UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
( ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended June 28, 1996
(X) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File Number: 0-10726
C-COR Electronics, Inc.
(Exact name of Registrant as specified in its charter)
Pennsylvania 24-0811591
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 Decibel Road, State College, Pennsylvania 16801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (814) 238-2461
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
(Title of Class)
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 ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. (X)
As of July 9, 1997, the aggregate market value of the voting stock held by
non-affiliates of the Registrant was $81,084,485.
As of July 9, 1997, the Registrant had 9,136,280 shares of Common Stock
outstanding.
<PAGE>
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
fiscal year ended June 28, 1996, as set forth in the pages attached hereto:
Item 1. Business is amended to include at the end thereof, the following
paragraphs:
Segment Information:
Prior to fiscal year 1996, the Company operated in one industry segment broadly
defined as the Electronic Distribution Products segment. During the fiscal year
ended June 28, 1996, a fundamental shift occurred in the markets and customers,
as cable television (CATV) operators reduced their purchases of the Company's
Digital Fiber Optics equipment in lieu of other technology alternatives. As a
result, during fiscal year 1996, the Company operated in two business segments,
the Electronic Distribution Products segment and the Digital Fiber Optics
Transmission Products segment.
The Electronic Distribution Products business segment provides hybrid fiber /
coax (HFC) equipment for signal distribution applications, primarily to the CATV
market. Customers in this segment are primarily CATV operators as well as
network integrators. Products for this segment are manufactured at the Company's
State College, Tipton, and Reedsville, Pennsylvania, facilities.
The Digital Fiber Optics Transmission Products segment provides products for
long-distance, point-to-point, video, voice and data signal transmission
applications, primarily for telephony, distance-learning, and other non-CATV
markets. Customers are primarily telephone companies, major broadcast companies,
and educational institutions. For a description of the products of each segment,
see "Products and Services" above.
The products of each segment are marketed by separate sales forces. During
fiscal year 1996, Rogers Cable System, Inc. and Time Warner Cable each accounted
for 18% of consolidated net sales, representing primarily sales of Electronic
Distribution Products. Within the Digital Fiber Optics Transmission Products
segment, there were no sales to customers that accounted for more than 10% of
consolidated net sales in fiscal year 1996. During fiscal year 1996, 38% of net
sales of Electronic Distribution Products were represented by international
sales, primarily in Canada, Asia, Europe and Latin America and 33% of net sales
of Digital Fiber Optics Transmission Products were international sales,
primarily in Canada. Of the Company's $27.1 million backlog of orders at June
28, 1996, $ 24.3 million related to Electronic Distribution Products and $2.8
million related to Digital Fiber Optics Transmission Products. Of the Company's
$9,401,000 in research and development expenditures for fiscal year 1996,
$4,857,000 related to Electronic Distribution Products designed at the Company's
State College, Pennsylvania, facility, and $4,544,000 related to Digital Fiber
Optics Transmission Products designed at the Company's Fremont, California,
facility.
For additional information concerning the Company's operating segments, see Item
7 of Management's Discussion and Analysis of Financial Condition and Results of
Operations - Segment Performance, and Notes P and Q of the Notes to Financial
Statements included elsewhere in this report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations is amended to include the following paragraphs:
Segment Performance:
Prior to fiscal year 1996, the Company operated in one industry segment broadly
defined as the Electronic Distribution Products segment. During the fiscal year
ended June 28, 1996, a fundamental shift occurred in the markets and customers,
as CATV operators reduced their purchases of the Company's Digital Fiber Optics
equipment in lieu of other technology alternatives. As a result, during fiscal
year 1996, the Company operated in two business segments, the Electronic
Distribution Products segment and the Digital Fiber Optics Transmission Products
segment.
The Electronic Distribution Products business segment provides hybrid fiber /
coax (HFC) equipment for signal distribution applications primarily to the CATV
market. Customers in this segment are primarily CATV operators as well as
network integrators. Net sales for this segment in fiscal year 1996 were
$139,539. Net sales in fiscal years 1995 and 1994 were $121,269 and $60,207,
respectively. The increased net sales in fiscal years 1996 and 1995 were
primarily attributable to increased demand for the Company's products, primarily
in the CATV industry (as more fully described above).
Gross profit margin in the Electronics Distribution Products segment was 24.6%
in fiscal year 1996. This compares to 27.1% and 29.5% for fiscal years 1995 and
1994, respectively. The reduction in gross profit margins in 1996 and 1995 was
the result of increased pricing pressures primarily on RF amplifier products,
and fixed manufacturing costs relating to underutilized capacity (as more fully
described above).
The Electronic Distribution Products segment generated operating income of
$14,254 for fiscal year 1996. This compares to operating income of $13,425 and
$4,777 in fiscal years 1995 and 1994, respectively. The increased operating
income in fiscal year 1996, compared to 1995, was a result of improved customer
and product sales mix, despite continued competitive pricing pressure on the
Company's RF product line (as more fully described above). The increased
operating income in fiscal year 1995, compared to fiscal year 1994, was
primarily a result of a 101% increase in sales volume (as more fully described
above).
The Digital Fiber Optic Transmission Products segment provides equipment for
long-distance, point-to-point, video, voice, and data signal transmission
applications, primarily for telephony, distance-learning, and other non-CATV
markets. Its customers are primarily telephone companies, major broadcast
companies, and educational institutions. Net sales in this segment for fiscal
year 1996 were $9,359. For comparative purposes, digital fiber optic revenues in
prior years were $16,172 and $14,839 for fiscal years 1995 and 1994,
respectively.
Gross profit margin in the Digital Fiber Optics Products segment was 33.5% in
fiscal year 1996. This compares 38.8% and 42.7% for fiscal years 1995 and 1994,
respectively. The reductions in gross margins in fiscal years 1996 and 1995 were
primarily a result of increased fixed manufacturing costs and decreased selling
prices.
This segment generated an operating loss of $4,600 during fiscal year 1996. For
comparative purposes, an operating loss of $323 and operating income of $1,295
were generated for fiscal years 1995 and 1994, respectively. The operating loss
incurred in fiscal year 1996 resulted primarily from increased expenditures for
digital fiber optics product development. The increased research and development
costs were intended to position the Company for introducing a new digital fiber
optic product platform, designed to compete functionally with other products
currently in the market. Research and development expenditures for this segment
were $4,544 in fiscal year 1996. For comparative purposes, research and product
development costs for digital fiber optics products were $2,836 and $1,712 in
fiscal years 1995 and 1994, respectively.
Subsequent Events:
The Company announced on July 10, 1997, that it will discontinue its Digital
Fiber Optics Transmission Products segment, located in Fremont, California, in a
phasedown process over nine months. The loss on disposal will include write-offs
of inventory and fixed assets, and will include other costs from the measurement
to the disposal date. The anticipated loss (net of tax effect) on the disposal
of the discontinued business is approximately $4,000, which will be included in
the fourth quarter fiscal year 1997 financial results.
<PAGE>
Item 8. Financial Statements and Supplementary data; Footnote P is amended to
read in full as follows:
P. Segment Information
Prior to the fiscal year ended June 28, 1996, the Company operated in one
principal industry segment broadly defined as the Electronic Distribution
Products segment. Sales of the Company's three product lines, RF, AM Fiber
Optics equipment, and Digital Fiber Optics equipment were primarily to customers
in the cable television (CATV) industry. During the fiscal year ended June 28,
1996, a fundamental shift occurred in the markets and customers, as CATV
operators reduced their purchases of the Company's Digital Fiber Optics
equipment in lieu of other technology alternatives. As a result, in the fiscal
year ended June 28, 1996, the Company operated in two industry segments: the
Electronic Distribution Products segment, which provides hybrid fiber/coax (HFC)
equipment for signal distribution applications primarily to the CATV market; and
the Digital Fiber Optics Transmission Products segment, which provides products
for long-distance, point-to-point, video, voice, and data signal transmission
applications, primarily for telephony, distance-learning, and other non-CATV
markets.
Information about industry segments for fiscal year 1996, and comparative prior
period information for fiscal years 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
Digital
Electronic Fiber Optics
Distribution Transmission
Products Products Consolidated
- -------------------------------------------------------------------------------------------------------------
Year ended June 28, 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total revenue $139,539 $ 9,359 $148,898
- -------------------------------------------------------------------------------------------------------------
Operating income (loss) $ 14,254 ($ 4,600) $ 9,654
- -------------------------------------------------------------------------------------------------------------
Identifiable assets at June 28, 1996 $ 70,885 $ 7,522 $ 78,407
- -------------------------------------------------------------------------------------------------------------
Capital expenditures $ 7,442 $ 586 $ 8,028
- -------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 3,971 $ 755 $ 4,726
- -------------------------------------------------------------------------------------------------------------
Year ended June 30, 1995
- -------------------------------------------------------------------------------------------------------------
Total revenue $121,269 $ 16,172 $137,441
- -------------------------------------------------------------------------------------------------------------
Operating income (loss) $ 13,425 $ (323) $ 13,102
- -------------------------------------------------------------------------------------------------------------
Identifiable assets at June 30, 1995 $ 81,796 $ 5,865 $ 87,661
- -------------------------------------------------------------------------------------------------------------
Capital expenditures $ 14,355 $ 1,016 $ 15,371
- -------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 2,920 $ 1,001 $ 3,921
- -------------------------------------------------------------------------------------------------------------
Year ended June 24, 1994
- -------------------------------------------------------------------------------------------------------------
Total revenue $ 60,207 $ 14,839 $ 75,046
- -------------------------------------------------------------------------------------------------------------
Operating income $ 4,777 $ 1,295 $ 6,072
- -------------------------------------------------------------------------------------------------------------
Identifiable assets at June 24, 1994 $ 41,913 $ 7,580 $ 49,493
- -------------------------------------------------------------------------------------------------------------
Capital expenditures $ 3,651 $ 455 $ 4,106
- -------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 1,518 $ 829 $ 2,347
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
The Company and subsidiaries operate in various geographic areas as indicated by
the following:
U.S. Canada Europe Eliminations Consolidated
- ----------------------------------------------------------------------------------------------------------------
Year ended June 28, 1996
- ----------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers:
<S> <C> <C> <C> <C> <C>
Domestic $ 91,050 $ 8,589 $ 6,086 $ 0 $105,725
Export 43,173 0 0 0 43,173
Transfers between geographic areas 11,078 0 0 ( 11,078) 0
- ----------------------------------------------------------------------------------------------------------------
Total revenue $145,301 $ 8,589 $ 6,086 ($11,078) $148,898
- ----------------------------------------------------------------------------------------------------------------
Operating income $ 5,535 $ 3,595 $ 524 $ 0 $ 9,654
- ----------------------------------------------------------------------------------------------------------------
Identifiable assets at June 28, 1996 $ 73,298 $ 3,464 $ 1,645 $ 0 $ 78,407
- ----------------------------------------------------------------------------------------------------------------
Capital expenditures $ 8,000 $ 10 $ 18 $ 0 $ 8,028
- ----------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 4,602 $ 15 $ 109 $ 0 $ 4,726
- ----------------------------------------------------------------------------------------------------------------
Year ended June 30, 1995
- ----------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers:
Domestic $ 83,864 $ 6,867 $ 8,504 $ 0 $ 99,235
Export 38,206 0 0 0 38,206
Transfers between geographic areas 10,108 0 0 ( 10,108) 0
- ----------------------------------------------------------------------------------------------------------------
Total revenue $132,178 $ 6,867 $ 8,504 ($10,108) $137,441
- ----------------------------------------------------------------------------------------------------------------
Operating income $ 10,420 $ 1,555 $ 1,127 $ 0 $ 13,102
- ----------------------------------------------------------------------------------------------------------------
Identifiable assets at June 30, 1995 $ 79,129 $ 3,213 $ 5,319 $ 0 $ 87,661
- ----------------------------------------------------------------------------------------------------------------
Capital expenditures $ 15,266 $ 43 $ 62 $ 0 $ 15,371
- ----------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 3,779 $ 24 $ 118 $ 0 $ 3,921
- ----------------------------------------------------------------------------------------------------------------
Year ended June 24, 1994
- ----------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers:
Domestic $ 56,013 $ 3,853 $ 2,193 $ 0 $ 62,059
Export 12,987 0 0 0 12,987
Transfers between geographic areas 3,321 0 0 ( 3,321) 0
- ----------------------------------------------------------------------------------------------------------------
Total revenue $ 72,321 $ 3,853 $ 2,193 ($ 3,321) $ 75,046
- ----------------------------------------------------------------------------------------------------------------
Operating income (loss) $ 5,072 $ 1,249 ($ 249) $ 0 $ 6,072
- ----------------------------------------------------------------------------------------------------------------
Identifiable assets at June 24, 1994 $ 46,009 $ 1,659 $ 1,825 $ 0 $ 49,493
- ----------------------------------------------------------------------------------------------------------------
Capital expenditures $ 4,070 $ 3 $ 33 $ 0 $ 4,106
- ----------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 2,212 $ 29 $ 106 $ 0 $ 2,347
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Most transfers between geograhic areas are made at the cost of producing the
items plus a profit margin. Identifiable assets are those assets identified with
the operations in each geographic area.
<PAGE>
Item 8. Financial Statements and Supplementary data is amended to include
Footnote Q as follows:
Q. Subsequent Events:
The Company announced on July 10, 1997, that it will discontinue its Digital
Fiber Optics Transmission Products segment, located in Fremont, California, in a
phasedown process over nine months. The loss on disposal will include write-offs
of inventory and fixed assets, and will include other costs from the measurement
to the disposal date. The anticipated loss (net of tax effect) on the disposal
of the discontinued business is approximately $4,000 (unaudited), which will be
included in the fourth quarter fiscal year 1997 financial results.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereunto duly authorized.
C-COR ELECTRONICS, INC.
(Registrant)
July 16, 1997
/s/ Chris A. Miller, Vice President-Finance,
Secretary and Treasurer (principal financial officer)
Consent of Independent Auditors
The Board of Directors
C-COR Electronics, Inc.
The audits referred to in our report dated August 9, 1996, except for notes P
and Q which are as of July 10, 1997, included the related financial statement
schedule as of June 28, 1996, and for each of the years in the three-year period
ended June 28, 1996, included in the annual report on form 10-K. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits. In our opinion, such financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly in all material respects the information set forth
therein.
We consent to the incorporation by reference in the registration statements
(Nos. 2-95959, 33-27440, 33-35208, 33-66590 and 333-02505) on form S-8 of C-COR
Electronics, Inc. and Subsidiaries of our reports, related to the consolidated
balance sheets of C-COR Electronics, Inc. and Subsidiaries as of June 28, 1996
and June 30, 1995, and the related consolidated statements of income,
shareholders' equity and cash flows and related financial statement schedule for
each of the years in the three-year period ended June 28, 1996, which reports
are incorporated by reference in or appear in the June 28, 1996 annual report on
form 10-K of C-COR ELectronics, Inc. and Subsidiaries.
/s/ KPMG Peat Marwick, LLP
State College, Pennsylvania
July 14, 1997
