<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
MARK ONE:
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 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 0-11879
VLSI TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2597282
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1109 MCKAY DRIVE, SAN JOSE, CALIFORNIA 95131
------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 434-3100
-------------------------------------------------
(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 / /
Shares outstanding of the Registrant's Common Stock as of March 31, 1995:
36,871,246
1
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
VLSI TECHNOLOGY, INC.
.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME - unaudited
(thousands except share and per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
----------------------------
March 31, April 1,
1995 1994*
------------ ------------
<S> <C> <C>
Net revenues $ 163,035 $ 138,123
Cost of sales 98,961 86,940
------------ ------------
Gross profit 64,074 51,183
------------ ------------
Operating expenses:
Research and development 20,668 18,705
Marketing, general and
administrative 27,775 24,130
------------ ------------
Operating income 15,631 8,348
Interest income and other expenses, net 881 802
Interest expense (1,862) (2,004)
------------ ------------
Income before provision for taxes on income 14,650 7,146
Provision for taxes on income 4,400 1,785
------------ ------------
Net income $ 10,250 $ 5,361
============ ============
Net income per share:
Primary $ .27 $ .15
============ ============
Fully diluted $ .26 $ .15
============ ============
Weighted average common and
common equivalent shares
outstanding:
Primary 38,444,541 36,802,421
============ ============
Fully diluted 41,797,558 39,780,651
============ ============
</TABLE>
* Reclassified to conform to current presentation.
See accompanying Notes to Consolidated Condensed Financial Statements.
2
<PAGE> 3
PART I. (CONTINUED)
Item 1. Financial Statements (continued)
VLSI TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS - unaudited
(thousands)
<TABLE>
<CAPTION>
March 31, December 30,
1995 1994
--------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 76,628 $ 93,310
Liquid investments 23,215 9,801
Accounts receivable, net of allowance for doubtful
accounts and customer returns of $2,100
($2,300 at December 30, 1994) 93,374 80,500
Inventories:
Raw materials 2,872 5,277
Work-in-process 38,981 43,123
Finished goods 13,744 11,296
--------- --------
Total inventories 55,597 59,696
Deferred and refundable income taxes 17,963 17,963
Prepaid expenses and other current assets 3,850 4,966
--------- --------
Total current assets 270,627 266,236
Property, plant and equipment, at cost 530,295 504,723
Accumulated depreciation and amortization (301,381) (285,593)
--------- --------
Net property, plant and equipment 228,914 219,130
Other assets 4,996 4,850
--------- --------
TOTAL ASSETS $ 504,537 $490,216
========= ========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE> 4
PART I. (CONTINUED)
Item 1. Financial Statements (continued)
VLSI TECHNOLOGY, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS - unaudited (continued)
(thousands except per share amounts)
<TABLE>
<CAPTION>
March 31, December 30,
1995 1994
-------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 56,404 $ 52,789
Accrued compensation and benefits 19,840 20,512
Deferred income 9,572 10,276
Reserve for special charge 6,924 7,335
Other accrued liabilities 26,027 21,104
Current capital lease obligations 6,243 7,882
Current portion of long-term debt 7,703 7,634
-------- --------
Total current liabilities 132,713 127,532
Non-current capital lease obligations 4,234 5,017
Long-term debt 89,874 91,787
Deferred income taxes 10,450 10,450
Stockholders' equity:
Preferred Shares, $.01 par value -- --
Common Shares, $.01 par value 369 367
Additional paid-in capital 233,486 231,902
Retained earnings 33,411 23,161
-------- --------
Total stockholders' equity 267,266 255,430
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $504,537 $490,216
======== ========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
4
<PAGE> 5
PART I. (CONTINUED)
Item 1. Financial Statements (continued)
VLSI TECHNOLOGY, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - unaudited
(thousands)
<TABLE>
<CAPTION>
Quarter Ended
---------------------------
March 31, April 1,
1995 1994
---- ----
Increase (decrease) in cash
and cash equivalents
<S> <C> <C>
Operating activities:
Net income $ 10,250 $ 5,361
Adjustments to reconcile net income
to cash generated by operations:
Depreciation and amortization 16,631 14,649
Changes in operating assets and liabilities:
Accounts receivable (12,874) (1,900)
Inventories 4,099 10,006
Accounts payable, accrued liabilities
and deferred income 6,847 (297)
Other 590 (676)
-------- --------
Cash generated by operations 25,543 27,143
-------- --------
Investing activities:
Purchases of liquid investments (21,704) (37,061)
Proceeds from maturities of liquid investments 8,300 27,205
Purchases of property, plant and equipment (25,931) (20,853)
Other (151) (200)
-------- --------
Net cash flow used for investing activities (39,486) (30,909)
-------- --------
Financing activities:
Payments on debt and capital lease obligations (4,266) (4,056)
Issuance of Common Shares, net 1,527 869
-------- --------
Net cash flow used for financing activities (2,739) (3,187)
-------- --------
Net decrease in cash and cash equivalents (16,682) (6,953)
Cash and cash equivalents, beginning of period 93,310 41,536
-------- --------
Cash and cash equivalents, end of period $ 76,628 $ 34,583
======== ========
Supplemental disclosure:
Cash outflows for property, plant and equipment $ 25,931 $ 20,853
Add: Secured equipment loans -- 822
-------- --------
Property, plant and equipment additions $ 25,931 $ 21,675
======== ========
Interest paid $ 877 $ 1,038
======== ========
Income taxes paid, net $ 769 $ 77
======== ========
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
5
<PAGE> 6
PART I. (CONTINUED)
Item 1. Financial Statements (continued)
VLSI TECHNOLOGY, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying interim consolidated condensed financial statements
have been prepared in conformance with generally accepted accounting
principles, consistent with those applied in the VLSI Technology, Inc.
Annual Report on Form 10-K for the year ended December 30, 1994 (the
1994 Annual Report). This Quarterly Report on Form 10-Q (Form 10-Q)
should be read in conjunction with the 1994 Annual Report. The interim
financial statements are unaudited, but reflect all normal recurring
adjustments that are, in the opinion of management, necessary to a fair
statement of results for the interim periods presented. The results for
the quarter ended March 31, 1995 are not necessarily indicative of the
results that may be expected for the year ending December 29, 1995.
2. While most fiscal years consist of 52 weeks, fiscal 1994 consisted of
53 weeks. The extra week is reflected in the first quarter of 1994,
resulting in 14 weeks for the quarter ended April 1, 1994 compared to
13 weeks for the quarter ended March 31, 1995.
3. The 1994 and 1995 year-to-date tax provisions reflect the benefit of
tax credit carryforwards and reduction in valuation reserve for U.S.
deferred taxes.
4. The Company is a named defendant in a lawsuit filed by Texas
Instruments Incorporated (TI) in 1990 claiming patent infringement. For
more information, see Note 4 of Notes to Consolidated Financial
Statements on pages 28 and 29 of the Company's 1994 Annual Report and
Item 1 in Part II of this Form 10-Q.
6
<PAGE> 7
PART I (CONTINUED)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS--FIRST QUARTER OF 1995 COMPARED TO THE FIRST QUARTER OF
1994
This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MDA) should be read in conjunction with the MDA in the 1994 Annual
Report.
The following table summarizes the Company's operating results for the
three-month period ended March 31, 1995 as compared to the three-month period
ended April 1, 1994 (dollars in thousands):
<TABLE>
<CAPTION>
FIRST QUARTER
------------------------------------------------------------------------
1995 1994
-------------------------------------- ----------------------
PERCENT PERCENT PERCENT
OF NET CHANGE OF NET
AMOUNTS REVENUES FROM 1994 AMOUNTS REVENUES
------- -------- --------- ------- --------
<S> <C> <C> <C> <C> <C>
Net revenues $163,035 100.0% 18.0% $138,123 100.0%
Cost of sales 98,961 60.7 13.8 86,940 62.9
-------- ----- -------- -----
Gross profit 64,074 39.3 25.2 51,183 37.1
Research & development 20,668 12.7 10.5 18,705 13.6
Marketing, general and
administrative 27,775 17.0 15.1 24,130 17.5
-------- ----- -------- -----
Operating income 15,631 9.6 87.2 8,348 6.0
Interest expense &
other, net 981 0.6 (18.4) 1,202 0.8
Income taxes 4,400 2.7 146.5 1,785 1.3
-------- ----- -------- -----
Net income $ 10,250 6.3 91.2 $ 5,361 3.9
======== ===== ======== =====
</TABLE>
The Company earned net income of $10.3 million in the first quarter of 1995,
compared to net income of $5.4 million in the first quarter of 1994. This change
reflects higher revenues, improved gross profit as a percentage of net revenues
(gross margin) and lower operating expenses as a percentage of net revenues,
partially offset by a higher tax rate.
Net revenues in the first quarter of 1995 increased 18.0% from the comparable
1994 period and 9.2% over the fourth quarter of 1994. The increase over the
first quarter of 1994 reflects increased net revenues from higher average sales
prices of X86-based personal computer (PC) devices and from increased unit
volumes of Application-Specific Integrated Circuits, especially communications
devices. The higher revenue in the first quarter of 1995 over the fourth quarter
of 1994 reflects increased unit volumes for wireless devices, devices for
personal computers designed by Apple Computer, Inc. and X86-based devices.
Software net revenues were down approximately 10% compared to both 1994 periods.
International net revenues (including export sales) increased 39.6%, accounting
for 51.3% of net revenues in the first quarter of 1995 compared to 43.4% of net
revenues in the first quarter of 1994, primarily due to increases in sales to
the Europe region. European net revenues increased from the comparable 1994
period due to growth in the Company's shipments of communications devices in
that region. Export sales to the Asia-Pacific area in the first quarter of 1995
increased over the first quarter of 1994, due to an increase in shipments of
devices for the PC market to that area.
7
<PAGE> 8
PART I (CONTINUED)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
RESULTS OF OPERATIONS--FIRST QUARTER OF 1995 COMPARED TO THE FIRST QUARTER OF
1994 (continued)
Gross margins increased from 37.1% in the first quarter of 1994 to 39.3% in the
first quarter of 1995. This result was driven by further improvement in sales
mix to products with higher gross margins and improved manufacturing
efficiencies. Gross margins were lower in the first quarter of 1995 than the
fourth quarter of 1994, reflecting the effect of a change in sales mix between
quarters. Gross margins in the PC chip set business are subject to pricing
pressures, which are expected to intensify in the second half of 1995 due to
increased competition from Intel Corporation (Intel), a major supplier in the PC
market.
R&D expenditures increased $2.0 million (10.5%) in the first quarter of 1995
over expenditures in the same 1994 period (but decreased as a percentage of net
revenues from 13.6% to 12.7%), reflecting continuing investment in new products
and package and process technologies. R&D expenditures in the first quarter of
1995 focused on design environment and process development and development of
products for the consumer and communications markets.
Marketing, general and administrative expenses for the first quarter of 1995
increased $3.6 million (15.1%) from the first quarter of the prior year but
decreased as a percentage of net revenues from 17.5% to 17.0%. The dollar
increase primarily reflects increased sales costs associated with higher revenue
levels and increased marketing activities. The recently weaker U.S. dollar in
relation to the Japanese Yen and major European currencies also contributed to
the increased expenses.
Interest expense and other, net, decreased to $1.0 million in the current
quarter from $1.2 million in the same period a year ago. Interest income on the
Company's overall higher cash balances increased, reflecting higher investment
yields than in the first quarter of 1994.
The Company's tax provision of 30% and 25% in the first quarters of 1995 and
1994, respectively, reflect utilization of tax credit carryforwards and
reduction in valuation reserve for U.S. deferred taxes.
FACTORS AFFECTING FUTURE RESULTS
As described by the following factors, as well as other factors affecting the
Company's operating results, past financial performance should not be considered
to be a reliable indicator of future performance, and investors should not use
historical trends to anticipate results or trends in future periods.
As discussed in the 1994 Annual Report, the semiconductor industry has a history
of cyclicality and is characterized by short product life cycles, continuous
evolution of process technology, high fixed costs, additions of manufacturing
capacity in large increments and wide fluctuations in product supply and demand.
In addition, competition is intense, particularly in core logic X86 chip sets
where Intel has become a major supplier of personal computer chip sets and
motherboards. The Company's products are susceptible to severe pricing pressures
and the Company continually attempts to pursue cost reductions, including
process enhancements and other manufacturing cost reductions in order to
maintain favorable gross margins. Future gross margins will also vary with the
general condition of the economy, customer acceptance of new technologies and
products, product functionality and capabilities, shifts in product mix,
manufacturing yields and the effect of ongoing manufacturing cost reduction
activities.
8
<PAGE> 9
PART I (CONTINUED)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
FACTORS AFFECTING FUTURE RESULTS (continued)
The Company expects to continue to invest in the research and development of new
products for all of its market segments in 1995. New product development often
requires long-term forecasting of markets, market trends, development and
implementation of new processes and technologies and a substantial capital
commitment. No assurance can be given that the Company's product and process
development efforts will be successful, that new product introductions will
achieve market acceptance or that the markets in question will develop.
Approximately two-thirds of the Company's net revenues for the first quarter of
1995 were derived from sales to its top 20 customers, a large percentage of
which are in the personal computer business. In addition, shipments to a single
customer in the personal computer business, Compaq Computer Corporation,
accounted for 11.2% of net revenues during the first quarter of 1995 compared to
20.7% in the first quarter of 1994. As a result of the concentration of the
Company's customer base, loss or cancellation of business from any of these
customers, significant changes in scheduled deliveries to any of these customers
or decreases in the prices of products sold to any of these customers could
materially adversely impact the Company's results of operations.
The Company sells its Application-Specific Standard Products (ASSPs) under terms
and conditions customarily found in the semiconductor industry. Sales of these
products are subject to customer cancellation with limited advance notice prior
to shipment. Due to the Company's relatively narrow customer base for certain
ASSPs and the short product life cycles of such products, the Company could be
unexpectedly left with significant inventory exposure, which could have a
material adverse effect on the Company's operating results.
The semiconductor industry is currently facing capacity constraints in wafer
manufacturing, assembly operations and test operations. While the Company
operates and maintains its own wafer manufacturing facilities, the Company
relies on two outside suppliers for production of wafers and on several
suppliers for the bulk of its assembly and test operations. Although the Company
has ongoing relationships with these suppliers, the Company has only one
contract for guaranteed capacity. While the one guaranteed contract is with a
wafer supplier, the other wafer supplier has reduced its 1995 allocation of
wafers to VLSI. If the Company is unable to receive sufficient manufacturing
capacity from suppliers, the Company may be unable to meet the demands of its
customers for its products, which may result in a material adverse impact on the
Company's operations.
Due to the industry-wide manufacturing capacity shortage, the Company is
accelerating the expansion and upgrading of its manufacturing capacity. These
activities require significant investments in capital equipment and facilities.
Any significant expansion or upgrade of semiconductor manufacturing capacity has
attendant risks. Currently, the Company is expanding and upgrading its
manufacturing facility in San Jose, California by converting production to a
6-inch CMOS wafer process. Additionally, the Company's San Antonio, Texas
facility is being converted to 100% sub-0.8-micron CMOS processes. The work
effort associated with the changes to these facilities could result in a
disruption to manufacturing output as well as wafer yields. Any delays, problems
or lack of successful completion of the Company's facilities conversion efforts
could have a material adverse impact on future operating results.
Other factors that may adversely effect VLSI's future results include pending
litigation and contingencies, environmental regulations and earthquakes. (See
the 1994 Annual Report for a more detailed discussion of Factors Affecting
Future Results.)
9
<PAGE> 10
PART I (CONTINUED)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
FACTORS AFFECTING FUTURE RESULTS (continued)
The status of the Company's pending material legal proceeding is set forth in
Item 1, Part II of this Form 10-Q. Although the trial is currently in progress,
due to the inherent uncertainties of litigation, the Company cannot accurately
predict the eventual outcome of this matter with TI. Management believes the
ultimate outcome of this matter will not result in a material adverse effect on
VLSI's consolidated financial position or results of operations. An unfavorable
outcome could, however, have an adverse effect on VLSI's future business
operations and could be material to any particular quarter's results of
operations. In addition, the ongoing costs of defending lawsuits utilizes cash
and management resources.
LIQUIDITY AND CAPITAL RESOURCES
VLSI generates cash from operations, equipment financings and sales of its
securities. Principal uses of cash include purchases of capital equipment needed
for semiconductor manufacturing and engineering and payments of debt and lease
obligations.
At March 31, 1995, total cash, cash equivalents and liquid investments decreased
$3.3 million from the 1994 fiscal year-end balance due primarily to purchases of
property, plant and equipment and payments of debt and capital leases in the
first three months of 1995. Working capital decreased to $137.9 million at March
31, 1995 compared to $138.7 million at December 30, 1994.
During the three-month period ended March 31, 1995, the Company generated $25.5
million of cash from operations, a 5.9% decrease from the $27.1 million of cash
generated for the three-month period ended April 1, 1994. Accounts receivable
were $12.9 million higher at March 31, 1995 than at December 30, 1994,
reflecting proportionately higher sales volumes in the latter part of the
quarter in 1995. Concurrently, inventory levels declined $4.1 million from
December 30, 1994 levels. The inventory decrease reflects, in part, VLSI
arranging for its assembly subcontractors to supply packaging materials rather
than VLSI acquiring these components, as well as decreases in certain PC device
inventories. Accounts payable and accrued liabilities at March 31, 1995
increased by $7.5 million from December 30, 1994 as a result of higher levels of
spending for fixed assets and an increase in accrued income taxes.
Cash used for investing activities was $39.5 million for the three-month period
ended March 31, 1995, as compared to $30.9 million for the three-month period
ended April 1, 1994. The large increase is a result of the Company's shifting
its cash equivalents into liquid investments in order to take advantage of
higher interest rates for liquid investments. VLSI invested $25.9 million in
property, plant and equipment during the first three months of 1995 compared to
$21.7 million in the comparable 1994 period. Capital additions during 1995 were
financed by cash. The 1995 and 1994 three-month investments in property, plant
and equipment included acquisition of equipment for sub-micron wafer
fabrication, upgrades to manufacturing and office facilities and computers and
software to support research and development activity. VLSI currently estimates
that total capital expenditures for 1995 could approximate $150 million as the
Company will begin facilitizing the third module of its San Antonio, Texas
facility. Total capital expenditures will primarily support increases in
sub-0.8-micron wafer fabrication capability. The Company expects to utilize cash
from operations and equipment financing for its 1995 capital expenditures.
10
<PAGE> 11
PART I (CONTINUED)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
LIQUIDITY AND CAPITAL RESOURCES (continued)
Cash used for financing activities was $2.7 million in the first three months of
1995 compared to $3.2 million in the same 1994 period. This decrease in net
expenditures reflects higher proceeds from the issuance of Common Shares in
1995. Unused committed credit facilities approximated $76.6 million at March 31,
1995.
In January and February 1995, Intel sold all 5.36 million shares of the
Company's Common Stock it had previously held. Intel currently holds a warrant
to purchase approximately 2.68 million shares of the Company's Common Stock at
an exercise price of $11.69 per share. The warrant expires in August 1995.
VLSI believes that its existing cash balances, together with cash flow from
operations and available credit facilities, will be sufficient to meet its
liquidity and capital expenditure needs through 1995. While the Company believes
that its current capital resources are sufficient to meet its near-term needs,
in order to meet its longer-term needs, VLSI continues to investigate the
possibility of generating financial resources through technology or
manufacturing partnerships, as well as from equity or debt financing based on
market conditions. There can be no assurance that the Company will be able to
obtain future financing when needed or on favorable terms.
The Company's Convertible Subordinated Debentures (Debentures) are convertible
into Common Stock of VLSI at any time prior to maturity, unless previously
redeemed, at a conversion price of $22.00 per share, subject to adjustment under
certain conditions. Based on the current estimated 1995 tax rate of 30%, the
Debentures become dilutive to the Company's earnings per share when earnings per
share exceed $0.27 per quarter. VLSI Common Stock traded as high as $24 per
share in May 1995. If the Debentures are converted, the effect will be an
improvement to liquidity, and a reduction in the Company's earnings per share.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to Item 3 of the Company's Annual Report on Form 10-K for the
fiscal year ended December 30, 1994 (the 1994 Form 10-K) for a discussion of
certain pending legal proceedings. Except as discussed below, there have been no
material developments in any of such matters since the filing of the Company's
1994 Form 10-K.
Texas Instruments
The Company is a named defendant in a lawsuit filed by TI in 1990 claiming
patent infringement. For more information, refer to the Company's 1994 Form 10-K
page 11 and Note 4 of Notes to Consolidated Financial Statements on pages 33 and
34.
With respect to the TI actions against the Company and four other defendants, in
February 1992, the United States International Trade Commission (ITC) affirmed
the decision of the Administrative Law Judge that the Company's old plastic
encapsulation gating process infringed TI's patent, but found the Company's
newly developed process to be non-infringing. The U.S. Executive Branch affirmed
the order in the second quarter of 1992. The United States Court of Appeal, for
the Federal Circuit, affirmed the ITC decision in the first quarter of 1993. In
the first quarter of 1994, the parties filed cross motions for summary judgment,
all of which were denied in August 1994. A trial with respect to TI's patent
infringement action in the United States District Court for the Northern
District of Texas, Dallas Division, commenced in April 1995 and is continuing as
of the filing of this Form 10-Q.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits - See Index to Exhibits on Page 14.
(b) Reports on Form 8-K - None.
12
<PAGE> 13
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.
VLSI TECHNOLOGY, INC.
(Registrant)
Date May 5, 1995 By: Gregory K. Hinckley
--------------------- ---------------------------------
Gregory K. Hinckley
Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
Date May 5, 1995 By: Balakrishnan S. Iyer
--------------------- ---------------------------------
Balakrishnan S. Iyer
Vice President, Controller and Chief
Accounting Officer
(Principal Accounting Officer)
13
<PAGE> 14
VLSI TECHNOLOGY, INC.
---------------------
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C>
11.1 Calculation of Earnings Per Share
27.1 Financial Data Schedule
</TABLE>
14
<PAGE> 1
Exhibit 11.1
VLSI TECHNOLOGY, INC.
CALCULATION OF EARNINGS PER SHARE - unaudited
(thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
March 31, April 1,
Primary earnings per share 1995 1994
- -------------------------- ---- ----
<S> <C> <C>
Net income $10,250 $ 5,361
======= =======
Average number of common and common
equivalent shares:
Average common shares outstanding 36,744 35,272
Dilutive options 1,701 1,530
------- -------
Average number of common and
common equivalent shares 38,445 36,802
======= =======
Earnings per common and common
equivalent share $ .27 $ .15
======= =======
Fully diluted earnings per share
- --------------------------------
Net income $10,250 $ 5,361
Add interest expense on convertible
subordinated debentures, net of tax
effect 704 755
------- -------
Adjusted net income $10,954 $ 6,116
======= =======
Average number of common and common
equivalent shares on a fully diluted
basis:
Average common shares outstanding 36,744 35,272
Dilutive options 2,440 1,895
Conversion of convertible debentures 2,614 2,614
------- -------
Average number of common and
common equivalent shares on a fully
diluted basis 41,798 39,781
======= =======
Fully diluted earnings per common
and common equivalent share $ .26 $ .15
======= =======
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements in the Quarterly Report on Form 10-Q of VLSI Technology,
Inc. for the quarter ended March 31, 1995 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-29-1995
<PERIOD-START> DEC-31-1994
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 76,628
<SECURITIES> 23,215
<RECEIVABLES> 95,474
<ALLOWANCES> (2,100)
<INVENTORY> 55,597
<CURRENT-ASSETS> 270,627
<PP&E> 530,295
<DEPRECIATION> (301,381)
<TOTAL-ASSETS> 504,537
<CURRENT-LIABILITIES> 132,713
<BONDS> 94,108
<COMMON> 369
0
0
<OTHER-SE> 266,897
<TOTAL-LIABILITY-AND-EQUITY> 504,537
<SALES> 163,035
<TOTAL-REVENUES> 163,035
<CGS> 98,961
<TOTAL-COSTS> 98,961
<OTHER-EXPENSES> 48,468
<LOSS-PROVISION> (25)
<INTEREST-EXPENSE> 1,862
<INCOME-PRETAX> 14,650
<INCOME-TAX> 4,400
<INCOME-CONTINUING> 10,250
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,250
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.26
</TABLE>
