SEC Info - DRS Technologies Inc - ‘8-K/A’ for 10/29/97

SEC Info℠

Home

Help

Please Sign In

DRS Technologies Inc – ‘8-K/A’ for 10/29/97

As of: Monday, 1/12/98 · For: 10/29/97 · Accession #: 950110-98-43 · File #: 1-08533 · Correction: This Filing’s “Filed as of” Date was Corrected and “Changed as of” 1/14/98 by the SEC on 1/14/98. `®`

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 1/12/98  DRS Technologies Inc              8-K/A®:7   10/29/97    1:55K                                    Scott Printing Co… 01/FA

Amendment to Current Report — Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K/A       Amendment to Current Report                           28    103K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exhibits Financial Statements Financial Statements, Pro Forma Financial Information and Exhibits Pro Forma Financial Information
1	1st Page - Filing Submission
2	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
4	Item 7A. Financial Statements
21	Item 7B. Pro Forma Financial Information
28	Item 7c. Exhibits

8-K/A 1st Page of 28 TOC ↑Top Previous Next ↓Bottom Just 1st
 
================================================================================

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

----------

  FORM 8-K/A

AMENDMENT NO. 1 TO APPLICATION OR REPORT
Pursuant to Section 12, 13 or 15(d) of the
 Securities Exchange Act of 1934

OCTOBER 29, 1997
 ---------------------------------
 (Date of earliest event reported)

 Commission file number 1-8533

DRS TECHNOLOGIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)

         DELAWARE                                         13-2632319
   -------------------------------                         -------------------
 (State or other jurisdiction of                          (I.R.S. Employer
    incorporation or organization)                         Identification No.)

5 SYLVAN WAY, PARSIPPANY, NEW JERSEY                              07054     
----------------------------------------                         ----------     
(Address of principal executive offices)                         (Zip Code)     

(973) 898-1500
--------------------------------------------------
(Registrant's telephone number, including area code)

================================================================================

8-K/A 2nd Page of 28 TOC 1st Previous Next ↓Bottom Just 2nd
The Current Report on Form 8-K, dated October 29, 1997, of DRS        
Technologies, Inc. (Commission File No. 1-8533) is hereby amended by filing     
herewith the following financial statements and pro forma financial information:

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS      

(a)  Financial Statements:                                            

       Combined audited balance sheets of Applied Systems Division of Spar
   Aerospace Limited and Spar Aerospace (UK) Ltd. (together, "Spar
       Applied Systems") as of December 31, 1995 and 1996, and the related
          combined audited statements of earnings, capital employed and retained
        earnings, and cash flows for the years ended December 31, 1994, 1995
and 1996.                                                   

(b)  Pro Forma Financial Information:                                 

        1.   Unaudited pro forma condensed consolidated balance sheet of DRS
             Technologies, Inc. and Subsidiaries and Spar Applied Systems as
of September 30, 1997.                            

          2.   Unaudited pro forma condensed consolidated statements of earnings
         of DRS Technologies, Inc. and Subsidiaries and Spar Applied
      Systems for the fiscal year ended March 31, 1997 and the
six-month period ended September 30, 1997.        

(c)  Exhibits:                                                        

Consent of KPMG, Chartered Accountants.                     

8-K/A 3rd Page of 28 TOC 1st Previous Next ↓Bottom Just 3rd
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.                                          

                  DRS TECHNOLOGIES, INC.
          Registrant

Date: January 12, 1998                /s/ NANCY R. PITEK                        
                                      ----------------------------------
                  Nancy R. Pitek
                                         Vice President, Finance and Treasurer

8-K/A 4th Page of 28 TOC 1st Previous Next ↓Bottom Just 4th
ITEM 7A. FINANCIAL STATEMENTS                                                   

Combined Financial Statements of                      

APPLIED SYSTEMS DIVISION OF                           
SPAR AEROSPACE LIMITED AND                            
SPAR AEROSPACE (UK) LTD.                              

Years ended December 31, 1994, 1995 and 1996          

8-K/A 5th Page of 28 TOC 1st Previous Next ↓Bottom Just 5th
INDEPENDENT AUDITORS' REPORT                                                    

To the Board of Directors of DRS Technologies, Inc.                             

We have audited the combined balance sheets of Applied Systems Division of Spar 
Aerospace Limited and Spar Aerospace (UK) Ltd. (a wholly-owned subsidiary of    
Spar Aerospace Limited) as at December 31, 1995 and 1996 and the combined       
statements of earnings, capital employed and retained earnings and cash flows   
for the years ended December 31, 1994, 1995 and 1996. These combined financial  
statements are the responsibility of the Company's management. Our              
responsibility is to express an opinion on these combined financial statements  
based on our audits.                                                            

We conducted our audits in accordance with generally accepted auditing standards
in the United States. Those standards require that we plan and perform an audit 
to obtain reasonable assurance whether the financial statements are free of     
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the financial statements. An audit    
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement       
presentation. We believe that our audits provide a reasonable basis for our     
opinion.                                                                        

In our opinion, the combined financial statements referred to above present     
fairly, in all material respects, the financial position of Applied Systems     
Division of Spar Aerospace Limited and Spar Aerospace (UK) Ltd. as at December  
31, 1995 and 1996 and the results of their operations and their cash flows for  
the years ended December 31, 1994, 1995 and 1996 in conformity with United      
States generally accepted accounting principles.                                

KPMG                                                                            

Chartered Accountants                                                           

Ottawa, Canada                                                                  

December 5, 1997                                                                

8-K/A 6th Page of 28 TOC 1st Previous Next ↓Bottom Just 6th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Combined Balance Sheets                                                         

December 31, 1995 and 1996                                                      
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------
                                                              1995      1996
--------------------------------------------------------------------------------

ASSETS                                                                          

Current assets:                                                                 
     Cash and cash equivalents                                $ 1,798    $10,263
     Accounts receivable (note 2)                              12,705      7,405
     Unbilled revenue                                           3,316      8,862
     Work-in-process                                            1,212        358
     Prepaid expenses                                              87        183
     Deferred income taxes (note 6)                             1,093        150
--------------------------------------------------------------------------------
                                                               20,211     27,221

Intangible asset, net (note 3)                                  6,472      4,391

Property, plant and equipment (note 4)                         21,169     22,062
     Less accumulated depreciation                             17,426     18,556
--------------------------------------------------------------------------------
                                                                3,743      3,506
--------------------------------------------------------------------------------
                                                              $30,426    $35,118
================================================================================

LIABILITIES AND OWNER'S EQUITY                                                  

Current liabilities:                                                            
     Accounts payable and accrued liabilities (note 5)        $ 9,245    $10,916
     Income taxes payable                                         403      1,270
     Deferred revenue                                           4,377      6,348
--------------------------------------------------------------------------------
                                                               14,025     18,534
Owner's equity:                                                                 
     Cumulative translation adjustment (note 8)                    67        382
     Capital employed and retained earnings (note 7)           16,334     16,202
--------------------------------------------------------------------------------
                                                               16,401     16,584
--------------------------------------------------------------------------------
                                                              $30,426    $35,118
================================================================================

Commitments and contingencies (note 9)                                          
Subsequent event (note 14)                                                      

See accompanying notes to combined financial statements.                        

8-K/A 7th Page of 28 TOC 1st Previous Next ↓Bottom Just 7th
                                                        [Enlarge/Download Table]



APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE LIMITED AND SPAR AEROSPACE (UK) LTD.                                

Combined Statements of Earnings                                                                                

Years ended December 31, 1994, 1995 and 1996                                                                   
(In thousands of Canadian dollars)                                                                             

---------------------------------------------------------------------------------------------------------------
                                                                      1994              1995             1996  
---------------------------------------------------------------------------------------------------------------
                                                                                                               
Revenue                                                             $52,078           $48,283          $46,133 

Cost of revenue                                                      33,975            30,434           24,391 

---------------------------------------------------------------------------------------------------------------
Gross profit                                                         18,103            17,849           21,742 

General, administrative and business                                                                           
   development (note 10)                                              6,079             7,702            6,969 
Depreciation and amortization                                         2,628             2,626            3,351 
Research and development                                                610               961            2,243 
---------------------------------------------------------------------------------------------------------------
                                                                      9,317            11,289           12,563 

---------------------------------------------------------------------------------------------------------------
Operating income                                                      8,786             6,560            9,179 

Foreign exchange loss (income)                                         (226)               93               84 
Interest expense (note 7)                                             1,679             1,233              224 
Other income                                                            (33)             (102)            (303)
---------------------------------------------------------------------------------------------------------------
                                                                      1,420             1,224                5 

---------------------------------------------------------------------------------------------------------------
Earnings before income taxes                                          7,366             5,336            9,174 

Income taxes (note 6):                                                                                         
     Current                                                          3,391             2,959            2,920 
     Deferred (reduction)                                              (489)             (604)             943 
---------------------------------------------------------------------------------------------------------------
                                                                      2,902             2,355            3,863 

---------------------------------------------------------------------------------------------------------------
Net earnings                                                        $ 4,464           $ 2,981          $ 5,311 
---------------------------------------------------------------------------------------------------------------

          See accompanying notes to combined financial statements.

8-K/A 8th Page of 28 TOC 1st Previous Next ↓Bottom Just 8th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Combined Statements of Capital Employed and Retained Earnings                   

Years ended December 31, 1994, 1995 and 1996                                    
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------
                                               1994        1995       1996
--------------------------------------------------------------------------------

Capital employed and retained earnings,                                         
  beginning of year                             $19,373     $22,438    $16,334

Net transfers to parent company                   (1,399)     (9,085)    (5,443)

Net earnings                                       4,464       2,981      5,311 

--------------------------------------------------------------------------------
Capital employed and retained earnings,                                         
  end of year                                   $22,438     $16,334    $16,202
--------------------------------------------------------------------------------

See accompanying notes to combined financial statements.                        

8-K/A 9th Page of 28 TOC 1st Previous Next ↓Bottom Just 9th
                                                        [Enlarge/Download Table]

APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                                                     
LIMITED AND SPAR AEROSPACE (UK) LTD.                                                                           

Combined Statements of Cash Flows                                                                              

Years ended December 31, 1994, 1995 and 1996                                                                   
(In thousands of Canadian dollars)                                                                             

---------------------------------------------------------------------------------------------------------------
                                                                      1994              1995             1996  
---------------------------------------------------------------------------------------------------------------
                                                                                                               
Operating activities:                                                                                          
     Net earnings                                                   $ 4,464           $ 2,981          $ 5,311 
     Deferred taxes                                                    (489)             (604)             943 
     Depreciation and amortization                                    2,628             2,626            3,351 
---------------------------------------------------------------------------------------------------------------
                                                                      6,603             5,003            9,605 
     Changes in working capital:                                                                               

         Accounts receivable                                         (1,258)            2,184            5,300 
         Work-in-process and unbilled revenues                       (2,042)            2,029           (4,692)
         Prepaid expenses                                               146                 3              (96)
         Accounts payable and accrued liabilities                     2,359             1,516            1,671 
         Income taxes payable                                           357                 6              867 
         Deferred revenue                                            (1,583)            1,174            1,971 
---------------------------------------------------------------------------------------------------------------
                                                                     (2,021)            6,912            5,021 

---------------------------------------------------------------------------------------------------------------
     Net cash from operating activities                               4,582            11,915           14,626 

Investing activities:                                                                                          
     Additions to property, plant and equipment                        (864)           (1,867)          (1,033)
     Purchase of intangible assets                                   (1,595)             (174)              -  
---------------------------------------------------------------------------------------------------------------
     Net cash used in investing activities                           (2,459)           (2,041)          (1,033)

Financing activities:                                                                                          
     Net transfers to parent company                                 (1,399)           (9,085)          (5,443)
     Translation                                                        152               (85)             315 
---------------------------------------------------------------------------------------------------------------
     Net cash used in financing activities                           (1,247)           (9,170)          (5,128)

---------------------------------------------------------------------------------------------------------------
Increase in cash and cash equivalents                                   876               704            8,465 

Cash and cash equivalents, beginning of year                            218             1,094            1,798 

---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year                              $ 1,094           $ 1,798          $10,263 
---------------------------------------------------------------------------------------------------------------

Supplemental disclosure:                                                                                       

Income taxes paid                                                   $   373           $   400          $   418 
---------------------------------------------------------------------------------------------------------------

See accompanying notes to combined financial statements.                        

8-K/A 10th Page of 28 TOC 1st Previous Next ↓Bottom Just 10th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements                                          

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                                  

(a) Description of business:                                        

         Applied Systems Division of Spar Aerospace Limited and Spar Aerospace
       (UK) Ltd. operate in the defence electronics industry in Canada and
      the UK in three principal product and service areas: Flight Safety
Systems; Naval Communications; and, Advanced Manufacturing. 

         The Flight Safety Systems products include Deployable Flight Incident
    Recorders (DFIRS), cockpit voice recorders and Emergency Avionic
Systems (EAS).                                              

    The Naval Communications products consist primarily of shipboard
internal communication systems.                             

The Advanced Manufacturing services provide build to print  
        manufacturing for low volume, high complexity circuit and assemblies
for space and defence applications.                         

(b) Basis of presentation:                                          

         The accompanying financial statements combine the accounts of Applied
      Systems Division of Spar Aerospace Limited and Spar Aerospace (UK)
         Ltd., a wholly-owned subsidiary of Spar Aerospace Limited, a publicly
        owned Canadian advanced technology company. These combined financial
  statements have been prepared by management in accordance with
     generally accepted accounting principles in the United States for
     purpose of inclusion in a filing document with the Securities and
       Exchange Commission in the United States related to the acquisition
       described in note 14. All significant intercompany transactions and
      balances have been eliminated upon combination. The combination of
         Applied Systems Division of Spar Aerospace Limited and Spar Aerospace
(UK) Ltd. is herein referred to as the Company.             

     Certain expenses which were previously incurred by Spar Aerospace
 Limited on behalf of the Company have been reflected in these
    financial statements as if the Company had been a separate legal
entity (see notes 6, 7,10 and 11).                          

8-K/A 11th Page of 28 TOC 1st Previous Next ↓Bottom Just 11th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 2                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):                      

(c) Revenue recognition:                                            

 Revenues related to long-term contracts are accrued using the
     percentage of completion method as the work is performed. Revenue
      recognized in excess of billings is reflected as unbilled revenue.
      Billings in excess of revenue recognized are reflected as deferred
      revenue. Provision is made for the total anticipated loss when the
        estimate of total costs on a contract indicates a loss. Revisions in
         cost and profit estimates during the course of the work are reflected
        in the period in which the need for the revision becomes known. Some
  contracts contain incentive and/or penalty provisions based on
         performance relative to established targets. Such awards or penalties
 are included in revenue or cost estimates when amounts can be
reasonably estimated.                                       

       All other revenue is recognized at the time products are shipped or
services are rendered to the customer.                      

(d) Cash and cash equivalents:                                      

        The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.    

(e) Research and development costs:                                 

Research and development costs are expensed as incurred.    

(f) Work-in-process:                                                

  Work-in-process is carried at the lower of cost of components,
       purchased parts, direct labour plus an applicable share of overhead
      expense properly chargeable to production or net realizable value.

(g) Property, plant and equipment:                                  

          Property, plant and equipment is recorded at cost and depreciated over
        the estimated useful life using the straight-line method. The ranges
         of estimated useful lives are: building and building improvements, 20
       years; office furnishings, computers, machinery and equipment, 3-10
      years; and, leasehold improvements over the term of the lease plus
renewal options, if applicable.                             

8-K/A 12th Page of 28 TOC 1st Previous Next ↓Bottom Just 12th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 3                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):                      

(h) Impairment of long-lived and intangible assets:                 

          The Company adopted the provisions of SFAS No. 121, Accounting for the
   Impairment of Long-Lived Assets and for Long-Lived Assets to Be
 Disposed Of, on January 1, 1996. This Statement requires that
          long-lived assets and certain identifiable intangibles be reviewed for
        impairment whenever events or changes in circumstances indicate that
          the carrying amount of an asset may not be recoverable. Recoverability
    of assets to be held and used is measured by a comparison of the
       carrying amount of an asset to future net cash flows expected to be
         generated by the asset. If such assets are considered to be impaired,
          the impairment to be recognized is measured by the amount by which the
      carrying amount of the assets exceed the fair value of the assets.
      Assets to be disposed of are reported at the lower of the carrying
       amount or fair value less costs to sell. Adoption of this Statement
       did not have a material impact on the Company's financial position,
results of operations or liquidity.                         

(i) Income taxes:                                                   

    The Company accounts for income taxes by the asset and liability
          method under SFAS 109, Accounting for Income Taxes. Under this method,
         deferred tax assets and liabilities are recognized for the future tax
  consequences attributable to differences between the financial
     statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit
         carryforwards. Deferred tax assets and liabilities are measured using
         enacted tax rates expected to apply to taxable income in the years in
     which those temporary differences are expected to be recovered or
          settled. The effect on deferred tax assets and liabilities of a change
        in tax rates is recognized in income in the period that includes the
          enactment date. Valuation allowances are established when necessary to
      reduce deferred tax assets to the amounts expected to be realized.

       Applied Systems Division of Spar Aerospace Limited's operations are
          included in Spar Aerospace Limited's income tax return. Spar Aerospace
        Limited's income tax provision has been allocated to Applied Systems
     Division as if Applied Systems Division filed separate income tax
        returns. As there has been no formal tax sharing arrangement between
Spar Aerospace Limited and the Applied Systems Division, the
   Division's current income tax liability has been reflected as a
      capital transaction. Spar Aerospace (UK) Ltd.'s current income tax
liability has been reflected as income taxes payable.       

8-K/A 13th Page of 28 TOC 1st Previous Next ↓Bottom Just 13th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 4                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):                      

(j) Pension costs and obligations:                                    

   Spar Aerospace Limited provides pension benefits in the form of a
  defined benefit pension plan (the "pension plan"). Pension costs
    attributable to the Company have been reflected in these financial
statements as detailed in note 11.                            

        Current service costs under the pension plan are charged to operations
as services are rendered, based on annual actuarial valuations
       performed using the projected benefit method prorated on services and
         management's best estimate assumptions of the rate of return on pension
 plan assets, rate of salary increases and various other factors
   including mortality rates, terminations, and retirement ages. The
     valuation of pension fund assets is based on market-related values,
which spread unrealized gains and losses over five years.     

  Any adjustments to pension costs are amortized, on a diminishing
         balance basis, over the expected average remaining service lives of the
employee groups covered by the plans.                         

(k) Foreign exchange:                                                 

         Transactions in foreign currencies are translated into Canadian dollars
    at the approximate prevailing rate at the time of the transaction.

    The operations of Spar Aerospace (UK) Ltd. are translated from the
       local (functional) currency in accordance with Statement of Financial
       Accounting Standard No. 52 to Canadian dollars. The rates of exchange
        at each balance sheet date are used for translating the balance sheets
   and a simple average rate of exchange is used for translating the
statements of earnings. Gains or losses resulting from these  
   translation adjustments are included in the accompanying combined
 balance sheets as a separate component of shareholders' equity.

(l) Fair value of financial instruments:                              

        Cash, accounts receivable and accounts payable and accrued liabilities
      reported in the combined financial statements approximate their fair
value given the relatively short periods to maturity of these 
instruments.                                                  

       No fair value has been established for the due to related party given
     the absence of a market to trade this instrument and the absence of
repayment terms.                                              

8-K/A 14th Page of 28 TOC 1st Previous Next ↓Bottom Just 14th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 5                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):                      

(m) Use of estimates:                                                 

     The preparation of financial statements requires management to make
      estimates and assumptions that affect the reported amounts of assets
   and liabilities and disclosure of contingent assets, liabilities,
revenues and expenses. Actual results could differ from those 
estimates.                                                    

2. ACCOUNTS RECEIVABLE:                                                         

The components of accounts receivable are as follows:                 

----------------------------------------------------------------------
                                                     1995       1996
----------------------------------------------------------------------
Trade receivables                                    $11,073    $6,081
Customer holdbacks                                     1,632     1,324
----------------------------------------------------------------------
                                                     $12,705    $7,405
======================================================================

The allowance for doubtful accounts was $Nil in 1995 and 1996.        

    Customer holdbacks amounting to $536 as of December 31, 1995 and 1996 will
be received in 1998.                                                  

3. INTANGIBLE ASSET:                                                            

    The intangible asset consists primarily of amounts paid under a technology
   transfer agreement which are carried at cost, unless in management's view
such costs are not recoverable through future contracts.              

 The intangible asset is amortized based on a percentage of the revenues
recognized for contracts on which the related technology is utilized. 
  Amortization expense related to intangible assets have amounted to $794,
 $496 and $1,989 in 1994, 1995 and 1996, respectively. In 1996, due to a
     revision in the total projected revenues attributed to this technology, the
estimated remaining useful life of the intangible asset was reduced.  

8-K/A 15th Page of 28 TOC 1st Previous Next ↓Bottom Just 15th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 6                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

4. PROPERTY, PLANT AND EQUIPMENT:                                               

Property, plant and equipment at December 31 is summarized as follows:

--------------------------------------------------------------------- 
                                                   1995       1996
--------------------------------------------------------------------- 
Building and building improvements                 $ 1,055    $ 1,230 
Office furnishings                                   1,039      1,085 
Machinery and equipment                             13,946     14,301 
Computer equipment                                   4,320      4,605 
Leasehold improvements                                 809        841 
--------------------------------------------------------------------- 
                                                  $21,169    $22,062
===================================================================== 

  Depreciation of property, plant and equipment amounted to $1,834, $2,130
and $1,362 in 1994, 1995 and 1996, respectively.                      

5. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES:                                    

--------------------------------------------------------------------- 
                                                     1995       1996
--------------------------------------------------------------------- 
Trade payables                                     $ 3,103    $ 5,451 
Accrued employee vacation expense                      581        564 
Provision for employee severance costs                 993        749 
Provision for possible losses                        1,100        700 
Other accrued liabilities                            1,739      1,922 
Warranty provision                                   1,729      1,530 
--------------------------------------------------------------------- 
                                                  $ 9,245    $10,916
===================================================================== 

8-K/A 16th Page of 28 TOC 1st Previous Next ↓Bottom Just 16th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 7                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

6. INCOME TAXES:                                                                

For the years ended December 31, 1994, 1995 and 1996, the Company has 
    computed its income taxes in accordance with the provisions of SFAS 109 as
if it had been operating as a stand-alone entity. The significant     
components of the provision for income taxes include the following:   

    --------------------------------------------------------------------------
                                                      1994     1995     1996
    --------------------------------------------------------------------------
Current:                                                              
        Canada                                        $3,018   $2,559   $2,502
        UK                                               373      400      418

Deferred (reduction):                                                 
        Canada                                          (489)    (604)      96
UK-                                               -       847 
    --------------------------------------------------------------------------
    Total tax provision                               $2,902   $2,355   $3,863
    ==========================================================================

Income taxes differ from the amounts computed by applying the Canadian
 federal and provincial income tax rate of 44.6% to income before income
taxes as a result of the following:                                   

    --------------------------------------------------------------------------
                                                      1994     1995     1996
    --------------------------------------------------------------------------
    Income tax provision at Canadian statutory rates  $3,285   $2,379   $4,091

     Manufacturing and processing reduction              (387)    (263)    (497)

     UK rate differential                                (171)    (120)    (575)

    Permanent differences                                297      379      970

     Investment tax credit                                (51)     (61)    (175)

   Other                                                (71)      41      49

    --------------------------------------------------------------------------
                                                      $2,902   $2,355   $3,863
    ==========================================================================

8-K/A 17th Page of 28 TOC 1st Previous Next ↓Bottom Just 17th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 8                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

6. INCOME TAXES (continued):                                                    

The tax effects of temporary differences that give rise to significant
components of the deferred tax assets and liabilities include the     
following:                                                            

  ------------------------------------------------------------------------
                                                           1995     1996
  ------------------------------------------------------------------------
Deferred tax assets:                                                  
Tax basis of property and equipment                           
       in excess of book value                           $  348    $ 311
     Warranty provision                                     257      273
Profits on long-term contracts recorded                       
       on the percentage of completion method               862      361
     Other                                                    3        3
  ------------------------------------------------------------------------
 Total deferred tax asset                                $1,470    $ 948
  ========================================================================

  Unbilled gross profit in inventory                      $ (316)   $(623)

  Investment tax credit                                      (61)    (175)
  ------------------------------------------------------------------------
  Total deferred tax liability                            $ (377)   $(798)
  ========================================================================

 Net deferred tax asset                                  $1,093    $ 150
  ========================================================================

7. CAPITAL EMPLOYED AND RETAINED EARNINGS:                                      

Capital employed and retained earnings comprise the parent company's  
investment in the net assets of its Applied Systems Division and the  
    retained earnings of Spar Aerospace (UK) Ltd. Such investment includes the
effects of intercompany transactions with the corporate office of Spar
Aerospace Limited, which consists of purchases of goods and services  
     necessary for the Company to carry on its day to day activities and include
telecommunication, payroll and corporate accounting, legal support and
marketing services. No interest expense had been charged by related   
parties. This represents a significant source of funding which, if the
 Company had been a stand-alone entity, would have been financed at fair
  market rates of interest. To better reflect the Company's actual cost of
doing business, interest expense has been imputed on the average      
 outstanding balance in the amount of $1,679 in 1994, $1,233 in 1995 and
  $224 in 1996. The monthly average of the Bank of Canada's prime rate was
     used to impute the interest expense (7.15% in 1994, 8.65% in 1995 and 6.06%
in 1996).                                                             

8-K/A 18th Page of 28 TOC 1st Previous Next ↓Bottom Just 18th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 9                                  

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

7. CAPITAL EMPLOYED AND RETAINED EARNINGS (continued):                          

Because the Company's operations are conducted as a division of Spar  
Aerospace Limited, and not as a distinct legal entity, there are no   
    customary equity and capital accounts for Applied Systems Division of Spar
Aerospace Limited. The Company's operations are funded by means of    
   intercompany accounts with Spar Aerospace Limited. Transactions and other
     charges and credits between the Company and Spar Aerospace Limited are more
fully described above in this note and in note 1(i), 6, 10 and 11.    

8.   CUMULATIVE TRANSLATION ADJUSTMENT:                                         

  ------------------------------------------------------------------------
                                                              1995    1996
  ------------------------------------------------------------------------
  Balance, beginning of year                                  $152    $ 67

Adjustment arising on translation of foreign operations               
    financial statements to Canadian dollars                   (85)    315
  ------------------------------------------------------------------------
  Balance, end of year                                        $ 67    $382
  ========================================================================

9.   COMMITMENTS AND CONTINGENCIES:                                             

At December 31, 1996, the Company was party to operating leases       
  (principally for administration and engineering facilities) with minimum
rental payments as follows:                                           

1997                                                        $552      
1998                                                         281      
----------------------------------------------------------------      
                                                      $833
================================================================      

Rent expenses of $397 in 1994, $509 in 1995 and $526 in 1996 and are  
included in general, administrative and business development expenses.

  The Company receives assistance from the Federal Government for research
and development activities which is applied to reduce the cost of the 
related expenditures. Government assistance in the amount of $3,893 is
repayable through royalties in the event the related research and     
 development projects are successfully commercialized. The royalties are
   calculated on the basis of 2 to 3% of total related sales and continue in
effect until the assistance received has been repaid or until the     
   technology ceases to contribute to commercialization of related products.

8-K/A 19th Page of 28 TOC 1st Previous Next ↓Bottom Just 19th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 10                                 

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

10. GENERAL, ADMINISTRATIVE AND BUSINESS DEVELOPMENT EXPENSES:                  

   General, administrative and business development expenses include charges
 made to Applied Systems Division of Spar Aerospace Limited for expenses
    incurred on its behalf by Spar Aerospace Limited. Management believes that
the charges made for 1995 and 1996, reflected in these financial      
statements, are reasonable and approximate the expenses that Applied  
    Systems Division of Spar Aerospace Limited would have incurred had it been
   operating as a stand-alone entity. These charges amounted to $469 in 1996
and $562 in 1995 and included telecommunication, payroll and corporate
accounting, legal support and marketing expenses.                     

     In 1994, charges made to Applied Systems Division of Spar Aerospace Limited
by Spar Aerospace Limited were not representative of actual expenses  
   incurred by the Corporate office. For this reason, an adjustment was made
to better reflect Applied Systems Division of Spar Aerospace Limited's
actual cost of doing business. The estimated costs reflected in these 
   financial statements amount to $515 based on the average of 1995 and 1996
costs. Management believes that this estimate is reasonable and       
   approximates the expenses that Applied Systems Division of Spar Aerospace
    Limited would have incurred in 1994 had it been operating as a stand-alone
entity.                                                               

11. PENSION COSTS AND OBLIGATIONS:                                              

 Certain employees of Applied Systems Division of Spar Aerospace Limited
   participate in a defined benefit pension plan sponsored by Spar Aerospace
  Limited. The plan is funded by Spar Aerospace Limited in accordance with
the independent actuarial valuations. The plan assets are invested    
     primarily in publicly traded equity and fixed income securities. Retirement
    benefits are based on various factors, including remuneration and years of
service.                                                              

    Based on actuarial valuations dated January 1, 1996, the estimated present
    value of accrued pension obligations allocated to Applied Systems Division
  of Spar Aerospace Limited was $843, $1,083 and $1,357 for 1994, 1995 and
1996, respectively. The market value of the plan assets available to  
discharge these obligations was at least equal to the accrued pension 
 obligations as at December 31, 1994, 1995 and 1996. For the purposes of
    measuring the accrued pension obligation, the discount rate was assumed to
    be 8.5%, the rate of return on the plan assets was assumed to be 8.5%, and
the rate of annual compensation increase was assumed at 5%.           

     The net expense in respect of all pension and retirement plans was $74, $83
and $93 in 1994, 1995 and 1996, respectively.                         

8-K/A 20th Page of 28 TOC 1st Previous Next ↓Bottom Just 20th
APPLIED SYSTEMS DIVISION OF SPAR AEROSPACE                                      
LIMITED AND SPAR AEROSPACE (UK) LTD.                                            

Notes to Combined Financial Statements, page 11                                 

Years ended in December 31, 1994, 1995 and 1996                                 
(In thousands of Canadian dollars)                                              

--------------------------------------------------------------------------------

12.  RISK CONCENTRATION:                                                        

 The Company derived 45%, 37% and 20% of its revenues for 1994, 1995 and
   1996 respectively, directly or indirectly from defense industry contracts
with the Canadian government.                                         

     The Company derived 6%, 12% and 12% of its revenues for 1994, 1995 and 1996
   respectively, directly or indirectly from defense industry contracts with
the United States government.                                         

The Company has $7,957 and $4,047 receivable from seven significant   
customers as of December 31, 1995 and 1996, respectively.             

13. INFORMATION ABOUT FOREIGN OPERATIONS:                                       

     The table below provides information pertaining to the Company's operations
     by geographic area. Intersegment sales, eliminated in combination, were not
significant.                                                          

----------------------------------------------------------------------
                                        Canada       U.K.      Total
----------------------------------------------------------------------
Revenues:                                                             
    1996                                $36,005     $10,128    $46,133
    1995                                 44,893       3,390     48,283
    1994                                 48,315       3,763     52,078

Earnings before income taxes:                                         
    1996                                  5,333       3,841      9,174
    1995                                  4,169       1,167      5,336
    1994                                  6,146       1,220      7,366

Identifiable assets:                                                  
    1996                                 23,349      11,769     35,118
    1995                                 27,445       2,981     30,426

14.  SUBSEQUENT EVENT:                                                          

   On October 28, 1997, DRS Technologies, Inc. purchased from Spar Aerospace
Limited, the business as described in note 1(a), represented by these 
    financial statements for cash totalling $48,150 (which included $8,150 for
cash acquired in connection with this transaction), subject to certain
working capital adjustments.                                          

8-K/A 21st Page of 28 TOC 1st Previous Next ↓Bottom Just 21st
ITEM 7B. PRO FORMA FINANCIAL INFORMATION                                        

DRS TECHNOLOGIES, INC. AND SUBSIDIARIES,
SPAR APPLIED SYSTEMS

 Pro Forma Financial Information (Unaudited)

The following unaudited pro forma financial information is based on the         
historical consolidated financial statements of DRS Technologies, Inc. and      
Subsidiaries ("DRS") and the combined historical financial statements of the    
Applied Systems Division of Spar Aerospace Limited and Spar Aerospace (UK), Ltd.
(together, "Spar Applied Systems"), giving effect to the acquisition by DRS of  
the net assets of the Applied Systems Division and 100% of the stock of Spar    
Aerospace (UK), Ltd. on October 29, 1997.                                       

Headquartered in Kanata, Ontario, Canada, and now operating under the name DRS  
Flight Safety and Communications, Spar Applied Systems has been an international
provider of aviation and defense systems for over 30 years. It designs,         
manufactures and markets sophisticated flight safety systems, naval             
communications systems and other advanced electronics for government and        
commercial customers around the world. It also provides custom manufacturing    
services for complex electronic assemblies and systems. Spar Applied Systems is 
a global supplier of deployable aircraft locator beacons and flight data        
recorder systems that store critical data for accident investigation and        
aircraft safety analysis. Its shipboard communications systems integrate        
Commercial Off-The-Shelf (COTS)-based computing and telecommunications equipment
for military requirements.                                                      

The following unaudited pro forma condensed consolidated financial statements   
(the "pro forma financial statements") have been prepared using the assumption  
that, with respect to the unaudited pro forma condensed consolidated balance    
sheet, the transaction occurred on September 30, 1997, and with respect to the  
unaudited pro forma condensed consolidated statements of earnings, the          
transaction occurred on April 1, 1996. These pro forma financial statements also
reflect giving effect to the transaction under the purchase method of           
accounting, based on assumptions and adjustments described in the accompanying  
notes to the pro forma financial statements. However, actual purchase accounting
adjustments may differ based on, among other factors, the final allocation of   
purchase price to the assets acquired and liabilities assumed. Foreign currency 
translations have been completed based on the prevailing rates in effect for the
periods presented. Certain accounts in the Spar Applied Systems historical      
financial statements have been reclassified to conform to the DRS financial     
statement presentation.                                                         

It should be understood that these pro forma financial statements do not        
necessarily reflect the actual consolidated financial position or results of    
operations of the combined entities since, among other factors, actual expenses 
may be lower or higher than amounts assumed or estimated. The unaudited pro     
forma financial statements may not be indicative of the results that actually   
would have occurred if the transaction had taken place on the dates indicated   
nor do they represent a basis of assessing future performance. The pro forma    
financial statements should be read in conjunction with the historical          
consolidated financial statements of DRS and Spar Applied Systems.              

8-K/A 22nd Page of 28 TOC 1st Previous Next ↓Bottom Just 22nd
                                                        [Enlarge/Download Table]
                                           DRS TECHNOLOGIES, INC & SUBSIDIARIES                                             
                                                  AND SPAR APPLIED SYSTEMS                                                  

                                  UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET                                  


                                                           HISTORICAL                                                       
                                              -----------------------------------------                       PRO FORMA     
                                                     DRS           SPAR APPLIED SYSTEMS     PRO FORMA        CONSOLIDATED   
                                              ------------------   --------------------    ADJUSTMENTS    ------------------
                                              September 30, 1997      June 30, 1997        ADD (DEDUCT)   September 30, 1997
                                              ------------------   --------------------    ------------   ------------------
                                                                                                                            
Assets                                                                                                                      

Current Assets:                                                                                                             
  Cash                                           $  7,435,000           7,417,000                  -         $ 14,852,000   
  Accounts receivable, net                         29,747,000           5,466,000                  -           35,213,000   
  Inventories, net of progress payments            27,901,000           3,200,000                  -           31,101,000   
  Prepaid expenses and other current assets         1,369,000              35,000                  -            1,404,000   
                                                 ------------          ----------           ----------       ------------   
  Total current assets                             66,452,000          16,118,000                  -           82,570,000   

Property, plant and equipment, at cost             50,915,000          16,082,000          (13,787,000)(2)     53,210,000   
Less accumulated depreciation and -                                                                                         
  amortization                                    (30,342,000)         13,787,000)          13,787,000(2)     (30,342,000)  
                                                 ------------          ----------           ----------       ------------   
Net equipment and improvements                     20,573,000           2,295,000                  -           22,868,000   

Intangible assets                                  15,247,000                 -             21,042,000(6)      36,289,000   
Less accumulated amortization                      (5,286,000)                -                    -           (5,286,000)  
                                                 ------------          ----------           ----------       ------------   
Net intangible assets                               9,961,000                 -             21,042,000         31,003,000   

Other assets                                        6,190,000           3,017,000                  -            9,207,000   
                                                 ------------          ----------           ----------       ------------   
                                                 $103,176,000          21,430,000           21,042,000       $145,648,000   
                                                 ============          ==========           ==========       ============   

                       See accompanying notes to unaudited pro forma condensed financial statements.                        

8-K/A 23rd Page of 28 TOC 1st Previous Next ↓Bottom Just 23rd
                                                        [Enlarge/Download Table]
                                           DRS TECHNOLOGIES, INC & SUBSIDIARIES                                             
                                                  AND SPAR APPLIED SYSTEMS                                                  

                                  UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET                                  


                                                           HISTORICAL                                                       
                                              -----------------------------------------                       PRO FORMA     
                                                     DRS           SPAR APPLIED SYSTEMS     PRO FORMA        CONSOLIDATED   
                                              ------------------   --------------------    ADJUSTMENTS    ------------------
                                              September 30, 1997      June 30, 1997        ADD (DEDUCT)   September 30, 1997
                                              ------------------   --------------------    ------------   ------------------
                                                                                                                            
Liabilities and Stockholders' Equity                                                                                        

Current liabilities:                                                                                                        
  Current installments - long term debt          $  7,256,000                  -                   -          $  7,256,000  
  Other current liabilities                        27,710,000            8,609,000          (1,517,000)(4)      34,802,000  
                                                 ------------           ----------          ----------        ------------  
  Total current liabilities                        34,966,000            9,187,000          (3,358,000)         42,058,000  

Long-term debt, excluding current installments     25,507,000                  -            35,380,000 (6)      60,887,000  
Deferred income taxes                               3,367,000                  -                   -             3,367,000  
Other liabilities                                   3,337,000                  -                   -             3,337,000  
                                                 ------------           ----------          ----------        ------------  
  Total liabilities                                67,177,000           11,701,000          33,863,000         109,649,000  
                                                                                                   -                        
Stockholders' equity:                                                                                                       
  Common stock                                         60,000                  -                   -                60,000  
  Additional paid-in capital                       14,629,000                  -                   -            14,629,000  
  Retained earnings                                23,495,000           12,821,000         (12,821,000)(5)      23,495,000  
                                                 ------------           ----------          ----------        ------------  
                                                   38,184,000           12,821,000         (12,821,000)         38,184,000  

Treasury stock, at cost                            (1,561,000)                 -                   -            (1,561,000) 
Unamortized restricted stock compensation            (624,000)                 -                   -              (624,000) 
                                                 ------------           ----------          ----------        ------------  
  Net stockholders' equity                         35,999,000           12,821,000         (12,821,000)         35,999,000  
                                                 ------------           ----------          ----------        ------------  
                                                 $103,176,000           21,430,000          21,042,000        $145,648,000  
                                                 ============           ==========          ==========        ============  

                       See accompanying notes to unaudited pro forma condensed financial statements.                        


8-K/A 24th Page of 28 TOC 1st Previous Next ↓Bottom Just 24th
                                                        [Enlarge/Download Table]

                                               DRS TECHNOLOGIES, INC & SUBSIDIARIES                                                
                                                      AND SPAR APPLIED SYSTEMS                                                     
                                             UNAUDITED PRO FORMA CONDENSED CONSOLIDATED                                            
                                                       STATEMENT OF EARNINGS                                                       


                                                                     HISTORICAL                                                    
                                                       --------------------------------------                        PRO FORMA     
                                                              DRS        SPAR APPLIED SYSTEMS                      CONSOLIDATED    
                                                       ----------------- --------------------   PRO FORMA         -----------------
                                                       Fiscal Year Ended      Year Ended        ADJUSTMENTS       Fiscal Year Ended
                                                         March 31, 1997    December 31, 1996    ADD (DEDUCT)        March 31, 1997 
                                                       ----------------- --------------------   ------------      -----------------
                                                                                                                                   
Revenues                                                 $ 143,578,000        33,829,000        (4,717,000)(3),(4)  $ 172,690,000  
Costs and expenses                                        (130,996,000)      (27,098,000)         (564,000)(5),(6)   (158,658,000) 
                                                         -------------       -----------        ----------          -------------  
  Operating income (loss)                                   12,582,000         6,731,000        (5,281,000)            14,032,000  

Interest and related expenses                               (3,592,000)         (164,000)       (2,282,000)(7)         (6,038,000) 
Interest and other income, net                                 698,000           160,000             --                   858,000  
Minority interest                                             (404,000              --               --                  (404,000) 
                                                         -------------       -----------        ----------          -------------  
  Earnings before income taxes                               9,284,000         6,727,000        (7,563,000)             8,448,000  

Income taxes                                                 3,621,000         2,833,000        (3,159,000)(8)          3,295,000  
                                                         -------------       -----------        ----------          -------------  
  Net earnings                                           $   5,663,000         3,894,000        (4,404,000)         $   5,153,000  
                                                         =============       ===========        ==========          =============  

Earnings per share of common stock                                                                                                 

   Primary                                               $        0.98                                              $         .90  
   Fully Diluted                                         $        0.84                                              $         .78  

Weighted average number of shares of common                                                                                        
  stock outstanding                                                                                                                
   Primary                                                   5,753,000                                                  5,753,000  
   Fully Diluted                                             8,931,000                                                  8,931,000  

                 See accompanying notes to unaudited pro forma condensed consolidated financial statements.                        

8-K/A 25th Page of 28 TOC 1st Previous Next ↓Bottom Just 25th
                                                        [Enlarge/Download Table]

                                               DRS TECHNOLOGIES, INC & SUBSIDIARIES                                                 
                                                      AND SPAR APPLIED SYSTEMS                                                      
                                             UNAUDITED PRO FORMA CONDENSED CONSOLIDATED                                             
                                                       STATEMENT OF EARNINGS                                                        


                                                                       HISTORICAL                                                   
                                                       ----------------------------------------                       PRO FORMA     
                                                              DRS          SPAR APPLIED SYSTEMS                     CONSOLIDATED    
                                                       -----------------   --------------------   PRO FORMA       ----------------- 
                                                        Six Months Ended     Six Months Ended    ADJUSTMENTS       Six Months Ended 
                                                       September 30, 1997     June 30, 1997      ADD (DEDUCT)     September 30, 1997
                                                       ------------------  -------------------- ------------      ----------------- 
                                                                                                                                    
Revenues                                                  $ 77,735,000          12,928,000      (1,047,000)(3),(4)  $ 89,616,000    
Costs and expenses                                         (71,551,000)        (11,737,000)       (282,000)(5),(6)   (83,570,000)   
                                                          ------------         -----------      ----------          ------------    
  Operating income                                           6,184,000           1,191,000      (1,329,000)            6,046,000    

Interest and related expenses                               (1,802,000)              2,000      (1,141,000)(7)        (2,941,000)   
Interest and other income, net                                 691,000             293,000            --                 984,000    
Minority interest                                             (612,000)               --              --                (612,000)   
                                                          ------------         -----------      ----------          ------------    

  Earnings before income taxes                               4,461,000           1,486,000      (2,470,000)            3,477,000    

Income taxes                                                 1,651,000             200,000        (565,000)(8)         1,286,000    
                                                          ------------         -----------      ----------          -------------   
  Net earnings                                            $  2,810,000           1,286,000      (1,905,000)         $  2,191,000    
                                                          ============         ===========      ==========          ============    

Earnings per share of common stock                                                                                                  
   Primary                                                $       0.48                                              $       0.37    
   Fully Diluted                                          $       0.41                                              $       0.35    

Weighted average number of shares of common                                                                                         
 stock outstanding                                                                                                                  
   Primary                                                   5,848,000                                                 5,848,000    
   Fully Diluted                                             9,044,000                                                 9,044,000    

                     See accompanying notes to unaudited pro forma condensed consolidated finanal statements.  ci                   

8-K/A 26th Page of 28 TOC 1st Previous Next ↓Bottom Just 26th
DRS TECHNOLOGIES, INC. AND SUBSIDIARIES,
SPAR APPLIED SYSTEMS

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

1)   The unaudited pro forma condensed consolidated financial statements of DRS 
   Technologies, Inc. and Subsidiaries ("DRS"), the Applied Systems Division
 of Spar Aerospace Limited and Spar Aerospace (UK) Ltd. (together, "Spar
Applied Systems") have been prepared by consolidating the historical  
consolidated financial statements of DRS with the historical combined 
financial statements of Spar Applied Systems. DRS prepares financial  
statements on the basis of a fiscal year ending March 31, whereas the 
    historical combined financial statements of Spar Applied Systems have been
prepared on a calendar year basis. As permitted under United States   
  Securities and Exchange Commission Regulation S-X, Article 11, these pro
     forma condensed consolidated financial statements (the "pro forma financial
   statements") have been prepared by consolidating the historical financial
     statements of DRS and Spar Applied Systems on the basis of their respective
  historical fiscal periods. Therefore, the pro forma financial statements
     have been prepared using the consolidated financial statements of DRS as of
     September 30, 1997 and for the fiscal year and six month period ended March
   31, 1997 and September 30, 1997, respectively, together with the combined
    financial ended December 31, 1996 statements of Spar Applied Systems as of
June 30, 1997 and for the year and the six month period ended June 30,
1997, respectively.                                                   

2)   In connection with the acquisition, the cost of property, plant and        
     equipment was reduced by the amount of accumulated depreciation in order to
arrive at estimated fair market values. Actual fair market values may 
differ from these estimates.                                          

3)   Spar Applied Systems has recognized revenue on all long-term contracts     
  using the percentage of completion method, based on work performed. With
respect to long-term production contracts, DRS's recognizes revenue as
     units are shipped. For purposes of these pro forma financial statements, it
    was not practicable to restate the historical financial statements of Spar
Applied Systems in order to conform with the DRS revenue recognition  
policy.                                                               

4)   The pro forma condensed consolidated statements of earnings have been      
 adjusted to reflect the reversal of revenue and elimination of deferred
 revenue recognized by Spar Applied Systems in connection with a certain
 contract. The unamortized balance of such deferred revenue was excluded
    from the net assets acquired by DRS in connection with the acquisition and
     therefore will not be included in reported results of operations subsequent
to the date of acquisition. For purposes of the pro forma condensed   
  consolidated balance sheet, differed taxes have been adjusted to reflect
   the future tax liability associated with such deferred revenue as assumed
by DRS in the acquisition.                                            

5)   DRS's capitalizes as a component of inventory general and administrative   
expenses chargeable to government contracts. Spar Applied Systems has 
historically expensed general and administrative expenses as incurred,
whether or not such expenses are chargeable to government contracts.  
   Because Spar Applied Systems has used the percentage of completion method
     for revenue recognition on long-term contracts (see Note 2 to the pro forma
financial statements), reported inventory balances have typically been
immaterial in relation to total assets and to total costs and expenses
 recognized in its statements of earnings. Management therefore believes
    that the effect of any adjustment to the pro forma financial statements to
conform the treatment of general and administrative expenses would be 
 immaterial. Accordingly, no such adjustments are reflected in these pro
forma financial statements.                                           

6)   On October 29, 1997 (the "Closing Date"), DRS acquired, through certain of 
  its subsidiaries, the net assets of the Applied Systems Division of Spar
  Aerospace Limited, a Canadian corporation, and 100% of the stock of Spar
Aerospace (UK) Ltd., incorporated under the laws of England and Wales,
pursuant to a Purchase Agreement (the "Agreement")                    

8-K/A 27th Page of 28 TOC 1st Previous Next ↓Bottom Just 27th
     dated as of September 19, 1997, between DRS and Spar Aerospace Limited (the
  "Acquisition"). The Company paid approximately $35.4 million in cash for
the Acquisition (which includes $6.9 million for cash acquired in     
connection with this transaction), subject to certain working capital 
adjustments as provided for in the Agreement.                         

    The Acquisition was accounted for using the purchase method of accounting.
DRS expects to incur professional fees and other costs related to the 
   Acquisition of approximately $1.0 million. The excess of cost over assets
acquired and liabilities assumed was approximately $21.0 million as of
  September 30, 1997, based on the unaudited balance sheet of Spar Applied
 Systems as of June 30, 1997. As of October 29, 1997, the excess of cost
over the estimated fair value of net assets acquired was approximately
     $16.9 million and is being amortized on a straight line basis over 30 years
at the rate of approximately $0.6 million per year. Purchase price    
     allocation has not yet been finalized, and actual purchase price allocation
may differ from that used for purposes of these Pro Forma Financial   
Statements.                                                           

6)   In connection with the Acquisition, on October 29, 1997, the Company       
 entered into a $60 million secured credit facility (the "Secured Credit
  Facility") with Mellon Bank, N.A., consisting of a $20 million term loan
    (the "Term Loan") and a $40 million revolving line of credit (the "Secured
     Line of Credit"). The Secured Credit Facility expires on March 31, 2003 and
 replaced the Company's existing $15 million unsecured revolving line of
    credit and $5 million secured equipment line of credit/term loan facility.
     The Term Loan was used to finance a portion of the Acquisition. The Secured
    Line of Credit was used to finance the remaining balance due in connection
     with the Acquisition and to repay outstanding borrowings on the $15 million
 unsecured revolving line of credit and the $5 million secured equipment
line of credit/term loan facility. The pro forma financial statements 
  include adjustments of $2,282 and $1,141 for the fiscal year ended March
   31, 1997 and the six month period ended September 30, 1997, respectively,
 to reflect interest expense on the debt associated with the Acquisition
based on prevailing interest rates as of the Closing Date.            

7)   The provision for income taxes has been adjusted to reflect the pro forma  
     effective rates for Spar Applied Systems as if the Acquisition had occurred
at the beginning of the periods presented.                            

8-K/A Last Page of 28 TOC 1st Previous Next ↓Bottom Just 28th
Item 7c. EXHIBITS                                                               

Consent of KPMG, Chartered Accountants

The Board of Directors                                                          
DRS Technologies, Inc:                                                          

We consent to the incorporation by reference in the registration statements (No.
2-87303, No. 2-99986, No. 2-99784, and No. 333-14487) on Form S-8 and (No.      
33-33125, No. 33-42886, No. 33-64641, and No. 333-04929) on Form S-3 of DRS     
Technologies, Inc. of our report dated December 5, 1997, with respect to the    
combined balance sheets of Applied Systems Division of Spar Aerospace Limited   
and Spar Aerospace (UK) Ltd., a wholly-owned subsidiary of Spar Aerospace       
Limited, as of December 31, 1996 and 1995, and the related combined statements  
of earnings, capital employed and retained earnings and cash flows for each of  
the years in the three-year period ended December 31, 1996, which report appears
in the Form 8-K of DRS Technologies, Inc. dated January 12, 1998, as amended.   

KPMG                                                                            
Ottawa, Canada                                                                  
January 12, 1998

8-K/A	1st Page of 28	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

8-K/A	2nd Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 2nd

8-K/A	3rd Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 3rd

8-K/A	4th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 4th

8-K/A	5th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 5th

8-K/A	6th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 6th

8-K/A	7th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 7th

8-K/A	8th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 8th

8-K/A	9th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 9th

8-K/A	10th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 10th

8-K/A	11th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 11th

8-K/A	12th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 12th

8-K/A	13th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 13th

8-K/A	14th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 14th

8-K/A	15th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 15th

8-K/A	16th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 16th

8-K/A	17th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 17th

8-K/A	18th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 18th

8-K/A	19th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 19th

8-K/A	20th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 20th

8-K/A	21st Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 21st

8-K/A	22nd Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 22nd

8-K/A	23rd Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 23rd

8-K/A	24th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 24th

8-K/A	25th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 25th

8-K/A	26th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 26th

8-K/A	27th Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 27th

8-K/A	Last Page of 28	TOC	1st	Previous	Next	↓Bottom	Just 28th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘8-K/A’ Filing	Date	First	Last	Other Filings

	3/31/03	27		10-K
Changed as of / Corrected on:	1/14/98
Filed on:	1/12/98	3	28
	12/5/97	5	28
For Period End:	10/29/97	1	27
	10/28/97	20
	9/30/97	2	27	10-Q, 10-Q/A
	9/19/97	27
	6/30/97	22	27	10-K, 10-Q, DEF 14A
	3/31/97	2	27	10-K
	12/31/96	2	28	10-Q
	4/1/96	21		8-K
	1/1/96	12	19
	12/31/95	2	28	10-Q
	12/31/94	2	20	10-Q
				List all Filings

↑Top

Filing Submission 0000950110-98-000043 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

DRS Technologies Inc – ‘8-K/A’ for 10/29/97

As of: Monday, 1/12/98 · For: 10/29/97 · Accession #: 950110-98-43 · File #: 1-08533 · Correction: This Filing’s “Filed as of” Date was Corrected and “Changed as of” 1/14/98 by the SEC on 1/14/98. ®

Previous ‘8-K’: ‘8-K’ on 11/13/97 for 8/29/97 · Next: ‘8-K’ on 11/4/98 for 10/20/98 · Latest: ‘8-K’ on 12/23/08 for 12/22/08

Amendment to Current Report — Form 8-KFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

As of: Monday, 1/12/98 · For: 10/29/97 · Accession #: 950110-98-43 · File #: 1-08533 · Correction: This Filing’s “Filed as of” Date was Corrected and “Changed as of” 1/14/98 by the SEC on 1/14/98. `®`

Amendment to Current Report — Form 8-K
Filing Table of Contents