EXHIBIT 99.1
ANNUAL REPORT
For the fiscal year ended March 31, 1999
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
Datron Systems Incorporated
3030 Enterprise Court, Vista, California 92083-8347
(Name of issuer of the securities held pursuant to
the plan and the address of its principal executive
office)
F-1
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
Index To Financial Statements
Page
Independent Auditors' Report F-2
Financial Statements:
Statements of Assets Available for Benefits F-3
Statements of Changes in Assets Available for Benefits F-4
Notes to Financial Statements F-5
Schedules:
None
All schedules are omitted because they are not
applicable or the required information is shown in
the Financial Statements or the notes thereto.
F-2
INDEPENDENT AUDITORS' REPORT
Datron Systems Incorporated
Employee Stock Purchase Plan
We have audited the accompanying statements of assets
available for benefits of Datron Systems Incorporated
Employee Stock Purchase Plan (the "Plan") as of March
31, 1999 and 1998, and the related statements of
changes in assets available for benefits for the year
ended March 31, 1999 and the nine months ended March 31,
1998. These financial statements are the responsibility
of the Plan's management. Our responsibility is to
express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about 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 financial statements referred to
above present fairly, in all material respects,
information regarding the Plan's assets available for
benefits as of March 31, 1999 and 1998, and the changes
in assets available for benefits of the Plan for the
year ended March 31, 1999 and the nine months ended
March 31, 1998 in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
San Diego, California
June 4, 1999
F-3
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF ASSETS AVAILABLE FOR BENEFITS
March 31, March 31,
1999 1998
-------- --------
Cash $17,970 $25,220
Participant contributions
receivable 2,520 2,312
------- -------
Assets available for benefits $20,490 $27,532
======= =======
See accompanying notes to financial statements.
F-4
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
Year Nine Months
Ended Ended
March 31, 1999 March 31, 1998
-------------- --------------
Participant contributions $84,161 $94,936
Benefits paid (74,294) (44,911)
Cash disbursements to employees
withdrawing from the plan (16,909) (22,493)
-------- -------
Net increase (decrease) $(7,042) $27,532
Assets available for benefits:
Beginning of period 27,532 0
------- -------
End of period $20,490 $27,532
======= =======
See accompanying notes to financial statements.
F-5
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1. Plan Description
In August 1997, the stockholders of Datron Systems
Incorporated (the "Company") adopted, effective July 1,
1997, the Datron Systems Incorporated Employee Stock
Purchase Plan (the "Plan") under Section 423 of the
Internal Revenue Code. The Plan is intended to provide
eligible employees with the opportunity to acquire an
equity interest in the Company through the acquisition
of stock purchase rights.
Employees are eligible to participate in the Plan
if they have been employed a minimum of five months and
work at least 20 hours per week. Eligible employees may
use funds from accumulated payroll deductions to
purchase shares of Company common stock at the end of
six-month offering periods. They may contribute up to
10% of gross earnings toward such purchases, not to
exceed $12,500 per offering period, and may purchase a
maximum of 1,000 shares per offering period. The
purchase price for the shares is 85% of the lesser of
the fair market value of the common stock at the
beginning of the offering period or at the end of the
offering period. Shares purchased must be held for a
minimum of three months before they can be sold. A total
of 200,000 shares has been authorized for issuance under
the Plan.
Common stock issued under the Plan is summarized as
follows:
1998 1997
------------------ ----------------
Offering Shares Purchase Shares Purchase
Period Ended Issued Price Issued Price
- ------------ ------ -------- ------ -------
June 30 6,648 $5.74 - -
December 31 7,821 $4.62 6,126 $7.33
------ -----
Total 14,469 6,126
====== =====
Note 2. Summary of Significant Accounting Policies
Basis of Accounting
The Plan's financial statements are prepared on the
accrual basis of accounting.
F-6
Administrative Expenses of the Plan
All expenses incurred in the administration of the Plan
are paid by the Company.
Contributions
Contributions to the Plan are made on a weekly basis as
compensation is paid to participants.
Income Taxes
The Plan was established under Section 423 of the
Internal Revenue Code and is, therefore, exempt from
income taxes.
F-7
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Compensation Committee of the Datron
Systems Incorporated Employee Stock Purchase Plan has
duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
DATRON SYSTEMS INCORPORATED
EMPLOYEE STOCK PURCHASE PLAN
By:/s/ William L. Stephan Date: June 24, 1999
William L. Stephan
Datron Systems Incorporated
Employee Stock Purchase
Plan Compensation Committee