<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: January 31, 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: 0-11552
TELEVIDEO SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2383795
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
550 East Brokaw Road, P.O.Box 49048, San Jose, California 95161-9048
(Address of principal executive offices)
(Zip Code)
(408) 954-8333
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
The number of shares outstanding of registrant's Common Stock, as of
March 7, 1995 is: 44,810,860.
(Consisting of 17 pages.)
<PAGE> 2
TELEVIDEO SYSTEMS, INC.
FORM 10-Q
FOR THE QUARTER ENDED JANUARY 31, 1995
INDEX
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
PART I. Financial Information 3
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets -
January 31, 1995 and October 31, 1994 4
Condensed Consolidated Statements of
Operations - Three Months Ended January 31,
1995, and January 31, 1994 5
Condensed Consolidated Statements of Cash
Flows - Three Months Ended January 31, 1995,
and January 31, 1994 6
Notes to Condensed Consolidated Financial
Statements - January 31, 1995 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 13
PART II. Other Information 16
ITEM 1. LEGAL PROCEEDINGS 16
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 16
SIGNATURES 17
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1995 AND 1994 QUARTERLY DATA
The condensed consolidated financial statements included
herein have been prepared by the management of TeleVideo Systems, Inc. (the
"Company"), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted,
pursuant to such rules and regulations, although the Company believes the
disclosures which are made are adequate to make the information presented not
misleading. Further, the condensed consolidated financial statements reflect,
in the opinion of management, all adjustments (which included only normal
recurring adjustments) necessary to present fairly the financial position and
results of operations as of and for the periods indicated.
It is suggested that these condensed consolidated financial statements
be read in conjunction with the financial statements and the notes thereto
included in the Company's Report on Form 10-K for the fiscal year ended October
31, 1994.
The results of operations for the three-month period ended January 31,
1995, are not necessarily indicative of the results to be expected for the
entire fiscal year ending October 31, 1995.
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3
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TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
January 31, October 31,
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,580 $ 2,131
(including restricted cash of
$1,500 in 1995 and 1994)
Marketable securities 58 68
Accounts receivable, net 1,657 2,045
Inventories 5,455 5,757
Prepayments and other 270 458
--------- ---------
Total current assets 12,020 10,459
--------- ---------
Property, plant and equipment:
Property, plant and equipment 4,702 16,419
Less accumulated depreciation (2,497) ( 6,983)
--------- ---------
Net property, plant and equipment 2,205 9,436
--------- ---------
Investment in affiliates (Note 2) 644 644
Notes and interest receivable from
related parties (Note 6) 3,901 3,506
Other assets 5,000 -
--------- ---------
Total assets $ 23,770 $ 24,045
========= =========
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 465 $ 1,363
Accrued liabilities 1,088 1,239
Income taxes 611 611
---------- ---------
Total current liabilities 2,164 3,213
---------- ---------
Stockholders' equity:
Common stock 446 446
Additional paid in capital 95,428 95,428
Accumulated deficit (74,268) (75,042)
---------- ---------
Total stockholders' equity 21,606 20,832
---------- ---------
Total liabilities & stockholders' equity $ 23,770 $ 24,045
========= =========
</TABLE>
4
<PAGE> 5
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 31, 1995 AND JANUARY 31, 1994
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
1995 1994
----------- ----------
<S> <C> <C>
Net sales $ 2,599 $ 3,456
Cost of sales 1,879 2,595
--------- ---------
Gross profit 720 861
--------- ---------
Operating expenses:
Marketing 663 723
Research and development 433 432
General and administrative 257 412
--------- ---------
Total operating expenses 1,353 1,567
--------- ---------
Loss from operations (633) (706)
--------- ---------
Investment gain - -
Interest income 128 120
Other income (*) 1,281 200
--------- ---------
Net gain (loss) before income tax 776 (386)
Income taxes (1) (4)
--------- ---------
Net gain (loss) after income tax $ 775 $ (390)
========= =========
Net gain (loss) per share $ 0.02 $ (0.01)
========= =========
Average shares outstanding 44,641 44,585
========= =========
</TABLE>
(*) Including a gain of $1.3 million from the sale of the building
in December 1994.
5
<PAGE> 6
TELEVIDEO SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 1995 AND JANUARY 31, 1994
(In thousands)
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 775 $ (389)
Charges (credits) to operations not
affecting cash:
Depreciation 87 175
Changes in certain current assets
and liabilities:
Accounts receivable 387 (69)
Inventories 302 174
Prepayments and other (102) (874)
Accounts payable (899) 550
Accrued liabilities (150) (409)
Income taxes 0 (1,541)
---------- ----------
Net cash provided by (used in)
operating activities 400 (2,383)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net retirements of (additions to) property,
plant & equipment 7,144 (3)
Decrease (increase) in other assets (5,010) (9)
Investment in marketable securities 10 2,485
Investment in affiliate 0 183
Loan to affiliate (95) 236
---------- ----------
Net cash provided by (used in) investing
activities 2,049 2,892
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 0 2
---------- ----------
Net cash provided by financing activities 0 2
---------- ----------
Increase (decrease) in cash
and cash equivalents 2,449 511
---------- ----------
Cash and cash equivalents at the
beginning of the period 2,131 3,148
---------- ----------
Cash and cash equivalents at the
end of the period $ 4,580 $ 3,659
========== ==========
</TABLE>
6
<PAGE> 7
TELEVIDEO SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
January 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation
The condensed consolidated financial statements include the accounts
of the Company and its majority owned subsidiaries, after elimination of
intercompany accounts and transactions.
Translation
The Company applies Statement of Financial Accounting Standards No. 52
for purposes of translating foreign currency financial statements of its
foreign subsidiaries. Translation gains and losses resulting from the
translation of foreign currency financial statements are deferred and
classified as adjustments to stockholders' equity.
Cash and Cash Equivalents
For purposes of the condensed consolidated statements of cash flows,
the Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents. Approximately $1.5 million, invested in
short term certificates of deposit, are pledged as security under a letter of
credit agreement.
Marketable Securities
Marketable securities are carried at the lower of aggregate cost or
quoted market value. The aggregate cost of marketable securities at January
31, 1995 was $75,799, while the quoted market value was $57,558. Unrealized
losses through January 31, 1995 were $18,241.
Inventories
Inventories are stated at the lower of cost or market. Costs are
computed on a currently adjusted standard basis (which approximates average
cost) for both finished goods and work-in-progress and includes material, labor
and manufacturing overhead costs. The
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components of inventory consist of the following (in thousands):
<TABLE>
<CAPTION>
January 31, October 31,
1995 1994
----------- -----------
<S> <C> <C>
Purchased parts $ 2,552 $ 3,562
Work-in-process 1,128 959
Finished goods 1,775 1,236
----------- -----------
$ 5,455 $ 5,757
=========== ===========
</TABLE>
Property, Plant & Equipment
Depreciation and amortization are provided over the estimated useful
lives of the assets using both straight-line and accelerated methods.
Estimated useful lives are as follows:
Buildings 40 years
Production equipment 1-10 years
Office furniture 1-10 years
Leasehold improvements Terms of lease
Net Income (Loss) Per Share
Net income and loss per share is based on the weighted average number
of shares of Common Stock outstanding during the period.
2. ACQUISITIONS AND DIVESTITURES:
Kabil Electronics Company, Ltd.
The Company owned a 35% interest in Kabil Electronics Company, Ltd. of
South Korea. The Company had written its investment in Kabil down to zero in
the previous years due to significant losses sustained by Kabil. In December
1994, the Company accepted an offer to sell its 35% interest in Kabil to the
majority owners for $1.4 million which is to be paid in installments over the
1995 calendar year. Approximately $300,000 was received in February 1995.
8
<PAGE> 9
AdMOS Technologies Inc.
During fiscal 1991, the Company acquired through its wholly owned
subsidiary, Silicon Logic, Inc., a 20% equity interest in a chip engineering
firm (AdMOS Technologies Inc.) in exchange for certain assets and a nominal
cash payment, the total value of which was $145,000. The acquisition of this
interest has been accounted for on the cost method. This investment was
written off in fiscal 1992 due to the continued economic difficulties
experienced by AdMOS.
In fiscal 1991 and 1992, the Company loaned AdMOS a total of $470,000,
which has been partially repaid. The outstanding balance at January 31, 1995
was $200,000. The repayment of a portion of this loan is personally guaranteed
by the President and controlling shareholders of AdMOS. Due to the economic
difficulties AdMOS is currently experiencing, the principal and interest
balances due on this note have been fully reserved.
In February 1995, TeleVideo further loaned AdMOS $384,000 which bears
interest at 10% per annum, for a period of six months. If AdMOS cannot repay
the loan in August 1995 when the payment is due, AdMOS will give TeleVideo the
right to purchase 1,785,714 shares of the stocks of AdMOS at $0.215 per share
which is equivalent to the principal amount of the loan. AdMOS also repaid
$96,000 to TeleVideo and was considered as a partial payment to the original
$200,000 loan.
Indigo, International
During the first quarter of fiscal 1994, the Company acquired a 40%
interest in Indigo, International in exchange for a cash investment of $25,000.
The investment is carried at cost. Indigo has incurred only minor operations
through January 31, 1995. The Company also signed a one-year lease agreement
with Indigo which leases a total of 320 square feet space from the Company at a
monthly rental payment of $200.
Ordynka
In fiscal 1990 to 1992, the Company acquired a 50% joint venture
interest in "Ordynka" in exchange for the contribution of cash (approximately
$187,000) and obsolete inventory that was fully reserved. The purpose of the
joint venture is the renovation of an office building of 30,000 square feet
located in the city of Moscow, Russia. Construction started in November 1991
and was completed in the last quarter of fiscal 1993. The total construction
cost was approximately $6.5 million. In November 1991, the Company also loaned
$1.0 million to the venture. Full amount of principal and interest was repaid
to the Company in May 1994. The building is occupied by a Russian company and
this company has paid off all construction
9
<PAGE> 10
liabilities of the venture. This advance of monies by the tenant will be
credited against future rents and is nonrefundable. It is believed that this
company intends to acquire ownership of the building with one of the other
venturers. TeleVideo has received an offer to sell its interest in the
venture. Negotiations are under way and it is anticipated that such a sale may
occur in the 1995 fiscal year.
Three H
In fiscal 1992, the Company acquired a 50% joint venture interest in
"Three H" in exchange for the contribution of cash of approximately $16,000.
In February of 1993, the Company loaned the Three H Joint Venture $1.0 million
as working capital for the purpose of conducting short term commodities
trading. The loan is unsecured. This note bears interest at 20% per annum and
stipulates a maximum term of two years. In fiscal 1994, a total amount of
$800,000 was repaid to the Company.
Nordgran, Pharmaplant and Tatiana
In November of 1993, the Company withdrew its $1.0 million investment
fund from the Nordgran Joint Venture in the Commonwealth of Independent States,
and reallocated the fund to alternate venture proposals: (a) "Pharmaplant,"
which involves the cultivation and processing of herb and ginseng products to
be sold both domestically and abroad, a proposed investment of $392,000,
represents 49% ownership of the joint venture. As of the end of January 1995,
approximately $123,288 had been contributed to the venture; (b) "Tatiana,"
which involves the manufacturing of meat/sausage food products and the
development of a two-story department store located at the suburban area of
Moscow, a proposed investment of $390,000, represents 48% ownership of the
joint venture. As of the end of January 1995, approximately $280,000 had been
contributed to the venture; and (c) approximately $392,712 was committed to the
"InterTerminal" joint venture (see below) in the form of a loan. The remaining
$204,000 was refunded to the Company in cash.
InterTerminal
The main purpose of the "InterTerminal" joint venture is the
construction of a truck terminal (approximately 100,000 square feet)
approximately 25 miles outside of Moscow. In April 1994, the Company acquired
a 51% ownership of the joint venture in exchange for a $5,100 cash investment
and a commitment to fund a $3.0 million loan, 20% interest rate, interest free
for one year, to the venture, the proceeds of which were to be used to fund
construction of the truck terminal. In the first quarter of fiscal 1995,
TeleVideo further agreed to loan the joint venture an additional $650,000 at an
interest rate of 20% per annum. As of January 31, 1995, a total amount of
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<PAGE> 11
$3,647,000 had been loaned to the venture. The $647,000 was funded in part
from the $392,712 reallocation from the Nordgran venture noted above and the
balance from TeleVideo's cash reserves. The building is substantially complete
as of January 31, 1995 although surface road leading into and out of the
terminal are still under construction. It is expected that the total project
cost, including approximately $1 million in construction infrastructure
contributed by the Russian venturer, will approximate $5 million. TeleVideo
may be required to contribute additional sums to cover all construction costs.
The venture plans to sell the building and has discussed offers from various
potential buyers with prices, depending on terms, ranging from $7 to $10
million. It is expected that a sale will occur in fiscal 1995 and management
of the Company are confident that the sales proceeds will allow the Company to
recoup its loans plus interest and to make a profit on its investment.
At the indicated dates the Company had the following investments in
affiliates and joint ventures (in thousands):
<TABLE>
<CAPTION>
January 31, October 31,
1995 1994
----------- -----------
<S> <C> <C>
Ordynka Joint Venture $ 187 $ 187
Three H Joint Venture 16 16
Pan Asian Bank 8 8
Pharmaplant 123 123
Tatiana 280 280
InterTerminal 5 5
Indigo 25 25
-------- --------
Total $ 644 $ 644
======== ========
</TABLE>
3. RESTRICTED CASH:
The Company has a letter of credit agreement with a bank whereby the
bank will issue up to $1.5 million of standby and sight letters of credit.
This agreement is contingent upon the Company maintaining cash deposits at the
bank as collateral in an amount no less than the outstanding borrowings.
These funds are held in three-month certificates of deposits and earn interest
at the rate of approximately 6.0% per annum. At January 31, 1995, the Company
had letters of credit outstanding of approximately $1,384,763 which were
secured by an equivalent amount of cash deposits.
4. INCOME TAXES:
The Company adopted, effective November 1, 1993, Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes,"
issued in February 1992. Under the liability method specified by SFAS 109,
deferred tax assets and liabilities are determined based
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on the difference between the financial statement and tax bases of assets and
liabilities as measured by the enacted tax rates which will be in effect when
these differences reverse. Deferred tax expense is the result of changes in
deferred tax assets and liabilities. The change from the deferred method to
the liability method of accounting for income taxes had no material impact on
the financial position or results of operations of the Company for the quarter
ended January 31, 1995.
The Company is in various stages of state income and sales tax audits.
The only state income tax audit issue that is still open is with the State of
Massachusetts. The Company has recorded the full amount of the proposed state
assessment and is not contesting any of the issues. The Company has also
accrued for California State income taxes that may become due as a result of
adjustments arising from prior year IRS audits. In total the Company has
accrued $600,000 to cover these potential liabilities.
The sales tax issues relate primarily to sales made for resale and out
of state transactions for which no sales tax was collected. The California
State Board of Equalization has audited the period from April 1990 through June
1994. The liability assessed is approximately $200,000 and the Company has
deposited the full amount in January 1995 in order to avoid additional interest
charges. The Company will contest the assessment.
5. LITIGATION:
As of today, the Company does not have any pending lawsuits.
6. RELATED PARTY TRANSACTIONS:
The Company's outstanding receivables from related parties are
summarized below (in thousands):
<TABLE>
<CAPTION>
January 31, October 31,
1995 1994
----------- -----------
<S> <C> <C>
Notes Receivable:
- - - -----------------
Three H Joint Venture $ 200 $ 200
InterTerminal 3,647 3,284
Interest Receivable:
- - - --------------------
Three H Joint Venture 32 22
InterTerminal 22 -
----------- -----------
Total $ 3,901 $ 3,506
=========== ===========
</TABLE>
12
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations
Operating loss for the three months ended January 31, 1995 of
approximately $633,000 was approximately 10.3% lower comparing with the same
period in fiscal 1994 which totaled approximately $706,000, primarily the
results of product cost reductions negotiated with its suppliers, shifting the
production process from in-house to overseas manufacturing, and continuing
emphasis on improving efficiency and reducing overhead costs.
The net gain for the first quarter of fiscal 1995 totaled
approximately $775,000, or $0.02 per share, compared to a net loss of $390,000,
or $0.01 per share, a year ago for the same three-month period. The net gain
for the first quarter of fiscal 1995 was primarily due to the sale of the
Company's real property which resulted in a gain of $1.3 million.
Net gain per share for the first quarter of fiscal 1995 was $0.02 per
share based on 44,641,000 weighted average shares outstanding, compared to a
net loss of $0.01 per share based on 44,585,000 weighted average shares
outstanding in the first quarter of fiscal 1994.
Net sales for the first quarter of fiscal 1995 of approximately $2.6
million were approximately 24.8% below the same quarter a year ago which
totaled approximately $3.5 million. The decline in net sales was principally
attributable to continuing pricing policies in the domestic market and
increased foreign competition.
Cost of sales were approximately $1.9 million in the first quarter of
fiscal 1995, or 27.6% less than the approximately $2.6 million reported in the
first quarter of fiscal 1994. Cost of sales in the first quarter of fiscal
1995 compared to the same period a year ago decreased as a percentage of sales
from approximately 75.1% in 1994 to approximately 72.3% in 1995. The decrease
in cost of sales percentage and the corresponding increase in gross margin
percentage for the three-month period ended January 31, 1995 (an increase from
approximately 24.9% to 27.7%) were primarily the results of product cost
reductions negotiated with its suppliers, and shifting the production process
from in-house to overseas manufacturing.
Marketing expense increased as a percentage of sales in the first
quarter of fiscal 1995 from approximately 20.9% in fiscal 1994 to 25.5% in
fiscal 1995 on a comparative quarter-to-quarter basis, while actual marketing
expenses decreased approximately 8.3% over this same three-month period. The
decrease in actual marketing expense was due primarily to reduced expenditures
resulting from reduction in employee staffing levels and the close down of the
sales offices in Massachusetts and France, but partially offset by the increase
in purchased services and advertising expenses on multimedia products.
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<PAGE> 14
Research and development expense increased as a percentage of sales in
the first quarter of fiscal 1995 from approximately 12.5% in fiscal 1994 to
16.7% in fiscal 1995, while actual research and development expense was
approximately the same.
General and administrative expense decreased as a percentage of sales
in the first quarter of fiscal 1995 from approximately 11.9% in fiscal 1994 to
9.9% in fiscal 1995, while actual expenses decreased approximately 37.6% over
this same three- month period. Reductions in expense levels reflected savings
in compensation due to reduced employee levels, and the Company's continued
efforts to reduce administrative operating expenses.
Interest income earned in the three months ended January 31, 1995
increased approximately 6.7% over the same time period a year ago. This
increase was due to the larger volume of funds loaned to related parties at
significantly high interest rates and higher cash levels.
The Company sold its headquarters in December of 1994 for $11 million
less certain expenses of sale. In order to match the current market value, the
net book value of the property was written down from $18.9 million to $9.4
million in October 1993. As a result of the sale, approximately $1.3 million
was recognized as a gain in the first quarter of fiscal 1995.
No income taxes were provided for in the quarter ended January 31,
1995, as the Company believes that it has adequate net operating loss and
credit carryovers to offset any current corporate income tax liability.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents totaled approximately $4.6 million at
January 31, 1995, up $2.4 million (approximately 114.9%) from fiscal 1994
year-end levels of $2.1 million. The increase in the cash and cash equivalent
position for the three-month period ended January 31, 1995 resulted primarily
from the sale of the Company's real property which provided $5.4 million in
cash, but partially offset by the purchase of a real property of approximately
$2.0 million and an additional loan of $363,000 to the InterTerminal joint
venture.
Cash provided by operations in the first three months of fiscal 1995
of $400,000 resulted primarily from the excess of operating cash revenues over
cash expenses. Cash provided by investing activities of $2.1 million resulted
primarily from the net decrease in real property of approximately $7.1 million
but partially offset by the increase in other receivable of $5.0 million.
Approximately $1.5 million in certificates of deposit were pledged as
collateral for comparable amounts of stand-by and sight
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<PAGE> 15
letters of credit under a letter of credit agreement as of the end of the first
quarter of 1995. At January 31, 1995, the Company had approximately $1.4
million in outstanding letters of credit which were secured by the pledged
deposits under this agreement.
Net accounts receivable of $1.7 million at the end of the first
quarter of fiscal 1995 were down approximately 19.0% from 1994 year-end level
of $2.0 million. Days sales outstanding in accounts receivable increased in
1995 from 56 days to 58 days. Trade accounts payable of $0.5 million at the
end of the first quarter of fiscal 1995 were down approximately 65.9% from the
1994 year-end level of $1.4 million.
Net inventories of approximately $5.5 million at the end of the first
quarter of fiscal 1995 were down approximately 5.2% from the 1994 year-end
level of $5.8 million due primarily to reduced sales volume.
Working capital at the end of the first quarter of fiscal 1995 was
$9.8 million, up approximately 36.0% from fiscal 1994 year-end level of $7.2
million.
The Company expects to generate cash in 1995 from its Russian venture
operations from the sale of its Ordynka and InterTerminal venture investments.
Management expects to generate cash of approximately $7.2 million from these
activities, including the expected repayment of its loans with InterTerminal.
Management also expects to generate $1.4 million in cash from the sale of its
35% interest in Kabil in fiscal 1995.
On December 12, 1994, the Company sold its real property located at
550 East Brokaw Road, San Jose, California which consists of approximately 19.8
acres of real property containing a building of 292,800 square feet for $11
million. After netting certain expenses of sale, the Company received $5.4
million in cash upon close of escrow. The remaining $5 million is in the form
of a promissory note which shall be due and payable in twenty-four months at an
interest rate of 9.5% per annum. Approximately $475,000 in cash will be
generated as interest annually. Interest shall be paid on a monthly basis.
On December 14, 1994, the Company purchased real property located at
2345 Harris Way, San Jose, California which consists of approximately 2.5 acres
of real property containing a building of 69,630 square feet. The purchase
price for the property is $1,925,000 and the full amount was paid in cash.
This property will become the Company's new headquarters. The Company will
move its entire operations to this building during the second quarter of fiscal
1995. During this transitional period, the Company is leasing back 40,000
square feet from the new owner of the Brokaw building until April 1995.
Monthly rental payment is approximately $20,000.
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<PAGE> 16
At the current consumption rate, the Company's cash balance of
approximately $4.6 million (which includes $1.5 million pledged as security for
stand-by and sight letters of credit) at January 31, 1995, together with
anticipated revenues from operations and other non-operating cash receipts, are
anticipated to be adequate to fund the Company's fiscal 1995 operations at
projected levels.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
See Note 5 of "Notes to Condensed Consolidated Financial Statements."
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit(s). None.
(b) Reports on Form 8-K. None.
[The remainder of this page is intentionally left blank]
16
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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.
TELEVIDEO SYSTEMS, INC.
March 13, 1995 /s/ K. Philip Hwang
--------------------------
Dr. K. Philip Hwang,
Chairman of the Board and,
Chief Executive Officer
/s/ David Kim
--------------------------
David Kim,
Chief Financial Officer
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-START> NOV-01-1994
<PERIOD-END> JAN-31-1995
<CASH> 4,580
<SECURITIES> 58
<RECEIVABLES> 1,937
<ALLOWANCES> 280
<INVENTORY> 5,455
<CURRENT-ASSETS> 12,020
<PP&E> 4,702
<DEPRECIATION> 2,497
<TOTAL-ASSETS> 23,770
<CURRENT-LIABILITIES> 2,164
<BONDS> 0
<COMMON> 446
0
0
<OTHER-SE> 21,160
<TOTAL-LIABILITY-AND-EQUITY> 23,770
<SALES> 2,599
<TOTAL-REVENUES> 2,599
<CGS> 1,879
<TOTAL-COSTS> 1,879
<OTHER-EXPENSES> 19
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (524)
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</TABLE>
