<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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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, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 0-11552
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Televideo, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 94-2383795
- ------------------------------- ----------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2345 Harris Way, San Jose, California 95131
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(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 954-8333
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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
1, 2000 is: 11,309,085.
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<PAGE>
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q for TeleVideo Inc. (the "Company")
for the first quarter ended January 31, 2000, includes certain statements
that may be deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements, other than statements of historical facts, included in this
report that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future, including,
but not limited to, such matters as future product development, business
development, marketing arrangements, future revenues from contracts, business
strategies, expansion and growth of the Company's operations and other such
matters are forward-looking statements. These statements are based on certain
assumptions and analyses made by the Company in light of its experience and
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate in the
circumstances. Such statements are subject to a number of assumptions, risks
and uncertainties, including the risk factors discussed below, general
economic and business conditions, the business opportunities (or lack
thereof) that may be presented to and pursued by the Company, changes in law
or regulations and other factors, many of which are beyond control of the
Company. Prospective investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
[The remainder of this page is intentionally left blank.]
<PAGE>
TELEVIDEO, INC.
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
January 31, October 31,
ASSETS 2000 1999
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(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 3,961 $ 4,487
Accounts receivable, net 1,284 1,523
Inventories, net 1,888 1,464
Prepayments and other 451 987
Notes receivable - current 67 67
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Total current assets 7,651 8,528
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PROPERTY, PLANT AND EQUIPMENT:
Production equipment 624 624
Office furniture and equipment 1,158 1,152
Leased property under capital lease 6,270 6,270
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8,052 8,046
Less accumulated depreciation and
amortization 2,123 2,010
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Property, plant and equipment, net 5,929 6,036
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INVESTMENTS IN AFFILIATES 1,117 1,117
NOTE RECEIVABLE, LESS CURRENT PORTION 2,614 2,636
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Total assets $ 17,311 $ 18,317
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LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Obligation under capital lease - current $ 270 $ 270
Accounts payable 1,013 964
Accrued liabilities 1,207 1,160
Income taxes 30 0
Deferred gain on sale of land and building -
current 538 538
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Total current liabilities 3,058 2,932
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Obligation under capital lease - long-term 5,751 5,812
Deferred gain on sale of land and building -
long-term 6,927 7,069
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Total liabilities 15,736 15,813
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STOCKHOLDERS' EQUITY:
<PAGE>
Common stock, $.01 par value:
Authorized--75,000,000 shares
Outstanding--11,309,085 shares at January 31,2000
and 11,271,085 shares at October 31, 1999
(net of 120,000 treasury shares) 453 453
Additional paid-in capital 95,735 95,703
Accumulated deficit (94,613) (93,652)
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Total stockholders' equity 1,575 2,504
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Total liabilities and stockholders'
equity $ 17,311 $ 18,317
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</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TELEVIDEO, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JANUARY 31, 2000 AND JANUARY 31, 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
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2000 1999
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<S> <C> <C>
NET SALES $ 1,521 $ 1,787
COST OF SALES 1,403 1,592
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GROSS PROFIT 118 195
OPERATING EXPENSES:
Sales and marketing 653 498
Research and development 221 64
General and administration 463 310
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Total operating expenses 1,337 872
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Loss from operations (1,219) (677)
INTEREST INCOME, net 134 32
OTHER INCOME, net 124 7
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Net loss $ (961) $ (638)
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Net loss per share, basic and diluted $ (.09) $ (.06)
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Weighted average shares outstanding 11,278 11,271
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</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
TELEVIDEO, INC.
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED JANUARY 31, 2000 AND JANUARY 31, 1999
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
January 31,
-----------------------------
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net cash used in operating activities $ (512) $ (1,698)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of land and building -- 7,859
Net additions to property, plant and equipment (6) --
Note receivable 22 (164)
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Net cash provided by investing
activities 16 7,695
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 32 0
Payments on lease obligations (62) (21)
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Net cash used in
financing activities (30) (21)
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INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (526) 5,976
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE PERIOD 4,487 1,640
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CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 3,961 $ 7,616
--------- ---------
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</TABLE>
<PAGE>
Non cash investing/financing activities:
In December 1998, the Company sold its main facility (land and building) for
approximately $11.0 million and concurrently leased back this facility over a
15 year lease term expiring in December 2013. The land component has been
recorded as an operating leaseback. The building element has been accounted
for as a capital lease, whereby a leased building asset and capital lease
obligation were recorded at the fair value of approximately $6.27 million. As
a result of the sale for $11.0 million (which includes a $2.75 million note
receivable) a deferred gain of approximately $8.0 million was recorded. The
deferred gain attributable to the land element, which approximates $3.44
million, is being amortized over the 15 year lease life on a straight line
method. The deferred gain attributable to the building element, which
approximates $4.56 million, is being amortized over leased building asset
life, which has been determined to be the 15 year lease term, on a straight
line method.
The $2.75 million note receivable bears interest at 7.25% per annum.
Principal and accrued interest is payable in equal monthly installments of
$21,735 each on the first day of each month commencing on January 1, 1999. If
not earlier paid in full, any unpaid principal and all accrued interest is
due and payable to TeleVideo, Inc. on December 1, 2013.
The accompanying notes are an integral part of these financial statements.
<PAGE>
TELEVIDEO, INC.
NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 2000
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information. The information at January 31, 2000 and
for the three months ended January 31, 2000 and 1999 include all
adjustments that the management of the Company believes are necessary for
fair presentation for the results of the periods presented.
Results for any interim period are not necessarily indicative of results
for any future interim period or for the entire year. The accompanying
financial statements and notes thereto should be read in conjunction with
the financial statements and notes thereto included in the Company's annual
report on Form 10-K.
PRINCIPLES OF CONSOLIDATION
The condensed consolidated financial statements include the accounts of the
Company and its majority owned subsidiaries, after elimination of inter-
company accounts and transactions. All of the Company's unconsolidated
affiliates are accounted for using the equity or the cost method.
USE OF ESTIMATES
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the
financial statements, as well as revenues and expenses during the reporting
period. Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
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-process and includes material, labor
and manufacturing overhead costs. The cost of purchased parts is determined
on a first-in, first-out basis. Amounts shown are net of reserves for
obsolescence of $1.0 million at both January 31, 2000 and October 31, 1999,
respectively:
<PAGE>
<TABLE>
<CAPTION>
January 31, October 31,
2000 1999
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<S> <C> <C>
Purchased parts and subassemblies $ 236 $ 216
Work-in-process 619 313
Finished goods 1,033 935
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$ 1,888 $ 1,464
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</TABLE>
PROPERTY, PLANT AND EQUIPMENT
Depreciation and amortization are provided over the estimated useful lives
of the assets using both straight line and accelerated methods.
Production equipment 1-10 years
Office furniture 1-10 years
Leased property 15 years
LOSS PER SHARE
Loss per share is based on the weighted average number of shares of
common stock outstanding during each period. Diluted earnings per
share is computed using the weighted average number of common and
common equivalent shares outstanding during the period. 287,250
shares outstanding under various Incentive Stock option plans have
been excluded from the computation as their effect is antidiultive.
RECLASSIFICATIONS
Certain reclassifications have been made to conform to the 2000
presentation. None of such reclassifications are material to the
financial statements taken as a whole.
2. ACQUISITIONS AND DIVESTITURES
MYSIMON, INC.
In September 1998, the Company invested in the online comparison
shopping Internet company, mySimon, Inc., receiving convertible
preferred stock. This investment represented an ownership interest of
between 3% and 4% of mySimon, Inc. as of January 31, 2000.
KORAM, INC.
In February 1998, the Company purchased a 50% interest in Koram, Inc, a
Korean restaurant venture. This investment is accounted for under the
equity method of accounting.
APPLIED PHOTONICS TECHNOLOGY, INC.
On April 16, 1997, the Company entered into a Common Stock Purchase
Agreement with Applied Photonics Technology, Inc. (APT), a California
corporation, whereby the Company purchased a 30% interest in APT for
$3.0 million.
Founded in October 1996, APT is a developmental stage enterprise
specializing in the development of electronics display technology. The
anticipated markets for APT's outdoor media display
<PAGE>
system include the billboard and illuminated sign markets, sports
stadiums and arenas, transportation terminals, volume retailers and
malls, and safety/public information displays.
The Company accounts for its investment in APT using the equity method
of accounting. During the fiscal year ended October 31, 1998, the
Company wrote off its equity investment, related goodwill, and note
receivable of approximately $4.1 million.
In December 1998, the Company loaned APT $176,000. This note bears
interest at the rate of 10% per annum and was due on December 1, 1999.
In September 1999, the Company loaned APT an additional $125,000. The
$125,000 note bears interest at the rate of 6% per annum and was due on
December 1, 1999. In September 1999, the Company entered into a
consulting agreement with APT in which APT agreed to undertake two
engineering development projects for the Company. The Company made an
advance payment of $125,000 under the agreement, which is the entire
amount of the Company's obligation. The Company wrote off the $426,000
in loans and advances to APT as of October 31, 1999. The Company has not
guaranteed any obligations of APT and has made no commitments to provide
additional financial support to APT.
As of March 14, 2000, the Company has not yet received payment on the
$426,000 in notes and loans written off at October 31, 1999, nor has APT
received their expected financing.
3. LETTER OF CREDIT AGREEMENT
The Company has one letter of credit agreement with its bank whereby the
bank will issue up to a total of $1.0 million of standby and sight
letters of credits. This agreement is contingent upon the Company
maintaining time deposits at the bank as collateral in a total amount
no less than the outstanding borrowings. At January 31, 2000, the
Company had no letters of credit outstanding.
4. SALE AND LEASEBACK OF BUILDING
In December 1998, the Company sold its main facility (land and building)
for approximately $11.0 million and concurrently leased back this facility
over a 15 year lease term expiring in December 2013. The land component has
been recorded as an operating leaseback. The building element has been
accounted for as a capital lease, whereby a leased building asset and
capital lease obligation were recorded at the fair value of approximately
$6.27 million. As a result of the sale for $11.0 million (which includes a
$2.75 million note receivable) a deferred gain of approximately $8.0
million was recorded. The deferred gain attributable to the land element,
which approximates $3.44 million, is being amortized over the 15 year lease
life on a straight line method. The deferred gain attributable to the
building element, which approximates $4.56 million, is being amortized over
leased building asset life, which has been determined to be the 15 year
lease term, on a straight line method.
The $2.75 million note receivable bears interest at 7.25% per annum.
Principal and accrued interest is payable in equal monthly
installments of $21,735 each on the first day of each month commencing
on January 1, 1999. If not earlier paid in full, any unpaid principal
and all accrued interest is due and payable to TeleVideo, Inc. on
December 1, 2013.
5. SUBSEQUENT EVENTS
MYSIMON, INC.
<PAGE>
In September 1998, the Company invested in the online comparison shopping
Internet company, mySimon, Inc., receiving convertible preferred stock.
This investment represented an ownership interest of between 3% and 4% '
of mySimon, Inc.
On February 29, 2000, CNET Networks, Inc. (formerly, CNET, Inc.)
completed the acquisition of mySimon, Inc. As a result of this
acquisition, the Company expects to receive approximately 375,000 shares
of common stock of CNET in exchange for 100% of its interest in mySimon.
The Company is currently restricted from selling any of its interest in
CNET until at least three days after the release of earnings for CNET
for the quarter ended March 31, 2000.
MULIX, INC.
On February 28, 2000, the Company purchased for $1 million in cash an
aggregate of 14,269,230 shares of unregistered Series A Convertible
Preferred Stock of Mulix, Inc., a Delaware corporation. The Company's
investment in Mulix represents a 35% interest in this privately-held
corporation. The cash investment will be accounted for on the equity
method of accounting. The purchase price and other terms of the
investment were arrived at by negotiation between the Company and Mulix,
with the per share price determined by the Mulix Board of Directors in
good faith based on financial and business information and other relevant
factors currently known to and considered by the Mulix board members. The
purchase price was paid for out of the Company's working capital.
Each share of Series A Preferred Stock is convertible into one share of
Mulix Common Stock, at the option of the Company. The Series A Preferred
Stock is automatically convertible into Common Stock under certain
circumstances, including a firm commitment underwritten public offering of
Mulix Common Stock with proceeds, net of underwriter's fees, of not less
than $15,000,000. Prior to conversion, the Series A Preferred Stock is
entitled to one vote per share. In connection with the investment, the
Company entered into a Voting Agreement with the founders of Mulix
regarding board size and membership. Dr. K. Philip Hwang, the Company's
Chairman and Chief Executive Officer, has accepted an appointment
to the Mulix Board of Directors, in accordance with the Voting Agreement.
The three founders of Mulix constitute the remainder of the board.
The Company has the right of first offer on future sales of Mulix equity
securities, subject to certain exceptions such as issuances of stock or
options under employee option plans.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
Net sales for the first quarter of fiscal 2000 were $1.5 million,
compared with $1.8 million in the first quarter of fiscal 1999, a decrease of
$0.3 million, or 20%. The decrease in net sales reflects a decrease in sales
of monitors of $0.5 million from the year ago quarter, offset partially by
sales of TeleCLIENT products, which the Company introduced in the second
quarter of fiscal 1999.
Cost of sales was $1.4 million in the first quarter of fiscal 2000,
compared with $1.6 million in the first quarter of fiscal 1999, a decrease of
$0.2 million, or 13%. As a percentage of net sales, gross margin was 7.8% in
the first quarter of fiscal 2000, compared with 10.9% in the first quarter of
fiscal 1999. The decrease, as a percentage of sales, primarily reflects
royalty expenses incurred by the Company in the first quarter of fiscal 2000
under the licensing agreement for the operating system software used in the
Company's TeleCLIENT products. In the first quarter of fiscal 2000, the
Company accrued $192,000 in royalty expenses. In the first quarter of fiscal
1999, the Company did not incur any charge for royalty expenses.
Sales and marketing expenses were $0.7 million in the first quarter of
fiscal 2000, compared with $0.5 million in the first quarter of fiscal 1999. As
a percentage of net sales, sales and marketing expenses increased to 47% in the
first quarter of fiscal 2000 compared with 27% in the first quarter of fiscal
1999. The increase reflects the additional costs incurred in support of the
Company's launch of its TeleCLIENT product line, which occurred in April 1999.
Research and development expenses were $0.2 million in the first quarter of
fiscal 2000, compared with $0.1 million in the first quarter of fiscal 1999, an
increase of $0.1 million. As a percentage of net sales, research and development
expenses increased to 13% in the first quarter of fiscal 2000 compared with 6%
in the first quarter of fiscal 1999. The increase represents increased costs
associated with the continued development of the Company's TeleCLIENT product
line.
General and administrative expenses were $0.5 million in the first
quarter of fiscal 2000, compared with $0.3 million in the first quarter of
fiscal 1999. As a percentage of net sales, general and administrative
expenses increased to 33% in the first quarter of fiscal 2000 compared with
17% in the first quarter of fiscal 1999. The increase is due primarily to
lease expenses that the Company began making in fiscal 1999 in accordance
with the sale and leaseback of the Company's headquarters facility.
Additional details about the sale and leaseback transaction are contained in
"Liquidity and Capital Resources."
The Company's loss from operations was approximately $1.2 million in the
first quarter of fiscal 2000 compared with approximately $0.7 million in the
first quarter of fiscal 1999.
Interest income, net of interest expense, was $134,000 in the first quarter
of fiscal 2000, compared with $32,000 in the first quarter of fiscal
1999, an increase of $102,000. The increase reflects interest income resulting
from the $2.75 million, 7.25% promissory note that the Company received pursuant
to the sale of its building in December 1998, as well as to additional cash that
the Company had during the quarter due to the building sale.
Other income was $124,000 in the first quarter of fiscal 2000, compared
with $7,000 in the first quarter of fiscal 1999, an increase of $117,000. The
increase was due primarily to the amortization of the deferred gain on the sale
of the Company's building.
<PAGE>
Net loss for the first quarter of fiscal 2000 was $1.0 million compared
with a net loss of $0.6 million in the first quarter of fiscal 1999.
LIQUIDITY AND CAPITAL RESOURCES
At January 31, 2000, the Company had $4.0 million in cash and cash
equivalents, a decrease of approximately $0.5 million over the same balances
at the end of fiscal 1999 of approximately $4.5 million. Net cash used in
operating activities improved from $1.7 million used in the three months
ended January 31, 1999 to $0.5 million used for the same period in fiscal
2000. In the first quarter of fiscal 2000, the Company generated more cash
from the conversion of working capital items as compared with the first
quarter of fiscal 1999.
In December 1998, the Company sold its 69,360 square foot headquarters
building in San Jose, California, including land and improvements, to TVCA,
LLC, an unaffiliated Delaware limited liability company ("TVCA") for $11.0
million. The nature of the consideration was $8.25 million in cash and a
$2.75 million promissory note. The note bears interest at 7.25% per annum.
Principal and accrued interest are payable in equal monthly installments of
$21,735 on the first day of each month, commencing January 1, 1999. If not
earlier paid in full, any unpaid principal and all accrued interest shall be
due and payable to TeleVideo, Inc. on December 1, 2013.
In December 1998, the Company leased back this facility over a 15 year
lease term expiring in December 2013. The land component has been accounted
for as a capital lease, whereby a leased building asset and capital lease
obligation were recorded at the fair value of approximately $6.27 million. As
a result of the sale for $11.0 million, a deferred gain of approximately $8.0
million was recorded. The deferred gain attributable to the land element,
which approximates $3.44 million, is being amortized over the 15 year lease
life on a straight line method. The deferred gain attributable to the
building element, which approximates $4.56 million, is being amortized on a
straight line basis over the leased building asset life, which has been
determined to be the 15 year lease term.
Net accounts receivable were $1.3 million at January 31, 2000, compared
with $1.5 million at October 31, 1999, a decrease of $0.2 million, or 13%,
while net inventories were $1.9 million at January 31, 2000, as compared with
$1.5 million at October 31, 1999, an increase of $0.4 million. The decrease
in accounts receivable reflects large collections in the first quarter of
fiscal 2000 from three of the Company's largest customers. The increase in
inventory reflects the purchase of additional terminal and TeleCLIENT
products during the quarter. Working capital at the end of the first quarter
of fiscal 2000 was approximately $4.6 million, a decrease of 16% from the
fiscal 1999 year-end level of approximately $5.5 million.
The Company believes that, with respect to its current operations, the
Company's cash balance of approximately $4.0 million at January 31, 2000, which
includes its $1.0 million certificate of deposit, plus revenues from operations
and other non-operating cash receipts, will be sufficient to meet the Company's
working capital and capital expenditure needs for the next twelve months.
<PAGE>
FACTORS THAT MAY AFFECT FUTURE RESULTS
COMPETITIVE MARKETS
The terminal market is intensely competitive. The principal elements of
competition are pricing, product quality and reliability, price/performance
characteristics, compatibility, marketing and distribution capability, service
and support, and reputation of the manufacturer. TeleVideo competes with a large
number of manufacturers, most of which have significantly greater financial,
marketing and technological resources than TeleVideo. There can be no assurance
that the Company will be able to continue to compete effectively.
PRODUCT DEVELOPMENT
The computer market is characterized by rapid technological change and
product obsolescence, often resulting in short product life cycles and rapid
price declines. The Company's success will continue to depend primarily on its
ability to continue to reduce costs through manufacturing efficiencies and price
negotiation with suppliers, the continued market acceptance of its existing
products and its ability to develop and introduce new products. There can be no
assurance that TeleVideo will successfully develop new products or that the new
products it develops will be introduced in a timely manner and receive
substantial market acceptance. There can also be no assurance that product
transitions will be managed in such a way to minimize inventory levels and
product obsolescence of discontinued products. The Company's operating results
could be adversely affected if TeleVideo is unable to manage all aspects of
product transitions successfully.
SINGLE SOURCED PRODUCTS
The Company generally utilizes standard parts and components available
from multiple suppliers. However, certain parts and components used in the
Company's products are available from a single source. If, contrary to its
expectations, the Company is unable to obtain sufficient quantities of any
single-sourced components, the Company will experience delays in product
shipments.
RELIANCE ON FORECASTS
The Company offers its products through various channels of
distribution. Changes in the financial condition of, or in the Company's
relationship with, its distributors could cause actual operating results to vary
from those expected. Also, the Company's customers generally order products on
an as-needed basis. Therefore, virtually all product shipments in a given fiscal
quarter result from orders received in that quarter. The Company anticipates
that the rate of new orders will vary significantly from month to month. The
Company's manufacturing plans and expenditure levels are based primarily on
sales forecasts. Consequently, if anticipated sales and shipments in any quarter
do not occur when expected, expenditure and inventory levels could be
disproportionately high and the Company's operating results for that quarter,
and potentially future quarters, would be adversely affected.
FACTORS THAT COULD AFFECT STOCK PRICE
The market price of TeleVideo's common stock could be subject to
fluctuations in response to quarter to quarter variations in operating results,
changes in analysts' earnings estimates, market conditions in the computer
technology industry, as well as general economic conditions and other factors
external to the Company.
FOREIGN CURRENCY AND POLITICAL RISK
The Company markets its products worldwide. In addition, a large
portion of the Company's part and component manufacturing, along with key
suppliers, are located outside the United States. Accordingly, the Company's
future results could be adversely affected by a variety of factors, including
without limitation, fluctuation in foreign currency exchange rates, changes in a
specific country's or region's political or economic conditions, trade
protection measures, import or export licensing requirements, unexpected changes
in regulatory requirements and natural disasters.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As of January 31, 2000, the Company had a long-term note receivable
(the "Note") of $2.7 million. The Company received the Note, which bears
interest at a fixed rate of 7.25% per annum, as partial consideration for the
sale of the Company's headquarters facility in December 1998. The interest rate
on the Note is fixed over the life of the Note, with principal and interest
payable in equal monthly installments of $21,735 each on the first day of each
month commencing on January 1, 1999. If not earlier paid in full, any unpaid
principal and all accrued interest shall be due and payable to TeleVideo, Inc.
on December 1, 2013.
Because the interest rate on the Note is fixed for the term of the
Note, any change in interest rates would not affect the Company's earnings or
cash flows if it chose to hold onto the note, although a change in interest
rates could affect the market value of the Note if the Company chose to sell the
note prior to maturity.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None.
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K.
(a) EXHIBIT(S).
Exhibit 27.0 Financial Data Schedule
(b) REPORTS ON FORM 8-K.
None
<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 amended report to be
signed on its behalf by the undersigned, thereunto duly authorized.
TELEVIDEO, INC.
------------------------------
(REGISTRANT)
DATE: MARCH 16, 2000 BY: /s/ JAMES WHEAT
------------------------------
JAMES WHEAT
CHIEF FINANCIAL OFFICER
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
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