-----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, TXEYk1HZROxfz5rBo8CGKX0yBM3Wp/Au6mEc+K6lXhopuHO/0TBDdwRWZBooWjyw LIHgBFVz6zdMGCp9lzoUEw== 0000912057-96-025349.txt : 19961113 0000912057-96-025349.hdr.sgml : 19961113 ACCESSION NUMBER: 0000912057-96-025349 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIQUINT SEMICONDUCTOR INC CENTRAL INDEX KEY: 0000913885 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 953654013 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-22660 FILM NUMBER: 96657772 BUSINESS ADDRESS: STREET 1: 3625A SW MURRAY BLVD CITY: BEAVERTON STATE: OR ZIP: 97005 BUSINESS PHONE: 5036443535 MAIL ADDRESS: STREET 2: 3625A SW MURRAY BLVD CITY: BEAVERTON STATE: OR ZIP: 97005 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) of THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter ended September 28, 1996 Commission File Number 0-22660 TRIQUINT SEMICONDUCTOR, INC. (Registrant) Incorporated in the State of California I.R.S. Employer Identification Number 95-3654013 3625A SW Murray Blvd., Beaverton, OR 97005 Telephone: (503) 644-3535 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 --- --- On September 27, 1996, 8,113,629 shares of the registrant's common stock were issued and outstanding. TRIQUINT SEMICONDUCTOR, INC. INDEX PART I. FINANCIAL INFORMATION PAGE NO. - ----------------------------------------------------------------------------------------------------- Item 1. Financial Statements Condensed Statements of Operations -- Three and nine months ended September 30, 1996 and 1995 3 Condensed Balance Sheets -- September 30, 1996 and December 31, 1995 4 Condensed Statements of Cash Flows -- Nine months ended September 30, 1996 and 1995 5 Notes to condensed 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 6. Exhibits and Reports on Form 8-K 14 SIGNATURES 15
PART I - FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS TRIQUINT SEMICONDUCTOR, INC. CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) THREE MONTHS ENDED NINE MONTHS ENDED ----------------------------- ----------------------------- SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 1996 1995 1996 1995 ------------- ------------- ------------ ------------- Total revenues $ 15,104 $ 12,745 $ 43,315 $ 33,322 Operating costs and expenses: Cost of goods sold 8,829 6,516 25,120 17,106 Research, development and engineering 2,868 2,299 8,017 6,848 Selling, general and administrative 2,722 2,579 7,927 6,858 ------------- ------------- ------------ ------------- Total operating costs and expenses 14,419 11,394 41,064 30,812 ------------- ------------- ------------ ------------- Income from operations 685 1,351 2,251 2,510 ------------- ------------- ------------ ------------- Other income (expense): Interest income 838 255 2,665 646 Interest expense (277) (131) (723) (364) Other, net 664 (22) 658 (68) ------------- ------------- ------------ ------------- Total other income, net 1,225 102 2,600 214 ------------- ------------- ------------ ------------- Income before income taxes 1,910 1,453 4,851 2,724 Income tax expense 58 44 225 83 ------------- ------------- ------------ ------------- Net income $ 1,852 $ 1,409 $ 4,626 $ 2,641 ============= ============= ============ ============= Net income per common and common equivalent share $ 0.21 $ 0.20 $ 0.53 $ 0.39 ============ ============= ============ ============= Weighted average common and common equivalent shares outstanding 8,798 7,134 8,732 6,758 ============ ============= ============ =============
See notes to Condensed Financial Statements. 3 TRIQUINT SEMICONDUCTOR, INC. CONDENSED BALANCE SHEETS (In thousands) (Unaudited) SEPTEMBER 30, DECEMBER 31, 1996 1995(1) ------------- ------------ ASSETS Current assets: Cash and cash equivalents $ 4,682 $ 35,051 Investments 39,825 27,921 Accounts receivable, net 10,555 7,388 Inventories, net 10,033 8,709 Prepaid expenses and other assets 676 432 ------------- ------------ Total current assets 65,771 79,501 ------------- ------------ Property, plant and equipment, net 17,629 14,460 Restricted investments 19,846 - Other non-current assets 89 63 ------------- ------------ Total assets $ 103,335 $ 94,024 ------------- ------------ ------------- ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of capital lease obligations $ 3,123 $ 2,329 Accounts payable and accrued expenses 12,282 11,443 Other current liabilities 141 216 ------------- ------------ Total current liabilities 15,546 13,988 Capital lease obligations, less current installments 9,632 7,392 ------------- ------------ Total liabilities 25,178 21,380 ------------- ------------ Shareholders' equity: Common stock 108,699 107,813 Accumulated deficit (30,542) (35,169) ------------- ------------ Total shareholders' equity 78,157 72,644 ------------- ------------ Total liabilities and shareholders' equity $ 103,335 $ 94,024 ============= ============
(1) The information in this column was derived from the Company's audited financial statements as of December 31, 1995. See notes to Condensed Financial Statements. 4 TRIQUINT SEMICONDUCTOR, INC. CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended ----------------------------- September 30, September 30, 1996 1995 ------------- ------------- Cash flows from operating activities: Net income $ 4,626 $ 2,641 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 2,025 2,196 Gain on sale of assets (728) (19) Change in assets and liabilities Decrease (Increase) in: Accounts receivable (3,167) (3,156) Inventories (1,324) (3,274) Prepaid expense and other assets (270) 205 Increase (decrease) in: Accounts payable and accrued expenses 839 1,678 Other current liabilities (75) 363 ------------- ------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,926 634 Cash flows from investing activities: Purchase of investments (49,870) (11,739) Purchase of restricted investments (19,846) - Sale/Maturity of investments 37,966 4,508 Capital expenditures (22) (417) Proceeds from sale of assets 728 19 ------------- ------------- NET CASH USED BY INVESTING ACTIVITIES (31,044) (7,629) Cash flows from financing activities: Principal payments under capital lease obligations (2,137) (1,258) Issuance of common stock, net 886 48,800 ------------- ------------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (1,251) 47,542 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (30,369) 40,547 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 35,051 9,443 ------------- ------------- CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 4,682 $ 49,990 ============= =============
See notes to Condensed Financial Statements. 5 TRIQUINT SEMICONDUCTOR, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS (In thousands except share amounts) (Unaudited) 1. BASIS OF PRESENTATION The accompanying financial statements have been prepared in conformity with generally accepted accounting principles. However, certain information or footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the statements include all adjustments necessary (which are of a normal and recurring nature) for the fair presentation of the results of the interim periods presented. These financial statements should be read in conjunction with the TriQuint Semiconductor, Inc. ("Company") audited consolidated financial statements for the year ended December 31, 1995, as included in the Company's 1995 Annual Report to Shareholders. The Company's fiscal year ends on the Saturday nearest December 31. For convenience, the Company has indicated in this quarterly report on Form 10-Q that its fiscal year ended on December 31. In addition, the Company's quarters end on the Saturday nearest the end of the calendar quarter. For convenience, the Company has indicated that its third quarter ended on September 30. 2. NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE Net income per common and common equivalent share is computed using the weighted average number of common and dilutive common equivalent shares assumed to be outstanding during the period. Common equivalent shares consist of options and warrants to purchase common stock. 3. RESEARCH AND DEVELOPMENT COSTS The Company charges all research and development costs associated with the development of new products to expense when incurred. Engineering and design costs related to revenues on non-recurring engineering services billed to customers are classified as research, development and engineering expense. Additionally, certain related contract engineering costs are also included in research, development and engineering expense. 4. INCOME TAXES The provision for income taxes has been recorded based on the current estimate of the Company's annual effective tax rate. For periods of income, this rate differs from the federal statutory rate primarily because of the utilization of net operating loss carryforwards. 5. INVENTORIES Inventories, net of reserves, stated at the lower of cost or market consist of: September 30, December 31, 1996 1995 ------------- ------------ Raw material $ 3,164 $ 2,198 Work in progress 5,856 5,908 Finished goods 1,013 603 ------------- ------------ Total inventories $ 10,033 $ 8,709 ============= ============ 6. SHAREHOLDERS' EQUITY Shares authorized and outstanding are as follows: SHARES OUTSTANDING September 30, December 31, 1996 1995 ------------- ------------ Preferred stock, no par value, 5,000,000 shares authorized - - Common stock, no par value, 25,000,000 shares authorized 8,113,629 7,929,881 7. SUPPLEMENTAL CASH FLOW INFORMATION NINE MONTHS ENDED September 30, September 30, 1996 1995 ------------- ------------- Cash Transactions: Cash paid for interest $ 722 $ 364 Cash paid for income taxes 17 9 Non-Cash Transactions: Purchase of assets through capital leases $ 5,171 - 9. LITIGATION See Part II, Item 1, of this Quarterly Report on Form 10-Q for a description of legal proceedings. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those anticipated in these forward looking statements as a result of certain factors discussed herein. INTRODUCTION TriQuint Semiconductor, Inc. ("TriQuint" or the "Company") designs, develops, manufactures and markets a broad range of high performance analog and mixed signal integrated circuits for the wireless communications, telecommunications and computing markets. The Company utilizes its proprietary gallium arsenide ("GaAs") technology to enable its products to overcome the performance barriers of silicon devices in a variety of applications. The Company sells its products on a worldwide basis and the Company's end user customers include Alcatel, Cirrus Logic, Digital Equipment, DSC Communications, Ericsson, Hughes, IBM, Lucent Technologies, Motorola, Northern Telecom, Philips, Rockwell, Siemens, Storage Technology and Stratacom. RESULTS OF OPERATIONS The following table sets forth the statement of operations data of the Company expressed as a percentage of total revenues for the periods indicated. Three Months Ended Nine Months Ended ------------------------------ ----------------------------- September 30, September 30, September 30, September 30, 1996 1995 1996 1995 ------------- ------------- ------------ ------------- Total revenues 100.0% 100.0% 100.0% 100.0% Operating costs and expenses: Cost of goods sold 58.5 51.1 58.0 51.3 Research, development and engineering 19.0 18.1 18.5 20.6 Selling, general and administrative 18.0 20.2 18.3 20.6 ------------- ------------- ------------ ------------ Total operating costs and expenses 95.5 89.4 94.8 92.5 ------------- ------------- ------------ ------------ Income from operations 4.5 10.6 5.2 7.5 Other income, net 8.1 0.8 6.0 0.6 ------------- ------------- ------------ ------------ Income before income taxes 12.6 11.4 11.2 8.1 Income tax expense 0.4 0.3 0.5 0.2 ------------- ------------- ------------ ------------ Net income 12.2% 11.1% 10.7% 7.9% ============= ============= ============ ============
TOTAL REVENUES The Company derives revenues from the sale of standard and customer- specific products and services. The Company's revenues also include non- recurring engineering (NRE) revenues relating to customer-specific products. Although revenues from standard products are separately identifiable by reference to the Company's standard product catalog, it is not practical to differentiate between customer-specific product revenue and NRE revenue because (i) the Company's contracts generally state a total contract price without differentiating between engineering and production activity, (ii) it is difficult to determine when engineering activity has transitioned to production activity and (iii) it is difficult to determine whether certain manufacturing services should be classified as engineering activity or customer-specific products. Total revenues for the three and nine months ended September 30, 1996 increased 18.5% and 30.0% to $15.1 million and $43.3 million, respectively, over the comparable three and nine month periods ended September 30, 1995. The increase in revenues during the three and nine months ended September 30, 1996 reflected an overall increase in the volume of product sales to existing and new customers, primarily from product sales in the wireless communications, telecommunications and computing markets. COST OF GOODS SOLD Cost of goods sold includes all direct material, labor and overhead expenses and certain production costs related to NRE revenues. In general, the Company believes that gross profit generated from the sale of customer-specific products and from NRE revenues is typically higher than gross profit generated from the sale of standard products. The factors affecting product mix include the relative demand in the markets served by customer-specific and standard products, as well as the number of NRE projects which result in volume requirements for customer-specific products. Cost of goods sold as a percentage of the total revenues for the three months ended September 30, 1996 increased to 58.5% from 51.1% for the comparable three month period ended September 30, 1995. For the nine months ended September 30, 1996 the cost of goods sold as a percentage of the total revenues increased to 58.0% from 51.3% for the comparable nine month period ended September 30, 1995. The increase in cost of goods sold as a percentage of total revenues, from the three and nine months comparable periods ended September 30, 1995, was primarily attributable to lower than expected production yields and an increase in certain manufacturing costs related to employee hiring and training and consulting services. The Company has in the past experienced lower than expected production yields which have delayed shipments of a given product and adversely affected gross margins. For example, in the fourth quarter of 1995, the Company announced that reduced production yields had materially affected its operating results. Although the Company has made some improvement in yields since that time, further improvement is needed to achieve previous performance levels. There can be no assurance that the Company will be able to maintain acceptable production yields in the future and, to the extent that it does not achieve acceptable production yields, its operating results would be materially adversely affected. In addition, the Company's operation of its own wafer fabrication facility entails a high degree of fixed costs and requires an adequate volume of production and sales to be profitable. During periods of decreased demand, high fixed wafer fabrication costs would have a material adverse effect on the Company's operating results. RESEARCH, DEVELOPMENT AND ENGINEERING Research, development and engineering expenses include the costs incurred in the design of products associated with NRE revenues, as well as ongoing product development and research and development expenses. The Company's research, development and engineering expenses for the three and nine months ended September 30, 1996 increased 24.7% and 17.1% to $2.9 million and $8.0 million, respectively, from the comparable three and nine month periods ended September 30, 1995. Research, development and engineering expenses as a percentage of total revenues for the three months ended September 30, 1995 increased to 19.0% from 18.0% for the comparable three month period ended September 30, 1995; for the nine months ended September 30, 1995, research, development and engineering expenses as a percentage of total revenues decreased to 18.5% from 20.6% for the comparable nine month period ended September 30, 1995. The increase in research, development and engineering expenses in absolute dollar level was primarily due to increased product development activities and NRE expenses. The decrease in research, development and engineering expenses as a percentage of total revenues resulted from revenue growth that outpaced the growth of research, development and engineering expenses. The Company is committed to substantial investments in research, development, and engineering and expects such expenses shall increase in absolute dollar amount in the future. SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expenses for the three and nine months ended September 30, 1996 increased 5.5% and 15.6% to approximately $2.7 million and $7.9 million, respectively, from the comparable three and nine month periods ended September 30, 1995. Selling, general and administrative expenses as a percentage of revenue for the three months ended September 30, 1996 decreased to 18.0% from 20.2% for the comparable three month period ended September 30, 1995; for the nine months ended September 30, 1996, selling, general and administrative expenses as a percentage of revenue decreased to 18.3% from 20.6% for the comparable nine month period ended September 30, 1995. The increase in absolute dollar level of selling, general and administrative expenses was primarily due to increased sales commissions in connection with the increase in total revenues and increased personnel expenses. The decrease in selling, general and administrative expenses as a percentage of total revenues resulted from revenue growth that outpaced the growth of selling, general and administrative expenses. OTHER INCOME, NET Other income, net for the three and nine months ended September 30, 1996 increased to an approximate net other income of $1.2 million and $2.6 million, respectively, as compared to net other income of $102,000 and $214,000 for the comparable three and nine month periods ended September 30, 1995. This improvement resulted from interest income earned on higher cash, cash equivalents and investment balances due primarily to the net proceeds of the follow-on stock offering in September, 1995 and from a $680,000 gain from the sale of the Company's minority interest in its primary distributor in Europe. INCOME TAX EXPENSE The effective tax rate for the nine months ended September 30, 1996 was 5.0%, which is less than the federal and state statutory rate of approximately 40% due to the use of net operating loss carryforwards. Income tax expense for the three and nine months ended September 30, 1996 increased to approximately $58,000 and $225,000, respectively, compared to $44,000 and $83,000 for the comparable three and nine month periods ended September 30, 1995. This increase in income tax expenses was attributable to higher profits partially offset by the use of net operating losses. VARIABILITY OF OPERATING RESULTS AND CYCLICALITY OF SEMICONDUCTOR INDUSTRY The Company's quarterly and annual results may vary significantly in the future due to a number of factors including timing, cancellation or delay of customer orders; market acceptance of the Company's and its customers' products; variations in manufacturing yields; timing of announcement and introduction of new products by the Company and its competitors; changes in revenues and product mix; competitive factors; changes in manufacturing capacity and variations in the utilization of this capacity; variations in average selling prices; variations in operating expenses; the long sales cycles associated with the Company's customer-specific products; the timing and level of product and process development costs; cyclicality of the semiconductor industry; the timing and level of NRE revenues and expenses relating to customer-specific products; and changes in inventory levels. Any unfavorable changes in these or other factors could have a material adverse effect on the Company's operating results. A significant portion of the Company's revenues in each fiscal period has historically been concentrated among a limited number of customers. In recent periods, sales to the Company's major customers as a percentage of total revenues have fluctuated. For the three months ended September 30, 1996, Cirrus Logic and Northern Telecom accounted for 19% and 8% respectively, of total revenues. The Company anticipates that its sales to Cirrus Logic will decrease in the fourth quarter of 1996 and in 1997 to less than 10% of total revenues. The Company's revenues, to a certain extent, depend upon its customers successfully introducing and marketing new products. Certain of these products are consumer products and there is no guarantee purchases by consumers will meet TriQuint customers' expectations. The Company does not have long-term purchase agreements with any of its customers. Customers generally purchase the Company's products pursuant to cancelable short-term purchase orders. The Company's business, financial condition, and results of operations have been materially adversely affected in the past by the failure of anticipated orders to materialize and by deferrals or cancellations of orders. The semiconductor industry has historically been characterized by wide fluctuations in product supply and demand. From time to time, the industry has also experienced significant downturns, often in connection with, or in anticipation of, declines in general economic conditions. These downturns have been characterized by diminished product demand, production overcapacity and subsequent accelerated erosion of average selling prices, and, in some cases, have lasted for extended periods of time. The Company's business has in the past been and could in the future be materially adversely affected by such industry- wide fluctuations. LIQUIDITY AND CAPITAL RESOURCES The Company completed a follow on public offering in September 1995 raising approximately $48.1 million, net of offering expenses. In December 1993 and January 1994, the Company completed its initial public offering raising approximately $16.7 million, net of offering expenses. In addition, the Company has funded its operations to date through other sales of equity, bank borrowing, capital equipment leases and cash flow from operations. As of September 30, 1996, the Company had working capital of approximately $50.2 million, including $44.5 million in cash, cash equivalents, and unrestricted investments. The Company has a $10.0 million unsecured revolving line of credit with a financial institution. Restrictive covenants included in the line of credit require the Company to maintain (i) a total liability to tangible net worth ratio of not more than 0.75 to 1.00, (ii) a current ratio of not less than 1.75 to 1.00, (iii) minimum tangible net worth greater than $50.0 million and (iv) cash and investments, including restricted investments, greater than $45.0 million. As of September 30, 1996 the Company was in compliance with the covenants contained in this line of credit. The Company's current wafer fabrication facility lease expires in January 1998. In May 1996, the Company obtained financing in the form of a five year operating lease to arrange for the construction of a new wafer fabrication and office complex at Dawson Creek ("the Dawson Creek Facility"), in Hillsboro, Oregon. The Company entered into several agreements each dated May 17, 1996 in connection with the operating lease. Pursuant to that certain Participation Agreement among the Company, Wolverine Leasing Corp. ("Wolverine"), Matisse Holding Company ("Matisse") and United States National Bank ("Bank"), Wolverine shall lease certain real property owned by Wolverine to the Company under an operating lease with an option by the Company to purchase such property. In addition, the Participation Agreement provides that Wolverine will make advances to the Company to cover the costs of certain improvements to such real property and to pay certain related financing costs, transaction costs, and other costs and expenses; Wolverine will use the proceeds of loans from the Bank and Matisse, as well as certain equity funds provided by Matisse, in order to provide the Company with such advances and such other costs and expenses. The Bank loans are collateralized by pledged investments from the Company, classified as restricted investments on the Company's balance sheet ($19.8 million as of September 30, 1996). Restrictive covenants included in the Participation Agreement between the Company and the Bank require the Company to maintain (i) a total liability to tangible net worth ratio of not more than 0.75 to 1.00, (ii) minimum tangible net worth greater than $50.0 million and (iii) cash and liquid investments, including restricted investments, greater than $45.0 million. As of September 30, 1996 the Company was in compliance with the covenants contained in the Participation Agreement. The following table presents a summary of the Company's cash flows (IN THOUSANDS): Nine Months Ended September 30, ------------------------------- 1996 1995 ----------- ----------- Net cash and cash equivalents provided by operating activities $ 1,926 $ 634 Net cash and cash equivalents used by investing activities (31,044) (7,629) Net cash and cash equivalents provided (used) by financing activities (1,251) 47,542 ----------- ----------- Net increase (decrease) in cash and cash equivalents $ (30,369) $ 40,547 =========== ===========
The cash provided by operating activities for the nine month period ended September 30, 1996, $1.9 million, related to cash generated from profitable operations partially offset by increased accounts receivable, inventories and prepaid expenses. The cash used by investing activities for the nine month period ended September 30, 1996, $31.0 million, related to the purchase of restricted investments pledged to collateralize the operating lease on the Dawson Creek Facility and the net purchase of non-restricted investments. These were partially offset by the sale of the Company's interest in its primary European distributor. The cash used by financing activities for the nine month period ended September 30, 1996, $1.3 million, related primarily to the payment of principal under capital leases partially offset by the issuance of common stock under employee stock purchase programs. For the nine months ended September 30, 1996, the Company established approximately $5.2 million in new capital leases. Since 1991, the Company has financed approximately $19.1 million of machinery and equipment through capital lease obligations. The Company expects to make continued investments in its capital equipment, including manufacturing and test equipment and computer hardware and software, in order to enhance its technology and competitive position. In addition, the Company's move to the new Dawson Creek Facility will require expenditures for capital equipment above normal operating levels. The Company expects to make additional capital expenditures of approximately $12.0 million over the next twelve months. The Company believes that its current cash and investment balances, together with cash anticipated to be generated from operations, additional equipment leases and the operating lease with Wolverine, will satisfy the Company's projected working capital and capital expenditure requirements through the end of 1997. However, the Company may be required to finance any additional requirements through additional equity, debt financings, or credit facilities. There can be no assurance that such additional financings or credit facilities will be available, or if available, that they will be on satisfactory terms. PART II - OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS. On June 9, 1994 the Company issued a press release indicating softness in the Company's revenues which would adversely affect the Company's financial results. The cause for the reduction in revenues was due somewhat to a general softness in orders in the telecommunications market; however, it was primarily the result of a decision by the Company's largest customer to delay shipment of certain products. As a result of this announcement, the Company's stock price dropped 48% on June 10, 1994. On July 12, 1994, a shareholder class action lawsuit was filed against the Company in the United States District Court for the Northern District of California. On June 21, 1996, the court granted the Company's motion to transfer the litigation to the District of Oregon. The suit alleges that the Company, its underwriters, and certain of its officers, directors and investors, intentionally misled the investing public regarding the financial prospects of the Company. Since the Company and its management have striven to keep investors current on the Company's progress at all times, the Company strongly denies any claims of wrongdoing and will defend this lawsuit vigorously. ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: Exhibit 27.1 Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed by the Company for the Quarter ended September 30, 1996. SIGNATURES 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. TriQuint Semiconductor, Inc. Dated: November 5, 1996 /s/ Steven J. Sharp --------------------------- STEVEN J. SHARP President, Chief Executive Officer and Chairman (Principal Executive Officer) Dated: November 5, 1996 /s/ Edward C.V. Winn --------------------------- EDWARD C.V. WINN Executive Vice President, Finance and Administration and Chief Financial Officer (Principal Financial and Accounting Officer) INDEX TO EXHIBITS EXHIBIT NO. DESCRIPTION - ------------------------------------------------ 27.1 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED BALANCE SHEET AS OF SEPTEMBER 30, 1996 AND THE CONDENSED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 4,682 39,825 10,760 (205) 10,033 65,771 49,464 (31,835) 103,335 15,546 9,632 0 0 108,699 (30,542) 103,335 43,315 43,315 25,120 41,064 (658) 0 723 4,851 225 4,626 0 0 0 4,626 0.53 0.53
-----END PRIVACY-ENHANCED MESSAGE-----