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 QUARTER ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER 0-20777
XIONICS DOCUMENT TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-3186685
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 BLANCHARD ROAD, BURLINGTON, MA 01803
(Address of principal executive offices) (Zip Code)
(617) 229-7000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
At February 13, 1997, there were 10,795,873 shares of the Company's $.01
par value common stock issued, with 10,629,123 shares outstanding.
<PAGE>
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
PAGE
NUMBER
PART I. FINANCIAL INFORMATION
ITEM 1. Condensed Consolidated Financial Statements
Balance Sheets--December 31, 1996 and June 30, 1996.......... 3
Statements of Operations--Six Months Ended December 31,
1996 and 1995 and Three Months Ended December 31, 1996
and 1995................................................... 4
Statements of Cash Flows--Six Months Ended December 31,
1996 and 1995.............................................. 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 6. Exhibits and Reports on Form 8K................................. 12
Signatures...................................................... 13
<PAGE>
<TABLE>
<CAPTION>
PART I--FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, June 30,
ASSETS 1996 1996
------------ -------------
<S> <C> <C>
(Unaudited)
Current Assets:
Cash and cash equivalents $28,792,103 $2,115,859
Short-term investments --- 644,613
Accounts receivable, less reserves of approximately 3,853,383 2,398,033
$95,000 and $140,000 at December 31, 1996 and
June 30, 1996, respectively
Contract receivable 2,971,773 ---
Inventories 1,379,270 1,020,035
Other current assets 834,874 398,264
----------- ----------
Total Current Assets 37,831,403 6,576,804
Property and Equipment, net 2,612,767 2,169,091
Acquired intangibles, net of accumulated amortization 132,500 194,167
of approximately $720,000 and $659,000 at
December 31, 1996 and June 30, 1996, respectively
Deferred offering costs --- 926,439
Other assets 870,094 38,000
----------- ----------
$41,446,764 $9,904,501
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable $1,898,822 $1,988,470
Term loans, current portion --- 322,667
Deferred revenue 859,653 1,368,833
Accrued liabilities 4,080,171 1,904,909
----------- ----------
Total Current Liabilities 6,838,646 5,584,879
Term loans, net of current portion --- 564,166
Secured promissory notes payable to a stockholder --- 2,094,000
Redeemable preferred stock:
Class C Redeemable Convertible Preferred Stock,
$.01 par value-- Authorized--2,779,615 shares
Issued and outstanding--2,698,938 shares, stated
at liquidation value, at June 30, 1996 and
none at December 31, 1996 --- 8,231,410
Stockholders' equity (deficit):
Preferred Stock, $.01 par value--
Authorized--10,000,000 shares
Issued and outstanding--none --- ---
Class A Convertible Preferred Stock, $.01 par value--
Authorized--3,603,305 shares
Issued and outstanding--3,125,051 at June 30, 1996 --- 3,606,658
and none at December 31, 1996
Common Stock, Class A, $.01 par value--
Authorized--20,000,000 shares
Issued--1,386,066 shares at June 30, 1996
Outstanding--1,161,755 at June 30, --- 13,861
1996 and none at December 31, 1996
Common Stock, Class B, $.01 par value--
Authorized--10,000,000 shares
Issued and outstanding--558,931 shares at
June 30, 1996 and none at December 31, 1996 --- 5,589
<PAGE>
Common Stock
Authorized--40,000,000 shares
Issued--10,795,873 shares at December 31, 1996
Outstanding--10,571,810 shares at
December 31, 1996 107,959 ---
Additional paid-in capital 43,782,004 1,312,381
Treasury stock, at cost--224,311 shares and 224,063
shares at June 30, 1996 and December 31, 1996,
respectively (151,246) (151,413)
Accumulated deficit (9,130,599) (11,357,030)
----------- ------------
Total stockholders' equity (deficit) 34,608,118 (6,569,954)
----------- ------------
$41,446,764 $9,904,501
=========== ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
----------------------------- ----------------------------
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Net revenue $9,504,581 $4,874,300 $17,945,507 $8,872,799
Cost of revenue 2,027,139 1,480,589 3,586,205 2,644,200
------------ ------------ ------------- ------------
Gross profit 7,477,442 3,393,711 14,359,302 6,228,599
Operating expenses:
Research and development 3,765,921 2,133,692 7,284,247 4,093,856
Selling, general and 2,311,322 2,272,890 4,571,166 4,628,526
administrative
------------ ------------ ------------- ------------
Income (loss) from operations 1,400,199 (1,012,871) 2,503,889 (2,493,783)
Other income (expense):
Interest expense (19,349) (68,585) (84,926) (161,441)
Interest income 340,352 29,034 351,574 33,400
Other income (expense) 11,786 31,533 8,751 (4,924)
------------ ------------ ------------- -------------
Income (loss) before provision 1,732,988 (1,020,889) 2,779,288 (2,626,748)
for income taxes
Provision for income taxes 343,597 --- 552,857 ---
------------ ------------ ------------- -------------
Net income (loss) $1,389,391 $(1,020,889) $2,226,431 $(2,626,748)
============ ============ ============= =============
Net income (loss) per common and $0.11 ($0.14) $0.20 ($0.36)
common equivalent share
============ ============ ============= =============
Weighted average number of 12,755,769 7,452,196 11,330,226 7,235,930
common and common equivalent
shares outstanding ============ ============ ============= =============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
<PAGE>
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
--------------------------
December 31, December 31,
1996 1995
------------ ------------
Cash flows from operating activities:
Net Income (loss) $2,226,431 $(2,626,748)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization 533,249 398,498
Changes in assets and liabilities--
Accounts receivable (1,455,350) (787,524)
Contract receivable (2,971,773) ---
Inventories (359,235) 20,984
Prepaid expenses and other current assets (436,610) (2,596)
Accounts payable (89,648) (152,689)
Deferred revenue (509,180) (431,655)
Accrued liabilities 2,175,262 616,096
------------ ------------
Net cash used in operating activities (886,854) (2,965,634)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment (915,258) (327,487)
Decrease in other assets (832,094) ---
Decrease in short-term investments 644,613 ---
------------ ------------
Net cash used in investing activities (1,102,739) (327,487)
------------ ------------
Cash flows from financing activities:
Repayment of term loans (886,833) ---
Repayment of note payable to stockholder (2,094,000) ---
Proceeds from exercise of stock options 35,181 68,218
Issuance of Class D Preferred Stock --- 4,500,000
Issuance of Class C Redeemable Convertible
Preferred Stock, net of issuance cost --- 3,274,349
Reissuance (purchase) of treasury stock 50 (250,000)
Sale of Common Stock, net of issuance costs 30,685,000 ---
Reclassification of deferred offering costs 926,439 ---
------------ ------------
Net cash provided by financing activities 28,665,837 7,592,567
Net increase in cash and cash equivalents 26,676,244 4,299,446
Cash and cash equivalents, beginning of period 2,115,859 1,226,364
------------ ------------
Cash and cash equivalents, end of period $28,792,103 $5,525,810
============ ============
Supplemental disclosure of cash flow information:
Cash paid for interest $133,497 $171,022
============ ============
Cash paid for income taxes $97,000 ---
============ ============
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
==========================================================================
==========================================================================
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements of Xionics Document
Technologies, Inc. and subsidiaries (the Company) presented herein have been
prepared pursuant to the rules of the Securities and Exchange Commission for
quarterly reports on Form 10-Q and do not include all of the information and
note disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended June 30, 1996,
included in the CompanyUs Registration Statement on Form S-1 (333-4613),
declared effective by the Securities and Exchange Commission on September 26,
1996.
The condensed consolidated financial statements and notes herein are
unaudited, but in the opinion of management, include all the adjustments
(consisting of normal, recurring adjustments) necessary to present fairly the
consolidated financial position, results of operations and cash flows of the
Company and its subsidiaries.
The results of operations for the interim periods shown herein are not
necessarily indicative of the results to be expected for any future interim
period or for the entire year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements reflect the
application of certain accounting policies described in this and other notes to
these condensed consolidated financial statements.
(a) Principles of Consolidation
The accompanying condensed consolidated financial statements reflect the
accounts of the Company and its wholly owned subsidiaries. All material
intercompany accounts and transactions have been eliminated in consolidation.
(b) Contract Receivable
The Company has an outstanding contract receivable of $2,971,773 at
December 31, 1996 from a significant customer. The contract receivable
represents the amount of revenue recognized in excess of cash received under an
agreement entered into by the Company and the customer whereby the Company
licensed certain of its page description technology, including its version of
the PostScript page description language, to the customer. There was no
outstanding contract receivable due to the Company as of June 30, 1996.
(c) Inventories
Inventories, which include material, labor and manufacturing overhead,
are stated at the lower of cost (first-in, first- out) or market and consist of
the following:
DECEMBER 31, 1996 JUNE 30, 1996
Raw materials $835,424 $493,660
Finished Goods 543,846 526,375
------------ ------------
$1,379,270 $1,020,035
<PAGE>
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(d) Property and Equipment
The Company records property and equipment at cost and provides for
depreciation and amortization on a straight-line basis over the estimated
useful lives of the assets, as follows:
ESTIMATED
USEFUL LIFE DECEMBER 31 ,1996 JUNE 30, 1996
Asset Classification
Computer equipment 3-5 Years $3,041,738 $2,525,394
Furniture and fixtures 3-7 Years 925,642 564,865
Machinery and equipment 3-5 Years 113,749 75,612
---------- ----------
4,081,129 3,165,871
Less Accumulated depreciation 1,468,362 996,780
and amortization ---------- ----------
and amortization $2,612,767 $2,169,091
========== ==========
(e) Deferred Offering Costs
As of June 30, 1996, the Company had capitalized approximately $926,000
in costs related to the Company's initial public offering. These costs were
capitalized as deferred offering costs on the June 30, 1996 balance sheet and
reclassified to stockholders' equity upon completion of the offering.
(f) Noncash Investing and Financing Activities
<TABLE>
<CAPTION>
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Supplemental disclosure of noncash transactions
Accretion of Preferred Stock --- $ 34,769
======== ==========
Conversion of Class A Convertible Preferred Stock
to Class B Common Stock --- $1,229,113
======== ==========
Conversion of Class C Redeemable Convertible
Preferred Stock to Common Stock $8,231,410 ---
========== ==========
Conversion of Class A Convertible Preferred Stock
to Common Stock $3,606,658 ---
========== ==========
Conversion of Class A Common Stock to Common
Stock $ 13,861 ---
========== ==========
Conversion of Class B Common Stock to Common $ 5,589 ---
Stock ========== ==========
Acquisition of Property and Equipment under Term --- $ 329,500
Loans ========== ==========
</TABLE>
<PAGE>
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT.)
(f) Noncash Investing and Financing Activities (cont.)
Converted to Class C Redeemable Convertible Preferred Stock---
Class B Redeemable Preferred Stock --- $2,310,596
Secured promissory notes payable to a stockholder --- $1,900,000
Senior subordinated promissory notes payable to --- $ 228,355
stockholders
<PAGE>
XIONICS DOCUMENT TECHNOLOGIES, INC. AND SUBSIDIARIES
ITEM 2 MANAGEMENTUS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Except for the historical information contained herein, this quarterly
Report on Form 10-Q may contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Investors are cautioned that forward-looking statements
are inherently uncertain. Actual performance and results of operations may
differ materially from those projected or suggested in the forward-looking
statements due to certain risks and uncertainties, including, without
limitation, (i) the Company's relationship with Hewlett-Packard Company, from
whom the Company derives a significant portion of revenue from the supply of
software and related technology and support, (ii) the Company's dependence for
revenue upon the ability of its customers to develop and sell their own
products, which incorporate the Company's technology, to end users, and (iii)
the timely introduction of new products, such as the Company's embedded
technology for multifunction peripheral devices, and the market acceptance of
those products, in an extremely competitive and rapidly changing market where
the market success of entities providing embedded software products for paper
handling devices has historically been largely determined by their success in
becoming one of the industry standards. The market price of the Company's
common shares could be subject to significant fluctuations in response to
quarter-to-quarter variations in the Company's operating results, announcements
of technological innovations or new products by the Company or its competitors
and other events or factors. In addition, the stock market in recent years has
experienced extreme price and volume fluctuations that have particularly
affected the market prices of many technology companies. These fluctuations, as
well as general economic and market conditions, may materially and adversely
affect the market price of the Company's common shares. Because of these and
other factors, past financial performance should not be considered an indicator
of future performance. Additional information concerning certain risks and
uncertainties that would cause actual results to differ materially from those
projected or suggested in the forward-looking statements is contained in the
Company's filings with the Securities and Exchange Commission, including those
risks and uncertainties discussed in the Company's Final Prospectus, dated
September 26, 1996, in the section entitled "Risk Factors." The forward-looking
statements contained herein represent the Company's judgment as of the date of
this quarterly report on Form 10-Q, and the Company cautions readers not to
place undue reliance on such statements.
OVERVIEW
Xionics Document Technologies, Inc. designs, develops and markets
advanced embedded systems technology for use in mainstream office devices such
as printers, copiers, scanners and multifunction devices. The Company derives
its revenue primarily from sales of its printer software products, which
include revenue from software licenses, royalties, engineering services and
maintenance, and from sales of its image acceleration products. Software
license revenue consists of the Company's charges for licensed source code,
which generally includes initial non-refundable fees which are recognized as
revenue upon the shipment of the source code, provided there are no significant
vendor obligations. Royalty revenue is generally earned as a percentage of net
revenue from unit sales by licensees of products that incorporate the Company's
software, and is generally recognized as earned in the Company's financial
statements in the quarter in which amounts due to the Company have been
determined using estimates based upon historical payments. Engineering services
<PAGE>
revenue is derived from fees paid for porting of the Company's software to
customer-specific device controllers. Payments under maintenance contracts are
due at the beginning of the contract; however, revenue is recognized ratably
over the term of the contract which is typically twelve months.
RESULTS OF OPERATIONS
Net revenue for the three months ended December 31, 1996 increased 95% to
$9.5 million compared to $4.9 million for the three months ended December 31,
1995. Net revenue for the six months ended December 31, 1996, increased 102% to
$17.9 million compared to $8.9 million for the six months ended December 31,
1995. The increases in both the three and six month periods resulted primarily
from growth in sales of the Companys printer software products, including
approximately $4.0 million and $8.0 million, respectively, of revenue
recognized under an amendment to its preexisting agreement with Hewlett-
Packard Company ("HP") which was entered into in March 1996 (the "HP
Agreement").
Gross profit for the three months ended December 31, 1996 increased 120%
to $7.5 million from $3.4 million for the three months ended December 31, 1995.
Gross margin increased to 79% for the three months ended December 31, 1996
compared to 70% for the three months ended December 31, 1995. Gross profit for
the six months ended December 31, 1996 increased 131% to $14.4 million from
$6.2 million for the six months ended December 31, 1995. Gross margin increased
to 80% for the six months ended December 31, 1996 compared to 70% for the six
months ended December 31, 1995. The increases in both the three and six month
periods were attributable primarily to increased sales of higher margin
Intelligent Peripheral System ("IPS") products and related engineering
services, primarily related to the HP Agreement, partially offset by a
reduction in gross margin attributable to the Company's image acceleration
products.
Research and development expenses increased by 76% to $3.8 million for
the three months ended December 31, 1996 from $2.1 million for the three months
ended December 31, 1995. Research and development expenses increased by 78% to
$7.3 million for the six months ended December 31, 1996 from $4.1 million for
the six months ended December 31, 1995. For both the three and six month
periods the higher expense level resulted primarily from increased expenditures
relating to the Company's multifunction peripheral technology, which is
currently in development. As a percentage of revenue, research and development
expenses decreased to 40% for the three months ended December 31, 1996 compared
to 44% for the three months ended December 31, 1995 and decreased to 41% for
the six months ended December 31, 1996 compared to 46% for the six months ended
December 31, 1995. The declines in research and development expenses as a
percentage of revenue were principally the result of higher revenue.
Selling, general and administrative expenses increased by 2% to $2.31
million for the three months ended December 31, 1996 from $2.27 million for the
three months ended December 31, 1995. Selling, general and administrative
expenses decreased by 1% to $4.57 million for the six months ended December 31,
1996 from $4.62 million for the six months ended December 31, 1995. The
decrease in selling, general and administrative expenses during the six month
comparative periods is primarily due to decreases in advertising, trade show
and travel expenses relating to the Company's image acceleration products. As a
percentage of revenue, selling, general and administrative expenses decreased
to 24% and 25%, respectively, for the three and six month periods ended
December 31, 1996, compared to 47% and 52% for the three and six month periods
ended December 31, 1995. In addition to lower levels of expense for the
<PAGE>
comparable six month periods, the decline in selling, general and
administrative expenses as a percentage of revenue was also principally the
result of higher revenue.
During the three and six month periods ended December 31, 1996, net
interest expense decreased by $49,000 and $76,000, respectively, or 72% and
47%, compared to the three and six month periods ended December 31, 1995. This
decrease resulted primarily from the reduction in bank lines of credit and note
payable to a shareholder, which were completely paid down by December 31, 1996.
Interest income and other income increased by $292,000 and $333,000,
respectively, or 481% and 1211%, during the three and six month periods ended
December 31, 1996, compared to the three and six month periods ended December
31, 1995. Increases in interest income resulted primarily from increased cash
balances as a result of receiving net proceeds from the Company's September 26,
1996 initial public offering.
The Company did not provide for income taxes during the three and six
month periods ended December 31, 1995 due to the loss for the periods and the
expected loss for fiscal 1996. The Company's effective income tax rate was 20%
for the three and six month periods ended December 31, 1996. The effective tax
rate for the periods differs from the statutory rate primarily as a result of
the utilization of a portion of net operating loss carry forwards.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had cash and cash equivalents of $28.8
million compared to $2.8 million at June 30, 1996. This increase is primarily
due to net proceeds resulting from the September 26, 1996 initial public
offering which was completed on October 1, 1996.
At present, the Company has available a $4.0 million working capital
revolving line of credit and a $2.0 million term loan facility with a bank,
both of which are secured by substantially all assets of the Company. The
working capital line of credit terminates on December 1, 1997, and no term loan
will be made after June 30, 1997. Under the loan facilities, the Company is
required to comply with certain restrictive covenants, which the Company was in
compliance with as of December 31, 1996. The interest rate for the working
capital line of credit is the bank's prime rate; the interest for the term loan
facility is the bank's prime rate plus 0.5%. As of December 31, 1996, there
were no outstanding borrowings under the working capital line of credit and
term loan facility. Under the terms of the working capital and term loan
facilities, the Company is prohibited from declaring or paying dividends on its
Common Stock. While the Company may in the future use private or public
placements of its securities as a source of liquidity, it has no present
intention to do so.
The Company believes that its existing cash and cash equivalent balances,
together with funds generated from operations and available borrowings under
its lines of credit will be sufficient to finance the Company's operations for
at least the next 12 months. In the event the Company acquires one or more
businesses or products, the Company's capital requirements could increase
substantially, and there can be no assurance that additional capital will be
available on terms acceptable to the Company, if at all.
<PAGE>
PART II -- OTHER INFORMATION
ITEMS 1. - 5.
Not applicable.
ITEM 5. OTHER INFORMATION
As reported in the Company's Form 10-Q for the quarter ended September 30,
1996, on October 1, 1996, pursuant to the terms of an Underwriting Agreement
(the "Underwriting Agreement") between the Company and Adams, Harkness & Hill,
Inc. and SoundView Financial Group, Inc. (the "Underwriters"), the Company
completed its initial public offering of 2,500,000 shares of its common stock.
The Company received the net proceeds of the initial public offering in the
amount of $27,900,000. On October 10, 1996, after receipt of notification from
the Underwriters that the Underwriters were exercising their option granted
pursuant to the Underwriting Agreement to purchase an additional 375,000 shares
of common stock from the Company, the Company closed the sale of the
over-allotment options and received additional net proceeds of $4,185,000 from
the Underwriters.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11 Statement re: Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1996.
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THE REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
XIONICS DOCUMENT TECHNOLOGIES, INC.
NAME TITLE DATE
- ---- ----- ----
/S/ ROBERT E. GILKES Chairman of the Board of February 14, 1997
- ----------------------------- Directors, Chief Executive
Robert E. Gilkes Officer, and President
/S/ GERARD T. FEENEY
- -----------------------------
GERARD T. FEENEY Chief Financial Officer February 14, 1997
<PAGE>
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Exhibit 11
==========================================================================
<TABLE>
<CAPTION>
XIONICS DOCUMENT TECHNOLOGIES, INC.
CALCULATION OF NET INCOME (LOSS) PER SHARE
FOR THE THREE AND SIX MONTH PERIODS ENDED DECEMBER 31 1995 AND 1996
Three Months Ended Six Months Ended
------------------------- ---------------------------
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
------------ ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Income (Loss)
$1,389,391 $(1,020,889) $2,226,431 $(2,626,748)
Reconciliation of average number of
shares outstanding to amount used in
net income (loss) per share computation:
Weighted average number of shares outstanding: 10,471,030 7,452,196 9,007,974 7,235,930
Assumed exercise of stock options 2,284,739 - 2,322,252 -
Weighted average number of shares outstanding, ----------- --------- ---------- -----------
as adjusted 12,755,769 7,452,196 11,330,226 7,235,930
Net Income (Loss) per share $0.11 $(0.14) $0.20 $(0.36)
----------- ---------- ---------- -----------
</TABLE>
12/31/96
CASH 28,792,103
MARKETABLE -
NOTES AND ACCOUNTS RECEIVABLE 3,948,383
ALLOWANCES FOR DOUBTFUL ACCOUNTS 95,000
INVENTORY 1,379,270
TOTAL CURRENT ASSETS 37,831,403
PROPERTY, PLANT & EQUIPMENT 4,081,129
ACCUMULATED DEPRECIATION 1,468,362
TOTAL ASSETS 41,446,764
TOTAL CURRENT LIABILITIES 6,838,646
BONDS, MORTGAGES AND SIMILAR DEBT -
PREFERRED STOCK MANDATORY REDEMPTION -
PREFERRED STOCK MANDATORY REDEMPTION -
COMMON STOCK 107,959
OTHER STOCKHOLDERS EQUITY:
ADDITIONAL PAID IN CAPITAL 43,782,004
RETAINED EARNINGS (9,130,599)
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 41,446,764
NET SALES OF TANGIBLE PRODUCTS 2,479,585
TOTAL REVENUE 9,504,581
COST OF TANGIBLE GOODS 1,257,807
TOTAL COST 2,027,139
OTHER COST AND EXPENSES 6,077,243
PROVISION FOR DOUBTFUL ACCOUNTS -
INTEREST AND AMORTIZATION 50,183
INCOME BEFORE TAXES AND OTHER ITEMS 1,732,988
INCOME TAX EXPENSE 343,597
INCOME/LOSS CONTINUING OPERATIONS 1,400,199
DISCONTINUED OPERATIONS -
EXTRAORDINARY ITEMS -
CUMULATIVE EFFECT-CHANGES IN ACCOUNTING -
NET INCOME OR LOSS 1,389,391
EARNINGS PER SHARE PRIMARY 0.11
EARNINGS PER SHARE FULLY DILUTED 0.11
