-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Mt0h5u4EIWNF9rNwRhZdtreCYs+c92vYfETI53gPkpAUGzeyuK/nhQIZOFew+A6p ViQco4CZhmfyw46geYG9eg== 0000950134-95-002804.txt : 19951119 0000950134-95-002804.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950134-95-002804 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DSC COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000316004 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 541025763 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10018 FILM NUMBER: 95589734 BUSINESS ADDRESS: STREET 1: 1000 COIT RD CITY: PLANO STATE: TX ZIP: 75075 BUSINESS PHONE: 2145193000 MAIL ADDRESS: STREET 1: 1000 COIT ROAD CITY: PLANO STATE: TX ZIP: 75075-5813 FORMER COMPANY: FORMER CONFORMED NAME: DIGITAL SWITCH CORP DATE OF NAME CHANGE: 19850425 10-Q 1 FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 1995 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to --------- --------- Commission File Number: 0-10018 ------- DSC COMMUNICATIONS CORPORATION ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 54-1025763 ------------------------------- ------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1000 Coit Road, Plano, Texas 75075 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (214) 519-3000 ---------------------------------------------------- (Registrant's telephone number, including area code) 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 --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No --- --- APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. Number of Shares Outstanding Title of Each Class as of October 31, 1995 -------------------------------- ------------------------------ Common Stock, $.01 Par Value 115,353,793 Page 1 of 15 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands)
September 30, December 31, 1995 1994 ------------- ------------- (Unaudited) Assets - ------------------------------------------------------- CURRENT ASSETS Cash and cash equivalents............................ $ 234,794 $ 52,942 Marketable securities................................ 298,804 218,380 Receivables.......................................... 286,149 239,740 Inventories.......................................... 274,197 180,674 Contract development costs........................... 12,574 14,202 Other current assets................................. 36,159 32,516 ----------- ------------ Total current assets............................ 1,142,677 738,454 ----------- ------------ PROPERTY AND EQUIPMENT, at cost........................ 641,242 526,248 Less accumulated depreciation and amortization.................................... (287,854) (243,285) ----------- ------------ 353,388 282,963 ----------- ------------ LONG-TERM RECEIVABLES.................................. 42,266 25,691 CAPITALIZED SOFTWARE DEVELOPMENT COSTS................. 42,211 38,583 COST IN EXCESS OF NET ASSETS OF BUSINESSES ACQUIRED, NET............................. 146,094 152,396 OTHER.................................................. 32,271 30,449 ----------- ------------ Total assets................................ $ 1,758,907 $ 1,268,536 =========== ============ Liabilities and Shareholders' Equity - ------------------------------------------------------- CURRENT LIABILITIES Short-term debt...................................... $ 42,095 $ 39,791 Accounts payable..................................... 117,250 91,054 Accrued liabilities.................................. 223,472 153,274 Customer advances.................................... 14,073 21,834 Income taxes payable................................. 4,682 22,219 Current portion of long-term debt.................... 37,585 17,248 ----------- ------------ Total current liabilities....................... 439,157 345,420 ----------- ------------ LONG-TERM DEBT, net of current portion................. 217,482 25,330 NONCURRENT INCOME TAXES AND OTHER LIABILITIES................................. 79,628 46,686 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Common stock, $.01 par value, issued - 120,290 in 1995 and 118,514 in 1994; outstanding - 115,301 in 1995 and 113,525 in 1994..................................... 1,203 1,185 Additional capital................................... 652,143 631,729 Unrealized losses on securities, net of income taxes................................. (331) (3,764) Accumulated translation adjustment................... 4,437 -- Retained earnings ................................... 408,299 265,061 ----------- ------------ 1,065,751 894,211 Treasury stock, at cost, 4,989 shares................ (43,111) (43,111) ----------- ------------ Total shareholders' equity........................ 1,022,640 851,100 ----------- ------------ Total liabilities and shareholders' equity...................... $ 1,758,907 $ 1,268,536 =========== ============
See the accompanying Notes to Condensed Consolidated Financial Statements. Page 2 of 15 3 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, ----------------------- ----------------------- 1995 1994 1995 1994 ---------- ---------- ---------- ---------- Revenue........................................... $ 370,119 $ 260,601 $ 1,048,127 $ 691,049 Cost of revenue................................... 195,713 134,140 537,325 354,706 ---------- ---------- ----------- ---------- Gross profit.................................... 174,406 126,461 510,802 336,343 ---------- ---------- ----------- ---------- Operating costs and expenses: Research and product development................ 47,597 33,559 142,482 87,175 Selling, general and administrative............. 52,552 35,579 149,379 100,087 Other operating costs........................... 2,320 949 6,732 5,827 ---------- ---------- ----------- ---------- Total operating costs and expenses............ 102,469 70,087 298,593 193,089 ---------- ---------- ----------- ---------- Operating income ............................... 71,937 56,374 212,209 143,254 Interest income................................... 7,845 4,473 19,237 12,037 Interest expense.................................. (6,278) (629) (11,605) (1,313) Other income (expense), net....................... 177 (1,625) (1,744) (3,922) ---------- ---------- ----------- ---------- Income before income taxes.................... 73,681 58,593 218,097 150,056 Income taxes...................................... 24,314 15,397 74,859 40,975 ---------- ---------- ----------- ---------- Net income ................................... $ 49,367 $ 43,196 $ 143,238 $ 109,081 ========== ========== =========== ========== Income per share.................................. $ 0.42 $ 0.37 $ 1.21 $ 0.94 ========== ========== =========== ========== Average shares used in computation................ 118,668 116,820 117,946 116,614
See the accompanying Notes to Condensed Consolidated Financial Statements. Page 3 of 15 4 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)
Nine Months Ended September 30, -------------------------- 1995 1994 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net income.................................. $ 143,238 $ 109,081 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization........... 58,288 38,876 Amortization of capitalized software development costs.................... 15,144 15,244 Increase in current and long-term receivables.................... (59,596) (30,385) Increase in inventories..................... (90,807) (29,840) Other, including changes in current payables and other current assets......... 55,486 15,421 Increase in noncurrent income taxes and other liabilities..................... 40,478 24,534 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES................ 162,231 142,931 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of marketable securities.......... (670,757) (289,632) Proceeds from sales and maturities of market securities................................ 593,429 232,025 Purchases of property and equipment......... (116,416) (99,031) Additions to capitalized software development costs......................... (18,772) (18,720) Purchase of long-term investment security... -- (12,500) Other....................................... (1,838) (1,129) ----------- ----------- NET CASH USED FOR INVESTING ACTIVITIES................ (214,354) (188,987) ----------- -----------
(Continued) Page 4 of 15 5 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (Continued) (In thousands) (Unaudited)
Nine Months Ended September 30, -------------------------- 1995 1994 ---------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings........... 2,304 -- Proceeds from long-term borrowings.......... 241,081 -- Payments on long-term borrowings............ (28,976) (11,323) Proceeds from the sale of common stock under stock programs.................... 19,637 11,926 Other....................................... (1,462) (195) ---------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES..................... 232,584 408 ---------- ---------- EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS..................... 1,391 -- ---------- ---------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.............................. 181,852 (45,648) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................................... 52,942 154,888 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD.... $ 234,794 $ 109,240 ========== ========== SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid............................... $ 1,124 $ 1,453 ========== ========== Income taxes paid........................... $ 53,202 $ 9,944 ========== ==========
See the accompanying Notes to Condensed Consolidated Financial Statements. Page 5 of 15 6 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements September 30, 1995 and 1994 and December 31, 1994 (Unaudited) BASIS OF PRESENTATION The accompanying unaudited Condensed Consolidated Financial Statements reflect, in the opinion of management, all adjustments necessary to present fairly the Company's financial position, results of operations and cash flows. Such adjustments are of a recurring nature unless otherwise disclosed herein. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to rules and regulations promulgated by the Securities and Exchange Commission. However, the Company believes that the disclosures contained herein are adequate to make the information presented not misleading. Quarterly consolidated financial results may not be indicative of annual consolidated financial results. The Company has not paid or declared a cash dividend on its common stock since its organization. Certain prior year's financial statement information has been reclassified to conform with the current year financial statement presentation. These unaudited financial statements should be read in conjunction with the audited financial statements and accompanying notes included in the Company's 1994 Annual Report to Shareholders for the year ended December 31, 1994. INVENTORIES Inventories consisted of the following (in thousands):
September 30, December 31, 1995 1994 ------------- ------------ Raw Materials . . . . . . . . . . . . . . . . . . . . . . $120,878 $ 66,466 Work in Process . . . . . . . . . . . . . . . . . . . . . 19,640 18,618 Finished Goods . . . . . . . . . . . . . . . . . . . . . . 133,679 95,590 -------- -------- $274,197 $180,674 ======== ========
Page 6 of 15 7 CREDIT AGREEMENTS AND SHORT-TERM BORROWINGS The Company has an uncollateralized revolving credit facility, which expires on February 24, 1998, with two banks providing for borrowings up to $50 million. The maximum borrowings available are reduced by the value of outstanding letters of credit issued by the banks on behalf of the Company, which totaled approximately $32.9 million at September 30, 1995. Outstanding letters of credit include $27.1 million issued to support various foreign subsidiary credit arrangements. Borrowings under the facility bear interest at the prime rate or at 0.75% to 1.50% above the LIBOR rate. A commitment fee of 0.35% on the daily average unused portion of the facility is also assessed. The agreement contains various financial covenants. There have been no borrowings under the credit facility during the nine months ended September 30, 1995. During the second quarter of 1995, two of the Company's foreign subsidiaries entered into short-term credit agreements providing for borrowings denominated in foreign currencies of up to $57.8 million, of which $42.1 million were outstanding at September 30, 1995. The interest rates on these agreements are floating market rates which ranged from 5% to 10% at September 30, 1995. LONG-TERM DEBT On April 21, 1995, the Company borrowed $225 million under a long-term, unsecured loan agreement with several insurance companies. The loan is payable in eight equal annual payments beginning in the second quarter of 1996 and bears interest at a rate of 9%, payable semi-annually. The loan contains various financial covenants including, among other things, limitations on additional debt and minimum levels of net worth. In April 1995, the Company made an unscheduled payment of $9.4 million to retire the outstanding balance of a 9.5% note. In July 1995, a foreign subsidiary borrowed $16.1 million under a long-term loan agreement. The loan bears interest at 8.75% per annum and is repayable in quarterly installments beginning in the third quarter of 1995 through the second quarter of 2000. INCOME TAX EXPENSE The Company's income tax expense includes federal, foreign, and state (including Puerto Rico) income taxes. The estimated effective income tax rate is based upon estimates for the full year for a number of variables including, among other things, forecasted income in the United States and foreign jurisdictions. The estimated effective tax rate for the first nine months of 1995 was lowered to 34% from 35% for Page 7 of 15 8 the first half of 1995 to reflect the most current estimate for the full year. As these estimates and others are finalized at the end of 1995, the effective tax rate could change again; also, an adjustment to Additional Capital will likely be made to the extent tax benefits are realized from employee exercises of stock options during 1995. The estimated effective income tax rate is higher in 1995 than in 1994 primarily due to limited availability in 1995 of net operating loss and tax credit carryforwards. COMMON STOCK At the April 26, 1995 Annual Shareholders' Meeting, the shareholders approved both an increase in the number of authorized shares of common stock from 250 million to 500 million and an increase of 1 million shares of common stock authorized for issuance under the Company's 1990 Employee Stock Purchase Plan. COMMITMENTS AND CONTINGENCIES Contingent Liabilities The Company has guarantees of $33.9 million outstanding at September 30, 1995 supporting Company and third-party performance bonds to customers and others, of which $5.8 million were collateralized by letters of credit issued under the Company's revolving domestic credit facility. The Company believes it has adequate reserves for any ultimate losses associated with these contingencies. The Company, in management of its exposure to fluctuations in foreign currency exchange rates, enters into forward foreign exchange contracts for both firm commitments and anticipated transactions of sales and purchases which are denominated in foreign currencies. At September 30, 1995, the Company had forward foreign exchange contracts of $56.4 million outstanding. For information regarding litigation, refer to Part II - Other Information, Item 1. "Legal Proceedings". Page 8 of 15 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations For the three months ended September 30, 1995, the Company reported revenue of $370.1 million and net income of $49.4 million, or $0.42 per share, compared to revenue of $260.6 million and net income of $43.2 million, or $0.37 per share, for the three months ended September 30, 1994. For the nine months ended September 30, 1995, the Company reported revenue of $1,048.1 million and net income of $143.2 million, or $1.21 per share, compared to revenue of $691.0 million and net income of $109.1 million, or $0.94 per share, for the nine months ended September 30, 1994. Revenue for the 1995 third quarter and first nine months increased 42% and 52%, respectively, compared to the same periods in 1994. The growth in revenue was primarily the result of increased demand for the Company's switching, access and transmission products as well as the inclusion of revenue from DSC Communications A/S acquired in November 1994. Gross profit as a percentage of revenue was 47% and 49% for the third quarter and first nine months of 1995, respectively, compared to 49% in both the third quarter and nine months ended September 30, 1994. The Company's gross margin percentage can vary significantly from period to period due to changes in the relative mix of product deliveries, including software enhancements. Research and product development expense in the third quarter of 1995 and 1994 was $47.6 million and $33.6 million, respectively, representing 13% of revenue for both the third quarter of 1995 and 1994. Research and product development for the nine months ended September 30, 1995 was $142.5 million, or 14% of revenue, compared to $87.2 million, or 13% of revenue, for the first nine months of 1994. The growth in research and product development expenses includes the development activities of DSC Communications A/S as well as increases in the Company's on-going development of new products and enhancements to existing products across all strategic product lines. Selling, general and administrative expense was $52.6 million and $149.4 million in the third quarter of 1995 and nine months ended September 30, 1995, respectively, compared to $35.6 million and $100.1 million, respectively, for the same periods in 1994. As a percentage of revenue, selling, general and administrative expense for both the three months and nine months ended September 30, 1995 was 14%, consistent with the same periods of 1994. The growth in expenses was due primarily to the inclusion of expenses of DSC Communications Page 9 of 15 10 A/S in 1995, increased international selling activities and higher legal costs. The Company's interest expense has increased substantially in 1995 over 1994 due primarily to the significant amount of new borrowings during 1995, including the $225 million of long-term debt which was funded on April 21, 1995. Interest income has also increased as proceeds from the $225 million loan have been invested in short-term investments until required for future business purposes. The Company's estimated effective income tax rate was 33% and 34% for the three and nine month periods ended September 30, 1995, respectively, compared to 26% and 27% for the same period in 1994. The increase in the effective income tax rate for both the quarter and nine months is due primarily to limited net operating loss and tax credit carryforwards available to reduce taxable earnings in 1995 compared to 1994 and increased foreign taxes. The Company has certain forward exchange contracts which are based on anticipated future business transactions in various foreign countries, primarily Germany and Italy, which totaled approximately $13.0 million at September 30, 1995. Future earnings could be affected since forward contracts related to anticipated transactions are marked-to-market each period. The Company's future quarterly and annual operating results may be affected by a number of factors, including the timing and ultimate receipt of orders from certain customers which continue to constitute a large portion of the Company's revenue; the successful enhancement of existing products; introduction and market acceptance of new products on a timely basis; mix of products sold; product costs; manufacturing lead times; significant fluctuations in foreign currency exchange rates; and changes in general worldwide economic conditions, any of which could have an adverse impact on operations. Financial Condition and Liquidity The Company's cash and cash equivalents at September 30, 1995 were $234.8 million compared to $52.9 million at December 31, 1994 while marketable securities were $298.8 million at September 30, 1995 compared to $218.4 million at December 31, 1994. In April 1995, the Company received proceeds from a $225 million long-term loan bearing interest at 9%. Interest payments will be made semi-annually, and principal payments will be made in eight equal annual installments beginning in the second quarter of 1996. The proceeds from the loan are expected to be used for general corporate purposes, including capital expenditures, although currently the majority of the proceeds from the loan have been used to purchase short-term investments. See "Long-term Debt" in the Notes to Condensed Consolidated Financial Statements for further information. Cash of $162.2 million was generated from operating activities. This was primarily the result of strong earnings and an increase in non-debt liabilities, partially offset by an increase in receivables and Page 10 of 15 11 inventories. The inventory growth is to support existing and anticipated customer requirements for the last quarter of 1995 and early 1996, including new product introductions. Investing activities during the nine months ended September 30, 1995 included additions to property and equipment of $116.4 million. These additions include the purchase of land and construction costs incurred on new facilities currently under construction in Copenhagen, Denmark. These new facilities are expected to cost approximately $50 million with occupancy of one building in late 1995 and the other building in early 1996. The new facilities will consolidate the operations of DSC Communications A/S which are currently located in numerous leased facilities. The Company's rapid business expansion and expected future domestic and international growth have and will continue to increase capital requirements, including facilities and manufacturing and development equipment. It is anticipated that 1995 capital expenditures will approximate $160 million to $180 million. In 1995 several of the Company's foreign subsidiaries entered into short-term credit arrangements totaling $57.8 million, of which $42.1 million was outstanding at September 30, 1995. Additionally, in July 1995 a foreign subsidiary borrowed $16.1 million under a long-term loan facility. These arrangements are being used to fund foreign facilities expansion and working capital needs and are repayable in the foreign subsidiaries' local currencies. See "Credit Agreements and Short-term Borrowings" and "Long-term Debt" in the Notes to Condensed Consolidated Financial Statements for further information. Other financing activities during the first nine months of 1995 included the repayment of the remaining $39.8 million of short-term borrowings obtained to fund a portion of the DSC Communications A/S acquisition, an unscheduled payment of $9.4 million to retire a 9.5% note in April 1995, and $19.6 million of scheduled payments on long-term borrowings. Financing activities during the nine months ended September 30, 1995 also includes proceeds of $19.6 million from the issuance of the Company's common stock under stock programs. The Company has a $50.0 million unsecured revolving credit facility, which expires on February 24, 1998, with $17.1 million of available borrowings at September 30, 1995, net of outstanding letters of credit. There have been no borrowings under the credit facility during the nine months ended September 30, 1995. See "Credit Agreements and Short- term Borrowings" in the Notes to Condensed Consolidated Financial Statements for further information. The Company believes that its existing cash and marketable securities and available credit facilities will be adequate to support the Company's short and long-term financial resource needs, including Page 11 of 15 12 working capital requirements, capital expenditures, operating lease obligations, and debt payments. Page 12 of 15 13 PART II - OTHER INFORMATION Item 1. Legal Proceedings. Litigation On July 20, 1993, the Company filed suit against Advanced Fibre Communications ("AFC"), a California corporation; Quadrium Corporation ("Quadrium"), a California corporation; and two individuals. The Company seeks a declaratory judgment that the two individuals are not entitled to any stock options or cash payments under the Company's 1990 Stock Option and Cash Payment Plan because of these defendants' alleged breaches of certain employment-related agreements with the Company. The Company further seeks a declaration that AFC's products are the proprietary property of the Company under the terms of certain Proprietary Information Agreements or certain Consulting Agreements with Quadrium. The Company also seeks unspecified damages for breaches of contract, civil conspiracy, and tortious interference. The individual defendants have both filed counterclaims whereby they claim entitlement to certain stock options and cash payments under several of the Company's stock option plans. AFC has also filed a counterclaim alleging that the Company has violated the Sherman Antitrust Act and certain state antitrust statutes, and further claims that the Company has (1) tortiously interfered with existing and prospective contractual relationships, (2) committed industrial espionage and misappropriation, (3) trespassed on AFC's business premises, (4) converted certain property of AFC, (5) committed unfair competition and (6) committed acts in violation of the Racketeering Influenced Corrupt Organization Act. The Company believes that it has valid and substantial claims against all of the defendants. The Company intends to vigorously defend all of the defendants' counterclaims, and further believes it has valid defenses to all of the counterclaims. The Company does not believe that the ultimate resolution of this suit will have a material adverse effect on its consolidated financial position. The Company is also a party to other legal proceedings which, in the opinion of management, are not expected to have a material adverse effect on the Company's consolidated financial position. Page 13 of 15 14 Item 6. Exhibits and Reports on Form 8-K. A. Exhibits. 11. Computation of Income Per Share. 27. Financial Data Schedule (for EDGAR filing purposes only) B. Reports on Form 8-K. No reports on Form 8-K have been filed during the three months ended September 30, 1995. Page 14 of 15 15 SIGNATURES Pursuant to the requirements 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. DSC COMMUNICATIONS CORPORATION Dated: November 10, 1995 By: /s/ Kenneth R. Vines --------------------------- Kenneth R. Vines Vice President, Finance, duly authorized officer and principal accounting officer Page 15 of 15 16 INDEX TO EXHIBITS Exhibit No. Description ------- ----------- 11. Computation of Income Per Share. 27. Financial Data Schedule (for EDGAR filing purposes only) EX-11 2 EXHIBIT 11 COMPUTATION OF INCOME PER SHARE 1 Exhibit 11 DSC COMMUNICATIONS CORPORATION AND SUBSIDIARIES Computation of Income per Share (In thousands) (Unaudited) The following table sets forth the computation of shares used in the calculation of income per share for the three months and nine months ended September 30, 1995 and 1994. Average Shares Used in Income per Share Calculation:
Three Months Ended Nine Months Ended September 30, September 30, --------------------- --------------------- 1995 1994 1995 1994 -------- ------- -------- ------- Weighted average shares outstanding during the period..................... 115,011 112,684 114,445 111,850 Common share equivalents outstanding: Options and warrants issued and contingently issuable............... 5,284 5,452 5,217 6,309 Assumed purchase of treasury shares..................... (1,627) (1,316) (1,716) (1,545) --------- --------- --------- --------- Weighted average shares used in calculation................... 118,668 116,820 117,946 116,614 ========= ========= ========= =========
Fully diluted income per share is not shown since the dilutive effect is less than three percent for the three months and nine months ended September 30, 1995 and 1994. EX-27 3 EXHIBIT 27 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 234,794 298,804 286,149 0 274,197 1,142,677 641,242 (287,854) 1,758,907 439,157 217,482 1,203 0 0 1,021,437 1,758,907 1,048,127 1,048,127 537,325 537,325 298,593 0 11,605 218,097 74,859 143,238 0 0 0 143,238 1.21 0
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