ESSEX CORPORATION
FORM 10-QSB/A NO. 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 2001
Commission File Number 0-10772
ESSEX CORPORATION
(Exact name of small business issuer as specified in its charter)
Virginia 54-0846569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9150 Guilford Road, Columbia, Maryland 21046
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (301) 939-7000
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
----- -----
State the number of shares outstanding of each of the issuer's class of Common
Stock as of the latest practicable date.
OUTSTANDING
CLASS AT APRIL 27, 2001
----- -----------------
Common Stock, no par value per share 4,700,361
Transitional Small Business Disclosure Format (Check One);
YES NO X
----- -----
ESSEX CORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim financial statements are unaudited but, in the opinion of
management, reflect all adjustments for a fair presentation of results for such
period. The results of operations for any interim period are not necessarily
indicative of results for the full year. These financial statements should be
read in conjunction with the financial statements and notes thereto contained in
the Company's Annual Report on Form 10-KSB/A No. 2 for the fiscal year ended
December 31, 2000.
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ESSEX CORPORATION
BALANCE SHEETS
April 1, December 31,
2001 2000
-------------------- --------------------
(unaudited) (audited)
ASSETS
CURRENT ASSETS
Cash $ 725,667 $ 1,015,634
Accounts receivable, net 132,843 165,614
Inventory 58,770 49,857
Prepayments and other 59,645 33,433
-------------------- --------------------
976,925 1,264,538
-------------------- --------------------
PROPERTY AND EQUIPMENT
Computers and special equipment 987,625 737,980
Furniture, equipment and other 237,770 225,508
-------------------- --------------------
1,225,395 963,488
Accumulated depreciation and amortization (867,561) (863,254)
-------------------- --------------------
357,834 100,234
-------------------- --------------------
OTHER ASSETS
Patents, net 166,066 158,100
Other 77,561 96,461
-------------------- --------------------
243,627 254,561
-------------------- --------------------
TOTAL ASSETS $ 1,578,386 $ 1,619,333
------------
==================== ====================
The accompanying notes are an integral part of these statements.
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ESSEX CORPORATION
BALANCE SHEETS
April 1, December 31,
2001 2000
-------------------- --------------------
(unaudited) (audited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 159,236 $ 131,934
Accrued wages and vacation 168,981 184,489
Capital leases 132,034 22,622
Other accrued expenses 78,030 81,748
Accrued lease settlement -- 107,766
-------------------- --------------------
538,281 528,559
LONG-TERM DEBT
Capital leases, net of current portion 113,401 --
-------------------- --------------------
Total Liabilities 651,682 528,559
-------------------- --------------------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
STOCKHOLDERS' EQUITY
Common stock, no par value; 25 million shares
authorized; 4,695,361 and 4,570,361 shares
issued and outstanding, respectively 7,030,320 6,496,320
Convertible preferred stock, $0.01 par value;
1 million total shares authorized; 500,000 shares
of Series B authorized, 375,000 and
312,500 shares outstanding, respectively 1,500,000 1,250,000
Additional paid-in capital 1,500,000 1,250,000
Accumulated deficit (9,103,616) (7,905,546)
-------------------- --------------------
926,704 1,090,774
-------------------- --------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,578,386 $ 1,619,333
==================== ====================
The accompanying notes are an integral part of these statements.
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ESSEX CORPORATION
STATEMENTS OF OPERATIONS
FOR THE THIRTEEN WEEK PERIODS
ENDED APRIL 1, 2001 AND MARCH 26, 2000
2001 2000
---------------------- ----------------------
(unaudited) (unaudited)
Revenues $ 412,828 $ 975,423
Costs of goods sold and services provided (198,953) (401,074)
Research and development (581,576) (117,167)
Selling, general and administrative expenses (586,063) (457,586)
---------------------- ----------------------
Operating Loss (953,764) (404)
Interest income (expense), net and debenture
financing amortization 5,694 (8,209)
---------------------- ----------------------
Loss Before Income Taxes (948,070) (8,613)
Provision for income taxes -- --
---------------------- ----------------------
Net Loss (948,070) (8,613)
Beneficial conversion feature of convertible
preferred stock (250,000) --
---------------------- ----------------------
Net Loss Attributable to Common Stockholders $ (1,198,070) $ (8,613)
====================== ======================
Weighted Average Number of Shares Outstanding 5,873,932 4,397,861
====================== ======================
Basic Loss Per Common Share $ (0.20) $ (0.00)
====================== ======================
Diluted Loss Per Common Share $ (0.20) $ (0.00)
====================== ======================
The accompanying notes are an integral part of these statements.
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ESSEX CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE THIRTEEN WEEK PERIODS
ENDED APRIL 1, 2001 AND MARCH 26, 2000
2001 2000
------------------------ ----------------------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (948,070) $ (8,613)
Adjustments to reconcile Net Loss to
Net Cash (Used In) Provided By Operating
Activities:
Depreciation and amortization 53,436 13,274
Gain on sale/retirement of fixed assets -- (4,986)
Stock option compensation expense 34,000 --
Change in Assets and Liabilities:
Accounts receivable 32,771 141,160
Inventory (8,913) (4,643)
Prepayments and other assets (26,212) (2,206)
Accounts Payable 27,302 50,188
Accrued lease settlement (107,766) --
Other Liabilities (42,012) 78,193
------------------------ ----------------------
Net Cash (Used In) Provided By Operating
Activities
(985,464) 262,367
------------------------ ----------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (36,800) --
Proceeds from sale of fixed assets -- 4,986
------------------------ ----------------------
Net Cash (Used In) Provided By Investing
Activities
(36,800) 4,986
------------------------ ----------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Sale of preferred stock 250,000 --
Sales of common stock 500,000 --
Short-term repayments (borrowings), net -- (38,093)
Payment of capital lease obligations (17,703) (10,561)
------------------------ ----------------------
Net Cash Provided By (Used In) Financing
Activities
732,297 (48,654)
------------------------ ----------------------
CASH AND CASH EQUIVALENTS
Net (decrease) increase (289,967) 218,699
Balance - beginning of period 1,015,634 502,663
------------------------ ----------------------
Balance - end of period $ 725,667 $ 721,362
======================== ======================
The accompanying notes are an integral part of these statements.
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ESSEX CORPORATION
NOTES TO INTERIM FINANCIAL INFORMATION
NOTE 1: General
FISCAL YEAR AND PRESENTATION
Essex Corporation (the "Company") is on a 52/53-week fiscal year ending the last
Sunday in December. Year 2000 was a 53-week fiscal year. Year 2001 is a 52-week
fiscal year. Certain amounts for 2000 have been reclassified to conform to the
2001 presentation.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Estimates are used when accounting for uncollectible accounts receivable,
inventory obsolescence and valuation, depreciation and amortization, intangible
assets, employee benefit plans and contingencies, among others. Actual results
could differ from those estimates.
IMPORTANT BUSINESS RISK FACTORS
The Company has historically been principally a supplier of technical services
under contracts or subcontracts with departments or agencies of the U.S.
Government, primarily the military services and other departments and agencies
of the Department of Defense. In recent years, the Company's revenues had been
principally from a commercial customer in the satellite communications business
area. This work substantially ended in December 1999 and limited other satellite
communications work has continued.
The Company has expended significant funds to transition into the commercial
marketplace, particularly the productization of its proprietary technologies in
optoelectronic processors. In June 2000, the Company announced that it had filed
applications to secure patent protection for innovative technologies in two
communications device families: Fiberoptic HyperFine Wavelength Division
Multiplex channelizers (HfWDM) and Optical Processor Enhanced Receiver
Architecture (OPERA). In September 2000, the Company obtained $2 million in
financing from an Investor Group to advance its programs to capitalize upon
these inventions. In March 2001, the Company received a commitment for an
additional $2 million in financing from the same Investor Group, of which
$500,000 has been received.
The Company incurred significant losses in the first quarter of 2001, primarily
due to the increased expenditures for development of its optoelectronics
products and services, particularly the optical telecommunications device
technologies. The Company plans to continue research and development spending in
2001 in the optoelectronics operations. The long-term success of the Company in
these areas is dependent on its ability to successfully develop and market
products related to its communications devices and optoelectronic processors.
The success of these efforts is subject to changing technologies, availability
of additional financing, competition and ultimately market acceptance.
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ESSEX CORPORATION
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred. Such costs include
direct labor and materials as well as a reasonable allocation of indirect costs.
However, no general and administrative costs are included. Equipment which has
alternative future uses is capitalized and charged to expense over its estimated
useful life.
NOTE 2: Basic and Diluted Earnings (Loss) Per Share
Basic earnings (loss) per common share are computed using the weighted average
number of common shares outstanding during the period and common shares issuable
upon the required conversion of preferred stock. Diluted earnings per common
share would incorporate the incremental shares issuable upon the assumed
exercise of stock options and warrants. Such incremental shares were anti
dilutive for the periods presented.
NOTE 3: Accounts Receivable Financing
The Company has a working capital financing agreement with an accounts
receivable factoring organization. Under such an agreement, the factoring
organization may purchase certain of the Company's accounts receivable subject
to full recourse against the Company in the case of nonpayment by the customers.
The Company generally receives 85%-90% of the invoice amount at the time of
purchase and the balance when the invoice is paid. The Company is charged an
interest fee and other processing charges, payable at the time each invoice is
paid. There were no funds advanced as of April 1, 2001 or December 31, 2000.
NOTE 4: Commitments and Contingencies
In early 2001, the Company entered into several capital leases for special
optical test and telephone equipment. The capital equipment cost of these leases
is approximately $250,000 and the lease terms are 2-3 years.
NOTE 5: Common Stock; Warrants; Preferred Stock
The Company's Articles of Incorporation authorize 1 million shares of preferred
stock, par value $0.01 per share, the series and rights of which may be
designated by the Board of Directors in accordance with applicable state and
federal law. In September 2000, the Board designated 500,000 shares of such
preferred stock as Series B. There were 312,500 shares of Series B issued in
2000 for $1,250,000 and an additional 62,500 shares issued in 2001 for $250,000
to the Investor Group. The remaining 125,000 shares are subscribed for by the
Investor Group at $500,000 which will be paid in equal installments in June and
September 2001. Each Series B share must be converted into 4 shares of common
stock before September 12, 2002. The Series B has 51% voting rights, subject to
certain terms and conditions, on all stockholder matters. No Series A preferred
shares are currently outstanding.
In connection with the issuance of the preferred stock, the Company also issued
common stock warrants to the preferred stock holders. These warrants are for an
additional 2 million shares of common stock. The warrants have a term of 5 years
and can be exercised at a nominal price. The warrants become exercisable under
certain terms and conditions, such as the market price of the common stock
exceeding $10 through $20 per share for 5 consecutive days, or the
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ESSEX CORPORATION
occurrence of an additional private placement of $10 million where the valuation
of the Company exceeds $50 million. The warrants would also become exercisable
upon a sale of all or substantially all of the assets of the Company or a merger
or acquisition of the Company. The Company has determined that the warrants had
a nominal fair value at issuance due to the restrictive covenants. The Company
has reserved 4 million shares of common stock in connection with the convertible
preferred stock and the possible exercise of the related common stock warrants.
In accordance with Emerging Issues Task Force Issue No. 98-5 "Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios", the Company has imputed and recorded a deemed
dividend of $1,500,000 on its Series B Preferred Stock equal to the difference
between the estimated current market price at original date of issuance and the
conversion price (the "beneficial conversion feature"). There remains an
additional $500,000 of beneficial conversion feature to be recorded as a deemed
dividend when the remaining preferred stock is issued. Such imputed dividends
have no impact on net income (loss) from operations or cash flows but have to be
considered when calculating earnings (loss) per share attributable to common
stockholders.
In March 2001, the Company closed on a private placement funding transaction
with the same Investor Group. Under the terms of the funding, the Company
received $500,000 immediately and will receive payments of $500,000 in June,
August and October 2001. The Company will issue 500,000 shares in total of its
common stock in connection with this transaction.
NOTE 6: Income Taxes
The Company is in a net operating loss (NOL) carryforward position for book and
tax purposes. No tax benefit will be recognized until taxable income is
realized.
NOTE 7: Statements of Cash Flows - Supplemental Disclosure
In 2001, the Company entered into capital leases for new equipment for $241,000.
There were no new capital leases entered into in the first quarter of 2000.
NOTE 8: Restatement of Certain 2000 Financial Data
The Company has restated components of stockholders' equity to reflect the
effect of the beneficial conversion feature of the Series B Convertible
Preferred Stock, by increasing Additional Paid-In Capital to $1,250,000 from $0
and changing Accumulated Deficit by a like amount, from $(6,655,546) to
$(7,905,546). There was no change to total stockholders' equity of $1,090,774.
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ESSEX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND OTHER SECTIONS
CONTAIN FORWARD-LOOKING STATEMENTS THAT ARE BASED ON MANAGEMENT'S EXPECTATIONS,
ESTIMATES, PROJECTIONS AND ASSUMPTIONS. WORDS SUCH AS "EXPECTS", "ANTICIPATES",
"PLANS", "BELIEVES", "ESTIMATES" AND VARIATIONS OF SUCH WORDS AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS THAT
INCLUDE, BUT ARE NOT LIMITED TO, PROJECTIONS OF REVENUES, EARNINGS, SEGMENT
PERFORMANCE, CASH FLOWS AND CONTRACT AWARDS. SUCH FORWARD-LOOKING STATEMENTS ARE
MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE
AND INVOLVE CERTAIN RISKS AND UNCERTAINTIES THAT ARE DIFFICULT TO PREDICT.
THEREFORE, ACTUAL FUTURE RESULTS AND TRENDS MAY DIFFER MATERIALLY FROM WHAT IS
INDICATED IN FORWARD-LOOKING STATEMENTS DUE TO A VARIETY OF FACTORS.
STATUS
The Company's business is focused increasingly upon applications of its
proprietary optoelectronics technology and products.
In September 2000 the Company closed on a private placement funding transaction
with GEF Optical Investment Company, LLC and Networking Ventures L.L.C.
(together, the "Investor Group"). Under the terms of the funding, the Company
has received $1,500,000 and will receive another $500,000 in 2001. The Investor
Group received preferred stock that is convertible into 1,500,000 shares of
common stock. Additional preferred stock convertible into another 500,000 common
shares will be issued as payments are made. The Investor Group was also issued
warrants for an additional 2 million shares of common stock. The warrants can be
exercised for a nominal price under certain terms and conditions. In December
2000 the Company received a separate investment of $400,000 from the Investor
Group through the purchase of Common Stock. In March 2001, the Company received
a commitment for an additional $2 million in financing from the same Investor
Group. The Company received $500,000 in March and will receive payments of
$500,000 in June, August and October of 2001. See Note 5 of Notes to Financial
Statements for further details.
The Company's primary use of the funds is to patent, develop and commercialize
its key leading-edge optical technologies, principally the fiberoptic HyperFine
Wavelength Division Multiplex channelizers (HfWDM) and wireless Optical
Processor Enhanced Receiver Architecture (OPERA). The Company began the internal
work to support patent filings and the related development work on the
technology devices during the third quarter of 2000. The purpose of the HfWDM is
to increase the number of usable communications channels within a single optical
fiber. The purpose of the OPERA is to increase capacity and improve voice and
data quality of wireless systems. These inventions arose from the Company's work
and expertise in the optical devices and communications fields.
The Company has a working laboratory model of the HfWDM which is being
demonstrated to prospective strategic partners and investors. The Company
expects that prototype units of its HyperFine family of devices will be
available for evaluation by customers beginning in mid-summer 2001. The Company
is developing simulations of its OPERA wireless receiver device technology and
is undertaking to determine the various market entry points for such device
technology. The Company is also having discussions with various established
commercial entities
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ESSEX CORPORATION
that are in the wireless communications market in order to determine the best
commercial applications of such technology.
The development of these devices has required a diversion of labor resources
from revenue generation since mid 2000 and is expected to continue to do so for
the remainder of 2001. The Company has begun to hire additional personnel to
augment existing technical staff. Since the Company is investing the new capital
in such research and development, the financial statements reflect higher than
normal expenses which increase the Company's reported losses.
Because of the emphasis on development, the Company has been unable to maintain
programs of sufficient volume and to expand such work to consistently achieve an
overall breakeven or better level of operations on such revenues. Work based on
the patented ImSyn(TM) Processor continues on application contracts for U.S.
Government customers for the development of advanced synthetic aperture radar
(SAR) techniques. The remaining value of these contracts is approximately
$740,000. The Company received $1.4 million in new contract awards in April 2001
from the Department of Defense. The largest contract, for $1 million for work to
be performed in 2001, is to apply improvements made to ImSyn(TM) optoelectronic
processors for high speed image processing.
The Company is working to reduce the deficit from operations and to improve its
cash flows. Backlog and order issues will continue to be major concerns until
substantial improvements realized from customer funded development programs have
been achieved. The Company has established significant reserves against its
ImSyn(TM) inventory for such changes and delays in the introduction of these
first units.
REVENUES
Revenues were $413,000 and $975,000 for the first quarters of 2001 and 2000,
respectively. The first quarter 2000 revenues include approximately $148,000 for
recovery of excess indirect costs on a government contract completed in 1994.
There was no such cost recovery in the first quarter of 2001. Without this
recovery, first quarter 2000 revenues would have been $827,000. Revenues in the
first quarter of 2001 were therefore 50% lower than the first quarter of 2000.
The decline in revenues was due to the diversion of labor resources to
continuing development work and the delay in receipt of new contract awards
until April 2001.
As of April 1, 2001, the Company had a backlog on programs related to services
and applications of optoelectronics of approximately $1,943,000, up from
$997,000 at December 31, 2000. The Company had no firm orders for ImSyn(TM)
units as of the date of this report.
INCOME (LOSS)
There was an operating loss of $954,000 and $400 in the first quarters of 2001
and 2000, respectively. There was a net loss of $948,000 and $9,000 in the first
quarters of 2001 and 2000, respectively. Without the approximately $148,000
recovery of excess costs on a previously completed contract, the first quarter
2000 operating and net losses would have been larger by this amount. Cost of
goods sold and services provided as a percentage of revenues (excluding revenue
from recovery of prior year excess costs) for the first quarter of 2001 was
48.2%, which was slightly lower than the 48.5% in 2000.
Research and development (R&D) increased in 2001 to approximately $582,000 from
approximately $117,000 in 2000. In 2001, the majority of the R&D costs were
incurred on efforts
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ESSEX CORPORATION
related to optical telecommunications technology. In 2000, the majority of the
expenditures were on ImSyn development. The Company has greatly increased its
R&D spending since the September 2000 capital infusion and expects to continue
its increased R&D spending in the optical and telecommunications areas in 2001.
The Company has increased selling, general and administrative expenses ("SG&A"),
particularly as related to optoelectronics and telecommunications new device
business areas. Overall, SG&A expenses remain high relative to the revenue
volume as the Company seeks to commercialize its optoelectronic
telecommunications products and services. The high SG&A expenses contributed to
the operating losses in the first quarters of 2001 and 2000.
CORPORATE MATTERS
In 2001, the Company netted $6,000 of interest income, primarily from the
temporary investment of funds from the private placements. Total interest
expense and debenture financing amortization costs were $8,000 in the first
quarter of 2000.
The Company is in a net operating loss (NOL) carryforward position. No provision
or benefit from income taxes was recognized in the first quarters of 2001 or
2000.
FINANCIAL CONDITION - LIQUIDITY AND CAPITAL RESOURCES
The Company evaluates its liquidity position using various factors. The
following represents some of the more important factors:
SELECTED FINANCIAL DATA ($ Thousands)
AS OF
---------------------------------------------------------------------
April 1, December 31, March 26,
2001 2000 2000
-------------------- -------------------- --------------------
(unaudited) (audited) (unaudited)
Total Assets $ 1,578 $ 1,619 $ 1,680
==================== ==================== ====================
Working Capital $ 439 $ 736 $ 390
==================== ==================== ====================
Current Ratio 1.81:1 2.39:1 1.36:1
==================== ==================== ====================
Advance from Accounts Receivable
Financing $ -- $ -- $ 21
Convertible Debentures -- -- 376
Capital Leases 245 23 13
-------------------- -------------------- --------------------
Total Debt/Financing $ 245 $ 23 $ 410
==================== ==================== ====================
Stockholders' Equity $ 927 $ 1,091 $ 601
==================== ==================== ====================
In late 2000, the Company received $1,250,000 of a $2 million commitment from
the private placement sale of 312,500 shares of Series B Preferred Stock to the
Investor Group. In the first quarter of 2001, the Company received $250,000 from
this commitment. The Company will receive the remaining $500,000 from equal
payments in June and September 2001 in exchange for
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ESSEX CORPORATION
an additional 125,000 shares of Series B Preferred Stock. The funds are to be
used primarily for the development of the optical telecommunications device
technologies.
The Company paid off the $376,000 of Convertible Debentures in November 2000. In
December 2000, the Company received proceeds of $400,000 from the sale of
160,000 shares of common stock to the Investor Group.
In March 2001, the Company negotiated an additional investment of $2 million
with the Investor Group. The additional investment is structured as a private
placement of 500,000 shares of Essex common stock. The funds will be received in
four equal installments during 2001 and the first payment was received in March
2001. The proceeds will primarily be used to expand development in the Company's
optoelectronic telecommunications device technologies.
The Company incurred significant losses in the first quarter of 2001, primarily
due to the increased expenditures for development of its optoelectronics
products and services, particularly the optical telecommunications device
technologies. The Company plans to continue research and development spending in
2001 in the optoelectronics operations.
The Company is seeking to establish joint ventures or strategic partnerships
including licensing of its technologies to major industrial concerns to
facilitate these goals. The Company may also seek additional funds under
appropriate terms from private sources, including the Investor Group, to
continue to finance development and to achieve initial market penetration.
Significant delays in the commercialization of the Company's optoelectronic
products, failure to market such products or failure to raise substantial
additional working capital would have a significant adverse effect on the
Company's future operating results and future financial position.
The Company has a working capital financing arrangement with an accounts
receivable factoring organization. Under such an agreement, the factoring
organization may purchase certain of the Company's accounts receivable subject
to full recourse against the Company in the case of nonpayment by the customers.
The Company generally receives 85%-90% of the invoice amount at the time of
purchase and the balance when the invoice is paid. The Company is charged an
interest fee and other processing charges, payable at the time each invoice is
paid. There were no funds advanced as of April 1, 2001 or December 31, 2000.
The Company believes that it will be able to meet its 2001 funding requirements
and obligations from the aforementioned sources of revenue and capital, and if
necessary, by cost reductions. However, there can be no assurances in this
regard and the Company expects that it will need significant additional
financing in the future.
THE PRECEDING PARAGRAPHS DISCUSSING THE COMPANY'S FINANCIAL CONDITION CONTAIN
FORWARD-LOOKING STATEMENTS. THE FACTORS AFFECTING THE ABILITY OF THE COMPANY TO
MEET ITS FUNDING REQUIREMENTS AND MANAGE ITS CASH RESOURCES INCLUDE, AMONG OTHER
THINGS, THE AMOUNT AND TIMING OF PRODUCT SALES, INVENTORY TURNOVER, THE
MAGNITUDE OF FIXED COSTS AND THE ABILITY TO OBTAIN WORKING CAPITAL, ALL OF WHICH
INVOLVE RISKS AND UNCERTAINTIES THAT ARE DIFFICULT TO PREDICT.
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ESSEX CORPORATION
PART II - OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
SIGNATURE
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ESSEX CORPORATION
(Registrant)
Date: August 22, 2001
/s/ Joseph R. Kurry, Jr.
--------------------------------------
Joseph R. Kurry, Jr.
Senior Vice President
Treasurer and Chief Financial Officer
(Mr. Kurry is the Principal Financial and Accounting Officer and has been duly
authorized to sign on behalf of the Registrant.)
14