U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- ---- Exchange Act of 1934
For the quarterly period ended September 30, 1996 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 No. 0-13836
SILICON VALLEY RESEARCH, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2743735
- --------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
6360 San Ignacio Avenue San Jose, CA 95119-1231
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(408) 361-0333
- --------------------------------------------------------------------------------
Registrant's telephone number, including area code
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date.
Common Shares Outstanding at September 30, 1996: 11,441,892
This report, containing all exhibits, contains 13 pages.
The exhibit index is on page 11.
<PAGE>
<TABLE>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
INDEX
<CAPTION>
Pages
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1996 and September 30, 1996 3
Consolidated Statements of Operations -
Three and Six Months Ended September 30, 1995 and 1996 4
Consolidated Condensed Statements of Cash Flows -
Three and Six Months Ended September 30, 1995 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 7-10
Part II. OTHER INFORMATION 10-11
Item 1 Legal Proceedings
Item 2 Changes in Securities
Item 3 Defaults Upon Senior Securities
Item 4 Submission of Matters to a Vote of
Securities Holders
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
Signature 12
Exhibit 27. Financial Data Schedule 13
</TABLE>
Page 2 of 13
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
Assets March 31, 1996 September 30, 1996
- ------ -------------- ------------------
(Unaudited)
Current Assets:
Cash and cash equivalents $ 10,238 $ 6,073
Accounts receivable, net of allowances of
$25 and $137, respectively 4,650 4,829
Prepaid expenses and other current assets 286 704
-------- --------
15,174 11,606
Fixed assets, net 537 764
Other assets, net 1,381 5,133
-------- --------
$ 17,092 $ 17,503
======== ========
Liabilities and Shareholders' Equity
- ------------------------------------
Current Liabilities:
Accounts payable $ 321 $ 464
Accrued expenses 1,329 1,599
Deferred revenue 1,537 3,369
Current portion of long-term debt 139 210
-------- --------
3,326 5,642
Long-term debt 38 19
-------- --------
3,364 5,661
-------- --------
Shareholders' Equity:
Preferred stock, no par value:
Authorized: 1,000 shares
Issued and outstanding: none -- --
Common stock, no par value:
Authorized: 25,000 shares
Issued and outstanding: 11,308 shares
at March 31, 1996 and 11,442 shares
at September 30, 1996 31,171 31,413
Accumulated deficit (17,423) (19,536)
Cumulative translation adjustment (20) (35)
-------- --------
13,728 11,842
-------- --------
$ 17,092 $ 17,503
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 3 of 13
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<TABLE>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
1995 1996 1995 1996
---------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
License fees and other $ 1,629 $ 399 $ 3,508 $ 2,857
Maintenance fees 867 761 1,631 1,414
------- ------- -------- -------
Total revenue 2,496 1,160 5,139 4,271
------- ------- -------- -------
Cost of revenue:
Cost of license fees and other 88 215 154 334
Cost of maintenance fees 98 137 222 236
------- ------- -------- -------
Total cost of revenue 186 352 376 570
------- ------- -------- -------
Gross margin 2,310 808 4,763 3,701
------- ------- -------- -------
Operating expenses:
Engineering, research and development 820 844 1,634 1,512
Selling and marketing 1,224 1,781 2,584 3,349
General and administrative 194 695 384 1,103
------- ------- -------- -------
Total operating expenses 2,238 3,320 4,602 5,964
------- ------- -------- -------
Operating income(loss) 72 (2,512) 161 (2,263)
------- ------- -------- -------
Other income (expense):
Interest income 15 87 21 199
Interest expense (18) (8) (46) (16)
Other, net (6) 1 (3) 2
------- ------- --------- -------
Total other income (expense) (9) 80 (28) 185
------- ------- --------- -------
Income(loss) before provision for
income taxes 63 (2,432) 133 (2,078)
Provision for income taxes -- -- -- 35
------- ------- --------- -------
Net income(loss) $ 63 $(2,432) $ 133 $(2,113)
======= ======= ======== =======
Net income(loss) per share $ 0.01 $ (0.20) $ 0.01 $ (0.17)
======= ======= ======== ======
Shares used in per share calculation 10,527 12,271 10,055 12,406
======= ======= ======== ======
<FN>
The accompanying notes are an integral part of these consolidated
financial statements.
</FN>
</TABLE>
Page 4 of 13
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SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
(In thousands)
Six Months Ended
September 30,
1995 1996
-------- --------
Cash Flows from Operating Activities:
Net income (loss) $ 133 $ (2,113)
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 391 679
Changes in assets and liabilities:
Accounts receivable (1,092) (245)
Prepaid expenses and other current assets (114) (420)
Accounts payable 142 145
Accrued expenses (411) 277
Deferred revenue (151) 1,853
Other, net (5) (2,164)
-------- --------
Net cash used in operating activities (1,107) (1,988)
-------- --------
Cash Flows from Investing Activities:
Acquisition of fixed assets (310) (283)
Software production costs and software licenses (413) (2,102)
-------- --------
Net cash used in investing activities (723) (2,385)
-------- --------
Cash Flows from Financing Activities:
Principal payments of long-term debt and
other liabilities (332) (68)
Proceeds from issuance of common stock 3,352 242
-------- --------
Net cash provided by financing activities 3,020 174
-------- --------
Effect of exchange rate changes on cash -- 34
-------- --------
Net increase (decrease) in cash and
cash equivalents 1,190 (4,165)
Cash and cash equivalents at beginning
of period 1,248 10,238
-------- --------
Cash and cash equivalents at end
of period $ 2,438 $ 6,073
======== ========
The accompanying notes are an integral part of these consolidated
financial statements.
Page 5 of 13
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SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996 - Unaudited
(In thousands)
Note 1: The accompanying consolidated financial statements have been prepared by
the Company, pursuant to the rules and regulations of the Securities and
Exchange Commission for interim financial statements. Therefore, they do not
include all the disclosures which were presented in the Company's annual report
on Form 10-K. These financial statements do not include all disclosures required
by generally accepted accounting principles and accordingly, should be read in
conjunction with the consolidated financial statements and notes included as
part of the Company's latest annual report on Form 10-K.
In the opinion of management, the consolidated financial statements include all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the consolidated financial position, results of operations and
cash flows for the interim period. The results of operations presented are not
necessarily indicative of the results to be expected for the full year or for
any other period.
Note 2: Statement of Cash Flows Information Six Months Ended
September 30,
1995 1996
------- -------
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 46 $ 16
Income taxes $ -- $ 13
Note 3: Other Assets March 31, September 30,
Other assets comprise: 1996 1996
------- -------
Software development costs $ 1,133 $ 1,697
Software licenses 1,211 2,744
------- -------
2,344 4,441
Less accumulated amortization (1,330) (1,833)
------- -------
1,014 2,608
Loan to officer 100 217
Prepaid royalties -- 1,213
Long term receivables -- 820
Other 267 275
------- -------
$ 1,381 $ 5,133
======= =======
In June 1996, the Company entered into an agreement whereby Silicon Valley
Research was granted the exclusive marketing rights to Bell Labs' CLOVER line of
deep submicron verification products worldwide, with the exception of Japan and
Taiwan, where the Company will co-market with Bell Labs' existing distributors.
Pursuant to the agreement, the Company agreed to make future payments to Bell
Labs as follows: $500 in fiscal 1997, $1,250 in fiscal 1998, and $1,000 in
fiscal 1999, which are guaranteed.
During the quarter ended September 30, 1996, the Company received a large
purchase order for products in which the license fees will be paid in
installments over fifteen months. Accordingly, the Company will recognize
revenue on this sale as the payments become due under the purchase order.
Note 4: Litigation
The Company is subject to certain types of litigation during its normal course
of business. In December, 1994, the Company was named as defendant in an action
brought by a competitor in the Santa Clara County Superior Court alleging unfair
competition and breach of contract. The third amended complaint, the operative
pleading, alleges unfair competition, breach of contract, breach of implied
covenant of good faith and fair dealing, unjust enrichment and fraud. The
plaintiff is seeking attorneys' fees and damages, and enforcement of the
contract. The litigation is in the discovery stage and the ultimate outcome
cannot presently be determined. Accordingly, no provision for any liability that
may result upon adjudication has been made in the consolidated financial
statements.
Page 6 of 13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(In thousands)
This Management's Discussion and Analysis of Financial Condition and Results of
Operations includes a number of forward-looking statements which reflect the
Company's current view with respect to future events and financial performance.
These forward-looking statements are subject to certain risks and uncertainties,
including those discussed in the Other Factors section of this Item 2, elsewhere
in this Form 10-Q and as set forth in the Company's form 10-K on file with the
SEC that could cause actual results to differ materially from historical results
or those anticipated. In this report, the words "anticipates," "believes,"
"expects," "intends," "future," and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
RESULTS OF OPERATIONS
REVENUE
Revenue for the second quarter of fiscal year 1997, which ended September 30,
1996, decreased to $1,160 from $2,496 in the second quarter a year ago. The 54%
decrease in revenues was due to lower than anticipated sales during the quarter
ended September 30, 1996. Also contributing was the continued slowness in the
marketplace, particularly in the Japanese market. During the quarter, the
Company received a large purchase order for products in which the license fees
will be paid in installments over fifteen months. Accordingly, the Company will
recognize revenue on this sale as the payments become due under the purchase
order. Revenue for the six month period ended September 30, 1996, decreased to
$4,271 from $5,139 over the six month period ended September 30, 1995. This 17%
decrease is the result of the lower than anticipated revenues in the quarter
ended September 30, 1996 and the large deferred order partially offset by
increased sales in the prior quarter. International sales, primarily Japan and
the Far East accounted for 29% of total revenue in the second quarter of fiscal
1997 compared to 49% in the second quarter a year ago.
The Company's expense levels are based, in part, on its expectations as to
future revenue levels, which are difficult to predict. A substantial portion of
the Company's revenues in each quarter results from shipments during the last
month of that quarter, and for that reason among others, the Company's revenues
are subject to significant quarterly fluctuations. If revenue levels are below
expectations, as in the quarter ended September 30, 1996, operating results may
be materially and adversely affected. In addition, the Company's quarterly and
annual results may fluctuate as a result of many factors, including the size and
timing of software license fees, timing of co-development projects with
customers, timing of operating expenditures, increased competition, new product
announcements and releases by the Company and its competitors, gain or loss of
significant customers or distributors, expense levels, renewal of maintenance
contracts, pricing changes by the Company or its competitors, personnel changes,
foreign currency exchange rates, and economic conditions generally and in the
electronics industry specifically.
COST OF REVENUE
Cost of license fees and other for the second quarter of fiscal year 1997 was
$215, compared to $88 in the second quarter of fiscal 1996. Cost of sales of
license fees for the six months ended September 30, 1996 was $334, compared to
$154 in the six months ended September 30, 1995. Cost of sales of license fees
is primarily the amortization of software development costs and royalty payments
due to third parties and both increased for the quarter and six months ended
September 30, 1996.
Cost of maintenance fees for the second quarter of fiscal year 1997 was $137
compared to $98 in the second quarter of fiscal 1996. Cost of maintenance fees
for the six months ended September 30, 1996 was $236 compared to $222 for the
six months ended September 30, 1995. Cost of maintenance fees is primarily the
cost of providing technical support and technical documentation.
ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES
Engineering, research and development expenses for the second quarter of fiscal
year 1997 were $844 compared to $820 in the second quarter a year ago. Comparing
the second quarter of fiscal 1997 and the second quarter of fiscal 1996,
engineering, research and development expenses were 73% and 33% of total
revenue, respectively. The slight dollar increase in engineering, research and
development expenses during this period is due to depreciation of improved
capital equipment and software acquisitions partially offset by
Page 7 of 13
<PAGE>
capitalized software development costs and reduced costs in Taiwan with lower
salary and expense rates. The percentage increase was primarily due to lower
than anticipated revenues in the second quarter of fiscal 1997.
Engineering, research and development expenses for the six months ended
September 30, 1996, were $1,512 compared to $1,634 for the six months ended
September 30, 1995. Comparing these periods, engineering, research and
development expenses were 35% and 32% of total revenue, respectively. The
decrease in absolute dollars is due to lower costs in the first quarter of
fiscal 1997 with increased capitalized software development costs and a
temporary reduction in headcount in the United States with increases in Taiwan
at lower salary and expense rates. The percentage increase was primarily due to
lower than anticipated revenues in the second quarter of fiscal 1997. The
Company continues to strengthen its engineering capabilities with increased
staffing and increased emphasis on development of new technology.
SELLING & MARKETING EXPENSES
Selling and marketing expenses for the second quarter of fiscal year 1997
increased to $1,781 from $1,224 in the second quarter a year ago. In the second
quarter of fiscal 1997 and the second quarter of fiscal 1996, selling and
marketing expenses were 154% and 49% of total revenue, respectively. Selling and
marketing expenses for the six months ended September 30, 1996, increased to
$3,349 from $2,584 in the six months ended September 30, 1995. Comparing the six
month periods, selling and marketing expenses were 78% and 50% of total revenue,
respectively. The dollar increases are due to the addition of sales and
marketing personnel and an increase in the reserve for bad debt. The percentage
increases were primarily due to lower than anticipated revenues, however, the
Company expects that selling and marketing expenses will continue to increase if
revenue increases.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased to $695 for the second quarter of
fiscal year 1997, from $194 in the second quarter a year ago. In the second
quarter of fiscal 1997 and the second quarter of fiscal 1996, selling, general
and administrative expenses were 60%, and 8% of total revenue, respectively.
General and administrative expenses for the six months ended September 30, 1996,
increased to $1,103 from $384 in the six months ended September 30, 1995.
Comparing the six month periods, general and administrative expenses were 26%
and 7% of total revenue, respectively. The absolute dollar increase is
attributed to increases to the senior management team, relocation expenses,
consulting expenses and legal expenses and the percentage increase is primarily
due to reduced revenues. The Company expects that general and administrative
expenses will decline in future quarters due to lower head count and cost
controls.
OTHER INCOME (EXPENSE)
Other income (expense) increased to $80 from $(9) comparing the second quarter
of fiscal year 1997 to the second quarter of fiscal 1996. Other income (expense)
increased to $185 from $(28) comparing the six months ended September 30, 1996
with the six months ended September 30, 1995. Other expenses are primarily
interest income and expense and the increases are due to investing the proceeds
received in the secondary offering.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended September 30, 1996, cash and cash equivalents
decreased $4,165 from $10,238 to $6,073. This decrease resulted primarily from
cash used by operating activities of $1,988 and $2,385 of cash used for
investing activities. The Company's primary unused sources of funds at September
30, 1996, consisted of cash and cash equivalents of approximately $6,073 and a
bank line of credit of $2,000. The Company believes its cash and cash generated
from operations and available borrowings will be sufficient to finance its
operations for at least the next twelve months. The Company's cash requirements
in the future may also be financed through additional equity or debt financings.
There can be no assurance that such financing can be obtained at favorable
terms, if at all. The Company's open commitments for the purchase of capital
assets as of September 30, 1996 were approximately $100.
The Company is currently engaged in litigation with Mentor Graphics. Regardless
of the outcome of this pending litigation, the litigation may result in
substantial cost and expenses to the Company and significant diversion of
efforts by the Company's technical and management personnel. In addition, an
adverse ruling in the litigation could have a material adverse effect on the
Company's business, operating results or financial condition.
Page 8 of 13
<PAGE>
OTHER FACTORS AFFECTING FUTURE RESULTS OF OPERATIONS
Revenues from sales of the SVR GARDS family of products have historically
represented a substantial majority of the Company's revenues. Although the
Company has recently introduced its SVR FloorPlacer and SVR SonIC products, the
Company expects that revenues from the sale of SVR GARDS products will continue
to account for a significant portion of the Company's revenues for the
foreseeable future. The life cycles of the Company's products are difficult to
predict due to the effect of new product introductions or product enhancements
by the Company or its competitors, market acceptance of new and enhanced
versions of the Company's products and competition in the Company's marketplace.
Declines in the demand for the SVR GARDS family of products, whether as a result
of competition, technological change, price reductions or otherwise, could have
a material adverse effect on the Company's business, operating results and
financial condition.
The EDA industry is characterized by extremely rapid technological change,
frequent new product introductions and enhancements, evolving industry standards
and rapidly changing customer requirements. The development of more complex ICs
embodying new technologies will require increasingly sophisticated design tools.
The Company's future results of operations will depend, in part, upon its
ability to enhance its current products and to develop and introduce new
products on a timely and cost-effective basis that will keep pace with
technological developments and evolving industry standards and methodologies, as
well as address the increasingly sophisticated needs of the Company's customers.
The Company has in the past and may in the future experience delays in new
product development and product enhancements. The Company began commercial
shipments of its new SVR FloorPlacer software products in the quarter ended
March 31, 1995, and of its new SVR SonIC software products in the quarter ended
June 30, 1995. There can be no assurance that these new products will gain
market acceptance or that the Company will be successful in developing and
marketing product enhancements or other new products that respond to
technological change, evolving industry standards and changing customer
requirements, that the Company will not experience difficulties that could delay
or prevent the successful development, introduction and marketing of these
products or product enhancements, or that its new products and product
enhancements will adequately meet the requirements of the marketplace and
achieve any significant degree of market acceptance. In addition, all of the
Company's current products operate in, and planned future products will operate
in, the Unix operating system. In the event that another operating system, such
as Windows NT, were to achieve broad acceptance in the EDA industry, the Company
would be required to port its products to such an operating system, which would
be costly and time consuming and could have a material adverse effect on the
Company's business, operating results or financial condition. Failure of the
Company, for technological or other reasons, to develop and introduce new
products and product enhancements in a timely and cost-effective manner would
have a material and adverse effect on the Company's business, operating results
and financial condition. In addition, the introduction or even announcement of
products by the Company or one or more of its competitors embodying new
technologies or changes in industry standards or customer requirements could
render the Company's existing products obsolete or unmarketable. Such deferment
of purchases could have a material adverse effect on the Company's business,
operating results or financial condition.
Software products as complex as those offered by the Company may contain defects
or failures when introduced or when new versions are released. The Company has,
in the past, discovered software defects in certain of its products and may
experience delays or lost revenue to correct such defects in the future.
Although the Company has not experienced material adverse effects resulting from
any such defects to date, there can be no assurance that, despite testing by the
Company, errors will not be found in new products or releases after commencement
of commercial shipments, resulting in loss of market share or failure to achieve
market acceptance. Any such occurrence could have a material effect upon the
Company's business, operating results or financial condition.
A small number of customers account for a significant percentage of the
Company's total revenue. There can be no assurance that sales to these entities,
individually or as a group, will reach or exceed historical levels in any future
period. Any substantial decrease in sales to one or more of these customers
could have a material adverse effect on the Company's business, operating
results or financial condition. The Company currently sells and markets its
products overseas, other than in Japan, through a limited number of
distributors. The Company hired new distributors in Taiwan, Korea, Europe and
Singapore within the last year. The Company has little history of performance by
its new distributors. In addition, there can be no assurance that the
distributors will be able to successfully distribute and support the Company's
products on a timely basis or that such distributors will not reduce their
efforts devoted to selling the Company's products or terminate their
Page 9 of 13
<PAGE>
relationship with the Company as a result of competition with other suppliers'
products. The loss of or changes in the relationship with or performance by one
or more of the Company's international distributors could have a material
adverse effect on the Company's business, results of operations and financial
condition. There can also be no assurance that the Company's distributor
strategy will be successful or that the Company will be able to retain current
distributors or to identify new distributors in the future that are acceptable
to the Company.
The licensing and sales of the Company's software products generally involves a
significant commitment of capital by prospective customers, with the attendant
delays frequently associated with large capital expenditures and lengthy
acceptance procedures. For these and other reasons, the sales cycle associated
with the licensing of the Company's products is typically lengthy and subject to
a number of significant risks over which the Company has little or no control.
Because the timing of customer orders is hard to predict, the Company believes
that its quarterly operating results are likely to vary significantly in the
future. Actual results of the Company could vary materially as a result of
factors, including, without limitation, the high average selling price and long
sales cycle for the Company's products, the relatively small number of orders
per quarter, dependence on sales to a limited number of large customers, timing
of receipt of orders, successful product introduction and acceptance of the
Company's products and increased competition.
The Company is dependent upon the semiconductor and more generally, the
electronics industries. Each of these industries is characterized by rapid
technological change, short product life cycles, fluctuations in manufacturing
capacity and pricing and gross margin pressures. Each of these industries is
highly cyclical and has periodically experienced significant downturns, often in
connection with, or in anticipation of declines in general economic conditions
during which the number of new IC design projects often decreases. Purchases of
new licenses from the Company are largely dependent upon the commencement of new
design projects, and factors negatively affecting any of these industries could
have a material adverse effect on the Company's business, operating results or
financial condition. The Company has experienced some order delays as the
semiconductor industry is experiencing a slowdown. The Company's business,
operating results and financial condition may, in the future, reflect
substantial fluctuations from period to period as a consequence of patterns and
general economic conditions in either the semiconductor or electronics industry.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings: Mentor Graphics filed a motion for summary
adjudication with the court on August 21, 1996. A hearing was
held on the motion on November 7, 1996, and the motion was
denied. There can be no assurance that there will be any
resolution of the litigation on terms satisfactory to the
Company.
Item 2. Changes in Securities: Not Applicable
Item 3. Defaults Upon Senior Securities: Not Applicable
Item 4. Submission of Matters to a Vote of Securities Holders:
(A) On September 19, 1996, the Annual Meeting of the
Shareholders of the Registrant was held. A total of 9,428,634
shares or approximately 83% of the shares outstanding were
represented at this meeting.
(B) At the meeting, the Shareholders elected the following
individuals as Directors with 9,270,379 votes in favor and
158,255 votes withheld: R. Anderson, G. Abood, T. Sherby, Y.
Nishi, B. Huberman, J. Doyle and the following individual, Roy
Rogers, as Director with 9,270,329 votes in favor and 158,305
votes withheld.
(C) The amendment to the Company's 1988 Stock Option Plan was
approved by 4,332,190 in favor, 375,106 opposed, 42,063
abstained and 4,679,285 non-broker votes.
(D) The amendment to the Company's 1993 Employee Stock
Purchase Plan was approved by 5,487,504 in favor, 164,529
opposed, 38,163 abstained and 3,738,439 non-broker votes.
(E) The amendment to the Company's 1990 Directors' Stock
Option Plan was approved by 8,310,728 in favor, 360,949
opposed, 60,763 abstained and 696,194 non-broker votes.
Item 5. Other Information: Not Applicable
Page 10 of 13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K:
(A) Exhibits:
Exhibit
Number Description of Exhibit
- ------- ----------------------
(a)(1) The financial statements filed as part of this Report at Item 1 are
listed in the Index to Financial Statements and Financial Statement
Schedules on page 2 of this Report.
(a)(2)) The following exhibits are filed with this Quarterly Report on Form
10-Q:
3.01 Registrant's Articles of Incorporation as amended to date (incorporated
by reference to Exhibit 3.01 of Registrant's Registration Statement on
Form S-1 ( File No. 2-89943) filed March 14, 1984, as amended (the
"1984 Registration Statement")).
3.02 Registrant's bylaws, as amended to date (incorporated by reference to
Exhibit 4.01 of the 1984 Registration Statement).
10.01* Registrant's 1990 Directors Stock Option Plan (incorporated by
reference to Exhibit A of Registrant's Proxy Statement dated July 10,
1990).
10.03* Registrant's 1988 Stock Option Plan, as amended to date, including the
stock option grant form and the stock option exercise notice and
agreement (incorporated by reference to Exhibit 10.15 of Registrant's
Annual Report on Form10-KSB for the fiscal year ended March 31, 1993).
10.05* Registrant's 1993 Employee Stock Purchase Plan, as amended to date
(incorporated by reference to Exhibit 10.20 of Registrant's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 1993).
10.06 Stock Purchase Agreement dated February 12,1993 between the Registrant
and several investors (incorporated by reference to Exhibit 4.01 of
Registrant's current report on Form 8-K filed on April 15, 1993).
10.07 Stock Purchase Agreement dated January 19,1994 between the Registrant
and several investors (incorporated by reference to Exhibit 4.01 of
Registrant's current report on Form 8-K filed on February 4, 1994).
10.08 Warrant Agreement dated March 22, 1994 between the Registrant and
Prutech Research and Development Partnership II (incorporated by
reference to Exhibit 10.22 of Registrant's Annual Report on Form 10-KSB
for the fiscal year ended March 31, 1994).
10.09 Subordination debt agreement dated September 15, 1994 between the
registrant and several investors (incorporated by reference to Exhibit
4.01 of Registrant's current report on Form 8-K filed on November 4,
1994).
10.10* Employment Agreement dated October 31, 1995 between the Registrant and
Glenn E. Abood (incorporated by reference to Exhibit 10.10 of
Registrant's Registration Statement on Form S-2 filed December 6,
1995).
10.11 Stock Purchase Agreement dated June 6, 1995 between the Registrant and
several investors (incorporated by reference to Exhibit 10.10 of the
Registrant's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1995).
10.12 Security and Loan Agreement dated September 15, 1995 by and among
Imperial Bank and the Registrant (incorporated by reference to Exhibit
10.12 of the Registrant's Registration Statement on Form SB-2 filed
December 6, 1995).
10.13 Master Equipment Lease Agreement dated November 9, 1995 by and between
Financing for Science International, Inc. and the Registrant
(incorporated by reference to Exhibit 10.13 of the Registrant's
Registration Statement on Form SB-2 filed December 6, 1995).
27.00 Financial Data Schedule
*Management Contract or Compensatory Plan or Arrangement
(B) Reports on Form 8-K: None filed during period
Page 11 of 13
<PAGE>
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.
SILICON VALLEY RESEARCH
Date: November 13, 1996 /s/ Cheryl S. Billings
----------------- ----------------------
Cheryl S. Billings
Vice President, Finance and
Chief Financial Officer
(Chief Financial and Accounting
Officer)
Page 12 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE
(Unaudited)
(in thousands, except per share data)
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
SEPTEMBER 30, 1996 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 6,073
<SECURITIES> 0
<RECEIVABLES> 4,966
<ALLOWANCES> 137
<INVENTORY> 0
<CURRENT-ASSETS> 11,606
<PP&E> 2,538
<DEPRECIATION> 1,774
<TOTAL-ASSETS> 17,503
<CURRENT-LIABILITIES> 5,642
<BONDS> 19
<COMMON> 31,413
0
0
<OTHER-SE> (19,571)
<TOTAL-LIABILITY-AND-EQUITY> 17,503
<SALES> 2,857
<TOTAL-REVENUES> 4,271
<CGS> 334
<TOTAL-COSTS> 570
<OTHER-EXPENSES> 5,964
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16
<INCOME-PRETAX> (2,078)
<INCOME-TAX> 35
<INCOME-CONTINUING> (2,113)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,113)
<EPS-PRIMARY> (0.17)
<EPS-DILUTED> (0.17)
</TABLE>
