been received prior to quarter end, the Company would have had cash flow from operations of approximately $35 million for the six months ended June 30, 1996. As of June 30, 1996, the Company had approximately $147 million available for borrowing under the revolving credit agreement. Cash flow related to investing activities primarily consists of the investment made for the acquisition of three affiliated companies. On February 20, 1996, the Company completed the acquisition of CW Systems, Inc., IG Systems, Inc., and Melco Systems, Inc. for $18.5 million, $8.8 million of which was paid out of existing cash balances and $9.7 million was financed through notes payable to the previous owners. The acquired companies specialize in providing information technology systems and services to large commercial organizations in several industries, as well as to certain state government agencies. Goodwill totaled $16 million, and will be amortized on a straight-line basis over 15 years. Other intangible assets, relating to non-compete agreements, totaled $1.4 million and will be amortized over two years. Other investing activities included capital expenditures, which have increased due to the implementation of a new enterprise reporting system (SAP) at BDM Federal, and working capital infusions to and earnings distributions from Vinnell's unconsolidated joint ventures. Financing activities include the net proceeds from the secondary stock offering of $15.3 million completed in March of this year and the reduction of the Company's working capital facility by $25 million. In addition, the Company continued to provide a benefit to its employees by enabling them to purchase shares of common stock through stock option exercises and the employee stock purchase plan. The remaining shares of stock available under the 1995 Employee Stock Purchase Program were purchased by employees during the months January to April 1996. In May, a successor plan (the 1996 Plan) was established which made available 1,000,000 shares of BDM common stock, with a maximum of 500,000 shares available for purchase in any 12-month period. During the offering period of May 1, 1996 to October 31, 1996, the purchase price is 85% of the closing price of BDM common stock on May 1, 1996, or 85% of the closing price at the end of each month, whichever is less. The purchase price will be reset every six months to 85% of the closing price on the first trading day of the next offering period. The new 1996 Plan includes a 90-day holding period during which employees may not sell shares purchased under the 1996 Plan. General Management believes the Company has sufficient liquidity and working capital resources necessary to conduct planned business operations , debt service requirements, planned investments, capital expenditures, and to ensure compliance with restrictive bank covenants for the foreseeable future.
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PART II Item 4. Submission of Matters to a Vote of Security Holders ------- --------------------------------------------------- At the Annual Meeting of Shareholders held on May 10, 1996, shareholders voted on the election of nine directors for the ensuing year, approval of the 1996 Employee Stock Purchase Plan (the 1996 Plan) and the appointment of independent accountants for 1996. Proxies were solicited for the meeting pursuant to Regulation 14, there was no solicitation in opposition to the management's nominees as listed in the proxy statement and all of the nominees were elected. The 1996 Plan makes available 1,000,000 shares of BDM common stock, with a maximum of 500,000 shares available for purchase in any 12-month period. During the offering period of May 1, 1996 to October 31, 1996, the purchase price is 85% of the closing price of BDM common stock on May 1, 1996 (the base price), or 85% of the closing price at the end of each month, whichever is less. The base price will be reset every six months to 85% of the closing price on the first trading day of the next offering period. The 1996 Plan includes a 90-day holding period during which employees may not sell shares purchased under the 1996 Plan. Shareholders cast 9,925,730 votes for and 372,027 votes against the 1996 Plan, with 11,894 votes abstained. Shareholders cast 11,072,713 votes for and 59,047 votes against approval of Coopers & Lybrand as the Company's independent accountants for 1996, with 14,059 votes abstained. Item 6. Exhibits and Reports on Form 8-K. ------- --------------------------------- (a) Exhibits: 11.1 Statement of Computation of Earnings Per Share (b) Reports on Form 8-K: The Company filed a Form 8-K dated February 20, 1996 related to the acquisition of three affiliated companies: CW Systems, Inc., IG Systems, Inc., and Melco Systems, Inc.
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BDM INTERNATIONAL, INC. 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. August 6, 1996 BDM INTERNATIONAL, INC. C. Thomas Faulders, III ----------------------------- C. Thomas Faulders, III Executive Vice President, Treasurer and Chief Financial Officer
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BDM INTERNATIONAL, INC. INDEX TO EXHIBITS Exhibit No. 11.1 Statement of Computation of Earnings Per Share

Dates Referenced Herein   and   Documents Incorporated By Reference

Referenced-On Page
This 10-Q Filing   Date First   Last      Other Filings
6/30/953710-Q, 424B1
12/31/953710-K
2/20/968148-K
3/27/968
5/1/96814
5/10/9614DEF 14A, SC 13G/A
For The Period Ended6/30/96113
7/31/961
Filed On / Filed As Of8/6/9615
10/31/96814
 
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