<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 28, 1997
Commission File Number 1-4289
GTI CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 05-0278990
- ------------------------------- ----------------------------------
(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
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
----- -----
As of August 8, 1997, the Registrant had one class of Common Stock, at a par
value of $.04 per share, with 8,973,475 shares outstanding.
This Report on Form 10-Q contains 13 pages.
<PAGE> 2
INDEX
GTI CORPORATION
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (UNAUDITED)
Condensed consolidated statements of operations for the three and six months ended June 28,
1997 and for the three and six months ended June 29, 1996 3
Condensed consolidated balance sheets as of June 28, 1997 and December 31, 1996 4
Condensed consolidated statements of cash flows for the six months ended June 28, 1997 and
June 29, 1996 5
Notes to condensed consolidated financial statements 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS 12
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 12
SIGNATURE 13
</TABLE>
2
<PAGE> 3
GTI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
----------------------------- ---------------------------
June 28, 1997 June 29, 1996 June 28,1997 June 29,1996
------------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 23,011 $ 23,017 $ 45,404 $ 49,635
Cost of sales 16,508 19,328 33,017 40,017
-------- -------- -------- --------
Gross profit 6,503 3,689 12,387 9,618
Operating expenses 5,891 6,501 11,367 13,319
-------- -------- -------- --------
Operating profit (loss) 612 (2,812) 1,020 (3,701)
Loss on sale of securities 672 -- 672 --
Other expenses 52 123 172 89
-------- -------- -------- --------
Income (loss) from continuing operations
before income taxes (112) (2,935) 176 (3,790)
Provision (benefit) for income taxes 177 (650) 277 (950)
-------- -------- -------- --------
Loss from continuing operations (289) (2,285) (101) (2,840)
Loss from discontinued operations,
net of income taxes -- (480) -- (1,563)
-------- -------- -------- --------
Net loss $( 289) $( 2,765) $( 101) $( 4,403)
======== ======== ======== ========
Net loss per share of common stock and common stock equivalents:
Continuing operations $( 0.04) $( 0.26) $( 0.03) $( 0.33)
Discontinued operations -- (0.06) -- (0.18)
-------- -------- -------- --------
Net loss $( 0.04) $( 0.32) $( 0.03) $( 0.51)
======== ======== ======== ========
Weighted average number of common shares
and common stock equivalents 8,973 8,973 8,973 8,973
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE> 4
GTI CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
June 28 1997
(Unaudited) Dec 31,1996
----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 3,086 $ 3,219
Accounts receivable, net 11,866 11,502
Inventories 26,946 18,551
Prepaid expenses and other 6,576 6,802
Net assets of discontinued operations 1,730 11,637
-------- --------
Total current assets 50,204 51,711
Property, plant and equipment, net 16,766 15,974
Goodwill and other assets 23,008 23,839
-------- --------
$ 89,978 $ 91,524
======== ========
Current liabilities:
Accounts payable, accrued and other liabilities $ 19,207 $ 17,298
Short-term borrowings -- 4,900
Current portion of long-term debt due to affiliate 1,250 --
-------- --------
Total current liabilities 20,457 22,198
Long-term debt due to affiliate, net of current portion 1,250 --
Deferred income taxes and other liabilities 1,330 2,176
Stockholders' equity:
Preferred stock, $35.00 cumulative convertible,
8,110 shares issued and outstanding 8,110 8,110
Common stock, 8,973,475 shares issued and oustanding 359 359
Additional paid in capital 44,082 44,082
Retained earnings 14,401 14,644
Cumulative translation adjustment (11) (45)
-------- --------
Total stockholders' equity 66,941 67,150
-------- --------
$ 89,978 $ 91,524
======== ========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
<PAGE> 5
GTI CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the six months ended
-----------------------------------
June 28, 1997 June 29, 1996
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Loss from continuing operations $ (101) $(2,840)
Adjustments:
Depreciation and amortization 2,614 2,896
Loss on sale of securities 672 --
Change in assets and liabilities:
Accounts receivable (364) 9,453
Inventories (8,395) 7,257
Prepaid expenses and other 226 (202)
Other non-current assets 831 (1,340)
Accounts payable, accrued and other liabilities 1,909 (9,979)
Other non-current liabilities (846) 52
------- -------
Net cash flow provided (used) by continuing operations (3,454) 5,297
Net operating cash flows used by discontinued operations (701) (2,783)
------- -------
Net cash provided (used) by operating activities (4,155) 2,514
------- -------
Cash flows from investing activities:
Purchases of property, plant and equipment (3,406) (3,041)
Proceeds from sale of discontinued operations 9,936 2,412
------- -------
Net cash provided (used) by investing activities 6,530 (629)
------- -------
Cash flows from financing activities:
Proceeds from (repayment of) lines of credit, net (4,900) 1,234
Proceeds from long-term debt due to affiliate 2,500 --
Preferred stock cash dividend (142) (142)
------- -------
Net cash provided (used) by financing activities (2,542) 1,092
------- -------
Net change in cumulative translation adjustment 34 (82)
------- -------
Net increase (decrease) in cash and cash equivalents (133) 2,895
Cash and cash equivalents - beginning of period 3,219 2,553
------- -------
Cash and cash equivalents - end of period $ 3,086 $ 5,448
======= =======
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
<PAGE> 6
GTI CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements reflect
the accounts of GTI Corporation (the "Company"), together with its
majority-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.
These unaudited condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company believes that the disclosures made are adequate to prevent the
information from being misleading. These unaudited condensed consolidated
financial statements reflect, in the opinion of management, all adjustments
(which include only normal recurring adjustments) necessary to present the
results of operations and financial position as of the dates and for the periods
presented. These unaudited condensed consolidated financial statements should be
read in conjunction with the audited financial statements and related notes
included in the Company's Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1996. The results for the interim
periods presented are not necessarily indicative of results to be expected for a
full year.
Certain prior-year amounts have been reclassified to conform to current-year
presentation.
NOTE 2: SUPPLEMENTAL STATEMENTS OF CASH FLOWS DISCLOSURE
Supplemental cash flow information (unaudited) for the six months ended June 28,
1997 and June 29, 1996 are summarized as follows:
<TABLE>
<CAPTION>
For the six months ended
----------------------------
June 28, 1997 June 29, 1996
------------ ------------
<S> <C> <C>
Interest paid $ 269 $ 185
========== =========
Income taxes paid $ 512 $ 2,474
========== =========
</TABLE>
6
<PAGE> 7
NOTE 3: INVENTORIES
Inventories, stated at the lower of cost (first in, first out) or market, are
summarized as follows:
<TABLE>
<CAPTION>
June 28, 1997
(Unaudited) December 31, 1996
----------- ----------
<S> <C> <C>
Raw materials $10,650 $ 5,891
Work in process 5,697 3,748
Finished goods 10,599 8,912
------- -------
Total inventories $26,946 $18,551
======= =======
</TABLE>
NOTE 4: DUE TO AFFILIATES
In February 1997, the Company entered into a $2.5 million Note Purchase
Agreement with Telemetrix PLC (the Company's majority shareholder) and a related
Common Stock Purchase Warrant Agreement (the "Warrant") as more fully described
in the Company's Annual Report on Form 10-K for the year ended December 31,
1996.
NOTE 5: DISCONTINUED OPERATION
In April 1997, the Company divested its interest in its Promptus subsidiary as
described more fully in the Form 8-K filed with the Securities and Exchange
Commission on May 13, 1997. In the quarter ended June 28, 1997, the Company
incurred a $672 loss on the liquidation of the VideoServer shares received in
connection with the Promptus divestiture, resulting from the decline in value of
VideoServer from the Promptus divestiture date to the date the Company was able
to liquidate the VideoServer shares. This $672 loss was recorded in continuing
operations.
NOTE 6: EARNINGS PER SHARE
Primary and fully diluted earnings per share are identical for all periods
presented.
For interim and annual periods ending after December 15, 1997, the Company will
adopt Statement of Financial Accounting Standards No. 128 ("SFAS 128"), Earnings
Per Share, which sets forth the basis for the computation of "basic" earnings
per share and "dilutive" earnings per share from the previous method of
computing both "primary" and "fully dilutive" earnings per share under
Accounting Principles Board Opinion No. 15 ("APB No. 15"), Earnings Per Share.
Early implementation of SFAS 128 is not permitted. The earnings per share
figures for the periods presented in this Form 10-Q are not materially different
from the amounts that would have been calculated using SFAS 128.
In loss periods, such as those presented in this Form 10-Q, the Company's
preferred stock is assumed not converted and the related preferred stock
dividends are added to the loss for purposes of the loss per share calculation.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Form 10-Q contains certain statements of a forward-looking nature relating
to future events or the future performance of the Company. Existing and
prospective investors are cautioned that such statements are only predictions
and that actual events or results may differ materially. In evaluating such
statements, such investors should specifically consider various factors
identified in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and other filings with the Securities and Exchange Commission
which could cause actual results to differ materially from those indicated by
such forward-looking statements.
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with the condensed consolidated
financial statements and notes to condensed consolidated financial statements
included elsewhere herein.
Figures are expressed in thousands, except per share amounts.
RESULTS OF OPERATIONS
Three months ended June 28, 1997 compared to the three months ended June 29,
1996
- ----------------------------------------------------------------------------
Revenues remained constant between quarters and were $23,011 for the second
quarter ended June 28, 1997 compared to $23,017 for the comparable quarter in
1996. The flat revenue in the current quarter resulted from an approximate 8.2%
decrease in average selling prices (including the effects of changes in mix),
offset by an approximate 8.9% increase in unit volume. Management attributes the
decrease in average selling prices to the competitive pressures caused by
downward pressures on prices in the market for networking products for which the
Company provides components. The decrease in average selling prices also
resulted from a greater current-quarter mix of lower-priced components for
telecommunications markets. The 8.9% increase in unit volume generally resulted
from growth in the overall market for networking products, improved quality in
the Company's products, and initial successes in telecommunications markets.
Sales to foreign customers of Valor decreased 5.7% for the second quarter of
1997 to 44.3% from 50.0% in the second quarter of 1996. This overall decrease in
foreign sales is primarily attributed to decreased volume to Valor's European
customers and, to a lesser extent, Valor's Asian customers.
Two of Valor's OEM customers collectively accounted for 27.8% and 26.4% of
Valor's sales in the current and prior quarter, respectively. The sales
percentage from Valor's OEM customers has historically fluctuated and may
continue to vary in future periods. Management believes that future sales
concentration to these customers is likely to continue; consequently, such
concentration may adversely affect both average selling prices and future sales
growth.
Valor's backlog at June 28, 1997, was approximately $14.4 million compared to
approximately $17.4 million at June 29, 1996. The Company's backlog at the
beginning of each quarterly period is not sufficient to achieve anticipated
revenues for the quarter. As a result, the Company's sales for any quarterly
period are dependent upon obtaining "turns business" (i.e., orders in a quarter
for shipment within the same quarter). Further, current trends are towards a
greater dependence on turns business as the Company's customers demand shorter
lead times and provide fewer long-term orders. Management expects this trend to
continue. If turns orders do not materialize, the Company's operating results
will be adversely affected. The Company's future performance on a
quarter-to-quarter basis will be heavily affected by the volume, mix and timing
of orders received.
8
<PAGE> 9
Cost of sales decreased $2,820 or 14.6% from $19,328 (84.0% of revenue) in the
second quarter of 1996 to $16,508 (71.7% of revenue) in the second quarter of
1997. This decrease is primarily due to reduced manufacturing overhead costs
resulting from the Company's July 1996 restructuring of its Asia manufacturing
operations. The decreased cost of sales in the current quarter also resulted
from decreased provisions for excess and obsolete inventories.
Gross profit increased $2,814 or 76.3% from $3,689 in the second quarter of 1996
to $6,503 for the comparable quarter in 1997. Gross profit as a percent of sales
increased from 16.0% to 28.3%. These improved margins resulted from the
decreased overhead and obsolescence costs and increased volume, which positive
factors more than off set the decreased sales prices. Nevertheless, based on
Valor's current fixed-cost structure, if future volumes manufactured are
significantly less than anticipated, the actual cost per unit and gross profit
could be materially and adversely affected.
Operating expenses for the second quarter of 1997 decreased by $610 or 9.4% from
$6,501 (28.2% of sales) in the second quarter of 1996 to $5,891 (25.6% of sales)
for the comparable quarter of 1997. The prior-year quarter included a $600
charge related to a litigation matter and a $650 charge related to employee
severance. Absent these prior-quarter costs, operating expenses increased by
12.2% due primarily to increased sales and marketing efforts in the current
quarter.
Other expenses for the second quarter of 1997 decreased $71 from $123 in the
comparable quarter of the prior year to $52 in the current quarter. However, in
the current quarter, the Company incurred a $672 loss on the liquidation of the
VideoServer shares received in connection with the Promptus divestiture,
resulting from the decline in value of VideoServer from the Promptus divestiture
date to the date the Company was able to liquidate the VideoServer shares.
The Company's tax provision (benefit) related to continuing operations was $177
provision for the second quarter of 1997 compared to $650 benefit for the
comparable quarter of the prior year. The current quarter provision is
disproportionate to the current-quarter loss from continuing operations because
the loss related to the VideoServer shares is a capital loss which has not been
tax benefited. The tax benefit from the second quarter of 1996 resulted from the
carryback of operating losses to previous profitable periods.
The increase in gross profit and the decreases in operating expenses and other
expenses, offset by the loss on the VideoServer securities, resulted in a loss
from continuing operations for the second quarter of 1997 of $289 or $0.04 per
share. This compares to a loss from continuing operations of $2,285 or $0.26 per
share in the comparable quarter of the prior year. Including the effects of
discontinued operations in the second quarter of 1996, the net loss decreased
$2,476 from $2,765 or $0.32 per share in the prior quarter to $289 or $0.04 per
share in the current quarter.
Six months ended June 28, 1997 compared to the six months ended June 29, 1996
- -----------------------------------------------------------------------------
Revenues decreased $4,231 or 8.5% from $49,635 in the six months ended June 29,
1996 to $45,404 in the six months ended June 28, 1997. This decrease in sales
resulted from an approximate 6.3% decrease in average selling prices (including
the effects of changes in mix), coupled with an approximate 2.4% decrease in
unit volume. Management attributes the decrease in average selling prices to the
competitive pressures caused by downward pressures on prices in the market for
networking products for which the Company provides components. The decrease in
average selling prices also resulted from a greater current-period mix of
lower-priced components for telecommunications markets. The 2.4% decrease in
unit volume resulted from the significant drop in unit volume from the first
quarter to the second quarter of the prior year. Although unit volumes have
increased since then, volumes have not yet returned to the 1996 first-quarter
levels.
9
<PAGE> 10
For the six-month period ended June 28, 1997, sales to foreign customers of
Valor decreased 6.7% to 43.3% from 50.0% in the comparable period of 1996. This
decrease in the mix of foreign sales is primarily attributed to decreased volume
to Valor's European customers and, to a lesser extent, Valor's Asian customers.
Two of Valor's OEM customers collectively accounted for 28.2% and 29.3% of
Valor's sales in the current and prior period, respectively. The sales
percentage from Valor's OEM customers has historically fluctuated and may
continue to vary in future periods. Management believes that future sales
concentration to these customers is likely to continue; consequently, such
concentration may adversely affect both average selling prices and future sales
growth.
Cost of sales decreased $7,000 or 17.5% from $40,017 (80.6% of revenue) in the
six month period of 1997 to $33,017 (72.7% of revenue) during the same period of
1996. This decrease is primarily due to decreased manufacturing overhead costs
resulting from the Company's July 1996 restructuring of its Asia manufacturing
operations. The decreased cost of sales also resulted from decreased provisions
for excess and obsolete inventories and a prior-period provision of $760 for
planned process and design engineering changes.
Gross profit increased $2,769 or 28.8% from $9,618 (19.4% of revenue) in the six
month period of 1996 to $12,387 (27.3% of revenue) in the same period in 1997.
These improved margins resulted from the decreased overhead, process change and
obsolescence costs, which positive factors more than offset the decreased
average selling prices.
Operating expenses for the six month period of 1997 decreased by $1,952 or 14.7%
from $13,319 (26.8% of revenue) in the six month period of 1996 to $11,367
(25.0% of revenue) for the comparable period in 1997. The prior year period
included a $600 charge related to a litigation matter and a $650 charge related
to employee severance. Absent these prior period costs, operating expenses
decreased $702 or 5.8% primarily as a result of the early 1996 restructuring of
the Company's corporate office.
Other expenses for the six-month period of 1997 increased $83 from $89 to $172
is primarily due to increased interest expense associated with increased
borrowings. Additionally, in the current quarter, the Company incurred a $672
loss on the liquidation of the VideoServer shares received in connection with
the Promptus divestiture, resulting from the decline in value of VideoServer
from the Promptus divestiture date to the date the Company was able to liquidate
the VideoServer shares.
The Company's tax provision (benefit) related to continuing operations was $277
provision for the six month period of 1997 compared to $950 benefit for the
comparable period of the prior year. The current-period provision is
disproportionate to the current-period loss from continuing operations because
the loss related to the VideoServer shares is a capital loss which has not been
tax benefited. The tax benefit in the comparable period of the prior year
resulted from the carryback of the prior-period operating losses to previous
profitable periods.
The increase in gross profit and the decrease in operating expenses, offset by
the loss on the VideoServer securities and the increase in other expenses,
resulted in a loss from continuing operations for the six-month period of 1997
of $101 or $0.03 per share. This compares to a loss from continuing operations
of $2,840 or $0.33 per share in the comparable six-month period of the prior
year. Including the effects of discontinued operations in the prior period of
1996, the net loss decreased $4,302 from $4,403 or $0.51 per share in the prior
period to $101 or $0.03 per share in the six-month period of 1997.
10
<PAGE> 11
LIQUIDITY AND CAPITAL RESOURCES
For the six-month period ended June 28, 1997 the Company satisfied its working
capital and capital expenditure requirements through borrowings from a related
party, the proceeds from the disposal of Promptus, and internally generated cash
from operations (net income before depreciation and amortization). The Company's
primary uses of these available funds was to add equipment, increase inventories
and reduce line of credit borrowings. These sources and uses of cash are
detailed in the Statement of Cash Flows included elsewhere in this Form 10-Q.
For the six month period ended June 28, 1997, the Company's inventories
increased by about $8.4 million. This increase resulted, in part, from current
period sales levels being lower than anticipated in the Company's production
plan. The increase in inventory also resulted from management's strategy to
increase inventory levels in order to meet the delivery timing and safety stock
levels expected by customers. Management expects inventory to decrease in the
second half of 1997, but there can be no assurance that such decrease will
occur, and there can be no assurance that the Company's inventory will be sold
at the prices or margins experienced in recent periods. If orders do not
materialize, and if inventory levels continue to rise, the Company's financial
position could be adversely effected.
In February 1997, the Company obtained a $2.5 million two year term note from
its majority shareholder as more fully described in the Company's 1996 Annual
Report. The first payment on this note of $625 plus interest is due in August
1997.
In April 1997, the Company completed the divestiture of its interest in Promptus
Communications, Inc. The Company received approximately $8.2 million in cash,
net of transaction costs, and 157,795 shares of VideoServer (NASDAQ: VSVR)
common stock. Through July 1997, the Company has sold approximately 140,000 of
these shares for total proceeds of about $1.5 million. The remaining shares will
be sold within the next year.
The Company has a line of credit agreement with a bank that expires on December
31, 1997. The total amount available under this line is $6 million, subject to
the balance of eligible accounts receivable (as defined). As of June 28, 1997,
approximately $4.8 million was available on the line of credit, none of which
was outstanding. Interest on the line of credit accrues at prime plus one and
one-quarter percent, and outstanding borrowings are collateralized by
substantially all of the Company's domestic assets. The agreement requires that
the Company decrease its inventory levels by about $5 million on or before
September 30, 1997. There can be no assurance that this decrease will occur, and
if it does not occur, there can be no assurance that the bank will waive the
event of default. If the bank terminates the line of credit, the Company's
available liquidity would be adversely effected.
During the first six months of 1997, the Company purchased capital equipment
approximating $3.4 million. These expenditures were primarily for production
equipment and information systems. The Company anticipates that additional
capital expenditures will be made during the balance of 1997, which will range
from $3 million to $5 million. These capital expenditures are anticipated to be
primarily for manufacturing and process engineering equipment, depending on the
need to further increase automation and capacity at Valor. The Company
anticipates that most of such capital expenditures will be funded through cash
generated from operations or line of credit borrowings.
Management believes that funds on hand, funds generated by operations, and funds
available through its line of credit will be sufficient to finance working
capital needs, projected capital-expenditure requirements and debt maturities at
least through the next twelve months.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
The Company's 1996 Annual Meeting of Stockholders was held on May 15,
1997 for the purpose of electing a Board of Directors for the ensuing
year and ratifying the selection of Arthur Andersen LLP as the
Company's independent public accountants for 1997.
Each of the nominees for seats on the Company's Board were duly
elected. The tabulation for all nominees was as follows:
<TABLE>
<CAPTION>
Against / Abstained /
Nominee For Withheld Not Voted
- ------------------------- --------- ------- -------
<S> <C> <C> <C>
Timothy M. Curtis 8,194,049 146,608 144,106
Edmund B. Fitzgerald 8,194,521 146,136 144,106
Albert J. Hugo-Martinez 8,194,299 146,358 144,106
Kenneth E. Maud 8,194,351 146,306 144,106
Robert E. Venter 7,810,819 529,838 144,106
</TABLE>
Also at the 1996 Annual Meeting of Stockholders, the selection of
Arthur Andersen LLP as the Company's independent public accountants was
ratified. The following is the vote tabulation for this matter:
<TABLE>
<CAPTION>
Against / Abstained /
Matter For Withheld Not Voted
- ----------------------------------- --------- -------- ---------
<S> <C> <C> <C>
Ratification of Arthur Andersen LLP 8,317,025 14,165 10,917
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 27 - Financial Data Schedule
b) Reports on Form 8-K
On May 13, 1997, GTI Corporation (the "Company") filed a
Report on Form 8-K regarding 1) the closing of an
asset-purchase transaction (effective April 28, 1997) between
Promptus Communications, Inc. ("Promptus," GTI's majority
owned subsidiary) and VideoServer, Inc. ("VideoServer")
(NASDAQ: VSVR) whereby VideoServer purchased from Promptus
certain assets and assumed certain liabilities known as the
Network Access Cards division and 2) subsequent to "1)" above,
the closing of a stock-purchase transaction (effective April
28, 1997) between the Company and Promptus whereby Promptus
purchased from the Company 100% of the Promptus shares held by
the Company.
12
<PAGE> 13
SIGNATURE
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.
GTI CORPORATION
---------------
(Registrant)
Date: August 8, 1997 By: /s/ BRUCE C. MYERS
--------------------
Bruce C. Myers
Vice President Finance and Treasurer
(Principal Financial and
Accounting Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-28-1997
<CASH> 3,086
<SECURITIES> 0
<RECEIVABLES> 11,866
<ALLOWANCES> 0
<INVENTORY> 26,946
<CURRENT-ASSETS> 50,204
<PP&E> 16,766
<DEPRECIATION> 0
<TOTAL-ASSETS> 89,978
<CURRENT-LIABILITIES> 20,457
<BONDS> 1,250
0
8,110
<COMMON> 359
<OTHER-SE> 58,472
<TOTAL-LIABILITY-AND-EQUITY> 89,978
<SALES> 45,404
<TOTAL-REVENUES> 45,404
<CGS> 33,017
<TOTAL-COSTS> 11,367
<OTHER-EXPENSES> 672
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 172
<INCOME-PRETAX> 176
<INCOME-TAX> 277
<INCOME-CONTINUING> (101)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (101)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
