-----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, RYzwtCxkrWfO63Yy+RnrdqhJQuJyrL63pMpqqDD200n32ppl2ysXzE3G9xpitsNJ oijejpKQsYlnbspBuaC6rQ== 0001015402-97-000037.txt : 19970221 0001015402-97-000037.hdr.sgml : 19970221 ACCESSION NUMBER: 0001015402-97-000037 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19961228 FILED AS OF DATE: 19970211 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONCURRENT COMPUTER CORP/DE CENTRAL INDEX KEY: 0000749038 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 042735766 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13150 FILM NUMBER: 97524810 BUSINESS ADDRESS: STREET 1: 2101 WEST CYPRESS CREEK ROAD CITY: FT LAUDERDALE STATE: FL ZIP: 33309 BUSINESS PHONE: 9549741700 MAIL ADDRESS: STREET 1: CONCURRENT COMPUTER CORP STREET 2: 2101 WEST CYPRESS CREEK RD CITY: FT LAUDERDALE STATE: FL ZIP: 33309 FORMER COMPANY: FORMER CONFORMED NAME: MASSACHUSETTS COMPUTER CORP DATE OF NAME CHANGE: 19881018 10-Q 1 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 Quarter Ended December 28, 1996 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 No. 0-13150 _____________ CONCURRENT COMPUTER CORPORATION Delaware 04-2735766 (State of Incorporation) (I.R.S. Employer Identification No.) 2101 West Cypress Creek Road, Ft. Lauderdale, FL 33309 Telephone: (954) 974-1700 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___ --- Number of shares of the Registrant's Common Stock, par value $0.01 per share, outstanding as of February 10, 1997 were 44,956,539. PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
CONCURRENT COMPUTER CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 28, DECEMBER 31, DECEMBER 28, DECEMBER 31, -------------- -------------- -------------- -------------- 1996 1995 1996 1995 -------------- -------------- -------------- -------------- Net sales Computer systems $ 12,870 $ 10,332 $ 26,244 $ 21,865 Service and other 13,755 14,151 28,138 29,070 -------------- -------------- -------------- -------------- Total 26,625 24,483 54,382 50,935 Cost of Sales Computer systems 6,796 5,892 13,905 12,363 Service and other 7,156 8,004 14,914 16,780 Transition 64 0 802 0 -------------- -------------- -------------- -------------- Total 14,016 13,896 29,621 29,143 -------------- -------------- -------------- -------------- Gross margin 12,609 10,587 24,761 21,792 Operating expenses Research and development 3,443 3,339 6,799 7,054 Selling, general and administrative 7,797 7,319 15,028 15,271 Transition/Restructuring expense 872 1,300 2,106 1,300 Post-retirement benefit reversal (1,200) 0 (2,181) 0 Total operating expenses 10,912 11,958 21,752 23,625 -------------- -------------- -------------- -------------- Operating income (loss) 1,697 (1,371) 3,009 (1,833) Interest expense (532) (626) (1,191) (1,320) Interest income 29 70 81 181 Other income (expense) - net (161) (30) (420) (517) Other non-recurring charges 0 0 0 (1,700) Gain/loss CyberGuard stock 2,192 0 (1,876) 0 -------------- -------------- -------------- -------------- Income (loss) before provision 3,225 (1,957) (397) (5,189) for income taxes Provision for income taxes 530 600 970 1,000 -------------- -------------- -------------- -------------- Net income (loss) $ 2,695 ($2,557) ($1,367) ($6,189) ============== ============== ============== ============== Net income (loss) per share $ 0.06 ($0.08) ($0.03) ($0.20) ============== ============== ============== ============== The accompanying notes are an integral part of the consolidated financial statements.
CONCURRENT COMPUTER CORPORATION CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS) DECEMBER 28, JUNE 30, -------------- ---------- 1996 1996 -------------- ---------- ASSETS Current Assets Cash and cash equivalents $ 2,672 $ 3,562 Trading securities 3,838 10,077 Accounts receivable - net 27,173 27,948 Inventories 13,573 11,683 Prepaid expenses and other current assets 2,066 2,384 -------------- ---------- Total current assets 49,322 55,654 Property, plant and equipment - net 16,874 16,453 Facilities held for disposal 4,700 4,700 Other long-term assets 1,634 3,407 -------------- ---------- Total assets $ 72,530 $ 80,214 ============== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Notes payable 5,423 5,013 Current portion of long-term debt 1,668 1,241 Revolving credit facilities 4,044 5,014 Accounts payable and accrued expenses 34,052 40,638 Deferred revenue 4,682 4,573 -------------- ---------- Total current liabilities 49,869 56,479 Long-term debt 5,564 6,603 Other long-term liabilities 2,094 4,454 Class B 9% cumulative convertible, redeemable, exchangeable preferred stock, mandatory redemption value of $6,263,000, $.01 par value per share, 1,000,000 authorized; 640,804.6 issued and outstanding at December 28, 1996 3,757 5,610 Stockholder's equity Common stock 448 412 Capital in excess of par value 89,817 84,252 Accumulated deficit after eliminating accumulated deficit of $81,826 at December 31, 1991, date of quasi-reorganization (78,107) (76,740) Treasury stock (58) (58) Cumulative translation adjustment (854) (798) -------------- ---------- Total stockholders' equity 11,246 7,068 -------------- ---------- Total liabilities and stockholders' equity $ 72,530 $ 80,214 ============== ========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS.
CONCURRENT COMPUTER CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) SIX MONTHS ENDED DECEMBER 28, DECEMBER 31, -------------- -------------- 1996 1995 -------------- -------------- Cash flows provided by (used by) operating activities: Net loss ($1,367) ($6,189) Adjustments to reconcile net loss to net cash provided by (used by) operating activities: Unrealized loss on CyberGuard Stock 2,666 0 Realized gain on CyberGuard stock (785) 0 Depreciation, amortization and other 2,409 5,977 Other non-cash expenses 2,025 3,065 Decrease (increase) in current assets: Accounts receivable 775 1,750 Inventories (2,215) 400 Prepaid expenses and other current assets 318 (25) Decrease in current liabilities other than debt obligations and restructuring reserve 0 (6,532) Increase (decrease) to restructuring reserve (5,957) 1,300 Decrease in other long-term assets 1,745 934 Decrease in other long-term liabilities (2,360) (86) -------------- -------------- Total adjustments to net loss (1,329) 6,783 -------------- -------------- Net cash provided by (used by) operating activities (2,696) 594 -------------- -------------- Cash flows provided by (used by) investing activities: Additions to property, plant and equipment (2,435) (1,230) Net proceeds from sale of trading securities 4,308 0 -------------- -------------- Net cash provided by (used by) investing activities 1,873 (1,230) -------------- -------------- Cash flows used by financing activities: Net proceeds (payments) of notes payable 410 (307) Net payments of revolving credit facility (970) (830) Repayment of long-term debt (612) (875) Net proceeds from sale and issuance of common stock 1,161 109 -------------- -------------- Net cash used by financing activities (11) (1,903) -------------- -------------- Effect of exchange rate changes on cash and cash equivalents (56) 244 -------------- -------------- Decrease in cash and cash equivalents ($890) ($2,295) ============== ============== Cash paid during the period for: Interest $ 961 $ 921 ============== ============== Income taxes (net of refunds) $ 615 $ 1,261 ============== ============== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS.
CONCURRENT COMPUTER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. The foregoing financial information reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. All such adjustments are of a normal recurring nature. While the Company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes included in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission. The results of interim periods are not necessarily indicative of the results to be expected for the full fiscal year. 2. CHANGES IN ACCOUNTING POLICY Post-retirement Benefits Other Than Pensions On July 1, 1993, the Company adopted the provisions of Statement of Financial Accounting Standards No. 106 "Employers' Accounting for Post-retirement Benefits Other Than Pensions" (FAS No. 106). This standard requires companies to accrue post-retirement benefits throughout the employees' active service periods until they attain full eligibility for those benefits. The transition obligation (the accumulated post-retirement benefit obligation at the date of adoption) may be recognized either immediately or by amortization over the longer of the average remaining service period of active employees or 20 years. In connection with the adoption of this standard in fiscal year 1994, the Company recorded a non-cash charge of $3.0 million representing the immediate recognition of the accumulated post-retirement benefit obligation at the date of the adoption. As a result of the Acquisition as defined in Management's Discussion and Analysis, the Company has decided to terminate the retirement benefits of current employees and former employees who are not yet retired. In the current quarter, a curtailment gain of $1.2 million was recorded relating to the active participants. The total year-to-date curtailment gain is $2.1 million. Stock-Based Compensation On July 1, 1996, the Company adopted the provisions of Statement of Financial Accounting Standards No. 123 "Accounting for Stock-Based Compensation" (FAS No. 123). This standard established a fair value method for accounting for stock-based compensation plans based upon the fair value of stock options and similar instruments, but does not require the adoption of this preferred method. The adoption of this standard will not impact results of operations, financial position or cash flows. INCOME (LOSS) PER SHARE Income (loss) per share for the three and six months ended December 28, 1996 and December 31. 1995, respectively, is based on the weighted average number of shares of common stock outstanding. The number of shares used in computing primary and fully diluted earnings per share for the three months ended December 28, 1996 was 45,310,000 and 45,317,000 respectively. For the three months ended December 31, 1995, the weighted average number of shares outstanding was 30,567,000. The number of shares used in computing net loss per share for the six months ended December 28, 1996 was 43,417,000 and for the six months ended December 31, 1995 was 30,439,000. 3. TRADING SECURITIES As of June 30, 1996, the company held 683,178 shares of CyberGuard stock with a market value of $14.75 per share. During the quarter ended September 27, 1996 the company had sold 91,500 shares at $10.645 per share, resulting in a realized loss of $376 thousand. In addition, the value of the stock at the end of the quarter ended September 27, 1996 was $8.50 per share, resulting in an unrealized loss of $3.7 million. During the quarter ended December 28, 1996, the company sold 261,500 shares at an average price of $12.748 per share, and sold a call option on an additional 300,000 shares. At December 28, 1996, the company held 330,178 shares, including the 300,000 shares subject to the call option. The market value of these shares was $3,838,319 or $11.625 per share. 4. INVENTORIES Inventories are valued at the lower of cost or market, with cost being determined by using the first-in, first-out ("FIFO") method. The components of inventories are as follows:
(DOLLARS IN THOUSANDS) DECEMBER 28, JUNE 30, 1996 1996 ------------ -------- Raw materials $ 8,924 $ 8,789 Work-in-process 2,699 352 Finished goods 1,950 2,542 ------------ -------- TOTAL $ 13,573 $ 11,683 ============ ========
5. ACCUMULATED DEPRECIATION Accumulated depreciation for property, plant and equipment at December 28, 1996 and June 30, 1996 was $47,117,000 and $44,213,000 respectively. 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
(DOLLARS IN THOUSANDS) DECEMBER 28, JUNE 30, 1996 1996 ------------- --------- Accounts payable, trade $ 12,393 $ 9,453 Accrued payroll, vacation and other employee expenses 7,135 7,934 Restructuring reserve 7,018 12,975 Other accrued expenses 7,506 10,276 ------------- --------- $ 34,052 $ 40,638 ============= =========
7. SALE/LEASEBACK On September 27, 1996, the Company entered into a Purchase and Sale Agreement providing for the sale/leaseback of its Oceanport, New Jersey facility. The transaction is contingent upon the buyer's ability to lease approximately 100,000 square feet of the 280,000 square foot building. The transaction was expected to close during the December, 1996 or January, 1997 timeframe. The contract has been extended in exchange for non-refundable monetary consideration. It is expected that this transaction will close by March or April, 1997. The $5.0 million sales price will be reduced by estimated selling costs of approximately $0.3 million. In accordance with the terms of the agreement under the New Term Loan, which is defined in Management's Discussion and Analysis of Financial Condition and Results of Operations, the Company is required to prepay the New Term Loan in an amount equal to 75% of the net proceeds of the sale of the facility. Accordingly, the net proceeds will be applied to the remaining outstanding balance of the New Term Loan (approximately $3.5 million). The remainder of the net proceeds will be available for working capital purposes. However, there can be no assurance that the transaction will be completed as contemplated. 8. PROVISION FOR RESTRUCTURING The Company recorded a restructuring provision of $24.5 million during the year ended June 30, 1996. This charge included the estimated costs related to the rationalization of facilities, workforce reductions, asset writedowns and other costs. The balance of the restructuring reserve at June 30, 1996 was $13.0 million. During the three and six months ended December 28, 1996, cash payments related to the 1996 restructuring amounted to approximately $1.7 million and $6.0 million respectively. Approximately $5.2 million related to employee termination costs. On May 5, 1992, the Company entered into an agreement with the Industrial Development Authority (IDA) in Ireland to maintain a presence in Ireland through April 30, 1998. In connection with the Acquisition, the Company has decided to close its Ireland operations. As a result, the Company may be required to pay approximately $575,000 (360,000 Irish pounds) to the IDA which is provided for in the restructuring provision. The Company is currently in negotiation with the IDA. 9. PREFERRED STOCK During the quarter ended December 28, 1996, CyberGuard exchanged 359,195.4 shares of the company's Class B 9% cumulative convertible, redeemable, exchangeable preferred stock for 900,000 shares of Concurrent Common Stock. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW On June 27, 1996, the Company acquired the Real-Time Division of Harris Computer Systems Corporation ("HCSC"), along with 683,178 shares of newly issued shares of HCSC, which was renamed CyberGuard Corporation, in exchange for 10,000,000 shares of Concurrent common stock, 1,000,000 shares of convertible exchangeable preferred stock of Concurrent with a 9% cumulative annual dividend payable quarterly in arrears and a mandatory redemption value of $6,263,000 and the assumption of certain liabilities related to the HCSC Real-Time Division ("Acquisition"). The aggregate purchase price of the Acquisition was approximately $18.7 million. The Acquisition has been accounted for as a purchase effective June 30, 1996. RESULTS OF OPERATIONS The quarter ended December 28, 1996 compared with the quarter ended December 31, 1995. Net Sales. Net sales increased to $26.6 million for the quarter ended December 28, 1996 from $24.5 million in the comparable period a year ago. The Company considers its computer systems and service business to be one class of products. Net product sales were $12.9 million for the quarter ended December 28, 1996 as compared with $10.3 million for the quarter ended December 31, 1995. Sales of proprietary systems continue to decline, while sales of open systems products are increasing. Maintenance sales decreased from $14.2 million in the second quarter of 1995 to $13.8 million in the second quarter of 1996, continuing the decline experienced over the past years as customers move from proprietary to open systems which require less maintenance. Gross Margin. Gross margin as a percentage of sales increased to 47.4% in the current quarter from 43.2% for the quarter ended December 31, 1995. The increase reflects the Company's higher product sales this quarter and its continued cost improvement efforts. Operating Income. Operating income increased $3.1 million to a profit of $1.7 million compared with a loss of $1.4 million in the quarter ended December 31, 1995. Expenses decreased $1.0 million in the current quarter compared with the quarter ended December 31, 1995, which was the net of $.4 million lower transition and restructuring costs, $.6 million higher selling, general and administrative, and research and development costs, and the recognition of a $1.2 million gain on discontinued post-retirement benefits for current and former employees as a result of the Acquisition. Net Income. Net income increased from a loss of $2.6 million in the quarter ended December 31, 1995 to a profit of $2.7 million in the current quarter. Of the $5.3 million increase in net income, $3.1 million resulted from operations as described above, and $2.2 million resulted from realized and unrealized gains on CyberGuard stock held for trading. The realized gain of $1.1 million resulted from the sale of 261,500 shares of Cyberguard stock at an average price of $12.748. The shares had been valued at $8.50 per share for the quarter ended September 27, 1996. The unrealized gain of $1.0 million is attributable to the revaluation of 330,178 shares of CyberGuard common stock at $11.625 per share at December 28, 1996, Six months ended December 28, 1996 compared with the six months ended December 31, 1995. Net Sales. Net sales increased to $54.4 million for the six months ended December 28, 1996 from $50.9 million in the comparable period a year ago. The Company considers its computer systems and service business to be one class of products. Net product sales were $26.2 million for the quarter ended December 28, 1996 as compared with $21.9 million for the six months ended December 31, 1995. Sales of proprietary systems continue to decline, while open systems products are increasing. Maintenance sales decreased from $29.1 million for the six months ended December 31, 1995 to $28.1 million for the comparable six months of 1996, continuing the decline experienced over the past years as customers move from proprietary to open systems which require less maintenance. Gross Margin. Gross margin as a percentage of sales increased to 47.4% in the current six month period from 42.8% for the six months ended December 31, 1995. The increase reflects the Company's higher product sales this quarter and its continued cost improvement efforts. Operating Income. Operating income increased $4.8 million to a profit of $3.0 million compared with a loss of $1.8 million in the six months ended December 31, 1995. Expenses decreased $1.9 million in the current six months compared with the six months ended December 31, 1995, which was the net of $.8 million higher transition and restructuring costs, and the recognition of a $2.2 million gain on discontinued post-retirement benefits for current and former employees as a result of the Acquisition. Net Income. Net income increased from a loss of $6.2 million in the six months ended December 31, 1995 to a loss of $1.4 million in the current half. The majority of the $4.8 gain in the half ended December 31, 1996 was from operating income, explained above. Interest and other non-recurring charges were similar in both periods. LIQUIDITY AND CAPITAL RESOURCES The Acquisition and related business integration and consolidation is expected to improve the Company's liquidity through improved operating performance, additional borrowing availability, and the planned disposition of its Oceanport, New Jersey facility. The Company may also utilize its remaining CyberGuard common stock holdings as an additional source of liquidity if needed. The Company's liquidity is dependent on many factors, including sales volume, operating profit ratio, debt service and the efficiency of asset use and turnover. The future liquidity of the Company depends to a significant extent on (i) the actual versus anticipated decline in sales of proprietary systems and service maintenance revenue; (ii) revenue growth from open systems; (iii) both the related costs and the length of time to realize the anticipated benefits from the combination of the real-time businesses of the Company and HCSC; and (iv) ongoing cost control actions. Liquidity will also be affected by: (i) timing of shipments which predominately occur during the last month of the quarter; (ii) the percentage of sales derived from outside the United States where there are generally longer accounts receivable collection cycles and which receivables are not included in the Company's borrowing base under its revolving credit facility; (iii) the sales level in the United States where related accounts receivable are included in the borrowing base of the Company's revolving credit facility; (iv) the number of countries in which the Company will operate, which may require maintenance of minimum cash levels in each country and, in certain cases, may restrict the repatriation of cash, such as cash held on deposit to secure office leases. The Company believes that it will be able to fund the acquisition costs, as well as fiscal year 1997 operations, through its operating results, existing financing facilities and the planned disposition of its Oceanport, New Jersey facility. There is no assurance that the Company's plans will be achieved. On June 28, 1996, the Company entered into a new agreement providing for a $19.9 million credit facility which matures August 1, 1999. The facility includes a $ 7.2 million term loan (the "New Term Loan") and a $12.7 million revolving credit facility (the "New Revolver"). The New Revolver represents a $4.7 million increase to the maximum revolver amount, subject to certain restrictions. In addition, the Company can borrow up to $3.0 million in standby letters of credit (the "LOC's") in connection with overseas lines of credit. The LOC's mature July 31, 1997 at which time the Company must extend the expiration date of the LOC's to August 1, 1999, or obtain alternative financing or guaranties in lieu thereof. At December 28, 1996, the outstanding balances under the New Term Loan and the New Revolver were $6.8 million and $4.0 million, respectively. The entire outstanding balance of the New Revolver has been classified as a current liability at December 28, 1996. Both the New Term Loan and the New Revolver bear interest at the prime rate plus 2.0%. The New Term Loan is payable in 28 monthly installments of approximately $139,000 each, commencing October 1, 1996 and ending January 1, 1999, with the final balance of approximately $3.3 million payable August 1, 1999. The New Revolver may be repaid and reborrowed, subject to certain collateral requirements, at any time during the term ending August 1, 1999. The Company has pledged substantially all of its domestic assets as collateral for the New Term Loan and the New Revolver. The Company may repay the New Term Loan at any time without penalty. In the event of a sale or sale/leaseback of its Oceanport facility, the Company is required to make a prepayment of the New Term Loan up to an amount equal to 75% of the net sale proceeds. Certain early termination fees apply if the Company terminates the facility in its entirety prior to August 1, 1999. The Company's joint venture agreement regarding its Japanese subsidiary has been renewed through June, 1997. In the event such agreement is not further extended, the Company could be required to satisfy the then outstanding amount of demand notes which are guaranteed by the Company ($2,583,312 at December 28, 1996). There can be no assurance that the agreement will be extended and, in the event the agreement is not extended, the Company may be required to extend its guarantees, or repay the demand notes and seek alternative financing. The Company expects to extend the joint venture agreement. The Company had cash and cash equivalents on hand of $2.7 million representing a decrease from $3.6 million as of June 30, 1996. In addition, the Company holds 330,178 shares of CyberGuard stock, which were valued at approximately $3.8 million ($11.625 per share) on December 28, 1996. Prepaid expenses and other current assets decreased by $0.3 million primarily due to timing differences. Other long-term assets decreased by $1.8 million primarily due to a reduction in the amount held in escrow to fund the directors and officers liability policy deductible. This deductible was reduced from $1.0 million to $0.25 million and the corresponding escrow amount was reduced accordingly. Accounts payable and accrued expenses decreased by $6.5 million due to primarily to reduction in the restructure reserve. Other long-term liabilities decreased by $2.4 million due primarily to the reduction in the post-retirement benefit obligation resulting from the plan termination. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This Form 10-Q contains forward-looking statements that are subject to risks and uncertainties. Statements indicating that the Company "expects," "estimates" or "believes" are forward-looking as are all other statements concerning future financial results, product offerings or other events that have not yet occurred. There are several important factors that could cause actual results or events to differ materially from those anticipated by the forward-looking statements contained herein. Such factors include, but are not limited to: the growth rates of the Company's market segments; the positioning of the Company's products in those segments; the Company's ability to effectively manage its business, and the growth of its business, in a rapidly changing environment; the timing of new product introductions; inventory risks due to changes in market conditions; the competitive environment in the computer industry; the Company's ability to establish successful strategic relationships; and general economic conditions. SELECTED OPERATING DATA AS A PERCENTAGE OF NET SALES
THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 28, DECEMBER 31, DECEMBER 28, DECEMBER 31, 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Net sales Computer systems 48.3% 42.2% 48.3% 42.9% Service and Other 51.7% 57.8% 51.7% 57.1% ------------- ------------- ------------- ------------- Total 100.0% 100.0% 100.0% 100.0% Cost of Sales Computer systems 25.5% 24.1% 25.6% 24.3% Service and other 26.9% 32.7% 27.4% 32.9% Transition 0.2% 0.0% 1.5% 0.0% ------------- ------------- ------------- ------------- Total 52.6% 56.8% 54.5% 57.2% Gross margin 47.4% 43.2% 45.5% 42.8% ------------- ------------- ------------- ------------- Operating expenses Research and development 12.9% 13.6% 12.5% 13.8% Selling, genral and administrative 29.3% 29.9% 27.6% 30.0% Transition/Restructure cost 3.3% 5.3% 3.9% 2.6% Post-retirement benefit reversal (4.5%) 0.0% (4.0%) 0.0% ------------- ------------- ------------- ------------- Total operating expenses 41.0% 48.8% 40.0% 46.4% Operating income (loss) 6.4% (5.6%) 5.5% (3.6%) Interest expense (2.0%) (2.6%) (2.2%) (2.6%) Interest income 0.1% 0.3% 0.1% 0.4% Other income (expense) - net (0.6%) (0.1%) (0.8%) (1.0%) Other non-recurring charges 0.0% 0.0% 0.0% (3.3%) Gain/loss Cyberguard stock 8.2% 0.0% (3.4%) 0.0% Income (loss) before provision 12.1% (8.0%) (0.7%) (10.2%) for income taxes Provision for income taxes 2.0% 2.5% 1.8% 2.0% ------------- ------------- ------------- ------------- Net income (loss) 10.1% (10.4%) (2.5%) (12.2%) ============= ============= ============= =============
PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K (a) Exhibits: (3) Amended and Restated By-laws of the Company (November, 1996) (10) Amendment No. Twelve to the Loan and Security Agreement dated as of October 21, 1996 between the Company and Foothill Capital Corporation (11) Amendment No. Thirteen to the Loan and Security Agreement dated as of November 5, 1996 between the Company and Foothill Capital Corporation (12) Statement on computation of per share earnings (27) Financial Data Schedule (b) Reports on Form 8-K. None SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this quarterly report for the quarter ended December 28, 1996 to be signed on its behalf by the undersigned thereunto duly authorized. Date: February 12, 1997 CONCURRENT COMPUTER CORPORATION By: /s/ E. Courtney Siegel -------------------------- E.COURTNEY SIEGEL President and Chief Executive Officer By: /s/ Daniel S. Dunleavy ------------------------ DANIEL S. DUNLEAVY Vice President, Chief Financial Officer and Chief Administrative Officer (Principal Financial and Accounting Officer) EX-3 2 EXHIBIT 3 AMENDED AND RESTATED BY-LAWS OF CONCURRENT COMPUTER CORPORATION (NOVEMBER 1996) **** ARTICLE I --------- Certificate of Incorporation ---------------------------- These by-laws, the powers of the corporation and of its directors and stockholders, and all matters concerning the conduct and regulation of the business of the corporation shall be subject to such provisions in regard thereto as are set forth in the certificate of incorporation filed pursuant to the General Corporation Law of the State of Delaware, which is hereby made a part of these by-laws. The term "certificate of incorporation" in these by-laws unless the context requires otherwise, includes not only the original certificate of incorporation filed to create the corporation but also all other certificates, agreements of merger or consolidation, plans of reorganization, or other instruments, howsoever designated, filed pursuant to the General Corporation Law of the State of Delaware which have the effect of amending or supplementing in some respect the corporation's original certificate of incorporation. ARTICLE II ---------- Annual Meeting -------------- An annual meeting of stockholders shall be held for the election of directors and for the transaction of any other business for the transaction of which the meeting shall have been properly convened on such day not a legal holiday in the months of September, October, or November in each year, or upon such other day as the board of directors may at any time otherwise determine, at such place, within or without the State of Delaware, and at such time as such day, place and time shall be fixed by the board of directors and specified in the notice of the meeting. Any other proper business may be transacted at the annual meeting. If the annual meeting for election of directors shall not be held on the date designated therefor, the directors shall cause the meeting to be held as soon thereafter as convenient. ARTICLE III ----------- Special Meetings of Stockholders -------------------------------- Special meetings of the stockholders may be held either within or without the State of Delaware, at such time and place and for such purposes as shall be specified in a call for such meeting made by the board of directors or by a writing filed with the secretary signed by the president or by a majority of the directors. ARTICLE IV ---------- Notice of Stockholders' Meetings -------------------------------- Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, which notice shall be given not less than ten nor more than fifty days before the date of the meeting, except where longer notice is required by law, to each stockholder entitled to vote at such meeting, by leaving such notice with him or by mailing it, postage prepaid, directed to him at his address as it appears upon the records of the corporation. In case of the death, absence, incapacity or refusal of the secretary, such notice may be given by a person designated either by the secretary or by the person or persons calling the meeting or by the board of directors. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. An affidavit of the secretary or an assistant secretary or of the transfer agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein. At an annual or special meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before a meeting business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors, (b) otherwise properly brought before the meeting by or at the direction of the board of directors, or (c) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before a meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the secretary of the corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the meeting (a) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (b) the name and address, as they appear on the corporation's books, of the stockholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (d) any material interest of the stockholder in such business. Provided at all times that stockholders may only give notice to the secretary of matters to be brought before a meeting that are suitable and appropriate for consideration by stockholders of a public company. Notwithstanding anything in the By-Laws to the contrary, no business shall be conducted at any meeting except in accordance with the procedures set forth in this paragraph. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this paragraph, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Only persons who are nominated in accordance with the procedures set forth in this paragraph shall be eligible for election as directors at a meeting of stockholders. Nominations of persons for election to the board of directors of the corporation may be made at a meeting of stockholders by or at the direction of the board of directors or by any stockholder of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this paragraph. Such nominations, other than those made by or at the direction of the board of directors, shall be made pursuant to timely notice in writing to the secretary of the corporation. To be timely, a stockholder's notice shall be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such stockholder's notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the corporation which are beneficially owned by such person and (iv) any other information relating to such person that is required to be disclosed in solicitations or proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such persons' written consent to being named in the proxy statement as a nominee and to serving as a director if elected); and (b) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation's books, of such stockholder and (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder. At the request of the board of directors any person nominated by the board of directors for election as a director shall furnish to the secretary of the corporation that information required to be set forth in a stockholder's notice of nomination which pertains to the nominee. No person shall be eligible for election as a director of the corporation unless nominated in accordance with the procedures set forth in this paragraph. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the By-Laws, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. ARTICLE V --------- Quorum of Stockholders: Stockholder List ---------------------------------------- At any meeting of the stockholders, a majority (based on voting rights of all shares) of all shares issued and outstanding and entitled to vote upon a question to be considered at the meeting shall constitute a quorum for the consideration of such question when represented at such meeting by the holders thereof in person or by their duly constituted and authorized attorney, but a less interest may adjourn any meeting from time to time, and the meeting may be held as adjourned without further notice. When a quorum is present at any meeting a majority of the stock so represented thereat and entitled to vote shall, except where a larger vote is required by law, by the certificate of incorporation or by these by-laws, decide any question brought before such meeting. The secretary or other officer having charge of the stock ledger shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten days prior to the meeting, either at a place within the city or town where the meeting is to be held, which place shall have been specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. Said list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders required by this Article or the books of the corporation, or the stockholders entitled to vote in person or by proxy at any meeting of stockholders. ARTICLE VI ---------- Proxies and Voting ------------------ Except as otherwise provided in the certificate of incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote for each share of the capital stock held by such stockholder. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy but (except as otherwise expressly permitted by law) no proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period or so long as it is coupled with an interest sufficient in law to support an irrevocable power. ARTICLE VII ----------- Stockholders' Record Date ------------------------- In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the board of directors may fix, in advance, a record date, which shall not be more than sixty or less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed: (1) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (2) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the board of directors is necessary, shall be the day on which the first written consent is expressed. (3) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the board of directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, provided, however, that the board of directors may fix a new record date for the adjourned meeting. ARTICLE VII ----------- Board of Directors ------------------ Except as otherwise provided by law or by the certificate of incorporation, the business and affairs of the corporation shall be managed by the board of directors. The number of directors shall be such number, not fewer than three nor more than twelve, as may be determined from time to time by resolution of the board of directors. Directors shall be elected by the stockholders at the annual meeting. Each director shall hold office until his successor is elected and qualified or until his earlier resignation or removal. Any director may resign at any time upon written notice to the corporation. No director need be a stockholder. ARTICLE IX ---------- Committees ---------- The board of directors may, by resolution passed by a majority of the whole board, designate one or more committees, each committee to consist of one or more of the directors of the corporation. The board may designate one or more directors as alternate members of any committee who may replace any absent or disqualified member at any meeting of the committee and may define the number and qualifications which shall constitute a quorum of such committee. Except as otherwise limited by law, any such committee, to the extent provided in the resolution appointing such committee, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member. ARTICLE X --------- Meetings of the Board of Directors and of Committees ---------------------------------------------------- Regular meetings of the board of directors may be held without call or formal notice at such places either within or without the State of Delaware and at such times as the board may by vote from time to time determine. Special meetings of the board of directors may be held at any place either within or without the State of Delaware at any time when called by the chairman of the board, secretary or two or more directors, reasonable notice of the time and place thereof being given to each director. Unless otherwise restricted by the certificate of incorporation or by other provisions of these by-laws, (a) any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting of all members of the board or of such committee, as the case may be, consent thereto in writing and such writing or writings are filed with the minutes of proceedings of the board or committee, and (b) members of the board of directors or of any committee designated by the board may participate in a meeting thereof by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at such meeting. ARTICLE XI ---------- Quorum of the Board of Directors -------------------------------- Except as otherwise expressly provided in the certificate of incorporation or in these by-laws, a majority of the total number of directors at the time in office shall constitute a quorum for the transaction of business, but a less number may adjourn any meeting from time to time. Except as otherwise so expressly provided, the vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, provided, that the affirmative vote in good faith of a majority of the disinterested directors, even though the disinterested directors shall be fewer than a quorum, shall be sufficient to authorize a contract or transaction in which one or more directors have an interest if the material facts as to such interest and the relation of the interested directors to the contract or transaction have been disclosed or are known to the directors. ARTICLE XII ----------- Waiver of Notice of Meetings ---------------------------- Whenever notice is required to be given under any provision of law or the certificate of corporation or by-laws, a written waiver thereof, signed by the person entitled to notice whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of incorporation or the by-laws. ARTICLE XIII ------------ Officers and Agents ------------------- The corporation shall have a president, secretary and treasurer, who shall be chosen by the directors, each of whom shall hold his office until his successor has been chosen and qualified or until his earlier resignation or removal. The corporation may have such other officers and agents as are desired, including without limitation a chairman of the board of directors and an executive vice president, each of whom shall be chosen by the board of directors and shall hold his office for such term and have such authority and duties as shall be determined by the board of directors. The board of directors may secure the fidelity of any or all of such officers or agents by bond or otherwise. Any number of offices may be held by the same person. Each officer shall, subject to these by-laws, have in addition to the duties and powers herein set forth, such duties and powers as the board of directors shall from time to time designate. In all cases where the duties of any officer, agent or employee are not specifically prescribed by the by-laws, or by the board of directors, such officer, agent or employee shall obey the orders and instructions of the president. Any officer may resign at any time upon written notice to the corporation. ARTICLE XIV ----------- Chairman of the Board --------------------- Except as otherwise voted by the board, the chairman of the board shall preside at all meetings of the stockholders and of the board of directors at which he is present. President & Chief Executive Officer ----------------------------------- The president and chief executive officer shall, subject to the direction and under the supervision of the board of directors, have general and active control of the corporation's affairs and business, and general supervision over its officers, agents and employees. In the absence of and when so designated by the chairman of the board, the president and chief executive officer shall perform the duties and responsibilities of the chairman of the board on a temporary basis in accordance with and as specifically prescribed by the by-laws or as specifically prescribed by the board of directors. The president and chief executive officer shall have custody of the treasurer's bond, if any. ARTICLE XV ---------- Secretary --------- The secretary shall record all the proceedings of the meetings of the stockholders and directors in a book, which shall be the property of the corporation, to be kept for that purpose. The secretary shall perform such other duties as shall be assigned to him by the board of directors. In the absence of the secretary from any such meeting, a temporary secretary shall be chosen, who shall record the proceedings of such meetings in the aforesaid book. ARTICLE XVI ----------- Treasurer --------- The treasurer shall, subject to the direction and under the supervision of the board of directors, have the care and custody of the funds and valuable papers of the corporation, except his own bond, and he shall, except as the board of directors shall generally or in particular cases authorize the endorsement thereof in some other manner, have power to endorse for deposit or collection all notes, checks, drafts and other obligations for the payment of money to the corporation or its order. He shall keep, or cause to be kept, accurate books of account, which shall be the property of the corporation. ARTICLE XVII ------------ Removals -------- The stockholders may, at any meeting called for the purpose, by vote of a majority of the capital stock issued and outstanding and entitled to vote thereon, remove any director from office. The board of directors may, at any meeting called for the purpose, by vote of a majority of their entire number remove from office any officer or agent of the corporation or any member of any committee appointed by the board of directors or by any committee of the board of directors or by any officer or agent of the corporation. ARTICLE XVIII ------------- Vacancies --------- Any vacancy occurring in any office of the corporation by death, resignation, removal or otherwise and newly created directorships resulting from any increase in the authorized number of directors, may be filled by a majority of the directors then in office (though less than a quorum) or by a sole remaining director, and each of the incumbents so chosen shall hold office for the unexpired term in respect of which the vacancy occurred and until his successor shall have been duly elected and qualified or for such shorter period as shall be specified in the filling of such vacancy or, if such vacancy shall have occurred in the office of director, until such a successor shall have been chosen by the stockholders. ARTICLE XIX ----------- Certificates of Stock --------------------- Every holder of stock in the corporation shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the board of directors (if one shall be incumbent) or the president or a vice-president and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary, certifying the number of shares owned by him in the corporation. If such certificate is countersigned (1) by a transfer agent other than the corporation or its employee, or (2) by a registrar other than the corporation or its employee, any other signatures on the certificate may be facsimile. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the date of issue. If the corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificates which the corporation shall issue to represent such class or series of stock or there shall be set forth on the face or back of the certificates which the corporation shall issue to represent such class or series of stock, a statement that the corporation will furnish, without charge to each stockholder who so requests, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Any restriction imposed upon the transfer of shares or registration of transfer of shares shall be noted conspicuously on the certificate representing the shares subject to such restriction. ARTICLE XX ---------- Loss of Certificate ------------------- The corporation may issue a new certificate of stock in place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the directors may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate in its place and upon such other terms or without any such bond which the board of directors shall prescribe. ARTICLE XXI ----------- Seal ---- The corporate seal shall, subject to alteration by the board of directors, consist of a flat-faced circular die with the word "Delaware" together with the name of the corporation and the year of its organization cut or engraved thereon. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE XXII - ------------- Execution of Papers - --------------------- Except as otherwise provided in these by-laws or as the board of directors may generally or in particular cases authorize the execution thereof in some other manner, all deeds, leases, transfers, contracts, bonds, checks, drafts and other obligations made, accepted or endorsed by the corporation, shall be signed by the president or by the treasurer. ARTICLE XXIII ------------- Indemnification --------------- The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving, at the request of the corporation, another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments and fines actually imposed or reasonably incurred by him in connection with such action, suit or proceeding unless in any proceeding he shall be finally adjudged not to have acted in good faith in the reasonable belief that his action was in the best interests of the corporation; provided, however, that such indemnification shall not cover liabilities in connection with any matter which shall be disposed of through a compromise payment by such person, pursuant to a consent decree or otherwise, unless such compromise shall be approved as in the best interest of the corporation, after notice that it involves such indemnification, (a) by the board of directors by a majority vote of a quorum consisting of directors who were not parties to such action, event or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable, a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders. Such indemnification may include payment by the corporation of expenses incurred in defending a civil or criminal action or proceeding in advance of the final disposition of such action or proceeding, upon receipt of an undertaking by the person indemnified to repay such payment if he shall be adjudicated to be not entitled to indemnification under these provisions. The rights of indemnification hereby provided shall not be exclusive of or affect other rights to which any director, officer, employee, agent or stockholder may be entitled. As used in this paragraph, the terms "director", "officer", "employee", "agent" or "stockholder" include their respective heirs, executors and administrators, and an "interested" director or officer is one against whom as such the proceeding in question or another proceeding on the same or similar grounds is then pending. Any indemnification to which a person is entitled under this paragraph shall be provided although the person to be indemnified is no longer such a director, officer, employee, agent or stockholder. Notwithstanding the foregoing, no indemnification shall be provided hereunder to the extent then prohibited by applicable law. ARTICLE XXIV ------------ Fiscal Year ----------- Except as from time to time otherwise provided by the board of directors, the fiscal year of the corporation shall end on the last day of June of each year. ARTICLE XXV ----------- Amendments ---------- Except as otherwise provided by law or by the certificate of incorporation, these by-laws, as from time to time altered or amended, may be made, altered or amended at any annual or special meeting of the stockholders called for the purpose, of which the notice shall specify the subject matter of the proposed alteration or amendment or new by-law or the article or articles to be affected thereby. If the certificate of incorporation so provides, these by-laws may also be made, altered or amended by a majority of the whole number of directors. Such action may be taken at any meeting of the board of directors, of which notice shall have been given as for a meeting of stockholders. EX-10 3 EXHIBIT 10 AMENDMENT NO. TWELVE TO THE LOAN AND SECURITY AGREEMENT CONCURRENT COMPUTER CORPORATION This Amendment No. Twelve To The Loan And Security Agreement (this "Amendment") is entered into as of this 21st day of October, 1996, by and between CONCURRENT COMPUTER CORPORATION, a Delaware corporation ("Borrower"), with its chief executive office located at 2101 W. Cypress Creek Road, Fort Lauderdale, Florida 33309 and FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), with a place of business located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025-3333, in light of the following facts: FACTS ----- FACT ONE: Foothill and Borrower have previously entered into that ---------- certain Loan And Security Agreement, dated as of June 29, 1995 (as amended and supplemented, the "Agreement"). FACT TWO: Foothill and Borrower desires to further amend the ---------- Agreement as provided herein. Terms defined in the Agreement which are used herein shall have the same meanings as set forth in the Agreement, unless otherwise specified. NOW, THEREFORE, Foothill and Borrower hereby modify and amend the Agreement as follows: 1. Subsection (g) of the Definition "Eligible Accounts" under Section ----------------- 1.1 of the Agreement, is hereby amended in its entirety to read as follows: "(g) Accounts with respect to an Account Debtor whose total obligations owing to Borrower exceed ten percent (10%) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such percentage, and with respect to Cyberguard Corporation, whose total obligations to Borrower exceed fifteen percent (15%) from October 15, 1996 through December 28, 1996 and shall revert to ten percent (10%); provided, however that -------- ------- accounts owed by the Illinois Department of Public Aid, Loral, Lockheed, Airinc, Boeing Co., Grumman Aircraft, Martin Marietta Corp., Hughes Aircraft, Hughes Training Inc., ABB Combustion Engineering, and other accounts that may be approved from time to time by Foothill may be eligible up to a maximum, per Account Debtor, of fifteen percent (15%) of all Eligible Accounts, so long as they are otherwise eligible hereunder;" 2. Notwithstanding anything to the contrary of Subsection (e) of the Definition of "Eligible Accounts" in Section 1.1 of the Agreement, commencing October 15, 1996 through December 31, 1996, the dollar amount shall read $1,500,000. Effective, January 1, 1997, dollar amount shall revert to $1,000,000. 3. As a condition subsequent to the effectiveness of Foothill's agreement to temporarily increase Cyberguard Corporation's concentration limit from ten percent (10%) to fifteen percent (15%), Foothill shall institute a contra reserve of Ten Thousand Dollars ($10,000) per week to Borrower's ineligible calculation through December 31, 1996. Beginning January 1, 1997, one hundred percent (100%) of any remaining Cybergard Corporation contras will be considered ineligible. 4. Foothill shall charge Borrower's loan account a fee in the amount of Fifteen Thousand Five Hundred Dollars ($15,500). Said fee shall be fully-earned, non-refundable, and due and payable on the date Borrower's loan account is charged. 5. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement, as supplemented, amended and modified, shall remain in full force and effect. IN WITNESS WHEREOF, Borrower and Foothill have executed this Amendment as of the day and year first written above. FOOTHILL CAPITAL CORPORATION CONCURRENT COMPUTER CORPORATION By /S/ LISA M. GONZALES By /S/ ROBERT FITZPATRICK ------------------ ------------------- Lisa M. Gonzales Robert Fitzpatrick Its Assistant Vice President Its Vice President & Treasurer ------------------------ -------------------------- EX-11 4 EXHIBIT 11 AMENDMENT NO. THIRTEEN TO THE LOAN AND SECURITY AGREEMENT CONCURRENT COMPUTER CORPORATION This Amendment No. Thirteen To The Loan And Security Agreement (this "Amendment") is entered into as of this 5th day of November, 1996, by and between CONCURRENT COMPUTER CORPORATION, a Delaware corporation ("Borrower"), with its chief executive office located at 2101 W. Cypress Creek Road, Fort Lauderdale, Florida 33309 and FOOTHILL CAPITAL CORPORATION, a California corporation ("Foothill"), with a place of business located at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025-3333, in light of the following facts: FACTS ----- FACT ONE: Foothill and Borrower have previously entered into that ---------- certain Loan And Security Agreement, dated as of June 29, 1995 (as amended and supplemented, the "Agreement"). FACT TWO: Foothill and Borrower desires to further amend the ---------- Agreement as provided herein. Terms defined in the Agreement which are used herein shall have the same meanings as set forth in the Agreement, unless otherwise specified. NOW, THEREFORE, Foothill and Borrower hereby modify and amend the Agreement as follows: 1. The second paragraph of Section 2.8 of the Agreement, is hereby amended in its entirety to read as follows: "Concurrent with the Permitted Real Property Disposition of the Oceanport Real Property and as a condition concurrent to the release of Foothill's lien upon the Oceanport Real Property, Borrower shall prepay the Term Note by seventy-five percent (75%) of the net cash proceeds of such Permitted Real Property Disposition, such repayment to be applied as follows: (i)Eight Hundred Thirty Four Thousand Dollars ($834,000), to the installments due under the Term Loan in the order of their maturity, and (ii) the remaining balance due under the Term Note in the inverse order of their maturity." 2. Foothill shall charge Borrower's loan account a fee in the amount of Fifteen Thousand Three Hundred Dollars ($15,300). Said fee shall be fully-earned, non-refundable, and due and payable on the date Borrower's loan account is charged. 3. In the event of a conflict between the terms and provisions of this Amendment and the terms and provisions of the Agreement, the terms and provisions of this Amendment shall govern. In all other respects, the Agreement, as supplemented, amended and modified, shall remain in full force and effect. IN WITNESS WHEREOF, Borrower and Foothill have executed this Amendment as of the day and year first written above. FOOTHILL CAPITAL CORPORATION CONCURRENT COMPUTER CORPORATION By /S/ LISA M. GONZALES By /S/ ROBERT FITZPATRICK ------------------ ------------------- Lisa M. Gonzales Robert Fitzpatrick Its Assistant Vice President Its Vice President & Treasurer ------------------------ -------------------------- EX-12 5 CONCURRENT COMPUTER CORPORATION EXHIBIT 12 CONCURRENT COMPUTER CORPORATION
PRIMARY AND FULLY DILUTED EARNINGS PER SHARE COMPUTATION (DOLLARS AND SHARES IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) THREE MONTHS ENDED SIX MONTHS ENDED DECEMBER 28, DECEMBER 31, DECEMBER 28, DECEMBER 31, ------------- ------------- ------------- ------------- 1996 1995 1996 1995 ------------- ------------- ------------- ------------- Net income (loss) $ 2,695 ($2,557) ($1,367) ($6,189) ============= ============= ============= ============= Weighted average number of common shares 44,466 30,567 43,417 30,439 Increase in weighted average number of common shares upon assumed conversion of preferred stock -- -- -- -- Increase in weighted average number of common shares upon assumed conversion of stock options 851 -- -- -- ------------- Total 45,317 30,567 43,417 30,439 ============= ============= ============= ============= NET INCOME (LOSS) PER SHARE Primary $ 0.06 ($0.08) ($0.03) ($0.20) ============= ============= ============= ============= Fully Diluted $ 0.06 ($0.08) ($0.03) ($0.20) ============= ============= ============= =============
EX-27 6
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED BALANCE SHEET AT DECEMBER 28, 1996, AND CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 28,1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUN-30-1996 JUN-30-1996 DEC-28-1996 2672 3838 29270 2097 13573 50250 63911 47117 72530 49869 5564 448 3750 0 10798 72530 26244 54382 13905 29621 0 2097 1191 (397) 970 (1367) 0 0 0 (1367) (.03) (.03)
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