-----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, jQv055x2skM0PE4tGnxrjO69K0pp9hfUntiOnuRFiHA8IJpbEpQ9VOMYJSWg9kRm /XQZ6dIaICJ3M3u8O4r4nw== 0000898430-94-000379.txt : 19940518 0000898430-94-000379.hdr.sgml : 19940518 ACCESSION NUMBER: 0000898430-94-000379 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940402 FILED AS OF DATE: 19940516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ACUSON CORP CENTRAL INDEX KEY: 0000717014 STANDARD INDUSTRIAL CLASSIFICATION: 3845 IRS NUMBER: 942784998 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10068 FILM NUMBER: 94528698 BUSINESS ADDRESS: STREET 1: 1220 CHARLESTON RD STREET 2: PO BOX 7393 CITY: MOUNTAIN VIEW STATE: CA ZIP: 94039 BUSINESS PHONE: 4159699112 MAIL ADDRESS: STREET 1: P O BOX 7393 STREET 2: 1220 CHARLESTON RD CITY: MOUNTAIN VIEW STATE: CA ZIP: 74039 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------- FORM 10-Q (Mark One) [X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended APRIL 2, 1994 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 0-14953 ACUSON CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 94-2784998 - - ----------------------------- -------------------------------- (State of Incorporation) (IRS Employer Identification No) 1220 CHARLESTON ROAD P. O. BOX 7393 MOUNTAIN VIEW, CA 94039-7393 (Address of principal executive offices) Registrant's telephone number, including area code, is (415) 969-9112 N/A ---------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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. Class Outstanding at April 29, 1994 - - -------------------------------- -------------------------------- Common Stock, $.0001 par value 28,510,528 shares ________________________________________________________________________________ FORM 10Q ACUSON CORPORATION INDEX PAGE NUMBER PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements Condensed Consolidated Balance Sheets as of April 2, 1994 and December 31, 1993 1 Condensed Consolidated Statements of Operations for the Three Months Ended April 2, 1994 and April 3, 1993 3 Condensed Consolidated Statements of Cash Flows for the Three Months Ended April 2, 1994 and April 3, 1993 4 Notes to Unaudited Condensed Consolidated Financial Statements 5 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings 9 ITEM 6. Exhibits and Reports on Form 8-K 10 Signature 11 ________________________________________________________________________________ ACUSON CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
APRIL 2, DECEMBER 31, ASSETS 1994 1993 (Unaudited) - - ---------------------------------------------------------------------- CURRENT ASSETS Cash and cash equivalents $ 49,258 $ 11,184 Short-term investments 38,174 48,103 -------- -------- Total cash and short-term investments 87,432 59,287 Accounts receivable 71,277 62,976 Inventories 42,033 41,964 Other current assets 29,133 37,095 -------- -------- Total current assets 229,875 201,322 -------- -------- PROPERTY AND EQUIPMENT At cost, net of accumulated depreciation and amortization of $79,152 in 1994 and $75,700 in 1993 44,608 44,307 OTHER ASSETS Net investment in leases 3,382 19,502 Other long-term assets 6,204 5,950 -------- -------- Total Assets $284,069 $271,081 ======== ========
________________________________________________________________________________ See accompanying notes to unaudited condensed consolidated financial statements. 1 _______________________________________________________________________________ ACUSON CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except per share amounts)
APRIL 2, DECEMBER 31, LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1993 (Unaudited) - - ------------------------------------------------------------------ CURRENT LIABILITIES Accounts payable $19,757 $12,644 Other accrued liabilities 72,090 75,176 ------- ------- Total current liabilities 91,847 87,820 ------- ------- Commitments and contingencies (Note 5) STOCKHOLDERS' EQUITY Preferred stock, par value $.0001 authorized - 10,000 shares outstanding - none -- -- Common stock, par value $.0001 authorized - 50,000 shares outstanding - 28,508 shares in 1994 and 28,279 shares in 1993 71,291 69,115 Cumulative translation adjustment (1,822) (2,259) Unrealized holding loss (236) -- Retained earnings 122,989 116,405 ------- ------- Total stockholders' equity 192,222 183,261 ------- ------- Total Liabilities and $284,069 $271,081 Stockholders' Equity ======== ========
________________________________________________________________________________ See accompanying notes to unaudited condensed consolidated financial statements. 2 ________________________________________________________________________________ ACUSON CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts)
THREE MONTHS ENDED ------------------ APRIL 2, APRIL 3, 1994 1993 - - ------------------------------------------------------------- NET SALES Product $74,688 $66,459 Service 18,137 15,836 ------- ------- Total net sales 92,825 82,295 ------- ------- COST OF SALES Product 31,132 25,915 Service 8,761 8,567 ------- ------- Total cost of sales 39,893 34,482 ------- ------- Gross profit 52,932 47,813 OPERATING EXPENSES Selling, general and administrative 26,640 27,038 Product development 17,317 14,223 ------- ------- Total operating expenses 43,957 41,261 ------- ------- Income from operations 8,975 6,552 INTEREST INCOME, NET 1,155 1,164 ------- ------- Income before provision for income taxes 10,130 7,716 PROVISION FOR INCOME TAXES 3,546 2,701 ------- ------- Net income $ 6,584 $ 5,015 ======= ======= EARNINGS PER SHARE $ 0.23 $ 0.17 ======= ======= WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 29,355 29,595 ======= =======
_______________________________________________________________________________ See accompanying notes to unaudited condensed consolidated financial statements. 3 - - ---------------------------------------------------------------- ACUSON CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)
THREE MONTHS ENDED --------------------- APRIL 2, APRIL 3, 1994 1993 - - ---------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 6,584 $ 5,015 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 4,964 4,708 Changes in: Accounts receivable (8,002) 2,765 Inventories 45 1,566 Other current assets 1,862 535 Accounts payable 7,079 5,360 Other accrued liabilities (1,988) 1,722 ------- -------- Net cash provide by operating activities 10,544 21,671 ------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Decrease (increase) in short-term investments 9,567 (7,656) Investment in property and equipment (4,988) (2,831) Decrease (increase) in investment in leases 22,518 (3,863) Increase in other assets (213) (269) ------- -------- Net cash provided by (used in) investing activities 26,884 (14,619) ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Repurchase of common stock (1,774) (9,497) Issuance of common stock under stock option and stock purchase plans 2,176 2,450 ------- -------- Net cash provided by (used in) financing activities 402 (7,047) ------- -------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 244 (6) ------- -------- Net increase (decrease) in cash and cash equivalents 38,074 (1) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 11,184 21,483 ------- ------- CASH AND CASH EQUIVALENTS, END OF PERIOD $49,258 $ 21,482 ======= ========
________________________________________________________________________________ See accompanying notes to unaudited condensed consolidated financial statements. 4 ________________________________________________________________________________ ACUSON CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 - INTERIM STATEMENTS In the opinion of management, the unaudited interim condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary to summarize fairly the Company's condensed consolidated financial position as of April 2, 1994 and its condensed consolidated results of operations and cash flows for the three-month periods ended April 2, 1994 and April 3, 1993. The results of operations for the three months ended April 2, 1994 are not necessarily indicative of the results to be expected for the entire year ending December 31, 1994. Certain information reported in prior years has been reclassified to conform to the 1994 presentation. The Company's principle accounting policies are set forth in the financial statements for the year ended December 31, 1993 and notes thereto contained in the Company's Annual Report filed with the Securities and Exchange Commission. NOTE 2 - CASH AND CASH EQUIVALENTS For purposes of the Statements of Cash Flows, the Company has classified certain short-term investments as cash equivalents if the original maturity of such investments is three months or less. The Company does not intend to hold its investments on a long-term basis; accordingly, such investments are classified as current assets in the accompanying consolidated balance sheets. NOTE 3 - CHANGE IN ACCOUNTING METHOD Effective January 1, 1994, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities" and the effect on the financial statements was not significant. Under SFAS No. 115, the Company's investments, which consisted entirely of debt securities, were classified as available-for- sale. These securities mature at various dates through the year 1995. As of April 2, 1994, the securities' gross unrealized holding loss was approximately $362,000. The unrealized holding loss of approximately $236,000, net of the tax effect, was reported as a separate component of stockholders' equity. The Company has determined that the unrealized holding loss is not a permanent impairment of the fair value of its investments. During the quarter the Company sold certain of its available-for-sale securities for proceeds of approximately $2,010,000. The Company realized a gain of approximately $15,000 on those sales. NOTE 4 - INVENTORIES The components of inventories were as follows (in thousands):
APRIL 2, DEC. 31, 1994 1993 - - ----------------------------------------------------------------- Raw materials $18,962 $17,093 Work-in-process 5,158 5,820 Finished goods 17,913 19,051 ------- ------- Total inventories $42,033 $41,964 ======= =======
________________________________________________________________________________ 5 NOTE 5 - LEGAL CONTINGENCIES In September 1991, Diasonics, Inc. filed an action against the Company in the Federal District Court for the Northern District of California alleging infringement of two patents owned by Diasonics. In May, 1994, the Company and Diasonics settled the litigation. The settlement will not have a material adverse effect on the Company's financial condition. On July 1, 1993 and July 30, 1993, individuals purporting to represent a class of persons who purchased Acuson common stock during the period between October 24, 1990 and July 22, 1992 filed two separate, but related, actions against the Company, twelve of its officers and one former officer in the Federal District Court for the Northern District of California alleging that the defendants' statements about the Company were incomplete or inaccurate, in violation of federal securities laws. Plaintiffs seek damages in an unspecified amount, as well as equitable relief or injunctive relief and attorneys' fees, experts' fees and costs. The Company intends to defend the suits vigorously. Management believes that the ultimate outcome of this matter will not have a material adverse effect on the Company's financial condition. ________________________________________________________________________________ 6 ________________________________________________________________________________ ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net sales for the quarter ended April 2, 1994 increased from $82.3 million in the quarter ended April 3, 1993 to $92.8 million. The increased revenues were primarily the result of increased product shipments in response to the release of Acoustic Response Technology (ART), increased international shipments that were favorably impacted in particular by the Acuson 128XP/4 introduced in May 1993, and increased service revenues worldwide. The increased sales were offset by lower average unit selling prices resulting from competitive pricing pressures and by more sales of lower priced product configurations. Service revenue for the quarter ended April 2, 1994 increased 14.5% to $18.1 million from $15.8 million in the quarter ended April 3, 1993, primarily due to growing service contract revenue from a larger base of installed systems. The Company believes that its first quarter results may not be indicative of the results for the entire year. Acuson expects that future revenues may be impacted for an indeterminate period by market uncertainties regarding the purchase of hospital equipment due to ongoing worldwide medical cost containment pressures and concern about the potential impacts of U.S. health care reform. Total cost of sales for the first quarter of 1994 was 43.0% of net sales, compared to 41.9% in the comparable 1993 period. The percentage increase reflected lower sales prices on systems and an increased proportion of service revenues, which have lower gross margins than product revenues. Selling, general and administrative expenses totaled $26.6 million in the quarter ended April 2, 1994, down from $27.0 million in the comparable prior year's period. As a percentage of sales, such expenses in the current quarter totaled 28.7% compared to 32.9% in the first quarter of 1993. Expenditures decreased as the result of a reduction in the Company's work force following the restructuring in the second quarter of 1993. Product development costs in the first quarter of 1994 totaled $17.3 million or 18.7% of sales, compared to $14.2 million or 17.3% of sales in the first quarter of 1993. The increase in product development expense resulted from increased costs for multiple product development programs. Provision for income taxes increased to $3.5 million in 1994 versus $2.7 million in 1993, primarily due to higher income. The Company's overall tax rate remained constant at approximately 35.0%. LIQUIDITY AND CAPITAL RESOURCES The Company's cash and short-term investments balance increased $28.1 million during the first quarter to $87.4 million at April 2, 1994. During the quarter, the Company generated $10.5 million in cash from operations, as compared to the first quarter of 1993 when operations generated $21.7 million in cash. The Company's financing and investing activities in the first quarter of 1994 generated $27.3 million in cash, with $21.6 million provided by the sale of the Company's lease portfolio. The Company also raised $2.2 million in cash in the first quarter of 1994 through employee participation in the Company's stock option and stock purchase plans, compared to $2.5 million during the first quarter of 1993. At April 2, 1994, the Company's working capital totaled $138.0 million. The Company also has a revolving unsecured credit facility for $50 million which is in effect through July 1995. No compensating balances are required and no amounts were outstanding under this credit facility. 7 ________________________________________________________________________________ Based on its current operating plan, the Company believes that the liquidity provided by its existing cash and short-term investment balances, the borrowing arrangements described above, and cash generated from operations will be sufficient to meet the Company's operating capital requirements for fiscal 1994. ________________________________________________________________________________ 8 - - -------------------------------------------------------------------------------- PART II ITEM 1 LEGAL PROCEEDINGS In September 1991, Diasonics, Inc. filed an action against the Company in the Federal District Court for the Northern District of California alleging infringement of two patents owned by Diasonics. In May, 1994, the Company and Diasonics settled the litigation. The settlement will not have a material adverse effect on the Company's financial condition. 9 ________________________________________________________________________________ ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits -------- 11.1 Statement regarding computation of per share earnings for the fiscal period ended April 2, 1994 b) Reports on Form 8-K ------------------- The Company filed no reports on Form 8-K during the quarter ended April 2, 1994. 10 ________________________________________________________________________________ SIGNATURE 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. ACUSON CORPORATION (Registrant) May 16, 1994 By /s/ Stephen T. Johnson ------------------------------------ Stephen T. Johnson Vice President, Chief Financial Officer and Treasurer (duly authorized Officer and Principal Financial and Accounting Officer) 11 EX-11.1 2 EPS COMPUTATION - - -------------------------------------------------------------------------------- EXHIBIT 11.1 ACUSON CORPORATION STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS FOR THE FISCAL PERIOD ENDED APRIL 2, 1994 In accordance with APB 15, the Company used the modified treasury stock method in computing the first quarter 1994 earnings per share. The following is a computation of earnings per share: Number of shares outstanding at April 2, 1994.................... 28,507,800 Number of shares assumed to be repurchased (limited to 20% of number of shares outstanding)................................ 5,701,560 Multiply by market value per common share........................ $ 12.50 ----------- Cost to repurchase............................................... $71,269,500 Assumed proceeds to the Company had everyone exercised........... 82,272,043 ----------- Excess assumed proceeds available................................ 11,002,543 Multiply by average interest rate for the period................. 1.24% ----------- Assumed interest on excess funds................................. 136,432 Less: tax provision.............................................. 47,751 ----------- Adjustment to net income......................................... 88,681 Add: net income................................................. 6,584,000 ----------- Adjusted net income.............................................. $ 6,672,681 =========== Divided by weighted shares outstanding, including common stock equivalents.................................................... 29,355,181 Fiscal period earnings per share................................. $0.23 =====
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