Form 10-K - Securities And Exchange Commission Page 33
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46events. The balance due on the contract is still under review. However,
the Company is not able to determine what, if any, impact the extended
completion period will have upon the receipt of final payment.
Unbilled contract costs subject to negotiation represent claims made or
to be made against an international customer for three contracts
covering 1994 to the present. Claims aggregating $1.5 million were
recorded in fiscal 2000. Claim costs have been incurred in connection
with customer caused delays, errors in specifications and designs, and
other out-of-scope items and may not be received in full during fiscal
2001. In accordance with generally accepted accounting principles,
revenue recorded by the Company from a claim does not exceed the
incurred contract costs related to the claim. The company is currently
updating and finalizing these claims and has begun legal proceedings
against the customer. As a related item, during fiscal 2000 the
aforementioned international customer, citing failure to deliver product
within contract terms, assessed liquidated damages totaling
approximately $1.6 million on two contracts currently in progress. The
Company disputes the basis for these liquidated damages and plans to
contest them vigorously. However, following generally accepted
accounting principles, the Company reduced contract values and
corresponding revenues by approximately $1.3 million, of which $1.0
million was recorded in fiscal 2000.
20
Notes to Consolidated Financial Statements
($ in thousands, except share data)
4.
Costs and Estimated Earnings on Uncompleted Contracts:
The following is a summary of long-term contracts in progress at
February 25, 2000 and February 26, 1999:
2000
1999
----
----
Costs incurred on uncompleted long-term contracts
$ 23,468
$ 24,926
Estimated earnings
14,937
18,529
--------
--------
38,405
43,455
Less billings to date
(32,809)
(39,814)
--------
--------
$
5,596
$
3,641
========
========
21
Notes to Consolidated Financial Statements
($ in thousands, except share data)
4.
Costs and Estimated Earnings on Uncompleted Contracts (Continued):
2000
1999
----
----
Included in accompanying balance sheets under the following captions:
Costs and estimated earnings in excess of billings
on uncompleted long-term contracts
$
8,878
$
10,416
Billings in excess of costs and estimated earnings on
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