______________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 17, 1995
COMPAQ COMPUTER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-9026 76-0011617
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation or organization) File Number)
20555 SH 249, Houston, Texas 77070
(Address, including zip code,
of Registrant's principal executive offices)
Registrant's telephone number, including area code: (713) 370-0670
______________________________________________________
<PAGE>
Item 5. Other Events.
The Registrant's news release dated October 17, 1995, with
respect to its financial results for the periods ended September 30,
1995, including an unaudited consolidated balance sheet as of September
30, 1995, and an unaudited consolidated statement of income for the
periods ended September 30, 1995, is attached.
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 hereunto duly authorized.
Compaq Computer Corporation
October 19, 1995 /s/ Daryl J. White
--------------------------------------
Daryl J. White, Senior Vice President,
Finance, and Chief Financial Officer
(as authorized officer and as
principal financial officer)
<PAGE>
Compaq Computer Corporation P.O. Box 692000 News Release
Public Relations Department Houston, Texas 77269-2000
Tel 713-514-0484 Fax 713-514-4583
FOR IMMEDIATE RELEASE
- ---------------------
Compaq Third Quarter Sales Are Record $3.6 Billion
Product Transitions Completed, Company Well-Positioned
for Fourth Quarter Opportunities
HOUSTON, October 17, 1995 -- Compaq Computer Corporation
(NYSE:CPQ) today announced record sales of $3.6 billion for
the third quarter ended September 30, 1995, a 27 percent
increase over the $2.8 billion reported in the same period of
1994.
Earnings per share rose 19 percent to $.89 compared with
$.75 last year. Net income was up 22 percent to $245 million
versus $201 million in the third quarter of 1994.
"Strong demand for Compaq products led to record sales
and shipments," said Eckhard Pfeiffer, president and chief
executive officer, Compaq Computer Corporation.
"Customers clearly believe that Compaq products offer
better value and innovation and have made Compaq the best
selling brand of computers in the world. We will continue to
complement our value and innovation leadership with
outstanding service and support. We are dedicated to
providing customers with the best ownership experience
anywhere," said Pfeiffer.
Outlook
- -------
"As we enter what is historically the best selling
quarter of the year, Compaq is optimistic about our sales
opportunities," said Pfeiffer. "Worldwide industry demand
appears to be quite strong and Compaq is well prepared. We
have completed the transition to exciting new products in our
desktop, portable, systems and consumer businesses. Customer
interest is strong for these products, which provide features
and capabilities that competitors have not been able to
match."
Compaq Reports Third Quarter Results
2-2-2
Transforming Compaq and the Industry
- ------------------------------------
Underscoring its leadership role in the industry, Compaq
today opened its Innovate Forum in Houston to the theme
"redefining corporate computing." The three-day event brings
together more than 4000 customers, industry partners and
industry observers from every region of the world to examine
the rapid transformation taking place in corporate computing.
"Compaq has played a central role in this transformation,
which is still very much in its initial stages," said
Pfeiffer. "But the speed at which it is taking place is
rapidly accelerating. Compaq and its partners are pushing the
capabilities of industry standard computers into ever-
increasing areas of corporate computing, at ever-decreasing
costs.
"Just yesterday, Compaq announced its most powerful
computer ever and teamed up with our partners Microsoft and
Tandem to define an industry-standard way of linking powerful
networking systems together. This form of `clustering' will
dramatically reduce the cost that companies pay for managing
critical information to run all aspects of their business,"
said Pfeiffer. "And with this transformation of corporate
computing, Compaq is transforming itself into a company that
reaches far beyond personal computers.
"The transformation at Compaq also extends in the other
direction, through consumer products like the Compaq Presario
and an agreement with Fisher-Price to jointly develop,
manufacture and market a line of education and entertainment-
oriented products for young children. This is only the
beginning of Compaq's vision for redefining the `home'
computing experience."
Third Quarter Highlights
- ------------------------
Consumer Products
Building on the tremendous success of Compaq's family of
Presario consumer PCs, this quarter Compaq introduced the
Presario 9500, 7100 and 5500 Series featuring breakthroughs in
audio and video technology that deliver the richest multimedia
experience available on a PC today. In addition to the new
Presarios, Compaq launched a bold, new advertising campaign
focusing on the dramatic impact Compaq PCs are having on
people's
Compaq Reports Third Quarter Results
3-3-3
lives. The campaign, which asks "Compaq -- Has it changed
your life yet?" highlights the innovations that enable Compaq
PCs to change people's lives.
In addition, Compaq expanded its senior management team
with the addition of Michael Heil, senior vice president and
general manager of the Consumer Products Division. Heil was
formerly a top executive with Sony and Los Angeles Cellular
Telephone Company, an AT&T- Bell South partnership. Reporting
to Compaq President and CEO Eckhard Pfeiffer, Heil will
oversee all of Compaq's worldwide consumer business, including
the development and marketing of all products and services for
the consumer marketplace and the expansion of Compaq's
worldwide retail distribution network.
In the third quarter, Compaq also launched into the
exciting field of
"Edutainment" as the company announced its joint development
agreement with Fisher-Price, a subsidiary of Mattel. The new
alliance combines the efforts of the world's leading
manufacturers of computers and pre-school toys to provide new
and engaging ways for young children to harness the power of
their multimedia PCs to play and learn.
Commercial Desktop Products
On August 16, Compaq raised the bar in the competitive PC
landscape with a barrage of new aggressively priced products
that set a new standard for PC value and
performance. Compaq announced aggressive price reductions of
up to 25 percent across its commercial and consumer desktop
product families which sent the rest of the industry
scrambling to keep up with the PC industry leader. Compaq
also introduced nine new
commercial desktop computers based on the 133 MHz Pentium chip
- -- the fastest microprocessor available today. In addition,
Compaq raised the standard minimum hard drive size throughout
its commercial desktop families, strengthening its position as
the value leader in the PC marketplace.
Compaq Reports Third Quarter Results
4-4-4
Portable Products
In the third quarter, Compaq announced its much-
anticipated high-performance notebook, the LTE 5000. Deemed
the ultimate business tool for mobile professionals, the LTE
5000 family features a full line-up of Pentium processor-based
models, an innovative modular design, true 64-bit
architecture, the largest hard drive storage, and highest
level of RAM available in the industry today. As a testament
to the notebook's advanced capabilities and performance,
Microsoft selected the LTE 5000 as its portable computer
platform for demonstrating Windows 95. Beginning with the
launch of Windows 95 in August, Microsoft armed its 400-person
field sales force and engineering teams with the LTE 5000 to
demonstrate to its customers the features and advances
provided by
Windows 95.
Underscoring Compaq's drive to reassert its leadership in
the portable PC marketplace, the company strengthened its
senior management staff with the addition of
Michael J. Winkler, who joins the company on November 6.
Formerly a top executive with Toshiba, Winkler joins the
company as senior vice president and general manager of
Compaq's Portables Division, reporting to Eckhard Pfeiffer.
Winkler's management experience and understanding of portables
technology and the PC marketplace further reinforce Compaq's
drive to the top of the notebook PC market.
Systems Highlights
Compaq continues to widen its market share lead in the
worldwide PC server and super server market according to a
recent report by International Data Corporation (IDC). Based
upon IDC's latest data, Compaq currently holds nearly three
times the PC server and super server market share of its
nearest competitor. IDC's Commercial Systems and Servers
report shows that Compaq attained 41 percent market share in
the second quarter of 1995, substantially outpacing its
nearest competitor, IBM (14 percent). Moreover, Compaq holds
over three times the PC server and super server market share
of HP (13 percent) and nearly seven times the market share of
Digital (6 percent).
Compaq Reports Third Quarter Results
5-5-5
On October 16, the company introduced new Compaq ProLiant
4500 servers that represent the vanguard platforms for
Compaq's continued push in the fast-growing distributed
enterprise computing marketplace. These are Compaq's highest
performance, most tightly integrated servers ever, and include
an industry-first model that ships with Microsoft BackOffice
on SmartStart. This specially configured model delivers
superior performance and ease of ownership to Microsoft
Windows NT customers.
In an aggressive move to deliver the enterprise-class
solutions and support required by Compaq's customers, Compaq
announced a new strategy for providing world-class enterprise
service and support for customers that require global
computing solutions. The worldwide service and support
strategy includes the introduction of new Compaq-branded
Service and Support Options, a new strategic alliance with
Digital Multivendor Customer Services to become Compaq's
Global Service and Support Provider, new distribution channel
service programs, and significant new investments in Compaq's
internal worldwide service and support infrastructure. This
strategy enables Compaq and its partners to offer total and
consistent service solutions to those customers with sites all
over the world.
Compaq also announced its server array product strategy
which defines the company's roadmap for building even larger
and more powerful computer systems by "clustering" industry-
standard computers together. This strategy - which includes
alliances with Tandem and Microsoft -- is of extraordinary
importance to Compaq customers that need to build massive yet
extremely cost-effective computing solutions as part of their
own competitive strategies.
Windows 95 -- Lead Systems Partner
As Microsoft's Lead Systems Partner for Windows 95,
Compaq played a primary role in the development, testing and
launch of Windows 95. Compaq spent the equivalent of 50 man-
years testing Windows 95 for compatibility and reliability,
assuring customers that
Compaq Reports Third Quarter Results
6-6-6
Compaq products offer a smooth transition to Windows 95. For
corporate customers, this means the Intelligent Manageability
features that are only available on Compaq products
reach their full potential in allowing customers to reduce
their overall cost of ownership. For
the consumer, Compaq's new Presario models are pre-loaded with
Windows 95 and offer
even greater MPEG digital video playback and three-dimensional
sound capabilities. In
addition, the company undertook an aggressive, company-wide
transition to the Microsoft Windows 95 operating system for
its own internal network. This rapid internal transition to
the new operating system will also enhance the support Compaq
provides its customers in running Windows 95.
Company Background
Compaq Computer Corporation is the world's largest
supplier of personal computers, offering desktop PCs, portable
PCs and servers. Founded in 1982, the company reported 1994
worldwide sales of $10.9 billion. Compaq products are sold
and supported in more than 100 countries through Compaq
marketing partners. Compaq also sells directly to customers
through Compaq Direct Plus at 1-800-888-5858. Compaq provides
24-hour customer support and can be reached through the Compaq
forums on America Online, CompuServe, Internet
(http://www.compaq.com), and Prodigy, or by calling
1-800-345-1518.
# # #
Compaq, Registered U.S. Patent and Trademark Office. Product
names mentioned herein may be trademarks and/or registered
trademarks of their respective companies. Innovate Forum is a
service mark of Compaq.
For further editorial information, contact:
Compaq Computer Corporation
Bob Beach, Yvonne Donaldson, Nora Hahn 713-514-0484
Miller Communications
Tony Sapienza, Donna Ruane 617-536-0470
[email protected]
COMPAQ COMPUTER CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS
September 30, December 31,
1995 1994
------ ------
(in millions)
Current assets:
Cash and cash equivalents $1,120 $ 471
Accounts receivable, net 2,669 2,287
Inventories 2,344 2,005
Deferred income taxes 303 303
Prepaid expenses and other current assets 142 92
------ ------
Total current assets 6,578 5,158
------ ------
Property, plant, and equipment, less
accumulated depreciation 1,058 944
Other assets 52 64
------ ------
$7,688 $6,166
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $1,573 $ 888
Income taxes payable 262 246
Other current liabilities 929 879
------ ------
Total current liabilities 2,764 2,013
------ ------
Long-term debt 300 300
------ ------
Deferred income taxes 179 179
------ ------
Stockholders' equity:-
Preferred stock, $.01 par value
(authorized: 10 million shares; issued: none)
Common stock and capital in excess
of $.01 par value
(authorized: 1 billion shares; issued and
outstanding: 265.8 million shares at
September 30, 1995 and 261.0 million
shares at December 31, 1994) 803 739
Retained earnings 3,642 2,935
------ ------
Total stockholders' equity 4,445 3,674
------ ------
$7,688 $6,166
====== ======
COMPAQ COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Nine months Quarter ended
ended
September 30, September 30,
1995 1994 1995 1994
------- ------ ------ ------
(in millions, except per share amounts)
Sales $10,054 $7,615 $3,594 $2,838
Cost of sales 7,685 5,682 2,775 2,185
------- ------ ------ ------
2,369 1,933 819 653
------- ------ ------ ------
Research and development costs 189 165 65 58
Selling, general, and
administrative expense 1,125 867 406 310
Other income and expense, net 74 58 8 14
------- ------ ------ ------
1,388 1,090 479 382
------- ------ ------ ------
Income before provision for
income taxes 981 843 340 271
Provision for income taxes 274 219 95 70
------- ------ ------ ------
Net income $ 707 $ 624 $ 245 $ 201
======= ====== ====== ======
Earnings per common and common
equivalent share:
Primary $ 2.59 $ 2.33 $ 0.89 $ 0.75
======= ====== ====== ======
Assuming full dilution $ 2.57 $ 2.33 $ 0.89 $ 0.75
======= ====== ====== ======
Shares used in computing
earnings per common
and common equivalent share:
Primary 272.8 267.9 275.2 268.8
======= ====== ====== ======
Assuming full dilution 274.5 268.1 275.2 268.8
======= ====== ====== ======
