-----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, WVj6tEbio5qnA+dMe8Lz44iWuG9HUVHelxPCU6/64UOfMOSERSui5sVhjGXk0DY/ 2nv76Wak3SdutQ+o6ws66Q== 0000950005-98-000056.txt : 19980204 0000950005-98-000056.hdr.sgml : 19980204 ACCESSION NUMBER: 0000950005-98-000056 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971228 FILED AS OF DATE: 19980203 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPECTRIAN CORP /CA/ CENTRAL INDEX KEY: 0000925054 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 770023003 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24360 FILM NUMBER: 98520269 BUSINESS ADDRESS: STREET 1: 350 WEST JAVA DRIVE CITY: SUNNYVALE STATE: CA ZIP: 94089 BUSINESS PHONE: 4087455400 MAIL ADDRESS: STREET 1: 350 WEST JAVA DRIVE STREET 2: C/O CORPORATE CONTROLLER CITY: SUNNYVALE STATE: CA ZIP: 94089 10-Q 1 FORM 10-Q ================================================================================ 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 December 28, 1997 OR [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number: 0-24360 SPECTRIAN CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 77-0023003 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 350 West Java Drive Sunnyvale, California 94089 (Address of principal executive offices) Telephone Number (408) 745-5400 (Registrant's telephone number, including area code) 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 ----- ----- As of December 28, 1997 there were 10,754,724 shares of the Registrant's Common Stock outstanding. ================================================================================ SPECTRIAN CORPORATION Form 10-Q INDEX Page No. Cover Page 1 Index 2 PART I - Financial Information ITEM 1 - Condensed consolidated financial statements Condensed consolidated balance sheets - December 28, 1997 and March 31, 1997 3 Condensed consolidated statements of operations - three and nine months ended December 28, 1997 and December 28, 1996 4 Condensed consolidated statements of cash flows - nine months ended December 28, 1997 and December 28, 1996 5 Notes to condensed consolidated financial statements 6 ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 9 PART II - Other Information ITEM 1 - Legal Proceedings 18 ITEM 2 - Changes in Securities and Use of Proceeds 18 ITEM 6 - Exhibits and Reports on Form 8-K 18 Signatures 19 2 SPECTRIAN CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
December 28, March 31, Assets 1997 1997 ---------------- ------------- (unaudited) Current assets: Cash and cash equivalents $ 2,717 $ 6,240 Short-term investments 98,032 -- Accounts receivable, less allowance for doubtful accounts of $373 and $365, respectively 34,373 15,825 Inventories 20,130 17,301 Prepaid expenses and other current assets 1,009 1,806 ---------- --------- Total current assets 156,261 41,172 Property and equipment, net 29,311 25,461 ---------- --------- $ 185,572 $ 66,633 ========== ========= Liabilities and Stockholders' Equity Current liabilities: Current portion of debt obligations $ 1,441 $ 1,588 Accounts payable 13,111 8,101 Accrued liabilities 10,877 7,421 ---------- --------- Total current liabilities 25,429 17,110 Debt obligations, net of current portion 6,239 7,057 ---------- --------- Total liabilities 31,668 24,167 ---------- --------- Stockholders' equity: Common stock, $0.001 par value, 20,000,000 shares authorized; 10,754,724 and 8,265,230 shares issued and outstanding, respectively 11 8 Additional paid-in capital 145,497 53,387 Unrealized gain on short-term investments 237 -- Retained earnings (accumulated deficit) 8,159 (10,929) ---------- --------- Total stockholders' equity 153,904 42,466 ---------- --------- $ 185,572 $ 66,633 ========== ========= The accompanying notes are an integral part of these condensed consolidated financial statements.
3 SPECTRIAN CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited)
Three months ended Nine months ended December 28, December 28, --------------------------- ----------------------------- 1997 1996 1997 1996 ---- ---- ---- ---- Revenues $ 47,158 $ 24,485 $ 141,165 $ 56,680 Costs and expenses: Cost of product sales 33,702 17,211 100,233 42,341 Research and development 5,074 4,773 13,455 12,836 Selling, general and administrative 3,429 2,293 9,936 6,620 --------- --------- --------- --------- 42,205 24,277 123,624 61,797 --------- --------- --------- --------- Operating income (loss) 4,953 208 17,541 (5,117) Interest income(expense), net 1,429 (70) 2,006 (395) Other income, net -- -- 1,530 -- --------- --------- --------- --------- Income (loss) before income taxes 6,382 (138) 21,077 (5,512) Income tax expense -- -- 1,988 -- --------- --------- --------- --------- Net income (loss) $ 6,382 $ 138 $ 19,089 $ (5,512) ========= ========= ========= ========= Net income (loss) per share Basic $ 0.59 $ 0.02 $ 2.00 $ (0.68) Diluted $ 0.56 $ 0.02 $ 1.83 $ (0.68) Shares used in computing per share amounts: Basic 10,744 8,169 9,531 8,105 Diluted 11,491 8,295 10,423 8,105 The accompanying notes are an integral part of these condensed consolidated financial statements.
4 SPECTRIAN CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Nine months ended December 28, ---------------------------------- 1997 1996 ---- ---- Cash flows from operating activities: Net income (loss) $ 19,089 $ (5,512) Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Gain on sale of subsidiary (1,530) -- Depreciation and amortization 6,913 4,486 Stock option compensation expense -- 72 Tax benefit associated with stock options 1,378 -- Changes in operating assets and liabilities Accounts receivable (19,281) 577 Inventories (4,405) (7,104) Prepaid expenses and other assets 760 (272) Accounts payable 5,796 1,666 Accrued liabilities 3,704 1,158 --------- --------- Net cash provided by (used for) operating activities 12,424 (4,929) --------- --------- Cash flows from investing activities: Purchase of short-term investments (102,843) -- Proceeds from sale of short-term investments 5,048 3,000 Purchase of property and equipment (11,639) (10,355) Proceeds from sale of land, building and improvements -- 16,418 Proceeds from sale of subsidiary 4,016 -- --------- --------- Net cash provided by (used for) investing activities (105,418) 9,063 --------- --------- Cash flows from financing activities: Repayment of debt (1,264) -- Proceeds from sales of Common Stock, net 90,735 910 --------- --------- Net cash provided by financing activities 89,471 910 --------- --------- Net increase (decrease) in cash and cash equivalents (3,523) 5,044 Cash and cash equivalents, beginning of period 6,240 1,163 --------- --------- Cash and cash equivalents, end of period $ 2,717 $ 6,207 ========= ========= The accompanying notes are an integral part of these condensed consolidated financial statements.
5 SPECTRIAN CORPORATION AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 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 the management, the statements include all adjustments (which are of a normal and recurring nature) necessary for the fair presentation of the financial information set forth therein. These financial statements should be read in conjunction with the Company's audited consolidated financial statements as incorporated by reference in the Company's Form 10-K for fiscal year ended March 31, 1997. The interim results presented herein are not necessarily indicative of the results of operations that may be expected for the full fiscal year ending March 31, 1998, or any other future period. NOTE 2: Reincorporation On September 11, 1997, the Company's shareholders approved the Company's reincorporation in the state of Delaware, providing for 20,000,000 authorized shares of Common Stock and 5,000,000 authorized shares of Preferred Stock, both with par values of $.001 per share. On October 3, 1997, the reincorporation in the state of Delaware was effected. The accompanying financial statements have been restated to give effect to the reincorporation. NOTE 3: Balance Sheet Components Balance sheet components are as follows: December 28, March 31, 1997 1997 ------------- ----------- (In thousands Inventories: Raw materials $ 9,925 $ 9,315 Work in process 8,499 6,699 Finished goods 1,706 1,287 ------- ------- $20,130 $17,301 ======= ======= Property and equipment: Machinery and equipment $44,877 $37,181 Land, building and improvements 2,822 2,813 Furniture and fixtures 1,376 1,382 Leasehold improvements 1,550 867 ------- ------- 50,622 42,246 Less accumulated depreciation and amortization 21,311 16,785 ------- ------- $29,311 $25,461 ======= ======= 6 NOTE 3: Balance Sheet Components (continued) December 28, March 31, 1997 1997 ---------------- --------------- (In thousands) Accrued liabilities: Employee compensation and benefits $ 4,098 $ 3,772 Warranty 5,140 1,940 Other accrued liabilities 1,639 1,709 ----------- ---------- $ 10,877 $ 7,421 =========== ========== NOTE 4: Short-Term Investments The Company accounts for investments in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities". Under the provisions of SFAS No. 115, the Company has classified its investments in certain debt securities as "available-for-sale." Such investments are recorded at fair market value, with unrealized gains and losses reported as a separate component of stockholders' equity. Interest income is recorded using an effective interest rate, with the associated premium or discount amortized to "Interest income, net." As of December 28, 1997, short-term investments classified as available-for-sale securities were as follows: Unrealized Estimated Cost Gains Fair Value ---------------------------------- -------- (In thousands) Corporate debt securities 68,737 99 68,836 U.S. Government securities 29,058 138 29,196 ------------------------------------------- $ 97,795 $ 237 $ 98,032 ------------------------------------------- NOTE 5: Revenue Recognition The Company recognizes product sales upon shipment and concurrently accrues for expected warranty expenses. Repair and service revenues are recognized when the service is performed. NOTE 6: Earnings Per Share Computation The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share" effective December 28, 1997. SFAS No. 128 requires the presentation of basic earnings per share ("EPS") and, for companies with complex capital structures [or potentially dilutive securities, such as convertible debt, options and warrants], diluted EPS. The Company's earnings per share for the three months and nine months ended December 28, 1996 have been restated for the effects of SFAS No. 128. Basic net income (loss) per share for the three and nine month periods ending December 28, 1997 has been computed using the weighted average number of outstanding shares of common stock. Diluted net income per share for the three and nine month periods ending December 28, 1997 has been computed using the weighted average number of outstanding shares of common stock and common equivalent shares from stock options outstanding (when dilutive using the treasury stock method). Using the treasury stock method, common stock options are assumed to be exercised and the proceeds used to buy back common stock at the Company's average stock price for the quarter ended December 28, 1997. Due to the net loss incurred during the nine month periods 7 ending December 28, 1996, common stock options outstanding would be antidilutive and are therefore not included in the loss per share calculation for that period. A reconciliation of the basic and diluted earnings per share calculations follows:
Three Months Ended Nine Months Ended December 28, 1997 December 28, 1997 -------------------------------- ---------------------------------- (In thousands except per share data) Per Share Per Share Income Shares Amount Income Shares Amount -------------------------------- ---------------------------------- Basic EPS $ 6,382 10,744 $ 0.59 $19,089 9,531 $2.00 Effect of dilutive securities 747 892 -------------------------------- ---------------------------------- Diluted EPS $ 6,382 11,491 $0.56 $19,089 10,423 $1.83 ================================ ==================================
Three Months Ended Nine Months Ended December 28, 1996 December 28, 1996 -------------------------------- ---------------------------------- (In thousands except per share data) Per Share Per Share Income Shares Amount Income Shares Amount --------- ---------- ----------- ----------- ---------- ----------- Basic EPS $ 138 8,169 $ 0.02 $ (5,512) 8,105 $(0.68) Effect of dilutive securities 126 -- -------------------------------- ---------------------------------- Diluted EPS $ 138 8,295 $0.02 $ (5,512) 8,105 $(0.68) ================================ ==================================
NOTE 7: Legal Proceedings Between December 23, 1997 and Febuary 3, 1998, four complaints were filed against the Company and certain of its officers in the Federal Court for the Northern District of California alleging violations of the federal securities laws. The plaintiffs in these lawsuits purport to represent a class of persons who purchased the Company's securities during the period of July 17, 1997 through October 23, 1997. The suits allege that the Company and certain of its officers intentionally misled the investing public regarding the financial prospects of the Company. The Company believes that the allegations are completely without merit and will vigorously defend itself. 8 SPECTRIAN CORPORATION AND SUBSIDIARY Management's Discussion and Analysis of Financial Condition and Results of Operations Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward looking statements include, but are not limited to: the statements under "Revenues" regarding future revenue growth, the statements in "Factors Affecting Future Operating Results;" and the statements in the last paragraph under "Liquidity and Capital Resources" regarding the anticipated spending for capital additions in fiscal 1998 and beyond, and the sufficiency of the Company's available resources to meet working capital and capital expenditure requirements. The forward looking statements contained herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those expressed in such forward looking statements, including those risks and uncertainties set forth below under "Factors Affecting Future Operating Results." Overview The Company designs, manufactures and markets highly linear single carrier and multicarrier radio frequency ("RF") power amplifiers that support a broad range of worldwide analog and digital wireless transmissions standards, including AMPS, TDMA, CDMA, TACS and GSM. The Company, founded in 1984 to perform design and engineering services, first entered the commercial amplifier market in 1988 and shipped its first cellular power amplifiers in 1990. The Company's revenues are now derived primarily from sales to a limited number of OEMs in the wireless infrastructure equipment market, in particular Northern Telecom Limited ("Northern Telecom"). The Company has historically pursued a strategy of vertical integration in its design and manufacturing processes, including the establishment of a 3-inch wafer fabrication facility in 1985 and the conversion to a 4-inch wafer fabrication facility to increase its capacity in 1996. During the third quarter just ended, the Company outsourced some of its higher volume printed circuit board sub-assemblies on a turnkey basis. The Company anticipates it will continue using an outsourcing strategy wherever it makes economic sense to do so. During fiscal 1997, Northern Telecom and Nortel Matra Communications ("Nortel Matra"), in which Northern Telecom has an equity interest, accounted for approximately 63% and 12% of revenues, respectively. During the three months ended December 28, 1997, Northern Telecom, Nortel Matra, and LG Information and Communications Limited ("LGIC") accounted for approximately 52%, 22% and 20% of revenues, respectively. During the nine months ended December 28, 1997, Northern Telecom, Nortel Matra and LGIC accounted for approximately 57%, 21% and 17% of the Company's revenues. The Company's business, financial condition and results of operations have been materially adversely affected in the past by anticipated orders failing to materialize and by deferrals or cancellations of orders as a result of changes in OEM requirements. If the Company were to lose Northern Telecom or any other major OEM customer, or if orders by Northern Telecom or any other major OEM customer were to otherwise materially decrease either in unit quantity or in price, the Company's business, financial condition and results of operations would be materially adversely affected. The Company's vertical integration strategy entails a number of risks, including a high level of fixed and variable costs, the management of complex processes, dependence on a single source of supply and a strict regulatory environment. During periods of low demand, high fixed wafer fabrication costs are likely to have a material adverse effect on the Company's operations. In addition, the Company's strategy of frequently introducing and rapidly expanding the manufacture of new products to meet evolving OEM customer and service provider needs has caused the Company to experience high materials and manufacturing costs, including high scrap and material waste, significant 9 material obsolescence, labor inefficiencies, high overtime hours, inefficient material procurement and an inability to recognize economies of scale. Results of Operations The following table sets forth for the periods indicated certain statement of operations data of the Company expressed as a percentage of total revenues and the gross margin on product sales.
Three Months Ended Nine Months Ended December 28, December 28, 1997 1996 1997 1996 ---- ---- ---- ---- Revenues 100.0% 100.0% 100.0% 100.0% Costs and expenses: Cost of product sales 71.5 70.3 71.0 74.7 Research and development 10.8 19.5 9.5 22.6 Selling, general and administrative 7.2 9.3 7.0 11.7 ------ ------ ------ ------ Total costs and expenses 89.5 99.1 87.5 109.0 Operating income (loss) 10.5 0.9 12.5 (9.0) Interest income (expense), net 3.0 (0.3) 1.4 (0.7) Other income -- -- 1.0 -- ------ ------ ------ ------ Income (loss) before income taxes 13.5 0.6 14.9 (9.7) Income tax expense -- -- 1.4 -- ------ ------ ------ ------ Net income (loss) 13.5% 0.6% 13.5% (9.7)% ====== ====== ====== ====== Gross margin on product sales 28.5% 29.7% 29.0% 25.3%
Revenues. The Company's revenues increased by 93% to $47.2 million for the three months ended December 28, 1997 from $24.5 million for the three months ended December 28, 1996. The Company's revenues increased by 149% to $141.2 million for the nine months ended December 28, 1997 from $56.7 million for the nine months ended December 28, 1996. The sizable increase in revenues for the three months ended December 28, 1997 reflects a significant increase in demand, primarily by Northern Telecom, for the Company's second generation GSM and multicarrier products, single carrier TDMA product and Korean PCS CDMA product. In addition to the products listed above, the increase in revenues for the nine months ended December 28, 1997 as compared to the nine months ended December 28, 1996, also reflects below normal customer demand experienced in the first quarter of fiscal 1997 ended June 29, 1996. Although the Company's future revenue is difficult to predict, the Company believes that the recent significant percentage growth in revenues will not be sustainable and that fiscal 1999 growth in revenues, if any, will be slight. Cost of Product Sales. Cost of product sales consists primarily of raw materials, RF semiconductor fabrication costs, amplifier assembly and test costs, overhead and warranty costs. The Company's cost of product sales increased by 95.8% to $33.7 million for the three months ended December 28, 1997 from $17.2 million for the three months ended December 28, 1996. Included in the cost of product sales were costs associated with the rapid increase in manufacturing volume for new products and costs associated with discontinuing older products. Gross margin on product sales was 28.5% for the three months ended December 28, 1997 as compared to 29.7% for the three months ended December 28, 1996. The Company's cost of product sales increased by 136.7% to $100.2 million for the nine months ended December 28, 1997 from $42.3 million for the nine months ended December 28, 1996. Gross margin on product sales was 29.0% for the nine months ended December 28, 1997 as compared to 25.3% for the nine months ended December 28, 1996. The improvement in product gross margin for the nine months ended December 28, 1997 primarily reflects the benefits of spreading fixed manufacturing overhead spending over a larger number of units sold. 10 Research and Development. Research and development ("R&D") expenses include the cost of designing, developing or reducing the manufacturing cost of amplifiers and RF semiconductors. The Company's R&D expenses increased by 6.3% to $5.1 million in the three months ended December 28, 1997 from $4.8 million in the three months ended December 28, 1996. R&D spending in the three months ended December 28, 1996 included development costs for the Company's 4-inch wafer fabrication facility. The increase in R&D spending in the three months ended December 28, 1997 reflects the absence of these facility development costs but was offset by increased overall R&D spending, primarily for personnel and related expenses. R&D expenses as a percentage of revenues decreased to 10.8% in the three months ended December 28, 1997 from 19.5% for the three months ended December 28, 1996, reflecting the substantially higher revenue levels in the three months ended December 28, 1997. The Company's R&D expenses increased by 4.8% to $13.5 million in the nine months ended December 28, 1997 from $12.8 million in the nine months ended December 28, 1996. The increase in R&D spending in the nine months ended December 28, 1997 reflects increased spending in both amplifier and semiconductor R&D for personnel expenses and project development expenses but was offset in part by facility development costs incurred in the nine month period ended December 28, 1996. R&D expenses as a percentage of revenues decreased to 9.5% in the nine months ended December 28, 1997 from 22.6% for the nine months ended December 28, 1996, reflecting the significantly higher revenue levels in the nine months ended December 28, 1997. Selling, General and Administrative. Selling, general and administrative ("SG&A") expenses include compensation and benefits for sales, marketing, senior management and administrative personnel, commissions paid to independent sales representatives, professional fees and other expenses. The Company's SG&A expenses increased by 49.5% to $3.4 million for the three months ended December 28, 1997 from $2.3 million for the three months ended December 28, 1996. SG&A expenses as a percentage of revenues decreased to 7.2% for the three months ended December 28, 1997 from 9.3% for the three months ended December 28, 1996. The Company's SG&A expenses increased by 50.1% to $9.9 million for the nine months ended December 28, 1997 from $6.6 million for the nine months ended December 28, 1996. SG&A expenses as a percentage of revenues decreased to 7.0% for the nine months ended December 28, 1997 from 11.7% for the nine months ended December 28, 1996. The increase in SG&A expenses for both periods was primarily due to outside commissions paid for South Korean sales, increases in sales and administrative headcount, and to a lesser extent the maintenance of a South Korean sales support office. The decrease of SG&A expenses as a percentage of sales in both periods was a result of the substantially higher revenue levels in those periods. Interest Income (Expense), net. Interest income, net for the three months ended December 28, 1997 was $1.4 million compared to net interest expense of $69,000 for the three months ended December 28, 1996. Interest income, net for the nine months ended December 28, 1997 was $2.0 million compared to net interest expense of $395,000 for the nine months ended December 28, 1996. The increase in net interest income was the result of interest income earned on substantially higher cash balances and short-term investments reflecting primarily the investment of the proceeds of the Company's August 1997 public offering. Income Taxes. The Company did not record an income tax expense for the three months ended December 28, 1997. As of the nine months ended December 28, 1997, the Company had recorded income tax expense of $2.0 million which the Company believes will be sufficient to cover its fiscal 1998 income tax provision. The combined effective tax rate of 9.4%, for the nine months ended December 28, 1997, reflects the use of net operating loss carryforwards ("NOLs"). The Company's ability to use its NOLs against taxable income may be subject to restrictions and limitations under Section 382 of the Internal Revenue Code of 1986, as amended, in the event of a change in ownership of the Company as defined therein. Factors Affecting Future Operating Results Customer Concentration; Dependence on Northern Telecom. The wireless infrastructure equipment market is dominated by a small number of large original equipment manufacturers ("OEMs"), including LM Ericsson Telephone Company ("Ericsson"), Lucent Technologies, Inc. ("Lucent"), Motorola Corporation ("Motorola"), Northern Telecom, Nortel Matra, and Siemens AG ("Siemens"). The Company's revenues are derived primarily from sales to a limited number of these OEMs. During the three months ended December 28, 1997, Northern Telecom, Nortel Matra and LGIC accounted for approximately 52%, 22% and 20% of the Company's revenues, respectively. Northern Telecom, 11 Nortel Matra and LGIC accounted for approximately 57%, 21% and 17% of the Company's revenues during the nine months ended December 28,1997. Furthermore, a substantial portion of revenues from Northern Telecom and Nortel Matra in the three and nine months ended December 28, 1997 resulted from sales of a limited number of the Company's products. The Company's top five customers accounted for 97% of its sales for the three and nine months ended December 28, 1997. The Company, Northern Telecom and Nortel Matra have an agreement, renegotiated annually, pursuant to which Northern Telecom and Nortel Matra commit to purchase a certain volume of their annual power amplifier requirements for specified prices from the Company. The renewal of the Company's agreement with Northern Telecom and Nortel Matra for calendar year 1998 was finalized in October 1997. Based on lower RF amplifier volume commitments and reduced pricing contained in this agreement and other factors, the Company expects that the Company's recent significant growth in revenues will not be sustainable and that fiscal 1999 revenue growth, if any, will be slight. In addition, there can be no assurance that Northern Telecom and Nortel Matra will enter into a contract as favorable to the Company, if any, in the future or otherwise agree to purchase the same or similar levels of their power amplifier requirements from the Company or purchase their power amplifier requirements at the same or similar pricing. Any reduction in the level of purchases of the Company's amplifiers by Northern Telecom and Nortel Matra, or any material reduction in pricing without significant offsets, would have a material adverse effect on the Company's business, financial condition and results of operations. Further, if the Company were to lose Northern Telecom or any other major OEM customer, or if orders by Northern Telecom or any other major OEM customer were to otherwise materially decrease, the Company's business, financial condition and results of operations would be materially adversely affected. In addition, the recent financial market turmoil and economic downturn in Korea may have a material adverse effect on the Company's sales of its products to LGIC, an OEM based in Korea, because a majority of the Company's products ordered by LGIC to date relate to the build-out of the Korean PCS system. In addition, because the Company's products are priced in U.S. dollars, the currency instability in the Korean and other Asian financial markets may have the effect of making the Company's products more expensive to LGIC than those of other manufacturers whose products are priced in one of the affected Asian currencies, and, therefore, LGIC may reduce future purchases of the Company's products. In addition, wireless infrastructure equipment OEMs have come under increasing price pressure from wireless service providers, which in turn has resulted in downward pricing pressure on the Company's products. The Company expects to incur increasing pricing pressures from Northern Telecom and other major OEM customers in future periods which will result in declining average sales prices for the Company's products. Fluctuations in Operating Results. The Company's quarterly and annual results have in the past been, and will continue to be, subject to significant fluctuations due to a number of factors, any of which could have a material adverse effect on the Company's business, financial condition and results of operations. In particular, the Company's results of operations are likely to vary due to the timing, cancellation, delay or rescheduling of OEM customer orders and shipments; the timing of announcements or introductions of new products by the Company, its competitors or their respective OEM customers; the acceptance of such products by wireless equipment OEMs and their customers; relative variations in manufacturing efficiencies, yields and costs; competitive factors such as the pricing, availability, and demand for competing amplification products; changes in average sales prices and product mix; variations in operating expenses; changes in manufacturing capacity and variations in the utilization of this capacity; shortages of key supplies; the long sales cycles associated with the Company's customer specific products; the timing and level of product and process development costs; changes in inventory levels; and most recently, the relative strength or weakness of international financial markets. Anticipated orders from the Company's OEM customers have in the past failed to materialize and delivery schedules have been deferred or canceled as a result of changes in OEM customer requirements and the Company expects this pattern to continue as customer requirements continue to change and industry standards continue to evolve. Reduced demand for wireless infrastructure equipment in the latter part of fiscal 1996 and the early part of fiscal 1997, driven partly by delays in the build-out of PCS infrastructure, caused significant fluctuations in the Company's product sales during that period of time. There can be no assurance that the Company will not experience such fluctuations in the future and, in fact, the Company anticipates lower product revenues over the next two to three quarters as a result of softening demand in the TDMA markets and delays in Korean PCS demand due to the unstable Asian financial markets and general economic conditions in Korea and other Asian countries. The Company establishes its expenditure levels for product development and other operating expenses based on its expected revenues, and expenses are relatively fixed in the short term. As a result, variations in timing of revenues can cause significant variations in quarterly results of operations. There can be no assurance that the Company will be profitable on a quarter-to-quarter basis in the future. The Company believes that period to period comparisons of its financial results are not necessarily meaningful and should not be relied upon as an indication of future performance. Due to all 12 the foregoing factors, it is likely that in some future quarter or quarters the Company's revenues or operating results will not meet the expectations of public stock market analysts or investors. In such event, the market price of the Company's Common Stock would be materially adversely affected. Internal Amplifier Design and Production Capabilities of OEMs. The Company believes that a majority of the present worldwide production of power amplifiers is captive within the manufacturing operations of wireless equipment OEMs, many of which have chosen not to purchase amplifiers from outside suppliers. The Company also believes that OEMs who purchase from third party amplifier vendors are reluctant to switch once committed to a particular merchant vendor. Consequently, the Company has only limited opportunities to increase revenues by replacing internal OEM amplifier production or displacing other merchant amplifier suppliers. Moreover, given the limited opportunities for merchant RF amplifier suppliers, any decision by an OEM to employ a second source merchant supplier for a product currently purchased from a merchant supplier may reduce the existing merchant supplier's ability to maintain a given level of product sales to such OEM or, possibly, to retain the OEM as a customer due to price competition from the second source merchant supplier. There can be no assurance that the Company's major OEM customers will continue to rely, or increase their reliance, on the Company as an external source of supply for their power amplifiers, or that other wireless equipment OEMs will become customers of the Company. If the major wireless infrastructure equipment suppliers do not purchase or continue to purchase their power amplifiers from merchant suppliers, the Company's business, results of operations and financial condition will be materially adversely affected. Rapid Technological Change; Evolving Industry Standards; Dependence on New Products. The markets in which the Company and its OEM customers compete are characterized by rapidly changing technology, evolving industry standards and continuous improvements in products and services. In particular, because the Company's strategy of rapidly bringing to market products customized for numerous and evolving RF modulation standards requires developing and achieving volume production of a large number of distinct products, the Company's ability to rapidly design and produce individual products for which there is significant OEM customer demand will be a critical determinant of the Company's future success. For example, continued softening of demand in the TDMA market or failure of another modulation standard in which the Company has invested substantial development resources may have a material adverse effect on the Company's business, financial condition and results of operations. No assurance can be given that the Company's product development efforts will be successful, that its new products will meet customer requirements and be accepted or that its OEM customers' product offerings will achieve customer acceptance. If a significant number of development projects do not result in significant volume production or if technologies or standards supported by the Company's or its customers' products become obsolete or fail to gain widespread commercial acceptance, the Company's business may be materially adversely affected. Risks Associated with Internal Wafer Fabrication. The Company's operation of its wafer fabrication facilities entails a number of risks, including a high level of fixed and variable costs, the management of complex processes, dependence on a single source of supply and a strict regulatory environment. During periods of low demand, high fixed wafer fabrication costs are likely to have a material adverse effect on the Company's results of operations. The design and fabrication of RF semiconductors is a complex and precise process. Such manufacturing is sensitive to a wide variety of factors, including variations and impurities in the raw materials, difficulties in the fabrication process, performance of the manufacturing equipment, defects in the masks used to print circuits on a wafer and the level of contaminants in the manufacturing environment. As a result of these and other factors, semiconductor manufacturing yields from time to time in the past have suffered, and there can be no assurance that the Company will be able to achieve acceptable production yields in the future. In addition, the Company's wafer fabrication facility represents a single point of failure in its manufacturing process that would be costly and time-consuming to replace if its operation were interrupted. The interruption of wafer fabrication operations or the loss of employees dedicated to the wafer fabrication facility could have a material adverse effect on the Company's business, financial condition and results of operations. Any failure to maintain acceptable wafer production levels, either from the Company's facility or from a third party wafer supplier, will have a material adverse effect on the Company's business, financial condition and results of operations. Product Quality, Performance and Reliability. The Company expects that its customers will continue to establish demanding specifications for quality, performance and reliability that must be met by the Company's products. RF semiconductors as complex as those offered by the Company often encounter development delays and may contain undetected defects or failures when first introduced or after commencement of commercial shipments. The Company 13 has from time to time in the past experienced product quality, performance or reliability problems. In addition, multicarrier power amplifiers have a higher probability of malfunction because of their greater complexity. There can be no assurance that defects or failures will not occur in the future relating to the Company's product quality, performance and reliability that may have a material adverse effect on the Company's business, financial condition and results of operations. Sole or Limited Sources of Materials and Services. The Company currently procures from single sources certain components and services for its products including cast housings, printed circuit boards, specialized RF components and specialized sub-assemblies. The Company purchases these components and services on a purchase order basis, does not carry significant inventories of these components and does not have any long-term supply contracts with its sole source vendors. Although the Company is currently identifying potential alternative sources of these components, its reliance on sole sources entails certain risks, including reduced control over the price, timely delivery, reliability and quality of the components. If the Company were to change any of its sole source vendors, the Company would be required to requalify the components with each new vendor. Any inability of the Company to obtain timely deliveries of components of acceptable quality in required quantities or a significant increase in the prices of components for which the Company does not have alternative sources could materially adversely affect the Company's business, financial condition and results of operations. The Company has occasionally experienced difficulties in obtaining these components, and no assurance can be given that shortages will not occur in the future. Declining Average Sales Prices. The Company has experienced, and expects to continue to experience, declining average sales prices for its products. Wireless infrastructure equipment manufacturers have come under increasing price pressure from wireless service providers, which in turn has resulted in downward pricing pressure on the Company's products. In addition, competition among merchant suppliers has increased the downward pricing pressure on the Company's products. Since wireless infrastructure equipment manufacturers frequently negotiate supply arrangements far in advance of delivery dates, the Company often must commit to price reductions for its products before it is aware of how, or if, cost reductions can be obtained. To offset declining average sales prices, the Company believes that it must achieve manufacturing cost reductions. If the Company is unable to achieve such cost reductions, the Company's gross margins will decline, and such decline will have a material adverse effect on the Company's business, financial condition and results of operations. Risks of International Sales. Sales outside of the United States were 73% and 94% of revenues in fiscal 1997 and the nine months ended December 28, 1997, respectively. The Company expects that international sales will continue to account for a significant percentage of the Company's total revenues for the foreseeable future. These sales involve a number of inherent risks, including imposition of government controls, currency exchange fluctuations, potential insolvency of international distributors and representatives or customers, reduced protection for intellectual property rights in some countries, the impact of recessionary environments in economies outside the United States, political instability and generally longer receivables collection periods, as well as tariffs and other trade barriers. In addition, because substantially all of the Company's foreign sales are denominated in U.S. dollars, increases in the value of the dollar relative to the local currency would increase the price of the Company's products in foreign markets and make the Company's products relatively more expensive and less price competitive than competitors' products that are priced in local currencies. There can be no assurance that these factors will not have a material adverse effect on the Company's future international sales and, consequently, on the Company's business, financial condition and results of operations. The Company anticipates that the recent turmoil in Asian financial markets and the recent deterioration of the underlying economic conditions in certain Asian countries may have an impact on its sales to customers located in or whose projects are based in those countries due to the impact of currency fluctuations on the relative price of the Company's products and restrictions on government spending imposed by the International Monetary Fund (the "IMF") on those countries receiving the IMF's assistance. In addition, customers in those countries may face reduced access to working capital to fund component purchases, such as the Company's products, due to higher interest rates, reduced bank lending due to contractions in the money supply or the deterioration in the customer's or its bank's financial condition or the inability to access local equity financing. A substantial majority of the Company's products are sold to OEMs who incorporate the Company's products into systems sold and installed to end-user customers. These OEMs are not required by contract and do not typically provide the Company with information regarding the location and identity of their end-user customers, and, therefore, the Company is not able to determine what portion of its product sales have been or future orders will be incorporated into OEM sales to end-users in those Asian countries currently experiencing financial market turmoil and/or deterioration of economic conditions. Furthermore, a large 14 portion of the Company's existing customers and potential new customers are servicing new markets in developing countries that the Company's customers expect will deploy wireless communication networks as an alternative to the construction of a wireline infrastructure. If such countries decline to construct wireless communication systems, or construction of such systems is delayed for any reason, including business and economic conditions and changes in economic stability due to factors such as increased inflation and political turmoil, such delays could have a material adverse effect on the Company's business, results of operations and financial condition. Reliance upon Growth of Wireless Services. Sales of power amplifiers to wireless infrastructure equipment suppliers have in the past accounted, and are expected in the future to account, for substantially all of the Company's product sales. Demand for wireless infrastructure equipment is driven by demand for wireless service. Although demand for power amplifiers has grown in recent years, if demand for wireless services fails to increase or increases more slowly than the Company or its OEM customers currently anticipate, the Company's business, financial condition and results of operations would be materially and adversely affected. Market for the Company's Products Is Highly Competitive. The wireless communications equipment industry is extremely competitive and is characterized by rapid technological change, new product development and product obsolescence, evolving industry standards and significant price erosion over the life of a product. The ability of the Company to compete successfully and sustain profitability depends in part upon the rates at which wireless equipment OEMs incorporate the Company's products into their systems and the Company captures market share from other merchant suppliers. The Company's major OEM customers, including Northern Telecom, Nortel Matra, LGIC and QUALCOMM, continuously evaluate whether to manufacture their own amplification products or purchase them from outside sources. There can be no assurance that these OEM customers will incorporate the Company's products into their systems or that in general they will continue to rely, or expand their reliance, on external sources of supply for their power amplifiers. The Company's principal competitors in the market for wireless amplification products provided by merchant suppliers currently include AML Communications, Hewlett-Packard Wireless Infrastructure Division, Microwave Power Devices, NEC Corporation and Powerwave Technologies. No assurance can be given that the Company's competitors will not develop new technologies or enhancements to existing products or introduce new products that will offer superior price or performance features compared to the Company's products. Uncertain Protection of Intellectual Property. The Company's ability to compete successfully and achieve future revenue growth will depend, in part, on its ability to protect its proprietary technology and operate without infringing the rights of others. The Company has a policy of seeking patents on inventions resulting from its ongoing research and development activities. The Company has been awarded 15 United States patents, and has 20 United States patent applications pending including three that have been allowed but not yet formally issued. The Company also has been awarded six foreign patents and has ten foreign patent applications pending. There can be no assurance that the Company's pending patent applications will be allowed or that the issued or pending patents will not be challenged or circumvented by competitors. The failure of the Company to protect its proprietary technology could have a material adverse effect on its business, financial condition and results of operations. Risk of Third Party Claims of Infringement. The communications equipment industry is characterized by vigorous protection and pursuit of intellectual property rights or positions, which have resulted in significant and often protracted and expensive litigation. Although there is currently no pending intellectual property litigation against the Company, the Company or its suppliers may from time to time be notified of claims that the Company may be infringing patents or other intellectual property rights owned by third parties. In the event that any third party makes a successful claim against the Company or its customers and either a license is not made available to the Company on commercially reasonable terms or a "design around" is not practicable, the Company's business, financial condition and results of operations would be materially adversely affected Government Regulation of Communications Industry. Radio frequency transmissions and emissions, and certain equipment used in connection therewith, are regulated in the United States, Canada and throughout the rest of the world. Regulatory approvals generally must be obtained by the Company in connection with the manufacture and sale of its products, and by wireless service providers to operate the Company's products. If more stringent RF emission regulations are adopted, the Company and its OEM customers may be required to alter the manner in which radio signals are transmitted or otherwise alter the equipment transmitting such signals, which could materially adversely affect the Company's products and markets. The enactment by federal, state, local or international governments of new 15 laws or regulations or a change in the interpretation of existing regulations could also materially adversely affect the market for the Company's products. Environmental Regulations. The Company is subject to a variety of local, state and federal governmental regulations relating to the storage, discharge, handling, emission, generation, manufacture and disposal of toxic or other hazardous substances used to manufacture the Company's products. The Company believes that it is currently in compliance in all material respects with such regulations and that it has obtained all necessary environmental permits to conduct its business. Nevertheless, the failure to comply with current or future regulations could result in the imposition of substantial fines on the Company, suspension of production, alteration of its manufacturing processes or cessation of operations. Any failure by the Company to control the use, disposal, removal or storage of, or to adequately restrict the discharge of, or assist in the cleanup of, hazardous or toxic substances, could subject the Company to significant liabilities, including joint and several liability under certain statutes. The imposition of such liabilities could materially adversely affect the Company's business, financial condition and results of operations. Management of Growth; Dependence on Key Personnel. The growth in the Company's business has placed, and is expected to continue to place, a significant strain on the Company's personnel, management and other resources. The Company's ability to manage any future growth effectively will require it to attract, train, motivate, manage and retain new employees successfully, to integrate new employees into its overall operations, to retain the continued service of its key technical, marketing and management personnel, and to continue to improve its operational, financial and management information systems. Although the Company has employment contracts with several of its executive officers, these agreements do not obligate such individuals to remain in the employment of the Company. The Company does not maintain key man life insurance on any of its key technical personnel. The competition for such personnel is intense, and the loss of key employees could have a material adverse effect on the Company. Volatility of Stock Price. The market price of the shares of Common Stock has recently been and is likely to continue to be highly volatile. During the third fiscal quarter of 1998, the Company's closing stock price ranged from a high of $64.875 to a low of $16.875. The Company's stock price is affected significantly by factors such as fluctuations in the Company's operating results, announcements of technological innovations, new customer contracts or new products by the Company or its competitors, announcements by the Company's customers regarding their business or prospects, changes in analysts' expectations, governmental regulatory action, developments with respect to patents or proprietary rights, general market conditions and other factors. In addition, the stock market has from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. Pending Litigation. Between December 23, 1998 and Febuary 3, 1998, four complaints were filed against the Company and certain of its officers in the Federal Court for the Northern District of California alleging violations of the federal securities laws. The plaintiffs in these lawsuits purport to represent a class of persons who purchased the Company's securities during the period of July 17, 1997 through October 23, 1997. The suits allege that the Company and certain of its officers intentionally misled the investing public regarding the financial prospects of the Company. The Company believes that the allegations are completely without merit and will vigorously defend itself. Certain provisions of the Company's Certificate of Incorporation and indemnification agreements between the Company and its officers require the Company to advance to such officers ongoing legal expenses of defending the suits and may require the Company to indemnify them against judgments rendered on certain claims. The Company expects to incur significant legal expenses on its behalf and behalf of such officers in connection with this litigation. In addition, defending this litigation has resulted and will likely continue to result in the diversion of management's attention from the day-to-day operations of the Company's business. Although the Company does not believe that it or any of its officers has engaged in any wrongdoing, there can be no assurance that this stockholder litigation will be resolved in the Company's favor. An adverse result, settlement or prolonged litigation could have a material adverse effect on the Company's business, financial condition or results of operations. Liquidity and Capital Resources The Company has financed its growth through its initial public offering in August 1994, a recent public equity offering in August 1997 and through private sales of equity securities, capital equipment leases, bank lines of credit and 16 cash flows from operations. Cash provided by operations was $11.8 million for the nine months ended December 28, 1997 while cash used by operations in the corresponding period of fiscal 1997 was $4.9 million. The cash provided by operations for the nine months ended December 28, 1997 was principally generated by the Company's profits over the nine month period. The cash used by operations in fiscal 1997 was principally for purchasing inventory to support production growth for increasing product shipment volumes. As of December 28, 1997, the Company had working capital of $130.2 million including $100.7 million in cash, cash equivalents and short-term investments. In addition, the Company has a revolving line of credit of $10.0 million with a bank secured by the majority of the Company's assets. Under the terms of the master agreement governing this credit instrument, the Company is required to maintain certain minimum working capital, net worth, profitability and other specific financial ratios. As of December 28, 1997, the Company was in compliance with these financial covenants. There were no borrowings outstanding against this line of credit as of December 28, 1997. In January 1997, the Company borrowed $6.0 million under a term loan secured by certain capital equipment. The loan, which expires in January 2002, requires the payment of monthly principal plus interest and is subject to certain minimum working capital, net worth and other specific financial ratios. The Company was in compliance with these covenants as of December 28, 1997. In March 1997, the Company also secured a $3.2 million real estate loan, which expires in April 2007, for the purchase of a light industrial building for its future facilities expansion. Additions to property and equipment were $11.6 million for the nine months ended December 28, 1997 and $16.3 million in fiscal 1997. Capital additions for the first nine months of fiscal 1998 included the purchase of new corporate management information systems software, manufacturing test and production equipment required to support new products and increase factory capacity, and test equipment to support various research and development projects. The Company anticipates spending approximately $18 million over the next 12 months for capital additions primarily to support manufacturing capacity requirements, development projects and facilities expansion. Based on the Company's current working capital position, the cash flows the Company expects to generate from fiscal 1998 operations and the available line of credit the Company expects to renew, the Company believes that sufficient resources will be available to meet the Company's cash requirements for at least the next twelve months. Cash requirements for periods beyond the next twelve months depend on the Company's profitability, timing and level of capital expenditures, working capital requirements and rate of growth. 17 PART II - OTHER INFORMATION ITEM 1: Legal Proceedings Between December 23, 1997 and Febuary 3, 1998, four complaints were filed against the Company and certain of its officers in the Federal Court for the Northern District of California alleging violations of the federal securities laws. The plaintiffs in these lawsuits purport to represent a class of persons who purchased the Company's securities during the period of July 17, 1997 through October 23, 1997. The suits allege that the Company and certain of its officers intentionally misled the investing public regarding the financial prospects of the Company. The Company believes that the allegations are completely without merit and will vigorously defend itself. ITEM 2: Changes in Securities and Use of Proceeds (a) On October 3, 1997, the Company affected a reincorporation in Delaware. The Certificate of Incorporation and Bylaws of the surviving Delaware corporation were approved by the stockholders of the Company on September 11, 1997. (b) Not applicable. (c) Between September 28, 1997 and December 28, 1997, the Company issued options to purchase an aggregate of 25,000 shares of Common Stock to one employee at an exercise price of $17.625 per share pursuant to Non-Qualified Stock Option Agreements. The sale of the above securities were deemed to be exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), in reliance on Section 4(2) of the Securities Act, Regulation D promulgated thereunder, or Rule 701 promulgated under Section 3(b) of the Securities Act, as transactions not involving a public offering or transactions pursuant to compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipient had adequate access, through his relationship with the Company, to information about the Company. (d) Not applicable. ITEM 6: Exhibits and Reports on Form 8-K (a) Exhibits 11.1 Statement regarding computation of net income (loss) per share 27.1 Financial Data Schedule (b) On October 10, 1997 the Company filed a Report on Form 8-K regarding the effectiveness of its reincorporation in Delaware on October 3, 1997 and filing the Delaware corporation's certificate of incorporation, bylaws, form of indemnification agreement and the merger agreement used to affect the reincorporation. 18 SIGNATURES 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. Dated: February 3, 1998 SPECTRIAN CORPORATION (Registrant) /S/ BRUCE R. WRIGHT ---------------------------------------------------- Bruce R. Wright Executive Vice President, Finance and Administration, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) 19 EX-11 2 COMPUTATION OF NET INCOME (LOSS) Exhibit 11.1 SPECTRIAN CORPORATION AND SUBSIDIARY COMPUTATION OF NET INCOME (LOSS) PER SHARE (In thousands except per share data)
Three months ended Nine months ended December 28, December 28, --------------------------- ------------------------------ 1997 1996 1997 1996 ------- ------- ------- ------- Net income (loss) $ 6,382 $ 138 $19,089 $(5,512) ======= ======= ======= ======= Weighted average number of shares: Basic: Common stock 10,744 8,169 9,515 8,118 ------- ------- ------- ------- Diluted: Common stock 10,744 8,169 9,531 8,105 Common stock equivalents - stock options 747 126 892 n/a* ------- ------- ------- ------- Total diluted shares 11,491 8,295 10,423 8,105 ------- ------- ------- ------- Net income (loss) per share - basic $ 0.59 $ 0.02 $ 2.00 $ (0.68) ======= ======= ======= ======= Net income (loss) per share - diluted $ 0.56 $ 0.02 $ 1.83 $ (0.68) ======= ======= ======= ======= * Due to the loss in this period, stock options outstanding would be antidilutive and are therefore not included in the calculation.
20 EX-27 3 FINANCIAL DATA SCHEDULE
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED CONSOLIDATED BALANCE SHEETS, CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000925054 SPECTRIAN CORP /DE/ 1,000 3-MOS MAR-31-1998 SEP-29-1997 DEC-28-1997 2,717 98,032 34,373 373 20,130 156,261 50,622 21,311 185,572 25,429 6,239 145,508 0 0 8,396 185,572 47,158 47,158 33,702 33,702 8,503 0 (1,429) 6,382 0 6,382 0 0 0 6,382 0.59 0.56
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