-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, du2EURT9W2jeLbpthN83FDtVEscnm25UiQVwh62oTlNcysjVOQSsVF6OYJJ5GakS +V9tzMXhWV3eFKnZ3kbo5Q== 0000040656-95-000028.txt : 19950830 0000040656-95-000028.hdr.sgml : 19950830 ACCESSION NUMBER: 0000040656-95-000028 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950829 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL INSTRUMENT CORP /DE/ CENTRAL INDEX KEY: 0000040656 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 133575653 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-05442 FILM NUMBER: 95568194 BUSINESS ADDRESS: STREET 1: 181 W MADISON ST CITY: CHICAGO STATE: IL ZIP: 60602 BUSINESS PHONE: 3125415000 MAIL ADDRESS: STREET 1: 125 CHUBB AVE CITY: LYNDHURST STATE: NJ ZIP: 07071 10-Q/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q/A (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 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 1-5442 General Instrument Corporation (Exact name of registrant as specified in its charter) Delaware 13-3575653 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 181 West Madison Street, Chicago, Illinois 60602 (Address of principal executive offices) (Zip Code) (312) 541-5000 (Registrant's telephone number, including area code) The undersigned registrant hereby amends its Form 10-Q for the quarterly period ended March 31, 1995 on the pages attached hereto to correct its previous electronic submission of Exhibit 11. PART I FINANCIAL INFORMATION GENERAL INSTRUMENT CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Data) ASSETS
(Unaudited) March 31, December 31, 1995 1994 ------------ ------------ CURRENT ASSETS: Cash and cash equivalents $9,025 $5,128 Accounts receivable, less allowance for doubtful accounts of $13,707 and $7,582, respectively 350,947 306,754 Inventories 220,282 214,180 Prepaid expenses and other current assets 23,358 22,256 Deferred income taxes 121,561 93,446 ---------- -------- Total current assets 725,173 641,764 Property, plant and equipment - net 356,152 343,868 Intangibles, less accumulated amortization of $82,491 and $78,460, respectively 157,379 161,410 Excess of cost over fair value of net assets acquired, less accumulated amortization of $117,128 and $110,952, respectively 874,911 904,184 Investments and other assets 17,124 10,113 Deferred income taxes, net of valuation allowance 29,218 29,238 Deferred financing costs, less accumulated amortization of $24,315 and $22,980, respectively 17,039 18,374 ---------- -------- TOTAL ASSETS $2,176,996 $2,108,951 ========== ========== See notes to consolidated financial statements.
GENERAL INSTRUMENT CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Data) LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited) March 31, December 31, 1995 1994 ----------- ------------ CURRENT LIABILITIES: Accounts payable $166,685 $162,529 Accrued interest payable 9,663 2,737 Income taxes payable 57,064 52,670 Accrued liabilities 210,627 208,383 Current portion of long-term debt 2,155 2,155 --------- ---------- Total current liabilities 446,194 428,474 --------- ---------- Deferred income taxes 32,747 21,990 --------- ---------- Long-term debt 759,494 794,694 --------- ---------- Other non-current liabilities 199,199 186,615 --------- ---------- Commitments and contingencies Stockholders' equity: Preferred Stock, $.01 par value; 20,000,000 shares authorized; no shares issued - - Common Stock, $.01 par value; 400,000,000 shares authorized; 122,474,298 and 122,231,348 issued at March 31, 1995 and December 31, 1994, respectively 1,225 1,222 Additional paid-in capital 548,731 543,728 Retained earnings 189,690 132,634 ---------- ---------- 739,646 677,584 Less - Treasury stock, at cost, 11,259 shares of Common Stock (17) (17) Unearned compensation (267) (389) ---------- ---------- Total stockholders' equity 739,362 677,178 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,176,996 $2,108,951 ========== ========== See notes to consolidated financial statements.
GENERAL INSTRUMENT CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited - In Thousands, Except Net Income Per Share)
Three Months Ended March 31, --------------------- 1995 1994 --------- --------- NET SALES $608,717 $432,521 -------- -------- OPERATING COSTS AND EXPENSES: Cost of sales 417,885 283,369 Selling, general and administrative 64,032 39,124 Research and development 33,659 26,015 Amortization of excess of cost over fair value of net assets acquired 6,176 6,421 --------- --------- Total operating costs and expenses 521,752 354,929 --------- --------- OPERATING INCOME 86,965 77,592 Other expense, net (74) (1,065) Interest expense, net (13,028) (12,894) --------- --------- INCOME BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 73,863 63,633 Provision for income taxes (16,807) (10,732) --------- --------- INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 57,056 52,901 Cumulative effect of a change in accounting principle - (1,917) --------- --------- NET INCOME $57,056 $50,984 ========= ========= Weighted Average Shares Outstanding 123,282 122,964 Net Income per share Primary: Income before cumulative effect of a change in accounting principle $.46 $.43 Cumulative effect of a change in accounting principle - (.02) --------- --------- Net income $.46 $.41 ========= ========= Fully Diluted: Income before cumulative effect of a change in accounting principle $.42 $.41 Cumulative effect of a change in accounting principle - (.01) --------- --------- Net income $.42 $.40 ========= ========= See notes to consolidated financial statements.
GENERAL INSTRUMENT CORPORATION CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited - In Thousands)
Addit- Total Common Stock ional Common Unearned Stock- -------------- Paid-In Retained Stock in Compens- holders' Shares Amount Capital Earnings Treasury ation Equity ------ ------- -------- -------- -------- -------- -------- BALANCE, DECEMBER 31, 1994 122,231 $1,222 $543,728 $132,634 $(17) $(389) $677,178 Net income for the three months ended March 31, 1995 57,056 57,056 Exercise of stock options 243 3 3,114 3,117 Tax benefit from exercise of stock options 1,889 1,889 Amortization of unearned compensation 122 122 ------- ------ -------- -------- ----- ------ --------- BALANCE, MARCH 31, 1995 122,474 $1,225 $548,731 $189,690 $(17) $(267) $ 739,362 ======= ====== ======== ======== ===== ====== ========= See notes to consolidated financial statements.
GENERAL INSTRUMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - In Thousands)
Three Months Ended March 31, ------------------ 1995 1994 ------- ------- OPERATING ACTIVITIES: Net income $57,056 $50,984 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 26,010 22,386 Accounts receivable (44,194) (20,608) Inventories (6,102) (33,117) Prepaid expenses and other current assets (1,101) (484) Deferred income taxes (4,301) (137) Accounts payable, income taxes payable and other accrued liabilities 42,603 29,367 Other non-current liabilities 7 3,509 Other (270) 2,408 ------- ------- Net cash provided by operating activities 69,708 54,308 ------- ------- INVESTMENT ACTIVITIES: Additions to fixed assets - net (26,864) (20,124) Investments in other assets (6,506) - ------- ------- Net cash used in investment activities (33,370) (20,124) ------- ------- FINANCING ACTIVITIES: Costs associated with the sale of (358) (137) Common Stock Proceeds from the issuance of Flexible Term Notes 10,800 - Repayments of debt - (8,260) Net repayments of revolving credit facilities (46,000) (14,000) Proceeds from stock options 3,117 2,068 ------- ------- Net cash used in financing activities (32,441) (20,329) ------- ------- Increase in cash and cash equivalents 3,897 13,855 Cash and cash equivalents, beginning of the period 5,128 5,584 ------- ------- Cash and cash equivalents, end of the period $9,025 $19,439 ======= ======= See notes to consolidated financial statements.
GENERAL INSTRUMENT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (In Thousands, Unless Otherwise Noted) 1. BASIS OF PRESENTATION The consolidated balance sheet as of March 31, 1995, the consolidated statements of income for the three months ended March 31, 1995 and 1994, the consolidated statements of cash flows for the three months ended March 31, 1995 and 1994 and the consolidated statement of stockholders' equity for the three months ended March 31, 1995 of General Instrument Corporation (the "Company") are unaudited and reflect all adjustments of a normal recurring nature which are, in the opinion of management, necessary for a fair presentation of the interim period financial statements. There were no adjustments of a non-recurring nature recorded during the three months ended March 31, 1995 and 1994, except for an adjustment in March 1995 to reflect the settlement of certain tax matters (See Note 4) and a cumulative effect adjustment to reflect the adoption, as of January 1, 1994, of Financial Accounting Standards Board Statement No. 112 ("SFAS 112"), Employers' Accounting for Postemployment Benefits. These consolidated financial statements should be read in conjunction with the Company's December 31, 1994 consolidated financial statements and notes thereto. Certain reclassifications have been made to the comparative prior period financial statements to conform to the current period presentation. 2. INVENTORIES Inventories consists of: March 31, 1995 December 31, 1994 -------------- ----------------- Raw Materials $ 78,514 $ 81,987 Work in Process 33,091 25,822 Finished Goods 108,677 106,371 -------- -------- Inventories $220,282 $214,180 ======== ======== 3. LONG-TERM DEBT Long-term debt consists of: March 31, 1995 December 31, 1994 -------------- ----------------- Senior indebtedness: Revolving credit facilities $194,000 $240,000 Taiwan Loan 56,849 56,849 Flexible Term Notes 10,800 - Convertible Junior Subordinated Notes 500,000 500,000 -------- -------- Total 761,649 796,849 Less current maturities 2,155 2,155 -------- -------- Long-Term debt $759,494 $794,694 ======== ======== In January 1995, CommScope, Inc., an indirect wholly-owned subsidiary of the Company, entered into an $11 million loan agreement in connection with the issuance of notes by the Alabama State Industrial Development Authority (the "Flexible Term Notes"). Borrowings under the loan agreement bear interest at variable rates based upon current market conditions for short-term financing. The loan agree- ment will mature on January 1, 2015 and any remaining amounts outstanding under the Flexible Term Notes will be due and payable on that date. 4. INCOME TAXES The provision for income taxes for the three months ended March 31, 1995 is based on the expected annual rate reduced by a $12 million credit for the settlement of certain tax matters. 5. SUBSEQUENT EVENTS In April 1995, affiliates of Forstmann Little & Co. and certain current and former directors of the Company sold an aggregate of 15.595 million shares of Common Stock in a public offering. The Company received no proceeds from such offering. In April 1995, the stockholders approved an amendment to the Company's Certificate of Incorporation which increased the number of authorized shares of Common Stock to 400 million. GENERAL INSTRUMENT CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS NET SALES Net sales for the three months ended March 31, 1995 ("First Quarter 1995") were $609 million compared to $433 million in the three month period ended March 31, 1994 ("First Quarter 1994"), an increase of $176 million, or 41%. This increase relates primarily to higher sales volume in both the Broadband Communications and Power Semiconductor segments. Broadband Communications sales increased 42% in First Quarter 1995 over First Quarter 1994, primarily as a result of increased sales volume of GI Communications' DigiCipher digital compression products, distribution electronics and analog addressable system products. The higher sales volume reflects commercialization of digital broadband systems and continued increased cable television operator infrastructure spending in the United States, as well as the continued deployment of new cable television systems in international markets. Cable television product sales increased 24% in First Quarter 1995 over First Quarter 1994 and international sales of cable television electronics and coaxial cable increased 61% in First Quarter 1995 over First Quarter 1994. The increased sales in First Quarter 1995 were partially offset by a decline in the sales of VideoCipher RS analog satellite receiver consumer modules. In First Quarter 1994, the Company had significant sales of these modules to persons who had been receiving without authorization (or "pirating") the commercial satellite programming data signals, whereas, in First Quarter 1995 these sales were at minimal levels as expected. However, shipments of VideoCipher RS analog satellite receiver consumer modules for owners of new C-Band satellite dishes increased in First Quarter 1995 over First Quarter 1994 and the Company expects sales opportunities to potential new owners of C-Band satellite dishes to continue into the second quarter of 1995 (although there can be no assurance as to the amount of those sales), and to decline, perhaps substantially, thereafter. Power Semiconductor sales increased 33% in First Quarter 1995 over First Quarter 1994, primarily as a result of increased sales volume. Global demand for power rectifiers and protection devices continued to fuel growth of the Power Semiconductor segment with the most significant increases in sales of components to be incorporated in telecommunications, automotive, computer, and consumer electronics products. GROSS PROFIT (NET SALES LESS COST OF SALES) Gross profit increased $42 million, or 28%, to $191 million in First Quarter 1995 from $149 million in First Quarter 1994. Gross profit was 31.3% of sales in First Quarter 1995 compared to 34.5% of sales in First Quarter 1994. The increase in gross profit principally reflects the higher sales volume discussed above. The lower gross profit margin in First Quarter 1995 compared to First Quarter 1994 primarily reflects a shift in product mix from higher margin VideoCipher RS analog satellite receiver consumer modules to DigiCipher digital compression products, which initially carry lower margins, partially offset by the positive effects of production efficiencies as a result of increased volume and cost reduction efforts. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative ("SG&A") expenses increased $25 million to $64 million in First Quarter 1995 from $39 million in First Quarter 1994, and increased as a percentage of sales to 10.5% in First Quarter 1995 from 9% in First Quarter 1994. SG&A expense in First Quarter 1995 included expenses of $8 million related to the start-up of a national advertising campaign to support sales of C-Band satellite systems and a $5 million provision related to the potential uncollectibility of certain receivables. Adjusting for these two items, SG&A expense was $51 million and 8.5% of sales. The Company has been increasing its sales force, field support and marketing activities to take advantage of increased growth opportunities in international cable and satellite television and worldwide telecommunications markets. The increase in SG&A expense partly reflects such increased marketing and selling costs which contributed to the higher sales volumes discussed above. RESEARCH AND DEVELOPMENT Research and development ("R&D") expense was $34 million in First Quarter 1995 compared to $26 million in First Quarter 1994 and was approximately 6% of sales in each period. This level of spending reflects continued development of the second generation of cable set-top terminals, which incorporate digital compression and multimedia capabilities; development of enhanced addressable analog terminals; development of advanced digital systems for cable and satellite television distribution; and product development through strategic alliances. Emerging R&D activities include development of broadband telephony products and interactive multimedia technologies for broadband networks. NET INTEREST EXPENSE Net interest expense was $13 million both in First Quarter 1995 and First Quarter 1994. Lower weighted average borrowings in First Quarter 1995 compared to First Quarter 1994 were offset by higher interest rates. CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE Effective January 1, 1994, the Company adopted Financial Accounting Standards Board Statement No. 112, Employers' Accounting for Postemployment Benefits ("SFAS No. 112"). As a result of adopting SFAS No. 112, the Company recorded a cumulative effect charge to income of $2 million. INCOME TAXES Income taxes increased to $17 million in First Quarter 1995 from $11 million in First Quarter 1994 and the effective tax rate increased to 23% in First Quarter 1995 from 17% in First Quarter 1994. The increase in the effective tax rate in First Quarter 1995 is attributable to the Company having a valuation allowance related to domestic deferred tax assets in 1994 which was reduced during First Quarter 1994, to the extent that domestic taxable income was generated. As of December 31, 1994, the majority of the Company's domestic deferred tax assets were determined to be realizable and therefore there was no valuation allowance impact on income taxes in First Quarter 1995. In addition, the First Quarter 1995 income tax provision reflects a $12 million credit to income, related to the settlement of certain tax matters. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1995, working capital was $279 million compared to $213 million at December 31, 1994. The working capital increase of $66 million was due principally to increased sales volume with a corresponding increase in accounts receivable and increased deferred tax assets. Based on current levels of order input and backlog, as well as significant sales agreements not yet reflected in order and backlog levels, the Company believes that operational working capital levels are appropriate to support future operations. There can be no assurance, however, that future industry specific developments or general economic trends will not alter the Company's working capital requirements. At March 31, 1995, the Company had borrowings of $194 million under its revolving credit facilities and credit commitments, which the Company had not borrowed against, of $306 million. In addition, in January 1995, CommScope, Inc., an indirect wholly-owned subsidiary of the Company, entered into an $11 million loan agreement in connection with the issuance of notes by the Alabama State Industrial Development Authority. See Note 3 to the consolidated financial statements. During First Quarter 1995, the Company invested $27 million in equipment and facilities. These capital expenditures were used to expand capacity to meet increased current and future demands for analog and digital products, coaxial cable and rectifiers. Capital expenditures for the year ending December 31, 1995 are expected to approximate $170 million. The Company's research and development expenditures (principally focused on the Broadband Communications business) were $34 million and $26 million in First Quarter 1995 and First Quarter 1994, respectively, and are expected to approximate $130 million for the year ending December 31, 1995. At March 31, 1995, the Company had $9 million of cash and cash equivalents on hand compared to $5 million at December 31, 1994. At March 31, 1995, long-term debt, including current maturities, was $762 million compared to $797 million at December 31, 1994. The Company's principal source of liquidity both on a short- term and long-term basis is cash flow provided by operations. Occasionally, however, the Company may borrow against its revolving credit facilities to supplement cash flow from operations. The Company believes that, based upon its analysis of its consolidated financial position, its cash flow during the past 12 months and the expected results of operations in the future, operating cash flow and available funding under its revolving credit facilities will be adequate to fund operations, research and development expenditures, capital expenditures and debt service for the next 12 months. The Company intends to repay its remaining indebtedness primarily with cash flow from operations. There can be no assurance, however, that future industry specific developments or general economic trends will not adversely affect the Company's operations or its ability to meet its cash requirements. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 11 - Computation of Earnings Per Share (b) Report on Form 8-K No reports on Form 8-K were filed by the Registrant during the three months ended March 31, 1995. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. GENERAL INSTRUMENT CORPORATION August 29, 1995 /s/Paul J. Berzenski - -------------- ------------------------------------- Date Paul J. Berzenski Vice President and Controller Signing both in his capacity as Vice President on behalf of the Registrant and as Chief Accounting Officer of the Registrant EX-11 2 GENERAL INSTRUMENT CORPORATION Exhibit 11 - Computation of Earnings Per Share (In Thousands Except Per Share Amounts)
Three Months Ended March 31, ------------------ 1995 1994 ------- -------- PRIMARY: Income before cumulative effect of a change in accounting principle $57,056 $52,901 Cumulative effect of a change in accounting principle - (1,917) _______ _______ Net Income $57,056 $50,984 ======= ======= Weighted average common shares outstanding 122,304 120,432 Incremental shares under stock option plans 978 2,532 _______ _______ Weighted average common and common equivalent shares outstanding 123,282 122,964 ======= ======= Primary earnings per share: Income before cumulative effect of a change in accounting principle $0.46 $0.43 Cumulative effect of a change in accounting principle - (.02) _____ _____ Net income $0.46 $0.41 ===== ===== FULLY DILUTED: Income before cumulative effect of a change in accounting principle $57,056 $52,901 Interest and amortization of debt issuance costs related to the Convertible Junior Subordinated Notes, net of income tax effects 4,119 6,470 ------ ------- Adjusted income before a cumulative effect of a change in accounting principle 61,175 59,371 Cumulative effect of a change in accounting principle - (1,917) _______ ________ Adjusted net income $61,175 $57,454 ======= ======= Weighted average common shares outstanding 122,304 120,432 Incremental shares under stock option plans 1,236 2,532 Incremental shares attributable to Convertible Junior Subordinated Notes 21,053 21,053 _______ _______ Adjusted weighted average shares outstanding 144,593 144,017 ======= ======= Fully diluted earnings per share: Income before cumulative effect of a change in accounting principle $0.42 $0.41 Cumulative effect of a change in principle accounting - (.01) _______ _______ Net income $0.42 $0.40 ======= ======= Note: The computations of primary and fully diluted earnings per share assume incremental shares under stock option plans using the treasury method.
EX-27 3
5 1,000 3-MOS DEC-31-1995 MAR-31-1995 9,025 0 350,947 13,707 220,282 725,173 356,152 0 2,176,996 446,194 759,494 1,225 0 0 738,421 2,176,996 608,717 608,717 417,885 417,885 0 0 13,028 73,863 16,807 57,056 0 0 0 57,056 $0.46 $0.42
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