-----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, IyuevQOjEYbT9yQLAtthCquBDD/w1NbDkI8i9nv9Nyqmpc4qtffMyXXiu+WkyEB7 RUL4G6LmQgLIFTVY1y+eNA== 0000800460-96-000027.txt : 19960814 0000800460-96-000027.hdr.sgml : 19960814 ACCESSION NUMBER: 0000800460-96-000027 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA MICRO DEVICES CORP CENTRAL INDEX KEY: 0000800460 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 942672609 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15449 FILM NUMBER: 96610923 BUSINESS ADDRESS: STREET 1: 215 TOPAZ ST CITY: MILPITAS STATE: CA ZIP: 95035-5430 BUSINESS PHONE: 4082633214 MAIL ADDRESS: STREET 1: 215 TOPAZ STREET STREET 2: 215 TOPAZ STREET CITY: MILPITAS STATE: CA ZIP: 95035-5430 10-Q 1 United States 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 Period Ended June 30, 1996 Or [ ] Transition Report Pursuant To Section 10 Or 15(D) Of The Securities Exchange Act Of 1934 For the Transition Period From ____________ to ___________ Commission File Number 0-15449 CALIFORNIA MICRO DEVICES CORPORATION ------------------------------------ (Exact name of registrant as specified in its charter) California 94-2672609 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 215 Topaz Street, Milpitas, California 95035-5430 -------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (408) 263-3214 ------------- (Registrant's telephone number, including area code) Not applicable -------------- (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 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 the court. Yes X 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: As of June 30, 1996, there were outstanding 10,498,895 shares of Issuer's Common Stock. 1 CALIFORNIA MICRO DEVICES CORPORATION INDEX PART I. FINANCIAL INFORMATION Page Number Item 1. Financial Statements Statements of Operations Three Months Ended June 30, 1996 and 1995 2 Balance Sheets June 30, 1996 and March 31, 1996 3 Statements of Cash Flows Three Months Ended June 30, 1996 and 1995 4 Notes to 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 4. Submission of Matters to a Vote of Security Holders 9 Item 6. Exhibits and Reports on Form 8-K 10 Signature 11 ii PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements. CALIFORNIA MICRO DEVICES CORPORATION STATEMENTS OF OPERATIONS (Amounts in Thousands, Except Per Share Data) (Unaudited) Three Months Ended June 30, -------------------------- 1996 1995 ---- ---- Revenues: Net product sales $ 9,295 $ 8,344 Technology related sales 300 303 -------- ------- Total revenues 9,595 8,647 Cost and expenses: Cost of sales 6,224 4,753 Research and development 987 866 Selling, marketing and administrative 2,152 2,474 ------- ------- Total costs and expenses 9,363 8,093 ------- ------- Operating income 232 554 Other (income) expense, net (100) 37 ------ ------- Income before income taxes 332 517 Income taxes - - Net income $ 332 $ 517 ======= ======= Net income per share $ 0.03 $ 0.05 ======= ======= Weighted average common shares and share equivalents outstanding 11,020 9,782
The accompanying notes are an integral part of these financial statements. 2 CALIFORNIA MICRO DEVICES CORPORATION BALANCE SHEETS (Amounts in Thousands, Except Share Data) (Unaudited) June 30, March 31, 1996 1996 --------- --------- ASSETS Current assets: Cash and cash equivalents $ 510 $ 1,512 Short-term investments 18,436 20,638 Accounts receivable, less allowance for doubtful accounts of $909 and $960 4,558 4,500 Inventories 7,515 6,940 Prepaid expenses and other assets 462 585 -------- -------- Total current assets 31,481 34,175 Property and equipment, net 11,564 9,314 Restricted cash 1,144 905 Other long-term assets 450 534 -------- -------- Total assets $ 44,639 $ 44,928 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,091 $ 2, 832 Accrued salaries and benefits 1,032 1,250 Other accrued liabilities 3,355 4,279 Deferred margin on shipments to distributors 1,027 1, 039 Current maturities of long-term debt and capital lease obligations 855 1,282 -------- -------- Total current liabilities 9,360 10, 682 Long-term debt, less current maturities 7,490 7, 490 Capital lease obligations less current maturities 226 299 Deferred income - 107 -------- ------- Total liabilities 17,076 18,578 Shareholders' equity: Common stock - no par value; authorized 25,000,000; issued and outstanding 10,498,895 shares 56,378 55,442 Retained earnings (deficit) (28,815) (29,092) ------- ------- Total shareholders' equity 27,563 26,350 Total liabilities and shareholders' equity $44,639 $44,928 ======= =======
The accompanying notes are an integral part of these financial statements. 3 CALIFORNIA MICRO DEVICES CORPORATION STATEMENTS OF CASH FLOWS (Amounts in Thousands) (Unaudited) Three Months Ended June 30, ------------------- 1996 1995 -------- ------- Cash flows from operating activities: Net income $ 332 $ 517 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 540 360 Net (increase)/decrease in inventories (575) 172 Net (increase)/decrease in accounts receivable (58) (610) Net (increase)/decrease in prepaid expenses and other current assets 123 161 Net increase/(decrease) in trade accounts payable and other current liabilities (883) 232 Net (increase)/decrease in other long term assets 84 - Increase/(decrease) in deferred margin on distributor sales (12) 91 ------- ------- Net cash (used)/provided by operating activities (449) 923 ------- ------- Cash used in investing activities: Security purchases (2,069) (446) Security sales 4,216 600 Capital expenditures (2,790) (962) Net change in restricted cash (239) (241) ------- ------- Net cash used in investing activities (882) (1,049) ------- ------- Cash (used)/provided by financing activities: Payment of capital lease obligations (524) (648) Payment of long-term debt (83) (84) Proceeds from issuance of common stock 936 - ------- ------- Net cash (used)/provided by financing activities 329 (732) ------- ------- Net increase/(decrease) in cash and cash equivalents (1,002) (858) Cash and cash equivalents at the beginning of period 1,512 10,556 ------- ------- Cash and cash equivalents at the end of period $ 510 $ 9,698 ======= ======= Supplemental disclosure of cash flow information: Interest paid $ 64 $ 148 Income taxes paid $ - $ -
The accompanying notes are an integral part of these financial statements. 4 CALIFORNIA MICRO DEVICES CORPORATION Notes to Financial Statements 1. Basis of Presentation --------------------- In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly California Micro Devices Corporation's (the "Company") financial position as of June 30, 1996, results of operations for the three month periods ended June 30, 1996 and 1995, and cash flows for the three-month periods ended June 30, 1996 and 1995. Results for the quarter are not necessarily indicative of fiscal year results. 2. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The condensed financial statements should be read in conjunction with the financial statements included with the Company's annual report on Form 10-K for the fiscal year ended March 31, 1996. 3. Inventories ----------- The components of inventory consist of the following: (Amounts in Thousands) June 30, March 31, 1996 1996 -------- -------- Raw materials $ 1,006 $ 1,093 Work-in-process 4,360 3,949 Finished goods 2,149 1,898 -------- -------- $ 7,515 $ 6,940 ======== ========
4. Litigation ---------- Reference should be made to the Company's filings with the SEC, including its reports on Form 10-K for its 1996 fiscal year. In addition to the matters reported therein, the following legal proceedings have taken place: In connection with the purported class action litigation previously reported, the Company continues to engage in settlement discussions with counsel for the class. In consideration of the decisions to date in the class action proceedings, there can be no absolute assurance that the ultimate resolution of this litigation will be in the amount and form which the Company has recognized in its financial statements. However, based on information currently available to it, 5 the Company believes that any settlement of this matter will involve terms that are comparable in aggregate value to those previously proposed to and accepted by the former Class counsel. The Company is a defendant or plaintiff in various other actions which arose in the normal course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the financial condition or overall trends in the results of the operations of the Company. The Company believes that, with regard to these matters and those previously reported, it has, to the best of its knowledge, made such adjustments to its financial statements by means of reserves and expensing the costs thereof, that these matters will not have any additional adverse impact on the Company's financial condition. Provided, however, that if the ultimate resolution of the class action litigation substantially exceeds the amounts previously reserved therefore, such resolution may have a material adverse effect on the Company's financial condition. 5. Net Income Per Share -------------------- Net income per share for each period is computed using the weighted average number of common shares and dilutive common share equivalents outstanding during the periods. 6 ITEM 2. Management's Discussion And Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations. -------------------------- Results of Operations Product sales for the quarter ended June 30, 1996, increased by $951,000 or 11% compared to the quarter ended June 30, 1995, due to increased sales of semiconductor products in the telecommunications sector. Thin film product sales for the quarter ended June 30, 1996, were essentially flat as compared to the year earlier quarter. Thin film sales continue to represent the majority of net product sales, but declined to 55% of net product sales from 61% of net product sales compared to the same period in fiscal 1996 due to declining sales to the personal computer market, and the reduced level of activity in the electronic component markets. This decline was partially offset by increased sales to the networking and workstation markets. Compared to the quarter ended March 31, 1996 (fiscal 1996 fourth quarter), semiconductor sales for the June 30, 1996 quarter were essentially flat, but thin film sales declined $1.3 million primarily due to lower sales to the personal computer market. Technology related revenue for the quarters ended June 30, 1996 and June 30, 1995 related to engineering projects partially funded by Hitachi Metals, Ltd. ("HML"). Gross margins for net product sales for the quarter ended June 30, 1996 were 33% compared to 43% for the quarter ended June 30, 1995. The reduction in margins for the current quarter is a result of the change in product sales mix, reflecting increased sales of packaged devices which involve considerable external expenditures and reduced sales of product in die form, which absorbed considerable fixed internal overhead. Research and development expenditures for the quarter ended June 30, 1996 were 11% of product sales compared to 10% for the three months ended June 30, 1995. The increase in research and development expenditure to $987,000 for the June 30, 1996 quarter compared to $866,000 in the year earlier period was due primarily to new development projects, including new P/Active( products for SCSI Terminators and RC Network products. Selling, marketing, and administrative costs decreased as a percentage of sales to 23% of net product sales in the quarter ended June 30, 1996 compared to 30% of net product sales in the quarter ended June 30, 1995. This drop in spending primarily reflects reductions in unusual audit, consulting and legal fees incurred in the corresponding 1995 quarter. As a result of the factors discussed above, operating income for the quarter ended June 30, 1996 was $232,000 compared to operating income of $554,000 for the year earlier quarter. Other (income)/expense for the current quarter was an income of $100,000 as compared to an expense of $37,000 in the 1995 quarter. This was due to increased interest income from investments and also due to reduced interest expense on leased equipment and debt balances. No income taxes were accrued for the quarters ended June 30, 1996 or June 30, 1995, due to the availability of tax loss carryforwards. 7 The weighted average of common shares outstanding increased to 11.0 million shares in the June 30, 1996 quarter compared to 9.8 million shares for the quarter ended June 30, 1995. The increase of 1.2 million weighted shares outstanding is due primarily to stock options exercised by employees, and stock issued for proposed settlement agreements. The additional dilution was caused by the effect on the calculation of outstanding options due to the higher stock price during the June 30, 1996 quarter as compared to the June 30, 1995 quarter. Liquidity and Capital Resources The Company's cash, cash equivalents, and short term securities decreased by $3,204,000, from $22,150,000 at March 31, 1996 to $18,946,000 at June 30, 1996 primarily due to capital expenditures of $2,800,000 (including operating lease buyouts of approximately $1,800,000), paydown of capital lease and debt obligations, and lower other accrued liabilities due to reduced sales commissions and settlement of a contractual dispute. Accounts receivable increased by $58,000 for the quarter ended June 30, 1996, due primarily to timing of shipments in the quarter. Based on net product sales, net days sales outstanding were 53 days for the June 30, 1996 quarter compared with 46 days for the three months ended March 31, 1996. Timing of shipments accounted for approximately 5 days of this increase. Product inventories were $7,515,000 at June 30, 1996 or $575,000 greater than the balance of $6,940,000 at March 31, 1996. Increases in new product inventories and growth of established product lines contributed to the increase. The Company expects to be able to fund its liquidity needs for at least the next twelve months through its existing cash balances, cash flows from operations, and available bank borrowings under its line of credit. The Company has a bank line of credit, expiring July 31, 1997, under which it can borrow up to $3,000,000, at prime, collateralized by short term investments managed by the bank. As of June 30, 1996 there were no borrowings against this line of credit. Cautionary Statement Statements included herein which are not historical facts are forward looking statements. Such forward looking statements are made pursuant to the safe harbor provisions of the Private/Securities Litigation Reform Act of 1995. The forward looking statements regarding revenues, orders and sales involve a number of risks and uncertainties, including but not limited to, demand for the Company's product, pricing pressures which could effect the Company's gross margin or the ability to consummate sales, intense competition within the industry, the need for the Company to keep pace with technological developments and timely respond to changes in customer needs, the Company's dependence on third party suppliers for components for its products and the Company's dependence upon intellectual property rights which, if not available to the Company, could have a material adverse effect on the Company. These same factors, as well as others, such as the continuing litigation involving the Company, could also effect the liquidity needs of the Company. 8 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings. ------------------ Reference should be made to the Company's filings with the SEC, including its reports on Form and 10-K for its 1996 fiscal year. In addition to the matters reported therein, the following legal proceedings have taken place: In connection with the purported class action litigation previously reported, the Company continues to engage in settlement discussions with counsel for the class. In consideration of the decisions to date in the class action proceedings, there can be no absolute assurance that the ultimate resolution of this litigation will be in the amount and form which the Company has recognized in its financial statements. However, based on information currently available to it, the Company believes that any settlement of this matter will involve terms that are comparable in aggregate value to those previously proposed to and accepted by the former Class counsel. The Company is a defendant or plaintiff in various other actions which arose in the normal course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the financial condition or overall trends in the results of the operations of the Company. The Company believes that, with regard to these matters and those previously reported, it has, to the best of its knowledge, made such adjustments to its financial statements by means of reserves and expensing the costs thereof, that these matters will not have any additional adverse impact on the Company's financial condition. Provided, however, that if the ultimate resolution of the class action litigation substantially exceeds the amounts previously reserved therefore, such resolution may have a material adverse effect on the Company's financial condition. ITEM 4. Submission of Matters to a Vote of Security Holders. ---------------------------------------------------- The Company's annual meeting of stockholders, at which the proposals described below were submitted to stockholders, was held on July 26, 1996. Proposal No. 1 Election of Directors. The following individuals, -------------- who received the votes indicated, were elected as directors: NAME FOR WITHHELD ---------------- --------- -------- Jeffrey Kalb 8,340,672 113,845 Wade Meyercord 8,340,672 118,870 Dr. Angel Jordan 8,340,671 86,904 Stuart Schube 8,340,671 88,655 Dr. John Sprague 8,340,671 79,830 David Schoon 6,642,537 161,505
9 Proposal No. 2 The proposal to ratify the appointment of Ernst & -------------- Young LLP, as the Company's independent auditors for the current fiscal year was approved. The results of the voting was as follows: FOR AGAINST WITHHELD --------- ------- -------- 8,634,475 25,490 12,405
Proposal No. 3 The proposal to approve the amendment of the 1995 Employee Stock Option Plan was approved. The results of the voting was as follows: FOR AGAINST WITHHELD --------- ------- -------- 6,125,669 2,472,822 73,879
Proposal No. 5 The proposal to approve the amendment of the 1995 Non-Employee Directors' Stock Option Plan was approved. The results of the voting was as follows: FOR AGAINST WITHHELD --------- ------- -------- 6,303,965 2,290,827 77,578
ITEM 6. Exhibits and Reports on Form 8-K. --------------------------------- (a) Exhibits Exhibit 11 Computation of Per Share Earnings (b) Reports on Form 8-K (1) On June 25, 1996, the Company filed a Form 8-K, reporting the release of certain information regarding the Company's first quarter 1997 financials. (2) On August 2, 1996, the Company filed a Form 8-K, reporting the release of certain information regarding the Company's second quarter 1997 financials. (3) On August 2, 1996, the Company filed a Form 8-K, reporting the release of certain information regarding the Company's Annual Meeting of Shareholders including the election of its Directors, ratification of Independent Auditors, and amendments to stock option plans. (4) On August 5, 1996, the Company filed a Form 8-K, reporting the release of certain information regarding the Company's appointment of an advisory director to the Company's Board of Directors. 10 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CALIFORNIA MICRO DEVICES CORPORATION ------------------------------------ (Registrant) Date: August 14, 1996 /s/ John E. Trewin ----------------------------- John E. Trewin Vice President and Chief Financial Officer 11 EXHIBIT 11 CALIFORNIA MICRO DEVICES CORPORATION Computation of Per Share Earnings (Amounts in Thousands, Except Per Share Data) (Unaudited) Three Months Ended June 30, -------------------------- 1996 1995 ---- ----- Net income $ 332 $ 517 PRIMARY: Weighted average common shares outstanding 10,365 9,346 Common equivalents attributable to options 655 436 ------- ------- Total weighted average common and common equivalent shares outstanding 11,020 9,782 ======= ======= Net income per share $ 0.03 $ 0.05 ======= ======= FULLY DILUTED Weighted average common shares outstanding 10,365 9,346 Common equivalent attributable to options - using quarter-end market price 657 482 ------- ------- Total weighted average common and common equivalent shares outstanding 11,022 9,828 ======= ======= Net income per share $ 0.03 $ 0.05 ======= =======
12 EX-27 2
5 3-MOS MAR-31-1996 JUN-30-1996 510 18,436 5,467 (909) 7,515 31,481 19,660 (8,096) 44,639 9,360 0 0 0 56,378 (28,815) 44,639 9,295 9,595 6,224 6,224 2,812 0 227 332 0 332 0 0 0 332 .03 .03 Includes Prepaid expenses and other assets - 462. Includes Restricted cash - 1,144; and Other long-term assets - 450. Includes Technology related sales - 300. Includes Research and development - 987; and Selling, marketing and administration - 2,152; Interest (income) - (325); Other (income)/expense (net) - (2).
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