<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 April 29, 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 11,407,500 shares of common stock outstanding as of April 29, 1995.
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<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Unitrode Corporation
Consolidated Balance Sheets
<CAPTION>
April 29, 1995 January 31, 1995
Assets (Unaudited)
- -------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 18,611,616 $ 17,752,008
Short-term investments 3,223,130 12,961,780
Accounts receivable, net of allowance
of $280,918 in April, 1995
and $296,510 in January, 1995 16,859,683 13,746,458
Notes receivable 870,394 865,762
Inventories:
Raw materials 987,474 687,083
Work in process 4,352,893 4,198,556
Finished goods 3,132,130 2,430,863
------------ ------------
Total inventory 8,472,497 7,316,502
------------ ------------
Deferred income taxes 4,766,000 4,383,000
Prepaid expenses and other
current assets 1,354,464 1,455,541
------------ ------------
Total current assets 54,157,784 58,481,051
------------ ------------
Property, plant and equipment, at cost 68,982,972 68,415,540
Less accumulated depreciation 37,572,972 36,396,265
------------ ------------
Property, plant and equipment, net 31,410,000 32,019,275
------------ ------------
Notes and other receivables, net of
discount 4,684,752 4,878,392
Deferred income taxes 92,000 102,000
Excess of cost over net assets acquired,
net of accumulated amortization of
$1,613,200 in April, 1995 and
$1,542,199 in January, 1995 2,477,129 2,548,130
Other assets 4,825,327 5,275,532
------------ ------------
Total assets $ 97,646,992 $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>
April 29, 1995 January 31, 1995
Liabilities and Stockholders' Equity (Unaudited)
- ---------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Current portion of long-term debt $ 242,004 $ 299,696
Accounts payable 5,902,715 6,993,697
Income taxes payable 4,378,000 2,194,151
Accrued employee compensation and benefits 3,529,472 4,881,653
Accrued disposal costs and unusual charges 384,646 528,480
Accruals for distributor returns 693,950 587,500
Accrued legal and settlement expenses 1,530,891 1,534,999
Other current liabilities 4,033,736 3,918,289
----------- ------------
Total current liabilities 20,695,414 20,938,465
----------- ------------
Deferred income taxes 732,000 615,000
Other long-term liabilities 172,670 160,000
----------- ------------
Total liabilities 21,600,084 21,713,465
----------- ------------
Stockholders' equity:
Common stock, $.20 par value;
Authorized - 30,000,000 shares
Issued - 11,407,500 in April, 1995
and 11,781,100 in January, 1995 2,281,500 2,356,220
Additional paid-in capital 23,083,836 25,670,178
Retained earnings 51,126,228 54,067,673
----------- ------------
76,491,564 82,094,071
Less:
Deferred compensation 444,656 503,156
----------- ------------
Total stockholders' equity 76,046,908 81,590,915
----------- ------------
Total liabilities and
stockholders' equity $97,646,992 $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 April 29, 1995 April 30, 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Net revenues $25,887,470 $22,268,384
Cost of revenues 12,101,878 11,709,430
----------- -----------
Gross profit 13,785,592 10,558,954
----------- -----------
Operating expenses:
Research and development 3,045,589 2,341,831
Selling, general and administrative 5,223,393 5,459,295
----------- -----------
Total operating expenses 8,268,982 7,801,126
----------- -----------
Income from operations 5,516,610 2,757,828
----------- -----------
Other income:
Non-operating expense, net (12,958) (127,308)
Interest income 454,385 282,141
Interest expense (22,203) (23,395)
----------- -----------
Total other income 419,224 131,438
----------- -----------
Income before income tax provision 5,935,834 2,889,266
Income tax provision 2,137,000 1,011,000
----------- -----------
Net income $ 3,798,834 $ 1,878,266
=========== ===========
Earnings per common share:
Net income $ .32 $ .15
=========== ===========
Average common and common equivalent
shares outstanding 12,050,577 12,841,182
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 5
<TABLE>
Unitrode Corporation
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
For the three months ended April 29, 1995 April 30, 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,798,834 $ 1,878,266
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 1,999,568 1,692,408
Provision for losses on accounts receivable 5,100 20,305
Deferred compensation 58,500 64,814
Deferred income taxes (256,000) 415,000
Other, net 2,086 127,338
Loss on sale of property, plant
and equipment 1,252 42,735
(Increase) decrease in assets:
Accounts receivable (3,118,325) (228,330)
Inventories (1,155,995) 127,151
Prepaid expenses and other current assets 110,949 283,626
Increase (decrease) in liabilities:
Accounts payable (1,090,982) (1,235,283)
Income taxes payable 2,183,849 (466,630)
Accrued employee compensation and benefits (1,352,181) (1,247,411)
Accruals relating to unusual charges - (437,317)
Accruals for distributor returns 106,450 75,000
Accrued legal and settlement expenses (4,108) (165,072)
Other current and long-term liabilities 128,117 437,094
----------- -----------
Total adjustments (2,381,720) (494,572)
----------- -----------
Net cash provided by operating activities 1,417,114 1,383,694
----------- -----------
Cash flows from investing activities:
Purchase of property, plant and equipment (1,268,927) (2,678,233)
Proceeds on sale of assets 416,998 18,922
Notes receivable and other investments 185,717 82,498
Maturities of short-term investments 11,001,000 499,697
Purchases of short-term investments (1,289,427) -
Accrued disposal costs (143,834) (201,165)
----------- -----------
Net cash provided (used) by investing activities 8,901,527 (2,278,281)
----------- -----------
Cash flows from financing activities:
Principal payments on debt (57,692) (115,385)
Proceeds from exercise of common stock options 613,034 306,257
Purchase of common stock (10,014,375) (6,910,000)
----------- -----------
Net cash used by financing activities (9,459,033) (6,719,128)
----------- -----------
Net increase (decrease) in cash and cash equivalents 859,608 (7,613,715)
Cash and cash equivalents at beginning of period 17,752,008 30,256,715
----------- -----------
Cash and cash equivalents at end of period $18,611,616 $22,643,000
=========== ===========
Supplemental information:
Interest paid $ 24,000 $ 30,000
Income taxes paid, net of tax refunds 209,000 1,071,000
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 6
Unitrode Corporation
Notes to Consolidated Financial Statements
April 29, 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
Company's annual report on Form 10-K 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 three month period
ended April 29, 1995 are not necessarily indicative of the results that may be
expected for the year ended January 31, 1996.
Note 2 - Non-operating expense, net
- -----------------------------------
<TABLE>
<CAPTION>
Three months ended April 29, 1995 April 30, 1994
- ---------------------------------------------------------------------------
<S> <C> <C>
Equity in loss of affiliates $ (27,693) $ (76,533)
Foreign exchange loss (51,935) (41,234)
Loss on sale of fixed assets (1,252) (42,735)
Net rental asset income 67,922 33,194
--------- ---------
Non-operating expense,net $ (12,958) $(127,308)
========= =========
</TABLE>
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<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Three Months Ended April 29, 1995 versus Three Months Ended April 30, 1994
Net revenues of $25.9 million for the quarter ended April 29, 1995 increased by
16% compared with $22.3 million in the previous year's first 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 $25.9 million for the quarter ended April
29, 1995 compared with $18.4 million in the previous year's comparable quarter,
an increase of 41%. Sales from Unitrode Integrated Circuits Corporation
("UICC"), which now represents the total business, increased due to strong
demand from the electronic data processing markets, as well as sales of new
products. In addition, royalty income increased to $0.6 million in the first
quarter of fiscal year 1996 compared with $0.2 million in the previous year's
first quarter, primarily due to additional licensees. Approximately 63% of
UICC's sales for the first quarter of fiscal year 1996 were international
compared with 64% in fiscal year 1995.
Gross profit as a percentage of net sales, excluding Micro Networks and
Powercube, increased by approximately one percentage point to 52% compared to
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 from
higher production volumes.
Selling, general and administrative expenses as a percentage of net sales,
excluding the disposed operations, decreased by approximately three percentage
points to 21% as compared to the previous year's first quarter. This
percentage decrease was primarily due to the higher volume of sales. Research
and development expenses at UICC were 12% of net sales in the first quarter of
fiscal year 1996 compared with 11% in the prior fiscal year. This increase of
approximately $1.0 million related primarily to increased engineering headcount
and related product development efforts to support opportunities in the
Company's markets.
Interest income increased by $172,000 principally due to an increase in the
weighted average interest earned on cash and short-term investments.
The consolidated effective tax rate for the quarter ended April 29, 1995 was
36% compared with 35% in the prior year's first quarter.
Excluding disposed operations, net income was $3.8 million for the first
quarter of fiscal year 1996 compared to $2.1 million for the first quarter of
fiscal year 1995, an increase of 84%.
Bookings for the first quarter have increased 6% or approximately $1.6 million
to $27.4 million when compared with the prior year's first quarter, excluding
disposed operations. 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 $2.3 million or 9% when compared
to the previous quarter. The book-to-bill ratio for the first quarter was 1.08
compared to 1.42 in the prior year's first quarter, excluding disposed
operations.
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<PAGE> 8
RESULTS OF OPERATIONS (continued)
- ---------------------
Backlog at April 29, 1995 was approximately $29.9 million compared with $22.8
million at April 30, 1994, excluding disposed operations, and $28.1 million at
the end of the previous quarter. In comparison to the first quarter ended
April 30, 1994, backlog increased by approximately 31% or $7.1 million
principally due to strong demand from the electronic data processing markets as
well as orders for new products.
FINANCIAL CONDITION
- -------------------
Cash and short-term investments have decreased by $8.9 million since year-end
to $21.8 million at April 29, 1995. The principal uses of cash for the quarter
were $9.8 million for the repurchase of 500,000 shares of the Company's common
stock and $1.3 million for capital expenditures. The principal sources of cash
for the quarter were an increase in net cash of $1.4 million provided by
operating activities and $0.6 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 fiscal year 1996,
including planned capital expenditures of approximately $14.0 million, will be
met by internally generated funds and available cash. The Company also has
available an unused $15.0 million revolving credit agreement.
The ratio of current assets to current liabilities was 2.62:1 at April 29, 1995
compared with 2.79:1 at January 31, 1995. Working capital of $33.5 million at
April 29, 1995 has decreased by $4.1 million from January 31, 1995. Both of
these decreases resulted from the Company's stock repurchase.
Accounts receivable at April 29,1995 increased by $3.1 million from January 31,
1995 primarily due to increased sales. Receivable day sales outstanding were
53 days at April 29, 1995 compared to 47 days at January 31, 1995. Inventories
increased by $1.2 million since January 31, 1995 primarily to support the
increased level of new orders. Accrued employee compensation and benefits has
decreased by $1.4 million since year-end primarily due to incentive
compensation benefit payments relating to fiscal year 1995 performance.
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. At the
end of the first quarter 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. As of April 29, 1995 a total of 578,700
shares are currently remaining under the repurchase authorizations.
-8-
<PAGE> 9
Part II. Other Information
Unitrode Corporation
April 29, 1995
Item 1. Legal Proceedings
- --------------------------
None.
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 Primary and Fully Diluted Earnings per
Share
(b) REPORTS ON FORM 8-K: No reports on Form 8-K were filed by the
--------------------
Registrant during the first quarter of the fiscal year ended
January 31, 1996.
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<PAGE> 10
Unitrode Corporation
April 29, 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
June 5, 1995 /s/ Robert L. Gable
- ------------------ ---------------------------------
Date Robert L. Gable
Chairman, President and Chief
Executive Officer
June 5, 1995 /s/ Cosmo S. Trapani
- ------------------ ---------------------------------
Date Cosmo S. Trapani
Executive Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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<PAGE> 1
<TABLE>
EXHIBIT 11
Unitrode Corporation
Computation of Primary and Fully Diluted Earnings per Share
<CAPTION>
Three months ended April 29, 1995 April 30, 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 3,798,834 $ 1,878,266
=========== ===========
Primary earnings per share:
- ---------------------------
Weighted average of common shares outstanding 11,689,850 12,447,160
Equivalent shares arising from the assumed
exercise of stock options 360,727 394,022
----------- -----------
Weighted average of common and common
equivalent shares outstanding 12,050,577 12,841,182
=========== ===========
Net income $ .32 $ .15
=========== ===========
Fully diluted earnings per share:
- ---------------------------------
Weighted average of common and common
equivalent shares outstanding
(as determined for Primary earnings
per share above) 12,050,577 12,841,182
Incremental shares to reflect full
dilution 41,433(1) 15,582(1)
----------- -----------
Weighted average of common and common
equivalent shares outstanding, as
adjusted 12,092,010 12,856,764
=========== ===========
Net income $ .31 $ .15
=========== ===========
<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
THREE MONTHS ENDED APRIL 29, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-START> FEB-01-1995
<PERIOD-END> APR-29-1995
<EXCHANGE-RATE> 1
<CASH> 18,611,616
<SECURITIES> 3,223,130
<RECEIVABLES> 17,140,601
<ALLOWANCES> 280,918
<INVENTORY> 8,472,497
<CURRENT-ASSETS> 54,157,784
<PP&E> 68,982,972
<DEPRECIATION> 37,572,972
<TOTAL-ASSETS> 97,646,992
<CURRENT-LIABILITIES> 20,695,414
<BONDS> 0
<COMMON> 2,281,500
0
0
<OTHER-SE> 73,765,408
<TOTAL-LIABILITY-AND-EQUITY> 97,646,992
<SALES> 25,324,457
<TOTAL-REVENUES> 25,887,470
<CGS> 12,101,878
<TOTAL-COSTS> 12,101,878
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,100
<INTEREST-EXPENSE> 22,203
<INCOME-PRETAX> 5,935,834
<INCOME-TAX> 2,137,000
<INCOME-CONTINUING> 3,798,834
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,798,834
<EPS-PRIMARY> .32
<EPS-DILUTED> .31
</TABLE>
