UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED JUNE 30, 1996 OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER 0-14224
IFR SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 48-0777904
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)
10200 WEST YORK STREET, WICHITA, KANSAS 67215
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (316) 522-4981
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class
-------------------
Common Stock, $.01 par value
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant as of September 9, 1996: Common stock, $.01 par value,
$70,799,130.
Indicate the number of shares outstanding of each of the Registrant's classes of
common stock as of September 9, 1996: Common stock, $.01 par value, 5,482,449
shares.
DOCUMENTS INCORPORATED BY REFERENCE:
(1) Portions of the Registrant's annual report to shareholders for the year
ended June 30, 1996 are incorporated by reference into Parts I and II of this
Form 10-K.
(2) Portions of the Registrant's proxy statement for the November 7, 1996
annual meeting of shareholders are incorporated by reference into Part III of
this Form 10-K.
The exhibit index to this Form 10-K is located on pages 9 through 11.
1
PART I
ITEM 1. BUSINESS
IFR Systems, Inc. ("IFR" or the "Company") is a Delaware corporation with
its principal offices in Wichita, Kansas. IFR designs, manufactures, and
markets communications, test and measurement, avionics, and fiber optic test
instruments. These products are used to test radio products, aircraft avionics
systems and optical fiber. IFR has been engaged in this general industry
directly, and through a predecessor corporation, in the same general type of
business since 1968, and its initial public offering of common stock was made in
1986. IFR's fiber optics test equipment products are manufactured by its wholly
owned subsidiaries, Photon Kinetics, Inc. ("PK") and York Technology, Ltd.
("York")
IFR's communications service monitors are used to test and maintain radio
products, including pagers, scanners, military comm-transceivers, and cellular,
land mobile, marine and citizens band radios. Service monitors test mobile
radio equipment for proper frequency transmission, signal modulation and power
output. The principal end users of communications service monitors are original
equipment manufacturers, service and repair companies, government agencies, and
users of mobile radio equipment.
IFR's portable spectrum analyzers (test and measurement) measure the
amplitude of various frequency components in transceivers and other radio
frequency devices. IFR targets these products for original equipment
manufacturers, service and repair companies, and educational institutions.
IFR's avionics test instruments consist of portable and stationary
precision simulators which duplicate airborne conditions to test the
communications, weather radar, and instrument landing and navigational systems
installed in aircraft and ground stations. IFR's precision simulators are used
to test the avionics electronics systems in commercial, military, and general
aviation aircraft. The principal end users of such precision simulators are
general aviation service and repair companies, commercial airlines,
manufacturing firms, and the federal government.
IFR's fiber optic test instruments consist of portable and stationary units
which are used to test and verify specific parameters of optical fibers. These
products are used by telephone companies, installers of voice/data
communications networks, cable television operators, utilities, contractors,
fiber manufacturers, and the military. IFR also manufactures certain machine
parts and purchases electronic components for assembly into finished test
instruments.
IFR is engaged in research and development in order to update and replace
products with new models and to develop additional products. Research and
development expenditures were $7,374,000, $7,892,000 and $7,505,000 for 1996,
1995, and 1994, respectively. IFR's product development is directed toward
identifying and filling niche markets and toward the product markets where IFR
believes better growth opportunities exist, as well as providing for periodic
introduction of new or enhanced products for all markets served by IFR's
products.
IFR is not engaged in any significant customer-sponsored research and
development. IFR owns no significant patents or product licenses and believes
these are not significant factors in its business or the test and measurement
industry generally. Although IFR believes alternative sources of supply could be
developed, certain components are presently available from only one supplier.
During the past year, supplies were generally adequate and lead times
acceptable.
MARKETING AND COMPETITION
- -------------------------
IFR operates in one dominant industry segment--the electronic test and
measurement industry. IFR's product line includes approximately 40 separate
product models which are marketed through agencies throughout the world. General
demand for electronics test and measurement products is not considered to be
highly seasonal. However, test instruments generally are a capital budget
expenditure
2
for commercial and government agency customers, and purchases may be foregone or
postponed during periods of economic slump and tight budgets.
In addition to general economic conditions, economic conditions affecting
particular industries may affect demand for IFR's products. The group of
products manufactured by IFR's subsidiaries, PK and York, for fiber optics
testing are used primarily in the telecommunications industry, and sales are
affected by capital acquisitions budget priorities of telecommunications
companies, such as the regional Bell telephone companies.
IFR has maintained a portion of its business in military contracting. Over
the past 5 years the percentage of total revenues from sales to the military
have ranged from a high of 21.6% in 1995 to a low of 8.3% in 1992. IFR's only
significant military contract during fiscal 1996 and continuing in fiscal 1997
is a contract with the U.S. Army to supply test instruments and instruction
manuals for the Single Channel Ground and Airborne Radio System ("SINCGARS").
SINCGARS is a technically sophisticated radio system designed to prevent enemy
interception and monitoring of Army field communications. As of June 30, 1996,
there remains a backlog of approximately $8.6 million in orders which is
expected to ship during fiscal 1997 under the SINCGARS contract. Military
contracts generally provide an opportunity to diversify the customer base, but
typically involve lower margins than commercial sales to private industry. IFR
expects to continue to make military sales on a selective basis but has no
present plans to materially increase its military contracting.
IFR's products are marketed to a diverse customer base and no single
product line is a predominant factor in determining revenues and profits.
Except for the SINCGARS contract with the U.S. Army, backlog orders are not
material because most orders are in smaller quantities or on terms that allow
the customer to cancel or delay delivery without significant penalty. IFR
typically is able to meet its delivery schedules without maintaining large
inventories of completed goods and its customers generally do not require
extended payment terms. The ability to fund working capital requirements for
inventory and receivables financing is not a material factor affecting
competition in the industry.
IFR competes with numerous companies, foreign and domestic, many of which
have greater financial, marketing, and technical resources than IFR. The
principal competitors are domestic U.S. companies and competition is based
primarily on product quality, technological innovation, and customer service,
and IFR believes it is an effective competitor in these areas.
Financial information concerning export sales is incorporated herein by
reference from Note 7 of the "Notes to Consolidated Financial Statements"
contained on page 20 of IFR's annual report to shareholders for the year ended
June 30, 1996.
EMPLOYEES
- ---------
IFR presently employs approximately 800 persons, approximately 620 of whom
are employed at the corporate offices and manufacturing plant in Wichita,
Kansas, and 107 of whom are employed at Photon Kinetics' offices and
manufacturing plant in Beaverton, Oregon. Approximately 65 persons are employed
at York Technology's office and manufacturing plant in England and approximately
8 persons are employed at York Technology's office and manufacturing plant in
New Jersey. Management believes employee relations are satisfactory. None of
IFR's employees are currently represented by any collective bargaining unit.
REGULATION
- ----------
IFR is subject to laws and regulations affecting manufacturers and
employers generally and to certain Federal Communications Commission regulations
that affect equally all suppliers of similar products, and are not considered a
material factor in the Company's competitive position. Compliance with federal,
state, and local provisions which have been enacted or adopted regulating the
discharge of materials into the environment or otherwise relating to the
protection of the environment should not have a material effect upon IFR's
capital expenditures, earnings or competitive position.
3
ITEM 2. PROPERTIES
IFR occupies facilities appropriate for electronic assembly operations.
IFR occupies 156,000 square feet on a fifteen acre plant site near Wichita,
Kansas, including a pre-engineered metal building containing 80,000 square
feet which was constructed in 1989. The plant addition and approximately
nine acres of the plant site upon which it is situated are leased, as
described more fully in Note 3 of the "Notes to Consolidated Financial
Statements" contained on pages 18 and 19 of IFR's annual report to
shareholders for the year ended June 30, 1996, incorporated herein by
reference. IFR owns a metal building system containing 76,000 square feet and
six acres of the Wichita, Kansas plant site.
IFR also occupies a 46,000 square feet plant site located in Beaverton,
Oregon, which is leased through an operating lease arrangement which expires in
December, 1999, a 24,000 square feet plant site located in Chandlers Ford,
England, which is financed through a bank loan secured by the property, payable
over a period of 15 years and a 4,826 square feet plant site located in
Princeton, New Jersey, which is leased through an operating lease arrangement
which expires on 6/30/97.
IFR believes that at June 30, 1996, its present facilities are adequate,
with the capability to meet its capacity demand for the foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
IFR is not a party to any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of IFR's security holders during the
fiscal quarter ended June 30, 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The market information and the approximate number of holders of IFR's
common stock required by Item 5 are incorporated herein by reference from
"Market Price Data" contained on page 11 of IFR's annual report to
shareholders for the year ended June 30, 1996.
No cash dividends were paid during the fiscal years ended June 30, 1996
and June 30, 1995. IFR's Board of Directors will review the appropriateness
of future dividend payments based on IFR's cash requirements and performance.
ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is incorporated herein by reference
from the "Performance Highlights" contained on the inside front cover of
IFR's annual report to shareholders for the year ended June 30, 1996.
4
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information required by Item 7 is incorporated herein by reference from
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" contained on pages 9 through 11 of the IFR's annual report to
shareholders for the year ended June 30, 1996.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of IFR, included at pages
12 through 23 in IFR's annual report to shareholders for the year ended June 30,
1996, are incorporated herein by reference:
Consolidated Balance Sheets as of June 30, 1996 and 1995.
Consolidated Statements of Income for the years ended June 30, 1996, 1995,
and 1994.
Consolidated Statements of Shareholders' Equity for the years ended June
30, 1996, 1995, and 1994.
Consolidated Statements of Cash Flows for the years ended June 30, 1996,
1995, and 1994.
Notes to Consolidated Financial Statements.
Report of Independent Auditors
The supplementary financial information required by Item 8 is incorporated
herein by reference from "Quarterly Financial Data" contained on page 9 of IFR's
annual report to shareholders for the year ended June 30, 1996.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The names and ages of all executive officers of IFR and all positions and
offices held by each of them are as follows:
Name and Age Position
------------ --------
Alfred H. Hunt, III, 60 Vice Chairman, President and
Chief Executive Officer
Friedel E. Arnold, 59 Vice President and General Manager
Jeffrey A. Bloomer, 39 Treasurer and Chief Financial Officer
Iain M. Robertson, 55 President, Photon Kinetics, Inc.
Managing Director, York Technology Ltd.
Each of said officers serves for a term of one year or until his successor
has been duly elected by the Board of Directors. There are no family
relationships between said officers and/or any director of the
5
Company, and there are no arrangements or understandings between any officer and
any other person pursuant to which he was elected as an officer.
The business experience during the last five years of each of said
executive officers of the IFR is as follows:
Alfred H. Hunt, III has been President and Chief Executive Officer of IFR
since 1983. He became Vice Chairman of IFR in 1990. He was the Vice
President and General Manager of IFR from 1971 through 1983.
Friedel E. Arnold has been the General Manager of IFR since January 1995
and the Vice President since January 1996. During the period 1987 through
1994 he was the President of Dorne and Margolin, an aerospace manufacturing
company.
Jeffrey A. Bloomer has been the Treasurer and Chief Financial Officer of
IFR since November, 1995. He held the position of Director of Finance with
IFR from 1994 through 1995. During the period 1989 through 1993 he was
General Manager of Pawnee Industries, Inc. a plastics manufacturing
company.
Iain M. Robertson has been President of Photon Kinetics, Inc. and Managing
Director of York Technology Ltd. since July, 1995. During the period 1992
through 1995 he was a consultant and President of York Ltd. York Ltd. was
the parent corporation of York Technology Ltd., prior to the purchase by
IFR.
The other information required by Item 10, concerning directors of IFR, is
incorporated herein by reference from "Election of Directors" contained in IFR's
proxy statement for the November 7, 1996 annual meeting of shareholders.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated herein by reference
from "Election of Directors" and "Compensation of Executive Officers"
contained in IFR's proxy statement for the November 7, 1996 annual meeting of
shareholders.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated herein by reference
from "Outstanding Shares" and "Election of Directors" contained in IFR's proxy
statement for the November 7, 1996 annual meeting of shareholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by Item 13 is incorporated herein by reference
from "Certain Relationships" contained in IFR's proxy statement for the November
7, 1996 annual meeting of shareholders.
6
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) The following financial statements of IFR, included in IFR's annual
report to shareholders for the year ended June 30, 1996, are incorporated by
reference in Item 8 of this report:
Consolidated Balance Sheets as of June 30, 1996 and 1995
Consolidated Statements of Income for the years ended June 30, 1996, 1995,
and 1994
Consolidated Statements of Shareholders' Equity for the years ended June
30, 1996, 1995, and 1994
Consolidated Statements of Cash Flows for the years ended June 30, 1996,
1995, and 1994
Notes to Consolidated Financial Statements
Report of Independent Auditors
(a)(2) The supplementary financial information included in IFR's annual
report to shareholders for the year ended June 30, 1996 under the caption
"Quarterly Financial Data" is incorporated by reference in Item 8 of this
report. The following financial statement schedules of IFR are included in this
report in response to Item 14(d):
Schedule II--Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting
regulations of the Commission are not required under the related instructions or
are inapplicable, and therefore have been omitted.
(a)(3) See Exhibit Index
(b) No Form 8-K was filed during the fourth quarter of the fiscal year
ended June 30, 1996.
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
IFR Systems, Inc.
(Registrant)
Date: September 23, 1996 By /s/ Alfred H. Hunt, III
------------------------------------
Alfred H. Hunt, III
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Date: September 23, 1996 By /s/ Alfred H. Hunt, III
-------------------------------------------
Alfred H. Hunt, III,
Director, President, and Chief
Executive Officer (Principal Executive Officer)
Date: September 23, 1996 By /s/ Ralph R. Whitney, Jr.
-------------------------------------------
Ralph R. Whitney, Jr.,
Chairman of the Board of Directors
Date: September 23, 1996 By /s/ Wilton W. Cogswell, III
-------------------------------------------
Wilton W. Cogswell, III,
Director
Date: September 23, 1996 By /s/ Donald L. Graf
-------------------------------------------
Donald L. Graf,
Director
Date: September 23, 1996 By /s/ Paul E. Reinken
-------------------------------------------
Paul E. Reinken,
Director
Date: September 23, 1996 By /s/ John V. Grose
-------------------------------------------
John V. Grose
Director
Date: September 23, 1996 By /s/ Oscar L. Tang
-------------------------------------------
Oscar L. Tang,
Director
Date: September 23, 1996 By /s/ Jeffrey A. Bloomer
-------------------------------------------
Jeffrey A. Bloomer
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer)
8
EXHIBIT INDEX
Sequentially
Exhibit No. Description of Exhibit Numbered Page
- ----------- ---------------------- -------------
3.1 Certificate of Amendment of Certificate of *
Incorporation of IFR Systems, Inc. (the "Company")
dated February 27, 1989. (Incorporated by
reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended June 30,
1989, File No. 0-14224).
3.2 Certificate of Amendment of Certificate of Incorporation *
of the Company dated January 15, 1987.
(Incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year
ended June 30, 1987, File No. 0-14224).
3.3 Certificate of Incorporation of the Company. (Incorporated *
by reference to Exhibit 3.1 to the company's
Registration Statement on Form S-1 filed December 12,
1985, Reg. No. 33-2122).
3.4 By-Laws of the Company. (Incorporated by reference to *
Exhibit 3.3 to the Company's Annual Report on Form
10-K for the year ended June 30, 1987, File No. 0-
14224).
3.5 Amendment to By-Laws of the Company adopted *
January 26, 1990. (Incorporated by reference to
Exhibit 3.5 to the Company's Annual Report on Form
10-K for the year ended June 30, 1990, File No. 0-
14224).
4.1 Specimen certificate representing common stock of the *
Company. (Incorporated by reference to Exhibit 4.1 to
Amendment No. 2 to the Company's Registration
Statement on Form S-1 filed January 17, 1986, Reg. No
33-2122).
4.2 Article II of the Certificate of Incorporation of the *
Company, as amended by the Certificate of Amendment
of Certificate of Incorporation of the Company dated
January 15, 1987. (Included in Exhibit 3.2).
4.3 Articles I, III, and VII of the Certificate of *
Incorporation of the Company, (Included in Exhibits
3.1 and 3.3).
4.4 Articles 2, 3, and 5 of the By-Laws of the Company. *
(Included in Exhibit 3.4).
4.5 Rights Agreement between the Company and *
Harris Trust & Savings Bank dated as of February 28,
1989. (Incorporated by reference to Exhibit 4.5 to
the Company's Annual Report on Form 10-K for the year
ended June 30, 1989, File No. 0-14224).
4.6 Form of Rights Certificate of the Company. *
(Included in Exhibit 4.5).
9
Sequentially
Exhibit No. Description of Exhibit Numbered Page
- ----------- ---------------------- -------------
4.7 IFR Systems, Inc. 1992 Nonqualified Stock Option *
Plan (Incorporated by reference to Exhibit 4(a) to
the Company's Registration Statement on Form S-8
filed January 8, 1993, Reg. No. 33-56862).
4.8 Form of Option Agreement for IFR Systems, Inc. 1992 *
Nonquailified Stock Option Plan (Incorporated by
reference to Exhibit 4(b) to the Company's
Registration Statement on Form S-8 filed January 8,
1993, Reg. No. 33-56862).
10.1 Description of Incentive Bonus Plan for Management
of the Company. (Incorporated by reference from page
8 of the 1996 Proxy Statement as filed on September
23, 1996, File No. 0-14224).
10.2 Amended Incentive Stock Option Plan of the Company *
(Incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the year
ended June 30, 1987, File No. 0-14224).
10.3 Form of Termination Agreement between the Company
and Alfred H. Hunt, III.
10.4 Form of Termination Agreement between the Company
and Friedel E. Arnold.
10.5 IFR Systems, Inc. Employees' Profit Sharing Plan *
(Incorporated by reference to Exhibit 10.4 to the
Company's Annual Report on Form 10-K for the year
ended June 30, 1990, File No. 0-14224).
10.6 Amended and Restated Trust Agreement IFR Systems, Inc. *
Employee's Profit Sharing Plan. (Incorporated by
reference to Exhibit 10.5 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1990,
File No. 0-14224).
10.7 Restricted Stock Grant Plan of the Company. (Incorporated *
by reference to Exhibit 10.6 to the Company's Annual
Report on Form 10-K for the Year ended June 30, 1989,
File No. 0-14224).
10.8 1988 Incentive Stock Option Plan of the Company. *
(Incorporated by reference to Exhibit 10.7 to the
company's Annual Report on Form 10-K for the year
ended June 30, 1989, File No. 0-14224).
10.9 1996 Incentive Stock Option Plan of the Company
(Incorporated by reference from Exhibit A of the 1996
Proxy Statement as filed on September 23, 1996, File
No. 0-14224)
10
Sequentially
Exhibit No. Description of Exhibit Numbered Page
- ----------- ---------------------- -------------
10.10 Form of Indemnity Agreement entered into between *
the Company and its directors and certain of its
officers as of February 27, 1989. (Incorporated by
reference to Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1989,
File No. 0-14224).
10.11 Lease between the Company and the City of Goddard, *
Kansas dated as of May 1, 1989. (Incorporated by
reference to Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1989,
File No. 0-14224).
10.12 Guaranty Agreement between the Company and BANK IV *
Wichita, National Association, dated as of May 1,
1989. (Incorporated by reference to Exhibit 10.10 to
the Company's Annual Report on Form 10-K for the year
ended June 30, 1989, File No. 0-14224).
10.13 IFR Systems, Inc. Outside Director Compensation, Stock *
Option, and Retirement Plan. (Incorporated by
reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1990,
File No. 0-14224).
11.0 Statement re: computation of per share earnings.
13.0 The Company's 1996 Annual Report to Shareholders.
23.0 Consent of Ernst & Young LLP
27.0 Financial Data Schedule
* Document has been previously filed with the Securities and Exchange
Commission and is incorporated herein by reference and made a part hereof.
11
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
- ------------------------------------------------------------------------------------------------------------------------------------
COL. A COL. B COL C. COL. D COL. E
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at Beginning Charged to Costs Charged to Other Balance at End
DESCRIPTION of Period and Expenses Accounts--Describe Deductions--Describe (1) of Year
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended June 30,1996:
Allowance for doubtful accounts
(deducted in balance sheet from
accounts receivable) $472,381 $106,547 -- $148,004 $430,924
Year ended June 30,1995:
Allowance for doubtful accounts
(deducted in balance sheet from
accounts receivable) $240,722 $280,000 -- $48,341 $472,381
Year ended June 30,1994:
Allowance for doubtful accounts
(deducted in balance sheet from
accounts receivable) 355,222 85,000 -- 199,500 240,722
Note 1: Uncollectible accounts receivable charged off, less recoveries.
IFR SYSTEMS, INC.
EXHIBIT (11.0) - STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
1996 1995 1994
---------- ---------- ----------
(000's omitted, except per share data)
PRIMARY:
Average shares outstanding 5,496 5,314 5,237
Net effect of dilutive stock
options-based on the treasury
stock method using average
market price 155 142 56
---------- ---------- ----------
Totals 5,651 5,456 5,293
---------- ---------- ----------
---------- ---------- ----------
Net Income $ 4,761 $ 2,251 $ 987
---------- ---------- ----------
---------- ---------- ----------
Per Share Amount $ 0.84 $ 0.41 $ 0.19
---------- ---------- ----------
---------- ---------- ----------
FULLY DILUTED:
Average shares outstanding 5,496 5,314 5,237
Net effect of dilutive stock
options-based on the treasury
stock method using the period-
end market price, if greater
than average market price 177 212 56
Assumed conversion of 10%
convertible notes 13 119 153
---------- ---------- ----------
Totals 5,686 5,645 5,446
---------- ---------- ----------
---------- ---------- ----------
Net Income $ 4,761 $ 2,251 $ 987
Add 10% convertible note interest,
net of federal income tax effect 7 58 81
---------- ---------- ----------
Totals $ 4,768 $ 2,309 $ 1,068
---------- ---------- ----------
---------- ---------- ----------
Per Share Amount $ 0.84 $ 0.41 $ 0.20
---------- ---------- ----------
---------- ---------- ----------
Note: Average shares outstanding used for Net Income Per Share included in
the Company's financial statements do not reflect the effect of the
stock options granted or convertible notes since their aggregate
effect is less than 3%.