-----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, TXHiiXyqcxu74aBgaLH3a/kor89rWbgDzQidB3fNi6gKHPoMzlEtG66YjLVrVxBK d6hZbWkaJzKpyzUcHpAUtA== 0000806086-96-000019.txt : 19961113 0000806086-96-000019.hdr.sgml : 19961113 ACCESSION NUMBER: 0000806086-96-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960927 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCED TECHNOLOGY LABORATORIES INC CENTRAL INDEX KEY: 0000806086 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 911353386 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-15160 FILM NUMBER: 96657764 BUSINESS ADDRESS: STREET 1: 22100 BOTHELL EVERETT HWY SE STREET 2: PO BOX 3003 CITY: BOTHELL STATE: WA ZIP: 98041-3003 BUSINESS PHONE: 2064877000 FORMER COMPANY: FORMER CONFORMED NAME: ADVANCED TECHNOLOGY LABORATORIES INC/ DATE OF NAME CHANGE: 19930414 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period ended September 27, 1996 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period From _____ to _____ Commission File Number 0-15160 ADVANCED TECHNOLOGY LABORATORIES, INC. (Exact name of registrant as specified in its charter) Washington 91-1353386 (State of incorporation) (IRS Employer Identification No.) 22100 Bothell-Everett Highway Post Office Box 3003 Bothell, Washington 98041-3003 (Address of principal executive offices) (Zip Code) (206) 487-7000 (Telephone number) Common stock, $0.01 par value; 14,158,005 shares outstanding as of October 25, 1996 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 [ ] 1 ADVANCED TECHNOLOGY LABORATORIES, INC. TABLE OF CONTENTS PART I Financial Information Page No. - ------ --------------------- -------- Item 1. Financial Statements -------------------- Condensed Consolidated Balance Sheets - September 27, 1996 (Unaudited) and December 31, 1995.....3 Condensed Consolidated Statements of Operations (Unaudited) - Three Months and Nine Months Ended September 27, 1996 and September 29, 1995................4 Condensed Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 27, 1996 and September 29, 1995.......................................5 Notes to Condensed Consolidated Financial Statements.....6 Item 2. Management's Discussion and Analysis of Financial - ------ ------------------------------------------------- Condition and Results of Operations...................8 ----------------------------------- PART II Other Information - ------- ----------------- Item 1. Legal Proceedings........................................14 ----------------- Item 2. Changes in Securities................................... 14 --------------------- Item 3. Defaults Upon Senior Securities..........................14 ------------------------------- Item 4. Submission of Matters to a Vote of Security Holders......14 --------------------------------------------------- Item 5. Other Information........................................14 ----------------- Item 6. Exhibits and Reports on Form 8-K.........................14 -------------------------------- 2 PART I Financial Information - ----- --------------------- Item 1. Financial Statements -------------------- ADVANCED TECHNOLOGY LABORATORIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS - ------------------------------------------------------------------ (In thousands) 9/27/96 12/31/95 - ------------------------------------------------------------------ (Unaudited) ASSETS CURRENT ASSETS Cash and short-term investments $ 51,409 $ 35,654 Receivables, net 113,503 129,226 Inventories 98,729 94,877 Prepaid expenses 2,888 3,007 Deferred income taxes, net 16,030 9,048 ----------------------- Total current assets 282,559 271,812 PROPERTY, PLANT AND EQUIPMENT, NET 71,493 71,130 OTHER ASSETS, NET 10,316 10,506 ----------------------- $364,368 $353,448 ======================= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings $ 2,389 $ 2,911 Current portion of long-term debt 588 555 Accounts payable and accrued expenses 65,455 74,903 Accrual for litigation claim 35,139 5,000 Deferred revenue 18,124 21,038 Taxes on income 5,118 5,824 ----------------------- Total current liabilities 126,813 110,231 LONG-TERM DEBT 13,071 14,837 OTHER LONG-TERM LIABILITIES 19,283 17,457 SHAREHOLDERS' EQUITY 205,201 210,923 ---------------------- $364,368 $353,448 ======================= - ------------------------------------------------------------------ COMMON SHARES OUTSTANDING 14,177 13,610 - ------------------------------------------------------------------ See accompanying notes to condensed consolidated financial statements. 3 ADVANCED TECHNOLOGY LABORATORIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Nine months ended - ----------------------------------------------------------------------------- (In thousands, except per share 9/27/96 9/29/95 9/27/96 9/29/95 data) - ----------------------------------------------------------------------------- REVENUES Product sales $ 77,916 $ 73,642 $ 227,843 $ 218,712 Service 22,349 21,087 65,814 61,655 ----------------------------------------- 100,265 94,729 293,657 280,367 ----------------------------------------- COST OF SALES Product sales 38,076 38,703 113,246 113,159 Service 12,935 12,363 38,307 37,567 ---------------------------------------- 51,011 51,066 151,553 150,726 ---------------------------------------- GROSS PROFIT 49,254 43,663 142,104 129,641 OPERATING EXPENSES Selling, general and adminsitrative 30,174 29,203 90,560 87,059 Research and development 13,803 12,580 38,057 37,439 Provision for litigation claim -- -- 29,557 -- Restructuring and relocation expenses -- 1,838 -- 4,673 Other (income) expense, net 488 386 1,145 (686) --------------------------------------- 44,465 44,007 159,319 128,485 --------------------------------------- INCOME (LOSS) FROM OPERATIONS 4,789 (344) (17,215) 1,156 Interest Income 886 455 2,418 1,226 Interest Expense (942) (537) (1,968) (1,581) --------------------------------------- INCOME (LOSS) BEFORE INCOME TAXES 4,733 (426) (16,765) 801 Income Tax Expense (Benefit) 946 316 (4,343) 981 --------------------------------------- NET INCOME (LOSS) $ 3,787 $ (742) $ (12,422) $ (180) ======================================= Net Income (loss) per share $0.25 $(0.06) $(0.89) $(0.01) Weighted average common shares and equivalents outstanding 15,076 13,376 13,992 13,359 - ----------------------------------------------------------------------------- See accompanying notes to condensed consolidated financial statements 4 ADVANCED TECHNOLOGY LABORATORIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine months ended - ----------------------------------------------------------------------- (In thousands) 9/27/96 9/29/95 - ----------------------------------------------------------------------- OPERATING ACTIVITIES Net loss $(12,422) $ (180) Adjustments to reconcile net loss to cash provided (used) by operating activities: Depreciation and amortization 11,032 11,810 Deferred income taxes (6,982) -- Changes in: Receivables, net 14,923 1,037 Inventories (4,577) (4,059) Accounts payable and accrued expenses (8,833) (12,626) Accrual for litigation claim 30,139 -- Deferred revenue (1,987) 3,014 Taxes on income (719) 1,104 Other 498 (435) --------------------- Cash provided (used) by operating activities 21,072 (335) INVESTING ACTIVITIES Investment in property, plant and equipment (10,065) (10,431) Proceeds from maturing short-term investments 4,988 -- Other -- (350) -------------------- Cash used by investing activities (5,077) (10,781) FINANCING ACTIVITIES Increase (decrease) in short-term borrowings (522) 2,349 Repayment of long-term debt (520) (2,616) Repurchase of common shares (2,330) -- Exercise of stock options 8,357 697 ------------------- Cash provided by financing activities 4,985 430 Effect of foreign exchange rate changes (237) (1,078) ------------------- Net increase (decrease) in cash and cash equivalents 20,743 (11,764) Cash and cash equivalents, beginning of period 30,666 22,901 ------------------- Cash and cash equivalents, end of period $51,409 $11,137 =================== - ---------------------------------------------------------------------- See accompanying notes to condensed consolidated financial statements. 5 ADVANCED TECHNOLOGY LABORATORIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands) 1. Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Advanced Technology Laboratories, Inc. (ATL), which includes its subsidiaries and is referred to as the "Company". The Company develops, manufactures, markets and services diagnostic medical ultrasound systems worldwide. The Company sells its products to hospitals, clinics and physicians for use in radiology, cardiology, women's health care, vascular, musculoskeletal and intraoperative applications. The accompanying condensed consolidated financial statements and related notes have been prepared pursuant to the Securities and Exchange Commission rules and regulations for Form 10-Q. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The accompanying condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 1995 Form 10-K. The information furnished reflects, in the opinion of the management, all adjustments necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. 2. Cash and Short-term Investments The Company considers short-term investments with maturity dates of three months or less at the date of purchase to be cash equivalents for purposes of the statement of cash flows. 9/27/96 12/31/95 -------- -------- Cash and cash equivalents $51,409 $30,666 Short-term investments -- 4,988 -------- -------- $51,409 $35,654 ======== ======== 3. Inventories 9/27/96 12/31/95 -------- -------- Materials and work in process $33,575 $33,198 Finished products 23,570 22,007 Demonstrator equipment 20,678 19,825 Customer service 20,906 19,847 -------- -------- $98,729 $94,877 ======== ======== 6 ADVANCED TECHNOLOGY LABORATORIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Dollars in thousands) 4. Long-term debt On February 1, 1996, the remaining 11% subordinated convertible debentures totaling $1,213 were converted by the Company into 71,577 shares of the Company's common stock in accordance with the conversion ratio stated in the debenture agreements. 5. Accrual for Litigation Claim The Company accrued a provision for a patent litigation claim of $29,557 in the second quarter of 1996 in addition to $5,000 previously accrued in 1994. The claim was filed by SRI International (SRI) on July 15, 1991 in the U.S. District Court for the Northern District of California and concerns a patent on an electrical circuit allegedly used in three of ATL's discontinued products. The patent expired in 1994 and the circuit in dispute has never been used in any of ATL's current product lines. The court granted a motion by SRI requesting partial summary judgment on liability in November 1992 and the U.S. Court of Appeals for the Federal Circuit affirmed the summary judgment in December 1994. In May 1996, the U.S. District Court for the Northern District of California awarded damages to SRI of $27,948 plus interest and legal fees. The Company has posted a supersedeas bond secured by a letter of credit and cash and short-term investment and has appealed the amount of damages awarded. The Company is accruing interest expense on the full award during the appeal process. 6. Restructuring and Relocation Expenses During 1995, the Company implemented a new corporate structure which consolidated the Company's operations located in Ambler, Pennsylvania with the Company's headquarters operations in Bothell, Washington. The consolidation has been implemented as planned and has resulted in the relocation of Ambler manufacturing, administrative and research and development (R&D) functions to Bothell and a net reduction of approximately 100 full-time positions. During the first nine months of 1995, the Company incurred restructuring expenses for severance, outplacement and employee retention incentives of $2,500 and relocation expenses of $2,173. 7. Per Share Data Per share data is based on the weighted average number of common shares and dilutive common share equivalents outstanding during each period as presented in the condensed consolidated Statements of Operations. Dilutive common share equivalents are calculated under the treasury stock method and consist of unexercised employee stock options. Primary and fully diluted earnings per share are equivalent for all periods presented. 7 Item 2. Management's Discussion and Analysis of Financial ----------------------------------------------------- Condition and Results of Operations ----------------------------------- RESULTS OF OPERATIONS --------------------- Three months ended Nine months ended - ----------------------------------------------------------------------------- (In millions except per share data) 9/27/96 9/29/95 %Change 9/27/96 9/29/95 %Change - ----------------------------------------------------------------------------- Revenues $100.3 $94.7 5.8% $293.7 $280.4 4.7% Gross Profit $49.3 $43.7 12.8% $142.1 $129.6 9.6% Operating Expenses;excluding non-recurring items $44.5 $42.2 5.4% $129.7 $125.1 3.7% Provision for litigation claim -- -- $29.6 -- Restructuring and relocation expenses -- $1.8 -- $4.7 Benefit related to state tax audit -- -- -- $(1.3) Net Income (Loss) $3.8 $(0.7) $(12.4 $(0.2) Net Income (Loss) per Share $0.25 $(0.06) $(0.89) $(0.01) - ----------------------------------------------------------------------------- Net Income, excluding non- recurring items $3.8 $1.1 $10.2 $3.2 Net Income per Share, excluding non- recurring items $0.25 $0.08 $0.68 $0.24 - ----------------------------------------------------------------------------- The Company reported net income of $3.8 million or $0.25 per share in the third quarter of 1996 compared with a net loss of $0.7 million or $0.06 per share in the third quarter of 1995. Excluding non-recurring items in 1995, net income would have been $1.1 million or $0.08 per share for the third quarter of 1995. For the first nine months, the Company reported a net loss of $12.4 million or $0.89 per share in 1996 compared with a net loss of $180,000 or $0.01 per share in 1995. Excluding non-recurring items in both periods, net income for the first nine months would have been $10.2 million or $0.68 per share in 1996 and $3.2 million or $0.24 per share in 1995. REVENUES AND GROSS PROFIT - ------------------------- The Company's worldwide revenues grew 5.8% to $100.3 million in the third quarter of 1996 compared with $94.7 million in the third quarter of 1995. Total product sales increased by $4.3 million over the third quarter of 1995 to $77.9 million. Third quarter of 1995 product sales included approximately $2.6 million from the Ultramark(R) 4 system which was phased out of production at the end of 1995. Revenues from the Ultramark 4 for the same period in 1996 were 8 Item 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations (Continued) ----------------------------------- nominal. The increase in product sales reflects the success in both the U.S. and international markets of the HDI(R) 3000 product family and the Apogee(R) 800PLUS, which was introduced in the first quarter of 1996. Service revenues increased by $1.3 million over the third quarter of 1995 due to the continuing growth of the Company's worldwide installed base. For the first nine months of 1996, total revenues grew by 4.7% to $293.7 million compared with $280.4 million for the same period in 1995. Revenues from the sale of the Ultramark 4 were approximately $10.5 million for the first nine months of 1995; for the same period in 1996, revenues from the sale of the Ultramark 4 were nominal. Gross profit was $49.3 million in the third quarter of 1996 compared with $43.7 million in the same quarter of the prior year. Gross margin increased to 49.1% compared with 46.1% in the same period of the prior year. The increase in gross margin is due to the continued shift in product mix to the Company's higher margin product lines, the consolidation of the Company's manufacturing operations, efficiencies achieved in international service operations and progress on the Company's cost reduction programs. The improvement in gross margin also reflects the expansion of the HDI 3000 product family. Gross profit was $142.1 million for the first nine months of 1996 compared to $129.6 million for the same period of the prior year. Year-to- date gross margins increased to 48.4% from 46.2% in 1995, reflecting the impact of the same factors discussed above. In October 1996, the Company announced an agreement with Shantou Institute of Ultrasonic Instruments (SIUI), a major manufacturer of ultrasound systems in the People's Republic of China (PRC). The Company will transfer the Apogee 800PLUS ultrasound system manufacturing technology and exclusive distribution rights of the ultrasound system in the PRC to SIUI. The Company will continue to manufacture and distribute the Apogee 800PLUS system for worldwide distribution outside of China. The technology transfer will begin in the fourth quarter of 1996 and will continue throughout 1997. OPERATING EXPENSES, NET - ----------------------- Total operating expenses, excluding non-recurring items in 1995, increased to $44.5 million in the third quarter of 1996 compared with $42.2 million in the third quarter of 1995. Selling, general and administrative expenses of $30.2 million increased 3.3% over 1995, but declined as a percent of revenues to 30.1% from 30.8%. Selling, general and administrative expenses decreased by $0.7 million from the second quarter of 1996, reflecting the second quarter expenses related to the promotion of a clinical application using the High Definition(TM) Imaging (HDI) system for differentiation of solid breast tumors. Research and development expenses increased 9.7% to $13.8 million in the third quarter of 1996 from $12.6 million in the third quarter of 1995. Research and development expenses grew primarily due to planned increases for the Company's product development projects and expenses related to a joint development project with Vital Images, Inc. The agreement with Vital Images, Inc. is for the joint development of 3D ultrasound 9 Item 2. Management's Discussion and Analysis of Financial ----------------------------------------------------- Condition and Results of Operations (Continued) ----------------------------------- imaging utilizing Vital Images' volume rendering technology. Excluding non-recurring items, operating expenses for the first nine months of 1996 were $129.8 million compared with $125.1 million for the same period of 1995. Other (income) expense, net, for the first nine months of 1995 includes a non-recurring credit of $1.0 million for a Washington State Business and Occupation (B&O) tax refund which resulted from a favorable tax audit. B&O tax is imposed on gross receipts for products manufactured in the State of Washington and is included in other operating expenses. ACCRUAL FOR LITIGATION CLAIM - ---------------------------- The Company accrued a non-recurring provision for a patent litigation claim of $29.6 million in the second quarter of 1996 in addition to $5.0 million previously accrued in 1994. The claim was filed by SRI International (SRI) on July 15, 1991 in the U.S. District Court for the Northern District of California and concerns a patent on an electrical circuit allegedly used in three of ATL's discontinued products. The patent expired in 1994 and the circuit in dispute has never been used in any of ATL's current product lines. The court granted a motion by SRI requesting partial summary judgment on liability in November 1992 and the U.S. Court of Appeals for the Federal Circuit affirmed the summary judgment in December 1994. In May 1996, the U.S. District Court for the Northern District of California awarded damages to SRI of $27.9 million plus interest and legal fees. The Company has posted a supersedeas bond secured by a letter of credit and cash and short-term investments and has appealed the amount of damages awarded. The Company is accruing interest expense on the full award during the appeal process. RESTRUCTURING AND RELOCATION EXPENSES - ------------------------------------- During 1995, the Company implemented a new corporate structure which consolidated the Company's operations located in Ambler, Pennsylvania with the Company's headquarters operations in Bothell, Washington. The consolidation has been implemented as planned and resulted in the relocation of Ambler manufacturing, administrative and R&D functions to Bothell and a net reduction of approximately 100 full-time positions. During the first nine months of 1995, the Company incurred non-recurring restructuring expenses for severance, outplacement and employee retention incentives of $2.5 million and relocation expenses of $2.2 million. The Company incurred no corresponding expenses in 1996. INTEREST INCOME AND EXPENSE - --------------------------- The Company incurred net interest expense of $0.1 million during the third quarter of 1996, comparable with third quarter of 1995. Net interest expense includes post-judgment interest expense accrued on the damages awarded for the patent litigation claim discussed previously, offset by interest income earned on cash balances available for investment. 10 Item 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations (Continued) ----------------------------------- TAXES AND NET INCOME (LOSS) - --------------------------- For the third quarter of 1996, the Company reported income tax expense of $0.9 million, which represents a 20% effective tax rate for U.S. federal, state and foreign income. For the third quarter of 1995, income tax expense of $0.3 million included primarily foreign and state income taxes. Year-to-date income taxes include a deferred income tax benefit of $6.9 million related to the previously discussed accrual for litigation claim. CAPITAL RESOURCES AND LIQUIDITY ------------------------------- ----------------------------------------------------------- (In millions) 9/27/96 12/31/95 ----------------------------------------------------------- Cash and short-term investments $51.4 $35.7 Total Assets $364.4 $353.4 Long-term debt $13.1 $14.8 Shareholders' Equity $205.2 $210.9 ----------------------------------------------------------- Cash and investments totaled $51.4 million at September 27, 1996 compared with $35.7 million at December 31, 1995 and $56.6 million at the end of the second quarter of 1996. As shown in the Condensed Consolidated Statement of Cash Flows, during the first nine months of 1996, the Company generated $21.1 million of cash from operating activities. At September 27, 1996, receivables, net, decreased by $14.9 million and accounts payables and accrued expenses decreased by $8.8 million from December 31, 1995 which reflects the seasonally high activity levels in the fourth quarter of 1995. The decrease in receivables, net, is partially offset by a higher than normal level of lease contract receivables which have been sold to outside parties in the fourth quarter of 1996. Inventory levels increased by $4.6 million primarily in anticipation of increasing sales activity levels in the fourth quarter. Normal additions to property, plant and equipment used $10.1 million. Cash provided by financing activities totaled $5.0 million during the first nine months of 1996, primarily the net effect of $8.4 million generated through the exercise of employee stock options and $2.3 million used to repurchase shares of the Company's common stock. In the third quarter of 1996, the Company repurchased 78,000 shares of its own common stock in the open market for $2.3 million under a share repurchase program intended to service the Company's benefit plans. The Board of Directors authorized the Company in May 1996 to purchase up to 1,000,000 shares under this program, subject to certain criteria. 11 Item 2. Management's Discussion and Analysis of Financial ------------------------------------------------- Condition and Results of Operations (Continued) ----------------------------------- The Company has an accrued liability of $35.1 million as of the end of the third quarter of 1996 for a patent litigation claim discussed previously. In June 1996, the Company posted a supersedeas bond secured by a letter of credit and cash and short- term investments. The Company will utilize its cash and short-term investments to pay any damages from the patent litigation claim after the appeal process is completed. As of the end of the third quarter of 1996, the Company had $51.4 million in cash and short- term investments. In addition to its cash and investment balances, the Company has available domestic credit facilities of $25 million, including a committed line of credit of $15 million. Barring any unforeseen circumstances or events, management expects cash, available credit lines and funds from operations to be sufficient to meet the Company's operating requirements for 1996 and 1997. FORWARD LOOKING INFORMATION - --------------------------- As an update to the forward looking information provided in the Company's 1995 Annual Report to Shareholders and the Form 10-Q filings for the first and second quarters of 1996, the Company provides the following information. The Company believes that it continues to make progress toward its goal of a return on equity of 15%, which it hopes to achieve by the end of 1998. For the fourth quarter of 1996 it is the current expectation of the Company that revenues for the quarter should be in the range of $120-$125 million; that total gross margin should be approximately 50%; that selling, general, and administrative expenses should be around or slightly above $33 million; and that research and development expenses and other expenses should be in line with those expense levels for the third quarter. For the fourth quarter, the Company anticipates weighted average common shares and equivalents outstanding to be approximately 15.0 to 15.1 million shares. As a result, it is the Company's current expectation that earnings for the fourth quarter should be in line with financial community estimates in the approximate range of $0.70-$0.75 per share. The above statements are forward looking statements that involve a number of risks and uncertainties and should be read in conjunction with the Company's 1995 Annual Report to Shareholders, the Company's 1996 news releases, and the Company's SEC filings during 1996. There are certain important factors that could cause actual results to differ materially from those anticipated by the Company, which include the following factors. The U.S. ultrasound market remains sluggish and may cause revenues to fall short of expectations. Several of the Company's competitors have announced or may announce new ultrasound products in 1996, which may cause potential customers to alter or defer their buying plans and intentions. These factors could 12 Item 2. Management's Discussion and Analysis of Financial ---------------------------------------------------- Condition and Results of Operations (Continued) ----------------------------------- increase competition in the ultrasound market, which may adversely impact the Company's sales order volume or timing or selling prices or all of these factors. Unanticipated events, such as delays in the company's product development and cost reduction programs, the unavailability of vendor supplied components critical to the Company's products, a stronger U.S. dollar, delays or disruptions in obtaining regulatory approvals or from other regulatory actions, delays in contractual payments due the Company, or changes in the Company's strategy resulting from competitive pressures, reallocation of research and development or other priorities and resources, or reallocation of resources for unanticipated opportunities also could affect operating results. 13 PART II Other Information - ------ ----------------- Item 1. Legal Proceedings - In the appeal before the U.S. Court ----------------- of Appeals for the Federal Circuit of the judgment in favor of SRI discussed in Note 5 of the Condensed Consolidated Financial Statements, both parties in the proceeding have filed briefs with the Court. ATL will file its reply brief in the appeal by November 15, 1996. The matter will then be set for the scheduling by the Court of oral arguments in the case. Item 2. Changes in Securities - None --------------------- Item 3. Defaults Upon Senior Securities - None ------------------------------- Item 4. Submission of Matters to a Vote of Security Holders - ---------------------------------------------------- None Item 5. Other Information - None ----------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits - Financial Data Schedule (b) Reports on Form 8-K - None 14 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ADVANCED TECHNOLOGY LABORATORIES, INC. (Registrant) DATE: November 8, 1996 BY:/s/ Harvey N. Gillis ________________________________________ Harvey N. Gillis Senior Vice President Finance and Administration and Chief Financial Officer 15 EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 27, 1996 AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATION FOR THE NINE MONTHS ENDED SEPTMBER 27, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 JAN-1-1996 SEP-27-1996 51,409 0 113,503 0 98,729 282,559 71,493 0 364,368 126,813 13,071 0 0 0 0 364,368 227,843 293,657 113,246 151,553 159,319 0 1,968 (16,765) (4,343) (12,422) 0 0 0 (12,422) (0.89) (0.89) Other Expenses included a $29,557 nonrecurring provision for a patent litigation claim.
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