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SEC Filings
10-Q
ARGON ST, INC. filed this Form 10-Q on 06/13/1995
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                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   April 30, 1995

Note A - Basis of Presentation

       The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) that are, in the opinion of management, necessary for a fair
presentation of the results of operations, financial position and cash flows
for the periods presented.  The accompanying unaudited financial statements
have been prepared in accordance with the instructions to Form 10-Q and,
therefore, do not include all information necessary to be in conformity with
generally accepted accounting principles. 

       Reference is made to the Notes to Consolidated Financial Statements in
the Annual Report to Stockholders for the year ended July 31, 1994.
 
       The results of operations for the nine and three months ended April 30,
1995 are not necessarily indicative of the results to be expected for the full
year. 

Note B - Revenue Recognition

       Effective  August 1, 1993, the Company changed from completed component
to cost incurred as a percentage of the total estimated cost as the method for
determining percentage completion for revenue recognition on standard product
contracts.  The Company believes that, due to the increased complexity of its
standard product contracts,percentage-of-completion, based on cost incurred as
a percentage of total estimated cost, provides a better matching of revenue
and earnings with the related economic activity of the Company.

       The cumulative effect of this accounting change at August 1, 1993
reduced the loss by $22,187 or $.04 per share for the nine months ended April
30, 1994. 

Note C - Unbilled Accounts Receivable

       Unbilled accounts receivable represent the revenue recognized pursuant
to standard system contracts and customer-funded product development contracts
using the percentage-of-completion method but which are not yet billable under
the terms of the contract.  These amounts are billable based on contract terms
either upon shipment of the items, presentations of invoices, or completion of
the contract.  The cost of such revenue is determined generally by separate
job cost accounts and involves no deferral of cost.  If the estimated  total
costs on any contract indicate a loss, the entire amount of the estimated loss
is recognized immediately (see Note B).

Note D - Inventories

       Inventory includes work-in-process of approximately $770,000 and
$518,000 as of April 30, 1995 and July 31, 1994, respectively.  The remaining
inventory consists of parts and subassemblies, both purchased and
manufactured, that could be used in the manufacturing process or sold as spare
parts.

Note E - Property and Equipment

       Property and equipment is stated at cost.  Property and equipment is
depreciated over the useful life by the straight-line method for financial
reporting purposes.  Machinery and equipment includes construction-in-
progress, relating to a multispectral scanner, at July 31, 1994 in the
 amount of approximately $143,000.

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