______________________________________________________
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: July 24, 1996
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
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<PAGE>
Item 5. Other Events.
The Registrant's news release dated July 24, 1996, with respect to its
financial results for the periods ended June 30, 1996, including an
unaudited consolidated balance sheet as of June 30, 1996, and an unaudited
consolidated statement of income for the period ended June 30, 1996, 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
July 24, 1996 /s/ Earl Mason
--------------------
Earl Mason, 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
http://www.compaq.com
Compaq's Second Quarter Earnings Per Share $ .96
Sales Increase 14 Percent to $4 Billion
HOUSTON, July 24, 1996 -- Compaq Computer Corporation (NYSE:CPQ)
today announced net income of $267 million for the second quarter ended
June 30, 1996, an increase of 9 percent over the 1995 second quarter.
Earnings per share rose to $ .96, compared with
$ .90 reported in the same period of 1995. Compaq's worldwide sales in
the second quarter grew 14 percent to $4 billion, compared with $3.5
billion reported in the second quarter of 1995.
"We are very pleased with our solid financial performance--
particularly with the improvement in earnings and the return of gross
margins to 23 percent," said Eckhard Pfeiffer, President and Chief
Executive Officer, Compaq Computer Corporation. "This performance
reflects global operational improvements in the areas of logistics,
asset management, and cash collections as well as the beginning of a
major new product cycle that has led to a better mix of higher-margin
products. Our focus on asset management, for example, enabled us to
reduce inventory by $400 million, improve inventory turns from 6.5 (in
the first quarter) to 7.1, and decrease Days Sales Outstanding from 65
to 60 days. Taken together, these operational improvements caused our
cash balance to increase 86 percent over the preceding quarter to $1.9
billion," said Pfeiffer. "In response to our next-generation products,
aggressive pricing across product lines, and sustained price-performance
leadership, the successful sell-through of our products continues and
channel inventories ended the quarter in good shape."
OUTLOOK
"Our outlook calls for a strong second half," says Pfeiffer. "In
fact, we believe we are in an excellent position to gain market share
and achieve improved profitability for the balance of the year. Working
in our favor is the fact that Compaq is championing faster product life
cycles and has been rolling out, since early June, major new product
lines that embody useful innovation for the Internet age. On June 3, we
introduced a new class of Pentium Pro servers that deliver midrange-
system performance at half the cost of proprietary systems along with
network-based software tools that reduce implementation and support
costs. On June 17, we introduced a new range of thinner, lighter-weight
notebook PCs that incorporate faster processors, richer multimedia, and
the industry's first 28.8 BPS cellular modem with advanced telephony,
all of which puts Compaq on the road to regaining portables leadership.
"Just last week, we announced the industry's first family of home
PCs that are designed for five distinct consumer market segments and
offer five new form factors, including the first full-featured flat
panel desktop home PC. And two days ago, we launched a complete
redesign of our entire commercial desktop PC line, incorporating
Intelligent Manageability across the line and consolidating all models
under a single brand name--Deskpro. All of Compaq's new leadership
products have been contributing to a strong order book," said Pfeiffer,
"and in the months ahead we have many new leadership products yet to
announce, including special internetworking devices and Pentium Pro
workstations."
COMPANY BACKGROUND
Compaq Computer Corporation, a Fortune 100 company and the world's
largest supplier of personal computers, delivers useful innovation
through products that network people with information. Compaq is
strategically organized to meet the current and future needs of its
customers, offering enterprise computing solutions, networking products,
commercial PC products and consumer PCs. In 1995, the company reported
worldwide sales of $14.8 billion. The company is an industry leader in
environmentally friendly programs and business practices. Compaq
products are sold and supported in more than 100 countries through a
network of authorized Compaq marketing partners. Customer support and
information about Compaq and its products can be found at
http://www.compaq.com or by calling 1-800-OK-COMPAQ. Product
information and reseller locations can be obtained by calling
1-800-345-1518.
This release contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The
potential risks and uncertainties that could cause actual results to
differ materially include the timely development, production, and
acceptance of new products; responses to pricing actions and promotional
programs; continued competitive factors and pricing pressures; changes
in product mix; and inventory risks due to shifts in market demand.
Further information on the factors that could affect the company's
financial results are included in the company's SEC filings, including
the Form 10-Q for the quarter ended March 31, 1996, and the Form 10-Q
for the quarter ended June 30, 1996, which will be filed shortly.
# # #
Compaq, Registered U.S. Patent and Trademark Office. Product names
mentioned herein may be trademarks and/or registered trademarks of their
respective companies.
For further editorial information, contact:
Compaq Computer Corporation
Bob Beach 713-514-0484 [email protected]
Miller/Shandwick Technologies
Donna Ruane 617-536-0470 [email protected]
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COMPAQ COMPUTER CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS
June 30, December 31,
1996 1995
--------- ------------
(in millions)
Current assets:
Cash and cash equivalents $ 1,927 $ 745
Accounts receivable, net 2,687 3,141
Inventories 1,535 2,156
Deferred income taxes 365 365
Prepaid expenses and other current assets 121 120
------- -------
Total current assets 6,635 6,527
Property, plant, and equipment,
less accumulated depreciation 1,163 1,110
Other assets 193 181
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$ 7,991 $ 7,818
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,141 $ 1,379
Income taxes payable 83 190
Other current liabilities 1,078 1,111
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Total current liabilities 2,302 2,680
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Long-term debt 300 300
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Deferred income taxes 225 224
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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:
269.3 million shares at June 30, 1996
and 267.1 million shares at December 31, 1995) 922 890
Retained earnings 4,242 3,724
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Total stockholders' equity 5,164 4,614
------- -------
$ 7,991 $ 7,818
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<PAGE>
COMPAQ COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Six months ended Quarter ended
June 30, June 30,
1996 1995 1996 1995
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(in millions, except per share amounts)
Sales $ 8,206 $ 6,460 $ 4,001 $ 3,501
Cost of sales 6,400 4,910 3,080 2,675
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1,806 1,550 921 826
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Selling, general, and
administrative expense 871 719 440 391
Research and development costs 197 124 94 64
Other income and expense, net 22 66 5 30
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1,090 909 539 485
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Income before provision
for income taxes 716 641 382 341
Provision for income taxes 215 179 115 95
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Net income $ 501 $ 462 $ 267 $ 246
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Earnings per common and
common equivalent share:
Primary $ 1.81 $ 1.70 $ 0.97 $ 0.90
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Assuming full dilution $ 1.81 $ 1.69 $ 0.96 $ 0.90
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Shares used in computing
earnings per common and
common equivalent share:
Primary 276.4 271.6 276.7 272.2
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Assuming full dilution 277.0 272.8 277.1 273.1
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