UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______to___________
Commission File Number: 0-7445
DATRON SYSTEMS INCORPORATED
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-2582922
- -------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3030 Enterprise Court, Vista, California 92083-8347
- --------------------------------------------------------------
(Address of principal executive offices) (zip code)
760) 734-5454
-------------------------------------------------------
(Registrant's telephone number, including area code)
_______________________________________________________________
(Former name, former address and formal 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.
[ X ] Yes [ ] No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or
15 (d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
[ ] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
As of August 8, 2001, the Registrant had only one class of
common stock, par value $0.01, of which there were 2,806,602
shares outstanding.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DATRON SYSTEMS INCORPORATED
CONSOLIDATED BALANCE SHEETS (In thousands)
June 30,
2001 March 31,
(Unaudited) 2001
----------- --------
ASSETS <c> <c>
Current assets:
Cash and cash equivalents $3,678 $8,380
Accounts receivable, net 17,137 19,652
Inventories 12,803 11,495
Deferred income taxes 2,426 2,426
Prepaid expenses and other current assets 1,235 493
------- ------
Total current assets 37,279 42,446
Property, plant and equipment, net 8,771 9,004
Goodwill, net 4,981 5,032
Other assets 885 787
------- -------
Total assets $51,916 $57,269
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,173 $4,835
Accrued expenses 5,579 6,754
Customer advances 1,627 1,929
Income taxes payable 370 1,554
Current portion of long-term debt 98 96
------ ------
Total current liabilities 10,847 15,168
Long-term debt 2,958 2,984
Deferred income taxes 1,481 1,481
Deferred rent 159 150
------ ------
Total liabilities 15,445 19,783
------ ------
Stockholders' equity:
Preferred stock - par value $0.01;authorized
2,000,000 shares, none issued or outstanding --- ---
Common stock -- par value $0.01; authorized
10,000,000 shares, 2,758,257 and 3,116,292
shares issued in June and March, respectively 27 31
Additional paid-in capital 9,148 11,114
Retained earnings 27,296 28,417
Treasury stock, at cost;no shares in June and
368,005 shares in March --- ( 2,076)
------- -------
Total stockholders' equity 36,471 37,486
------- -------
Total liabilities and stockholders' equity $51,916 $57,269
======= =======
See notes to consolidated financial statements.
1
DATRON SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per-share amounts)
Three Months Ended
June 30,
2001 2000
-------- -------
<s> <c> <c>
Net sales $10,609 $13,354
Cost of sales 8,102 9,946
------- -------
Gross profit 2,507 3,408
Selling, general and administrative 3,655 2,996
Research and development 708 1,023
------- -------
Operating loss (1,856) (611)
Interest expense (52) (53)
Interest income 62 130
Other income (expense) 21 (8)
------- -------
Loss before income taxes (1,825) (542)
Income taxes (benefit) (704) (215)
------- -------
Net loss ($1,121) ($327)
======== =======
Loss per common share-basic ($0.41) ($0.12)
======== =======
Weighted average number of
common shares outstanding 2,752 2,721
======== =======
Loss per common share-diluted ($0.41) ($0.12)
======== =======
Weighted average number of
common and common equivalent
shares outstanding 2,752 2,721
======== =======
See notes to consolidated financial
statements.
2
DATRON SYSTEMS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Three Months Ended
June 30,
2001 2000
------- ------
<s> <c> <c>
Cash Flows from Operating Activities
Net loss ($1,121) ($327)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 458 482
Changes in operating assets and liabilities:
Accounts receivable 2,515 1,318
Inventories (1,308) (79)
Prepaid expenses and other assets (842) (347)
Accounts payable and accrued expenses (2,837) (4,045)
Customer advances (302) (793)
Income taxes payable (1,184) (1,062)
Deferred rent 9 15
Other 1 14
------- ------
Net cash used in operating activities (4,611) (4,824)
------- ------
Cash Flows from Investing Activities
Additions to property, plant and equipment (172) (154)
------- ------
Net cash used in investing activities (172) (154)
------- ------
Cash Flows from Financing Activities
Repayments of long-term debt (24) (23)
Stock options exercised 23 39
Issuance of common stock 82 57
------- ------
Net cash provided by financing activities 81 73
------- ------
Decrease in cash and cash equivalents (4,702) (4,905)
Cash and cash equivalents at beginning of period 8,380 12,183
------- ------
Cash and cash equivalents at end of period $3,678 $7,278
======= ======
See notes to consolidated financial statements.
3
Datron Systems Incorporated
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
The unaudited consolidated financial statements included herein
contain the accounts of Datron Systems Incorporated and its
wholly owned subsidiaries (the "Company") and have been prepared
in accordance with the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations.
It is suggested that these financial statements be read in
connection with the financial statements and notes thereto
included in the Company's annual report on Form 10-K for the
fiscal year ended March 31, 2001.
In the opinion of the Company's management, the accompanying
unaudited financial statements contain all adjustments,
consisting only of normal recurring adjustments, unless otherwise
stated, which are necessary to present fairly its financial
position at June 30, 2001 and the results of its operations and
its cash flows for the periods presented. Results of operations
for the periods presented herein are not necessarily indicative
of what results will be for the entire fiscal year. The balance
sheet at March 31, 2001 has been derived from audited financial
statements.
In June 2001, the Financial Accounting Standards Board ("FASB")
issued two new pronouncements: Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations," and SFAS No.
142, "Goodwill and Other Intangible Assets." SFAS No. 141
requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001 and that the
use of the pooling-of-interests method is no longer allowed.
SFAS No. 142 requires that upon adoption, amortization of
goodwill will cease and instead, the carrying value of goodwill
will be evaluated for impairment on an annual basis.
Identifiable intangible assets will continue to be amortized over
their useful lives and reviewed for impairment in accordance with
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of." The Company is
required to implement SFAS No. 141 on July 1, 2001 and SFAS No.
142 at the beginning of its next fiscal year, April 1, 2002. The
Company is evaluating the impact of the adoption of these
standards and has not yet determined the effect, if any, that
their adoption will have on its consolidated financial position
or results of operations.
On July 3, 2001, The Titan Corporation ("Titan") commenced an
exchange offer (the "Offer") through its wholly owned subsidiary,
Gem Acquisition Corp. ("Merger Sub"), for all of the outstanding
shares of common stock ("Datron Common Stock") of Datron Systems
Incorporated ("Datron"). The Offer expired at midnight (NYC
time) on August 3, 2001 and the Merger Sub accepted for payment
approximately 1,953,682 shares tendered by Datron stockholders in
the Offer. As a result, Titan owns approximately 69.6% of Datron
Common Stock. Each validly tendered share of Datron Common Stock
will be exchanged for 0.81919 shares of Titan common stock, and
cash will be issued for fractional shares of Titan common stock.
In addition, pursuant to the terms of an Agreement and Plan of
Merger and Reorganization dated as of June 24, 2001 by and among
Datron, Merger Sub and Titan, effective August 3, 2001, Datron's
board of directors was increased from six to seven members, three
of Datron's board members resigned and Titan designated four
directors who were elected to Datron's board. Titan designees
now constitute a majority of the Board of Directors of Datron.
The Offer is the first step of Titan's two-step acquisition of
Datron. The second step will be the merger (the "Merger") of
Merger Sub with and into Datron, which will take place as soon as
practicable subject to applicable legal requirements. Upon
completion of the Merger, Datron will be a wholly owned
subsidiary of Titan.
2. Earnings (Loss) per Share
Basic earnings per share ("EPS") is calculated based on the
weighted average number of shares outstanding during the period.
Diluted EPS is calculated based on the weighted average number of
shares outstanding during the period plus equivalent shares
issuable under the Company's stock option plans when such amounts
are dilutive. Options to purchase 441,365 shares of common stock
at prices ranging from $5.10 to $15.73 were not included in the
computation of diluted EPS at June 30, 2001 because the effect of
such options would be anti-dilutive. Such options expire at
various dates from March 12, 2002 to May 13, 2011. At June 30,
2000, options to purchase 433,150 shares of common stock at
prices ranging from $5.10 to $15.73 were not included in the
computation of diluted EPS because the effect of such options
would be anti-dilutive.
4
3. Accounts Receivable
At June 30, 2001 and March 31, 2001, accounts receivable were as
follows:
June 30, March 31,
2001 2001
------------- ------------
<s> <c> <c>
Billed $ 13,276,000 $ 15,484,000
Unbilled 3,983,000 4,285,000
------------- ------------
Subtotal 17,259,000 19,769,000
Allowance for doubtful accounts (122,000) (117,000)
------------- ------------
Total $17,137,000 $19,652,000
============= ===========
4. Inventories
At June 30, 2001 and March 31, 2001, inventories were as follows:
June 30, March 31,
2001 2001
------------ ------------
<s> <c> <c>
Raw materials $ 7,139,000 $ 7,714,000
Work-in-process 3,599,000 2,395,000
Finished goods 2,065,000 1,386,000
------------- ------------
Total $12,803,000 $11,495,000
============= ============
Inventories are presented net of allowances for obsolescence of
$1,732,000 and $1,665,000 at June 30, 2001 and March 31, 2001,
respectively.
5. Property, Plant and Equipment
At June 30, 2001 and March 31, 2001, property, plant and
equipment was as follows:
June 30, March 31,
2001 2001
------------ -----------
<s> <c> <c>
Land and buildings $ 9,052,000 $ 9,052,000
Machinery and equipment 15,530,000 15,400,000
Furniture and office equipment 1,558,000 1,552,000
Leasehold improvements 752,000 751,000
Construction-in-process 92,000 57,000
----------- ----------
Subtotal 26,984,000 26,812,000
Accumulated depreciation and
amortization (18,213,000) (17,808,000)
------------- -----------
Total $ 8,771,000 $ 9,004,000
============ ============
5
6. Segment Information
Segment information was as follows for the periods shown:
Three Months Ended
June 30,
2001 2000
------------ -----------
<s>
Net sales: <c> <c>
Antenna and Imaging Systems $ 7,450,000 $ 9,848,000
Communication Products 3,159,000 3,506,000
----------- -----------
Consolidated net sales $10,609,000 $13,354,000
=========== ===========
Operating income (loss):
Antenna and Imaging Systems $ 151,000 $ 206,000
Communication Products (1,090,000) (464,000)
General corporate expenses (917,000) (353,000)
---------- ----------
Consolidated operating income (loss) (1,856,000) (611,000)
Interest income, net 10,000 77,000
Other income (expense) 21,000 (8,000)
----------- ----------
Loss before income taxes $(l,825,000) $(542,000)
=========== ==========
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Datron Systems Incorporated and its wholly owned subsidiaries
(the "Company") report operations in two business segments:
Antenna and Imaging Systems, and Communication Products. The
Antenna and Imaging Systems business segment designs and
manufactures satellite communication systems, subsystems and
antennas that are sold worldwide to commercial and governmental
customers, including the U.S. Department of Defense. Its major
product lines are (i) satellite tracking antennas used for remote
sensing, telemetry, tracking and control ("TT&C") and satellite
communication purposes by governmental and commercial users, and
(ii) mobile broadband communication systems for airlines,
military transports and mobile land and marine direct broadcast
satellite ("DBS") television users. The Communication Products
business segment designs, manufactures and distributes voice and
data communication radios for worldwide military and civilian
purposes.
This Management's Discussion and Analysis of Financial Condition
and Results of Operations contains "forward-looking statements"
as defined in the Private Securities Litigation Reform Act of
1995. A variety of factors could cause the Company's actual
results to differ from the anticipated results expressed in such
forward-looking statements. These include, among others,
uncertainties stemming from the dependence of the Company on
foreign sales and on large orders from a relatively small number
of customers, risks relating to the decline in the Company's
traditional defense business and the Company's efforts to develop
and market consumer products, lack of timely development or
customer acceptance of new products, changes in or unavailability
of products and services offered by satellite service providers
and their related suppliers, worldwide economic downturns and
currency devaluations, restrictions imposed by the U.S.
government on the export of Company products, and the impact of
competition. For more information, please review the Company's
periodic reports under the Securities Exchange Act of 1934,
including without limitation the Investment Considerations set
forth in the Company's Annual Report on Form 10-K.
Results of Operations
Net loss for the first quarter of fiscal 2002 was $1,121,000, or
$0.41 per diluted share, compared with a net loss of $327,000, or
$0.12 per diluted share, in the first quarter of fiscal 2001.
Excluding merger-related expenses, net loss for the quarter was
approximately $892,000, or $0.32 per diluted share. Net sales in
the first quarter of fiscal 2002 were $10,609,000, a 21% decrease
from first quarter net sales last fiscal year of $13,354,000.
The decline in sales was primarily due to lower sales of antenna
systems and mobile broadband communication products. The larger
net loss was primarily due to lower gross profits on the lower
sales as well as expenses of approximately $381,000 ($229,000, or
$0.08 per diluted share, after-tax) related to the acquisition of
the Company by The Titan Corporation, partially offset by lower
research and development expenses.
Operating results for each business segment were as follows:
6
Antenna and Imaging Systems
Three Months Ended
June 30,
2001 2000
---------- ----------
<s> <c> <c>
Net sales $7,450,000 $9,848,000
========== ==========
Gross profit $1,941,000 $2,540,000
========== ==========
Operating income $151,000 $206,000
========== ==========
Sales of Antenna and Imaging Systems products decreased 24% in
the first quarter of fiscal 2002 compared with the first quarter
of fiscal 2001. The decrease was primarily due to lower sales of
antenna systems and airborne broadband communication products.
The market for antenna systems continues to be soft and it is
expected to remain so through at least the second quarter of
fiscal 2002.
Gross profit percentage on sales of Antenna and Imaging Systems
products was 26.1% in the first quarter of fiscal 2002 compared
with 25.8% in the first quarter last fiscal year. The
improvement resulted from lower material costs and a more
favorable product mix.
Operating income percentage from sales of Antenna and Imaging
Systems products was 2.0% in the first quarter of fiscal 2002
compared with 2.1% in the first quarter last fiscal year.
Although selling and administrative expenses as a percentage of
sales were higher in the recent quarter due to the lower sales,
they were offset by lower research and development expenses.
Communication Products
Three Months Ended
June 30,
2001 2000
----------- ----------
<s> <c> <c>
Net sales $3,159,000 $3,506,000
=========== ==========
Gross profit $566,000 $868,000
=========== ==========
Operating loss ($1,090,000) ($464,000)
=========== ==========
Sales of Communication Products decreased 10% in the first
quarter of fiscal 2002 compared with the first quarter of fiscal
2001. The decrease in sales was primarily due to an export
licensing problem that delayed shipment of a $1.5 million portion
of a radio order. Those radios are expected to ship in the
second quarter. This segment's business has traditionally been
driven by one or two large contracts each fiscal year with growth
often occurring in the second half.
Gross profit percentage on sales of Communication Products was
17.9% in the first quarter of fiscal 2002 compared with 24.8% in
the first quarter last fiscal year. Low sales and expenses
related to the rapid reconfiguration of radios to permit partial
shipment of the radios affected by the export licensing problem
were responsible for the decline.
Operating loss percentage from sales of Communication Products
was 34.5% in the first quarter of fiscal 2002 compared with an
operating loss percentage of 13.2% in the first quarter last
fiscal year. The decline was primarily due to lower gross
margins and higher research and development expenses.
Consolidated expenses
Selling, general and administrative expenses were $3,655,000 in
the first quarter of fiscal 2002, a 22% increase compared with
first quarter of fiscal 2001 expenses of $2,996,000. The
increase was primarily due to expenses related to the pending
acquisition of the Company by The Titan Corporation.
<page>7
Research and development expenses were $708,000 in the first
quarter of fiscal 2002 compared with $1,023,000 in the first
quarter last fiscal year. The 31% decrease was primarily due a
reduction in spending on programs to improve mobile DBS antenna
products, partially offset by an increase in spending on design
improvements for the new GuardianTM radios.
Order backlog at June 30
2001 2000
----------- -----------
<s> <c> <c>
Antenna and Imaging Systems $9,969,000 $19,361,000
Communication Products 2,732,000 7,609,000
----------- -----------
Total $12,701,000 $26,970,000
=========== ===========
The 49% decrease in Antenna and Imaging Systems backlog at June
30, 2001 compared with June 30, 2000 was primarily due to
continued softness in the markets for antenna systems and remote
sensing earth stations and to the absence of microwave product
orders due to the sale of that product line in the third quarter
of fiscal 2001. In addition, $1.4 million of backlog for
broadband satellite communication antennas was reversed during
the first quarter due to a contract cancellation.
The 64% decrease in Communication Products backlog at June 30,
2001 compared with June 30, 2000 was due to low first quarter
bookings compared with strong bookings of radio products in the
first quarter last fiscal year. An improvement in Communication
Products bookings is expected in the second quarter, which should
translate into sales growth and improved profitability in the
second half of fiscal 2002.
Liquidity and Capital Resources
At June 30, 2001, working capital was $26,432,000 compared with
$27,278,000 at March 31, 2001, a decrease of $846,000, or 3%.
Major changes affecting working capital during this period were
as follows: accounts receivable decreased $2,515,000 primarily
due to low sales during the recent quarter; inventories increased
$1,308,000; accounts payable and accrued expenses decreased
$2,837,000 primarily due to payment of expenses related to sales
in the fourth quarter of fiscal 2001; and income taxes payable
decreased $1,184,000. The Company's cash position at June 30,
2001 was $3,678,000 compared with $8,380,000 at March 31, 2001, a
decrease of 56%. At June 30, 2001, the Company had no borrowings
against its revolving line of credit.
Capital equipment expenditures were $172,000 in the first quarter
of fiscal 2002 compared with $154,000 in the first quarter last
fiscal year. Capital expenditures in fiscal 2002 are expected to
be higher than fiscal 2001 expenditures due to anticipated
tooling requirements for new products.
At June 30, 2001, the Company had a $15,000,000 revolving line of
credit with a bank. The line may be used for the issuance of
standby letters of credit up to $15,000,00 and working capital
advances up to $5,000,000 provided total credit extended does not
exceed $15,000,000. The line of credit expires on August 2, 2002
and is not subject to a borrowing base formula. At June 30,
2001, there were no borrowings under the line of credit and the
bank had issued letters of credit against the line totaling
$4,236,000. The Company believes its existing working capital,
anticipated future cash flows from operations and available
credit with its bank are sufficient to finance presently planned
capital and working capital requirements.
Recently Issued Accounting Pronouncements
In June 2001, the Financial Accounting Standards Board ("FASB")
issued two new pronouncements: Statement of Financial Accounting
Standards ("SFAS") No. 141, "Business Combinations," and SFAS No.
142, "Goodwill and Other Intangible Assets." SFAS No. 141
requires that the purchase method of accounting be used for all
business combinations initiated after June 30, 2001 and that the
use of the pooling-of-interests method is no longer allowed.
SFAS No. 142 requires that upon adoption, amortization of
goodwill will cease and instead, the carrying value of goodwill
will be evaluated for impairment on an annual basis.
Identifiable intangible assets will continue to be amortized over
their useful lives and reviewed for impairment in accordance with
SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed Of." The Company is
required to implement SFAS No. 141 on July 1, 2001 and SFAS No.
142 at the beginning of its next fiscal year, April 1, 2002. The
Company is evaluating the impact of the adoption of these
standards and has not yet determined the effect, if any, that
their adoption will have on its consolidated financial position
or results of operations.
8
PART II -- OTHER INFORMATION
Item 2. Changes in Securities.
Pursuant to a business loan agreement with a bank, the Company
must comply with certain financial covenants. The agreement also
prohibits the Company from declaration or payment of dividends or
other distributions on the Company's stock, except under certain
conditions specified in the agreement. The Company is in
compliance with both requirements.
Item 3. Legal Proceedings.
In August 1992, Trans World Communications, Inc. (Trans World), a
wholly owned subsidiary of the Company and which was renamed
Datron World Communications Inc. on March 31, 1995, was named as
defendant in a lawsuit filed by ATACS Corporation (ATACS) and
AIRTACS Corporation (AIRTACS) relating to a contract to provide
radio communication shelters. ATACS and AIRTACS contend that
Trans World entered into an agreement to team with them on the
contract and then wrongfully failed to use them as
subcontractors. They seek damages in excess of $2,000,000. In
rulings on May 28, 1997 and September 3, 1997, the court found
Trans World in breach of a teaming agreement and awarded ATACS
and AIRTACS one dollar ($1.00) in damages. On September 8,
1998, the U.S. Court of Appeals affirmed the district court's
decision except as to the award of nominal damages, and remanded
the matter to the district court for further hearing on damages.
On June 14, 2000, the district court issued an order awarding
ATACS and AIRTACS damages of $30,075 including prejudgment
interest. On July 12, 2000, ATACS and AIRTACS appealed the
district court's judgment to the U.S. Court of Appeals. On
August 7, 2001, the U.S. Court of Appeals reversed the judgment
of the district court and remanded the matter to the district
court with instructions to recalculate damages.
Item 5. Other Information.
On July 3, 2001, The Titan Corporation ("Titan") commenced an
exchange offer (the "Offer") through its wholly owned subsidiary,
Gem Acquisition Corp. ("Merger Sub"), for all of the outstanding
shares of common stock ("Datron Common Stock") of Datron Systems
Incorporated ("Datron"). The Offer expired at midnight (NYC
time) on August 3, 2001 and the Merger Sub accepted for payment
approximately 1,953,682 shares tendered by Datron stockholders in
the Offer. As a result, Titan owns approximately 69.6% of Datron
Common Stock. Each validly tendered share of Datron Common Stock
will be exchanged for 0.81919 shares of Titan common stock, and
cash will be issued for fractional shares of Titan common stock.
In addition, pursuant to the terms of an Agreement and Plan of
Merger and Reorganization dated as of June 24, 2001 by and among
Datron, Merger Sub and Titan, effective August 3, 2001, Datron's
board of directors was increased from six to seven members, three
of Datron's board members resigned and Titan designated four
directors who were elected to Datron's board. Titan designees
now constitute a majority of the Board of Directors of Datron.
The Offer is the first step of Titan's two-step acquisition of
Datron. The second step will be the merger (the "Merger") of
Merger Sub with and into Datron, which will take place as soon as
practicable subject to applicable legal requirements. Upon
completion of the Merger, Datron will be a wholly owned
subsidiary of Titan.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
2.1* Agreement and Plan of Merger and Reorganization dated
as of June 24, 2001 by and among Datron Systems
Incorporated, The Titan Corporation and Gem Acquisition
Corp.
3(ii). Amended and Restated Bylaws of Datron Systems
Incorporated as of August 3, 2001.
9
(b) Reports on Form 8-K:
The Registrant filed a report on Form 8-K on May 4,
2001 containing the response from David A. Derby,
chairman, president and chief executive officer of
Datron Systems Incorporated, to the letter dated April
24, 2001 from Duncan Soukup, managing director of
Acquisitor plc.
The Registrant filed a report on Form 8-K on June 26,
2001 containing the text of the press release it issued
on June 25, 2001 announcing the Registrant had entered
into an agreement and plan of merger with The Titan
Corporation and Gem Acquisition Corp. The same report
on Form 8-K contained the response from Victor A.
Hebert, legal counsel to Datron Systems Incorporated,
to the June 25, 2001 letter from Frank C. Lanza,
chairman and chief executive officer of L-3
Communications, to George M. Ball of Philpott Ball &
Werner.
The Registrant filed a report on Form 8-K on July 3,
2001 containing as an exhibit the Merger Agreement with
The Titan Corporation and Gem Acquisition Corp.
previously announced on June 25, 2001. The same report
on Form 8-K contained the response from David A. Derby
to the June 28, 2001 letter from Mr. Lanza in which Mr.
Lanza proposed that L-3 Communications acquire all of
the Registrant's outstanding common stock and options
to purchase common stock for $16.25 per share.
* Incorporated by this reference to Exhibit 99.16 to
Registrant's Form 8-K filed with the Commission on July 3,
2001.
10
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.
DATRON SYSTEMS INCORPORATED
<s> <c> <c> <c>
Date: August 10, 2001 By: WILLIAM L. STEPHAN
WILLIAM L. STEPHAN
Vice President and Chief
Financial Officer
(Principal Financial and
Accounting Officer)
11