<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended OCTOBER 28, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
--------- ---------
Commission file number 1-5609
UNITRODE CORPORATION
(Exact name of registrant as specified in its charter)
MARYLAND 04-2271186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7 CONTINENTAL BOULEVARD, MERRIMACK, NEW HAMPSHIRE 03054
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (603) 424-2410
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of 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
----- -----
There were 11,441,251 shares of common stock outstanding as of October 28,
1995.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Unitrode Corporation
Consolidated Balance Sheets
October 28, 1995 January 31, 1995
Assets (Unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 29,840,551 $ 17,752,008
Short-term investments - 12,961,780
Accounts receivable, net of allowance
of $300,149 in October, 1995
and $296,510 in January, 1995 18,802,163 13,746,458
Notes receivable 879,836 865,762
Inventories:
Raw materials 1,577,503 687,083
Work in process 5,146,015 4,198,556
Finished goods 2,240,153 2,430,863
------------ ------------
Total inventory 8,963,671 7,316,502
------------ ------------
Deferred income taxes 4,628,000 4,383,000
Prepaid expenses and other
current assets 3,010,057 1,455,541
------------ ------------
Total current assets 66,124,278 58,481,051
------------ ------------
Property, plant and equipment, at cost 73,945,581 68,415,540
Less accumulated depreciation 41,771,895 36,396,265
------------ ------------
Property, plant and equipment, net 32,173,686 32,019,275
------------ ------------
Notes and other receivables, net of
unamortized discount of $83,810 in
October, 1995 and $100,952 in
January, 1995 4,322,201 4,878,392
Deferred income taxes 98,000 102,000
Excess of cost over net assets acquired,
net of accumulated amortization of
$1,755,202 in October, 1995 and
$1,542,199 in January, 1995 2,335,127 2,548,130
Other assets 4,715,759 5,275,532
------------ ------------
Total assets $109,769,051 $103,304,380
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 3
<TABLE>
Unitrode Corporation
Consolidated Balance Sheets
<CAPTION>
October 28, 1995 January 31, 1995
Liabilities and Stockholders' Equity (Unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 126,619 $ 299,696
Accounts payable 7,945,780 6,993,697
Income taxes payable 2,080,637 2,194,151
Accrued employee compensation and benefits 6,755,773 4,881,653
Accrued disposal costs and unusual charges 282,863 528,480
Accruals for distributor returns 1,120,550 587,500
Accrued legal and settlement expenses 1,503,040 1,534,999
Other current liabilities 3,707,330 3,918,289
------------ ------------
Total current liabilities 23,522,592 20,938,465
------------ ------------
Deferred income taxes 824,000 615,000
Other long-term liabilities 268,670 160,000
------------ ------------
Total liabilities 24,615,262 21,713,465
------------ ------------
Stockholders' equity:
Common stock, $.20 par value;
Authorized - 30,000,000 shares
Issued - 11,441,251 in October, 1995 and
11,781,100 in January, 1995 2,288,250 2,356,220
Additional paid-in capital 23,372,299 25,670,178
Retained earnings 59,836,865 54,067,673
------------ ------------
85,497,414 82,094,071
Less:
Deferred compensation 343,625 503,156
------------ ------------
Total stockholders' equity 85,153,789 81,590,915
------------ ------------
Total liabilities and
stockholders' equity $109,769,051 $103,304,380
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 4
<TABLE>
Unitrode Corporation
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
For the three months ended October 28, 1995 October 29, 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Net revenues $30,116,417 $25,800,305
Cost of revenues 14,023,335 12,719,279
----------- -----------
Gross profit 16,093,082 13,081,026
----------- -----------
Operating expenses:
Research and development 3,842,443 2,430,751
Selling, general and administrative 5,559,844 5,484,837
Unusual items - 2,688,789
----------- -----------
Total operating expenses 9,402,287 10,604,377
----------- -----------
Income from operations 6,690,795 2,476,649
----------- -----------
Other income:
Non-operating income, net 102,951 96,268
Interest income 405,172 288,129
Interest expense (21,274) (23,929)
----------- -----------
Total other income 486,849 360,468
----------- -----------
Income before income tax provision 7,177,644 2,837,117
Income tax provision 2,634,000 455,000
----------- -----------
Net income $ 4,543,644 $ 2,382,117
=========== ===========
Earnings per common share:
Net income $ .38 $ .20
=========== ===========
Average common and common equivalent
shares outstanding 11,897,040 12,084,143
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 5
<TABLE>
Unitrode Corporation
Consolidated Statements of Operations
(Unaudited)
<CAPTION>
For the nine months ended October 28, 1995 October 29, 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Net revenues $84,863,673 $72,026,273
Cost of revenues 39,633,452 36,977,402
----------- -----------
Gross profit 45,230,221 35,048,871
----------- -----------
Operating expenses:
Research and development 10,328,072 6,899,543
Selling, general and administrative 16,245,093 16,635,953
Unusual items - 5,542,002
----------- -----------
Total operating expenses 26,573,165 29,077,498
----------- -----------
Income from operations 18,657,056 5,971,373
----------- -----------
Other income:
Non-operating expense, net (54,570) (40,606)
Interest income 1,233,892 855,169
Interest expense (65,442) (71,516)
----------- -----------
Total other income 1,113,880 743,047
----------- -----------
Income before income tax provision 19,770,936 6,714,420
Income tax provision 7,254,000 1,240,000
----------- -----------
Net income $12,516,936 $ 5,474,420
=========== ===========
Earnings per common share:
Net income $ 1.05 $ .44
=========== ===========
Average common and common equivalent
shares outstanding 11,920,763 12,431,934
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE> 6
<TABLE>
Unitrode Corporation
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
For the nine months ended October 28, 1995 October 29, 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 12,516,936 $ 5,474,420
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 6,451,370 5,478,551
Loss on the sale of divisions - 5,542,002
Provision for losses on accounts receivable 21,900 59,390
Deferred compensation 159,531 181,815
Deferred income taxes (32,000) 848,000
Other, net 137,019 219,951
(Increase) decrease in assets:
Accounts receivable (5,077,605) (2,051,719)
Inventories (1,647,169) (254,749)
Prepaid expenses and other current assets (1,587,874) (1,342,657)
Increase (decrease) in liabilities:
Accounts payable 952,083 (469,347)
Income taxes payable (113,514) (1,799,183)
Accrued employee compensation and benefits 1,874,120 616,830
Accruals relating to unusual charges - (461,496)
Accruals for distributor returns 533,050 112,850
Accrued legal and settlement expenses (31,959) 619,258
Other current and long-term liabilities (210,617) 1,572,695
------------ ------------
Total adjustments 1,428,335 8,872,191
------------ ------------
Net cash provided by operating activities 13,945,271 14,346,611
------------ ------------
Cash flows from investing activities:
Purchase of property, plant and equipment (6,238,220) (10,928,553)
Proceeds on sale of assets 419,449 51,370
Proceeds on sale of businesses and repayment
of notes receivable 667,588 6,040,598
Other investments (84,581) (89,783)
Accrued disposal costs (245,617) (678,186)
Maturities of short-term investments 14,200,750 499,697
Purchases of short-term investments (1,289,427) (9,001,000)
------------ ------------
Net cash provided (used) by investing activities 7,429,942 (14,105,857)
------------ ------------
Cash flows from financing activities:
Principal payments on debt (173,077) (173,077)
Proceeds from exercise of common stock options 911,682 1,481,678
Purchase of common stock (10,025,275) (14,420,394)
------------ ------------
Net cash used by financing activities (9,286,670) (13,111,793)
------------ ------------
Net increase (decrease) in cash and cash equivalents 12,088,543 (12,871,039)
Cash and cash equivalents at beginning of period 17,752,008 30,256,715
------------ ------------
Cash and cash equivalents at end of period $ 29,840,551 $ 17,385,676
============ ============
Supplemental information:
Interest paid $ 68,000 $ 72,000
Income taxes paid, net of tax refunds 7,400,000 2,204,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 7
Unitrode Corporation
Notes to Consolidated Financial Statements
October 28, 1995
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. For further information, refer
to the consolidated financial statements and footnotes included in the annual
report on Form 10-K of Unitrode Corporation (the "Company") for the year ended
January 31, 1995.
In the opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the nine month period
ended October 28, 1995 are not necessarily indicative of the results that may
be expected for the year ended January 31, 1996. Certain amounts for fiscal
year 1995 have been reclassified to conform with presentation of similar
amounts in fiscal year 1996.
NOTE 2 - ACQUISITIONS AND DISPOSITIONS OF ASSETS
- ------------------------------------------------
On October 12, 1994, the Company sold certain of the assets of its Micro
Networks Division, ("Micro Networks"), to SMC Acquisition Corp. (the "Buyer")
pursuant to an Asset Purchase Agreement. The Buyer also assumed certain of the
liabilities of Micro Networks. The assets sold consist principally of accounts
receivable, inventory, and machinery and equipment. The liabilities assumed by
the Buyer consist principally of accounts payable and accrued compensation and
benefits. Under the agreement, the Buyer agreed to pay $3.7 million as
follows: $3.0 million in cash on October 12, 1994 and a $650,000 unsecured
note payable in equal quarterly installments over 3 years with interest at
prime plus 2 percent. The Buyer has also entered into a multi-year lease for
use of the building with the Company and has agreed to pay royalties on
revenues subject to certain provisions. The Company has taken charges of
approximately $1.4 million for the writeoff of goodwill, $0.4 million to
writedown the building to its fair market value of $2.3 million, and $1.1
million for disposal costs. In addition, the Company has established a reserve
of $325,000 on the unsecured note. The disposal costs consist primarily of
professional fees, facility related costs, and employee settlements and
bonuses.
On June 23, 1994, the Company sold substantially all of the assets of its
wholly owned subsidiary, Powercube Corporation, ("Powercube"), to Natel
Engineering Company, Inc. (the "Buyer") pursuant to an Asset Purchase
Agreement. The Buyer also assumed certain of the liabilities of Powercube. The
assets sold consist principally of accounts receivable, inventory and machinery
and equipment. The liabilities assumed by the Buyer consist principally of
accounts payable, accrued commissions and accrued warranty. Under the
agreement, the Buyer paid approximately $2.7 million in cash on June 23, 1994
for substantially all of the assets of Powercube, except for the land and
building which the Company has available for sale. In addition, the Company
has taken a charge of approximately $1.3 million for writedowns of certain
assets and $0.5 million for disposal costs. The writedown of assets included
$0.8 million for the building and $0.5 million for goodwill.
-7-
<PAGE> 8
Unitrode Corporation
Notes to Consolidated Financial Statements
October 28, 1995
(Unaudited)
<TABLE>
NOTE 2 - ACQUISITIONS AND DISPOSITIONS OF ASSETS (continued)
- ------------------------------------------------
The following schedule summarizes the basis for the total fiscal year 1995
unusual items charge:
<CAPTION>
Micro Networks Powercube Total
-------------- --------- -----
<S> <C> <C> <C>
Total book value of assets sold $ 3,572,136 $ 4,121,128 $ 7,693,264
Total book value of liabilities
assumed by Buyers (401,000) (355,915) (756,915)
----------- ----------- -----------
Net book value of assets sold 3,171,136 3,765,213 6,936,349
Less:
Proceeds on sale 3,690,898 2,688,000 6,378,898
----------- ----------- -----------
Gain (loss) on sale 519,762 (1,077,213) (557,451)
Reserve on unsecured note (325,000) - (325,000)
Writedown of assets (1,825,803) (1,324,780) (3,150,583)
Disposal costs (1,057,748) (451,220) (1,508,968)
----------- ----------- -----------
Unusual items charge $(2,688,789) $(2,853,213) $(5,542,002)
=========== =========== ===========
</TABLE>
<TABLE>
NOTE 3 - NON-OPERATING INCOME (EXPENSE), NET
- --------------------------------------------
<CAPTION>
Three months ended October 28, 1995 October 29, 1994
-------------------------------------------------------------------------------------------
<S> <C> <C>
Gain on investments $ - $ 19,639
Foreign exchange gain 63,340 22,504
Loss on sale of fixed assets - (7,755)
Net rental assets income 39,611 61,880
--------- ---------
Non-operating income, net $ 102,951 $ 96,268
========= =========
</TABLE>
<TABLE>
<CAPTION>
Nine months ended October 28, 1995 October 29, 1994
-------------------------------------------------------------------------------------------
<S> <C> <C>
Loss on investments $(106,193) $ (37,297)
Foreign exchange gain (loss) 19,732 (41,433)
Loss on sale of fixed assets (1,252) (100,243)
Net rental assets income 33,143 138,367
--------- ---------
Non-operating expense, net $ (54,570) $ (40,606)
========= =========
</TABLE>
NOTE 4 - COMMITMENTS AND CONTINGENT LIABILITIES
On August 18, 1994 the U.S. District Court for the District of Massachusetts
entered an order preliminarily approving a settlement and certifying a class
for settlement purposes only in the lawsuit entitled WILLIAM STEINER v. UNITRODE
CORP., ET.AL., Civil Action No. 90-11443-MLW. In the suit, the plaintiff,
representing a settlement class of purchasers of the Company's common stock
between March 2, 1988 and March 16, 1990, alleged violation of the antifraud
provisions of the federal securities laws by the Company and certain of its
former officers and directors. An order giving final approval to the settlement
was entered by the court on December 7, 1994 which involved a settlement amount
of $3 million consisting of $1.5 million in cash and $1.5 million in
warrants to purchase the Company's common stock. The Company paid the $1.5
million cash settlement in the fourth quarter of fiscal year 1995. Pursuant to
an order issued by the Court on October 17, 1995, the claims administrator
distributed the cash, net of expenses, and 247,883 warrants valued at $1.5
million to the court-approved settlement class of shareholders and their
counsel. The settlement amount has been provided for and did not have a
material adverse effect on the Company.
-8-
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
- ---------------------
Three Months Ended October 28, 1995 versus Three Months Ended October 29, 1994
Net revenues of $30.1 million for the quarter ended October 28, 1995 increased
by 17% compared with $25.8 million in the previous year's third quarter.
Excluding the Micro Networks Division ("Micro Networks") and Powercube
Corporation ("Powercube") which were sold on October 12, 1994 and June 23,
1994, respectively, net revenues were $30.1 million for the quarter ended
October 28, 1995 compared with $24.7 million in the previous year's comparable
quarter, an increase of 22%. Integrated circuit sales, which now represent
the total business of the Company, increased due to strong demand from the
electronic data processing markets, as well as sales of new products. Revenues
from product sales to one of the Company's customers represented approximately
23% and 21% of integrated circuit sales for the third quarter of fiscal years
1996 and 1995, respectively. Approximately 64% of integrated circuit sales in
the third quarter of fiscal year 1996 were international compared to 57% in the
third quarter of fiscal year 1995.
Gross profit as a percentage of net sales, excluding Micro Networks and
Powercube, increased to 52.3% compared to 50.6% for the same quarter in the
prior year. This improvement was primarily due to a lower average cost per
unit as a result of manufacturing efficiencies and higher production volumes.
Selling, general and administrative expenses as a percentage of net sales,
excluding the disposed operations, decreased by almost 3 percentage points to
19% as compared to the previous year's third quarter. This percentage decrease
was primarily due to legal expenses associated with the William Steiner lawsuit
and the Department of Defense settlement of $0.6 million in the previous year's
third quarter. Research and development expenses, excluding the disposed
operations, were approximately 13% of net sales in the third quarter of fiscal
year 1996 compared with 10% in the prior fiscal year. This increase of
approximately $1.5 million, or 65%, related primarily to increased employment
in engineering and related product development efforts to support opportunities
in the Company's markets.
In the third quarter of fiscal year 1995, the Company sold the Micro Networks
Division and recorded a charge of $2.7 million for unusual items as a result of
this disposal. (For further information, see Note 2 to the Company's
consolidated financial statements.)
The consolidated effective tax rate for the quarter ended October 28, 1995 was
36.7% compared with 16% for the quarter ended October 29, 1994. The effective
tax rate in last year's third quarter was favorably impacted by the sale of
Micro Networks.
Excluding disposed operations, net income was $4.5 million, or $.38 per share,
for the third quarter of fiscal year 1996 compared to $3.7 million, or $ .31
per share, for the third quarter of fiscal year 1995, an increase of 23%.
Integrated circuit bookings for the third quarter have increased 52% or
approximately $11.1 million to $32.5 million when compared with the prior
year's third quarter. The improvement was due to strong demand from the
electronic data processing markets as well as orders for new products. In
addition, bookings have improved approximately $1.3 million or 4% when compared
to the previous quarter. The book-to-bill ratio for the third quarter was 1.10
compared to .89 in the prior year's third quarter, excluding disposed
operations.
-9-
<PAGE> 10
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------
Integrated circuit backlog at October 28, 1995 was approximately $36.0 million
compared with $27.5 million at October 29, 1994, and $32.9 million at the end
of the previous quarter. In comparison to the third quarter ended October 29,
1994, backlog increased by approximately $8.5 million or 31% principally due to
strong demand from the electronic data processing markets, as well as orders
for new products.
During the third quarter, the Company's Merrimack wafer fabrication facility
was operating close to full capacity. Recently the Company's Board of
Directors authorized approximately $2.1 million in capital expenditures for the
existing wafer fabrication facility, which will enhance capacity by
approximately 20%. Sales growth in future quarters will be supported by this
internal increase in capacity as well as using wafers sourced from foundry
suppliers, including wafers from GMT Microelectronics Corporation, a foundry to
which the Company has an investment in and has a right to a certain percentage
of its output.
Nine Months Ended October 28, 1995 versus Nine Months Ended October 29, 1994
Net revenues for the nine months ended October 28, 1995 were $84.9 million, an
increase of 18%, compared with $72.0 million in the prior year's first nine
months. Excluding disposed operations, net revenues for the first nine months
increased by approximately 33% or $21 million from the comparable period in the
prior year. The sales increase was primarily due to strong demand in the
electronic data processing markets coupled with new product sales. In
addition, royalty income increased by $0.6 million to $1.8 million for the nine
months ended October 28, 1995 compared to the previous fiscal year, primarily
due to additional licensees. Revenues from product sales to one of the
Company's customers represented approximately 21% and 23% of integrated circuit
sales in the nine months ended October 28, 1995 and October 29, 1994,
respectively. International sales accounted for approximately 62% of
integrated circuit sales in the nine months ended October 28, 1995 compared to
60% in the nine months ended October 29, 1994.
Excluding the disposed operations, gross profit as a percentage of net sales
increased by 1.5 percentage points to 52.3%, compared with the prior year.
This improvement was primarily due to a lower average cost per unit as a result
of manufacturing efficiencies and higher production volumes.
Selling, general and administrative expenses as a percentage of net sales,
excluding disposed operations, decreased to 20% for the nine months ended
October 28, 1995 compared to 23% for the nine months ended October 29, 1994.
Approximately 1% of this decrease was due to the higher volume of sales in
fiscal year 1996 and approximately 2% of the decrease was due to legal
expenses associated with the William Steiner lawsuit and the Department of
Defense settlement of $1.2 million in the previous year. Excluding the disposed
operations, research and development expenses were approximately 12% of net
sales for the first nine months of fiscal year 1996 compared with 10% in fiscal
year 1995. This increase of approximately $4.1 million or 66% relates
primarily to increased product development efforts and employment to support
opportunities in the Company's markets.
For the nine months ended October 29, 1994, the Company had charges of $5.5
million due to unusual items. These charges consisted of $2.7 million from the
sale of Micro Networks and $2.9 million from the sale of Powercube. (For
further information, see Note 2 to the Company's consolidated financial
statements.)
Interest income increased by $379,000 principally due to an increase in the
weighted average interest rate earned on cash and short-term investments.
The consolidated effective tax rate for the nine months ended October 28, 1995
was 36.7% compared with 18.5% for the nine months ended October 29, 1994. The
effective tax rate for the nine months ended October 29, 1994 was favorably
impacted by the sales of Micro Network and Powercube, as well as a reduction in
the valuation allowance for tax credit carryforwards.
-10-
<PAGE> 11
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------
Net income, excluding disposed operations, for the nine months ended October
28, 1995 was $12.5 million, or $1.05 per share, compared with $8.5 million, or
$.68 per share, in the prior fiscal year, an increase of 47%.
Integrated circuit bookings for the first nine months of fiscal year 1996 were
approximately $91.1 million which represents an increase of 21% from the
comparable period in the prior year. New orders increased primarily due to the
strong demand in the electronic data processing markets, as well as demand for
new products. The integrated circuit book-to-bill ratio for the nine months
ended was 1.10 in fiscal year 1996 compared to 1.20 in the prior year. This
decrease in the book-to-bill ratio was primarily due to increased sales in
fiscal year 1996 to satisfy backlog requirements as additional manufacturing
capacity increased production levels.
FINANCIAL CONDITION
- -------------------
Cash and short-term investments have decreased by $0.9 million since year-end
to $29.8 million at October 28, 1995. The principal uses of cash were $10.0
million for the repurchase of the Company's common stock and $6.2 million for
capital expenditures. The principal sources of cash were an increase in net
cash of $13.9 million provided by operating activities and $0.9 million in
proceeds from exercises of stock options under the Company's Stock Option
Plans.
It is anticipated that the Company's operating cash needs for the remainder of
fiscal year 1996, including additional planned capital expenditures of
approximately $6.0 million, will be met by internally generated funds and
available cash. On October 20, 1995, the Company entered into a $25.0 million
revolving credit agreement with Baybank, which replaced the previous unused
$15.0 million revolving credit agreement with another bank.
The ratio of current assets to current liabilities was 2.81:1 at October 28,
1995 compared with 2.79:1 at January 31, 1995. Working capital of $42.6
million at October 28, 1995 has increased by $5.1 million from January 31,
1995.
Accounts receivable at October 28, 1995 increased by $5.1 million from January
31, 1995 primarily due to increased sales. Receivable day sales outstanding
were 54 days at October 28, 1995 compared to 47 days at January 31, 1995.
Inventories have increased by $1.6 million since January 31, 1995 primarily to
support the increased level of new orders. Prepaid expenses and other current
assets increased by $1.6 million since year-end principally due to a $1.0
million deposit made to a silicon wafer manufacturer as payment in advance of
production to guarantee certain quantities of wafers starting in fiscal year
1997.
Accrued employee compensation and benefits increased by $1.9 million since
January 31, 1995 primarily due to the increase in incentive compensation
benefit accruals.
On February 21, 1995, the Company's Board of Directors authorized the
repurchase of up to 1,000,000 additional shares of its common stock. During
the first nine months of fiscal year 1996, the Company repurchased 500,000
shares of the Company's common stock at an average price per share of $19.63 or
a total of approximately $9.8 million, excluding stock swaps. As of October
28, 1995, there were 578,700 shares remaining to be repurchased under the
authorizations.
-11-
<PAGE> 12
PART II. OTHER INFORMATION
Unitrode Corporation
October 28, 1995
Item 1. Legal Proceedings
- --------------------------
On August 18, 1994 the U.S. District Court for the District of
Massachusetts entered an order preliminarily approving a settlement and
certifying a class for settlement purposes only in the lawsuit entitled WILLIAM
STEINER v. UNITRODE CORP., ET.AL., Civil Action No. 90-11443-MLW. In the suit,
the plaintiff, representing a settlement class of purchasers of the Company's
common stock between March 2, 1988 and March 16, 1990, alleged violation of the
antifraud provisions of the federal securities laws by the Company and certain
of its former officers and directors. An order giving final approval to the
settlement was entered by the court on December 7, 1994 which involved a
settlement amount of $3 million consisting of $1.5 million in cash and $1.5
million in stock warrants to purchase the Company's common stock. The Company
paid the $1.5 million cash settlement in the fourth quarter of fiscal year
1995. Pursuant to an order issued by the Court on October 17, 1995, the claims
administrator distributed the cash, net of expenses, and 247,883 warrants valued
at $1.5 million to the court-approved settlement class of shareholders and their
counsel. The settlement amount has been provided for and did not have a
material adverse effect on the Company.
Item 2. Changes in the Rights of the Company's Security Holders
- ----------------------------------------------------------------
None.
Item 3. Defaults upon Senior Securities
- ----------------------------------------
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None.
Item 5. Other Information
- --------------------------
None
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
Exhibit 11 - Computation of Earnings per Share
(b) REPORTS ON FORM 8-K: No reports on Form 8-K were filed by the
Registrant during the third quarter of the fiscal year ended
January 31, 1996.
-12-
<PAGE> 13
Unitrode Corporation
October 28, 1995
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.
UNITRODE CORPORATION
December 8, 1995 /s/ Robert L. Gable
- ---------------------- -----------------------------------
Date Robert L. Gable
Chairman, President and Chief
Executive Officer
December 8, 1995 /s/ Cosmo S. Trapani
- ---------------------- -----------------------------------
Date Cosmo S. Trapani
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting
Officer)
-13-
<PAGE> 1
<TABLE>
Exhibit 11
Unitrode Corporation
Computation of Primary and Fully Diluted Earnings per Share
Three months ended October 28, 1995 October 29, 1994
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net income $4,543,644 $ 2,382,117
========== ============
Primary earnings per share:
- ---------------------------------------------
Weighted average of common shares outstanding 11,431,701 11,691,675
Equivalent shares arising from the assumed
exercise of stock options 465,339 392,468
---------- ------------
Weighted average of common and common
equivalent shares outstanding 11,897,040 12,084,143
========== ============
Net income $ .38 $ .20
========== ============
Fully diluted earnings per share:
- -------------------------------------
Weighted average of common and common
equivalent shares outstanding
(as determined for Primary earnings
per share above) 11,897,040 12,084,143
Incremental shares to reflect full
dilution 1(1) 37,735(1)
---------- ------------
Weighted average of common and common
equivalent shares outstanding, as
adjusted 11,897,041 12,121,878
========== ============
Net income $ .38 $ .20
========== ============
<FN>
(1) This calculation is submitted in accordance with Regulation S-K item 601(b)(11)
although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because
it results in dilution of less than 3%.
</TABLE>
<PAGE> 2
<TABLE>
Exhibit 11
Unitrode Corporation
Computation of Primary and Fully Diluted Earnings per Share
<CAPTION>
Nine months ended October 28, 1995 October 29, 1994
- ------------------------------------------------------------------------------------
<S> <C> <C>
Net income $12,516,936 $ 5,474,420
=========== ============
Primary earnings per share:
- ---------------------------------------------
Weighted average of common shares outstanding 11,511,953 12,048,060
Equivalent shares arising from the assumed
exercise of stock options 408,810 383,874
----------- ------------
Weighted average of common and common
equivalent shares outstanding 11,920,763 12,431,934
=========== ============
Net income $ 1.05 $ .44
=========== ============
Fully diluted earnings per share:
- ---------------------------------------------
Weighted average of common and common
equivalent shares outstanding
(as determined for Primary earnings
per share above) 11,920,763 12,431,934
Incremental shares to reflect full
dilution 35,584(1) 17,802(1)
----------- ------------
Weighted average of common and common
equivalent shares outstanding, as
adjusted 11,956,347 12,449,736
=========== ============
Net income $ 1.05 $ .44
=========== ============
<FN>
(1) This calculation is submitted in accordance with Regulation S-K item 601(b)(11)
although not required by footnote 2 to paragraph 14 of APB Opinion No. 15 because
it results in dilution of less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF UNITRODE CORPORATION FOR THE NINE
MONTHS ENDED OCTOBER 28, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> OCT-28-1995
<EXCHANGE-RATE> 1
<CASH> 29,840,551
<SECURITIES> 0
<RECEIVABLES> 19,102,312
<ALLOWANCES> 300,149
<INVENTORY> 8,963,671
<CURRENT-ASSETS> 66,124,278
<PP&E> 73,945,581
<DEPRECIATION> 41,771,895
<TOTAL-ASSETS> 109,769,051
<CURRENT-LIABILITIES> 23,522,592
<BONDS> 0
<COMMON> 2,288,250
0
0
<OTHER-SE> 82,865,539
<TOTAL-LIABILITY-AND-EQUITY> 109,769,051
<SALES> 83,051,792
<TOTAL-REVENUES> 84,863,673
<CGS> 39,633,452
<TOTAL-COSTS> 39,633,452
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 21,900
<INTEREST-EXPENSE> 65,442
<INCOME-PRETAX> 19,770,936
<INCOME-TAX> 7,254,000
<INCOME-CONTINUING> 12,516,936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,516,936
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.05
</TABLE>
