Navy Ends Suspension; Tracor, Inc., Resumes Government Contracting

Frank W. McBee Jr., chairman and president of Tracor, Inc., has announced that the temporary suspension of the company by the Department of the Navy was lifted, effective November 22, 1985, and that Tracor has resumed contracting activity with government agencies.

Tracor was suspended October 16, 1985, in connection with an investigation relating to a product quality matter that occurred between 1981 and 1983 at a plant of one of its subsidiaries and which was corrected by the company nearly two years ago.

Mr. McBee said: "We are pleased that a resolution with regard to this matter has been reached. The interruption to our pursuit of new government business was unfortunate; however, it represented only a slight delay in achieving our objectives for new government business in 1986 and beyond.

"Costs associated with the settlement agreement with the Department of the Navy, along with other matters, will result in an additional charge to 1985 income of $7.5 million, net of income taxes. The charge will reduce 1985 net income per share by 38 cents. Included in the $7.5 million charge is a $2.1-million after-tax item which recognizes a potential overrun that has developed on a major program. In addition, Tracor management has determined that it is in the best longterm interests of the company to pursue the divestiture of certain nonprofitable businesses, which will result in a discontinued operations charge of $4.6 million after tax, or 24 cents per share.

"Even with these substantial charges, net income for the year should be approximately $16 million, compared to $33.2 million in 1984." Tracor, Inc. is an international technological products and services company with headquarters in Austin, Texas. The company is a major technical contractor in sonar, communications, and aviation programs; a leader in the development and production of passive electronic countermeasures systems and military telecommunications terminals; and a major manufacturer of scientific instruments and electrical and electromechanical components.

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Maritime Reporter Magazine, page 8,  Jan 1986

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