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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 16, 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)
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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Item 5. Other Events.
The Registrant's news release dated October 16, 1996, with
respect to its financial results for the periods ended September
30, 1996, including an unaudited consolidated balance sheet as of
September 30, 1996, and an unaudited consolidated statement of
income for the period ended September 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
October 16, 1996 /s/ Earl Mason
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Earl Mason, Senior Vice President,
Finance, and Chief Financial Officer
(as authorized officer and as
principal financial officer)
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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
FOR IMMEDIATE RELEASE
Compaq's Third Quarter Earnings Per Share $1.25;
Sales Increase 25 Percent to $4.5 Billion
HOUSTON, October 16, 1996 - Compaq Computer Corporation
(NYSE:CPQ) today announced net income of $350 million for the
third quarter ended September 30, 1996, an increase of 43 percent
over the 1995 third quarter. Earnings per share rose to $1.25,
compared with $.89 reported in the same period of 1995. Compaq's
worldwide sales grew 25 percent to $4.5 billion, compared with
$3.6 billion reported in the third quarter of 1995.
"We're very pleased with Compaq's continuing solid financial
performance, and especially with the improvements in earnings and
the growth of gross margins to 23.8 percent," said Eckhard
Pfeiffer, President and Chief Executive Officer, Compaq Computer
Corporation.
Earl Mason, Compaq Senior Vice President of Finance and
Chief Financial Officer, said, "Our ongoing focus on asset
management reduced Compaq's inventory by $855 million, compared
with the third quarter of 1995, increased inventory turns from
5.1 to 9.0, and decreased Days Sales Outstanding from 67 to 57.
Taken together, these operational improvements lifted our cash
balance 185 percent from the previous year to $3.2 billion.
These excellent results achieved a return on invested capital of
39.2 percent, providing a notable increase in shareholder value."
Outlook
"Our outlook continues to call for a strong second half,"
said Pfeiffer. "We're confident that Compaq's business model
enables us to gain market share and improve profitability. I see
a number of developments working in our favor. First, the
options business, which includes monitors, hard drives,
keyboards, CD changers and other accessories, remains one of our
most profitable businesses and has grown significantly over the
third quarter of 1995. Second, we now have the strongest lineup
of products and strategic partnerships in our history. Our
midrange servers have set a new industry-leading
price/performance benchmark, and our technology know-how related
to the Internet and corporate intranets is gathering momentum as
demonstrated by the announcement of the new high-performance
Netelligent networking products. At the end of the month, we
intend to launch industry-standard NT-based workstations, priced
far less than proprietary workstations, that will meet the
demanding needs of engineering and financial professionals. This
is further evidence of our ability to break new ground in
distributed enterprise computing."
Company Background
Compaq Computer Corporation, a Fortune 100 company, is the
fifth largest computer company in the world and the largest
global supplier of personal computers, delivering useful
innovation through products that connect people with people and
people with information. The company is an industry leader in
environmentally friendly programs and business practices. Compaq
is strategically organized to meet the current and future needs
of its customers, offering Internet and enterprise computing
solutions, networking products, commercial PC products and
consumer PCs. As the leader in distributed enterprise solutions,
Compaq has shipped approximately one million servers. In 1995,
the company reported worldwide sales of $14.8 billion. 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 June 30, 1996, and
the Form 10-Q for the quarter ended September 30, 1996, which
will be filed shortly.
(Attached is the Consolidated Balance Sheet and Statement of
Income.)
# # #
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
September 30, December 31,
1996 1995
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(in millions)
Current assets:
Cash and cash equivalents $ 3,191 $ 745
Accounts receivable, net 2,828 3,141
Inventories 1,489 2,156
Deferred income taxes 364 365
Prepaid expenses and other current assets 124 120
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Total current assets 7,996 6,527
Property, plant, and equipment,
less accumulated depreciation 1,174 1,110
Other assets 174 181
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$ 9,344 $ 7,818
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,882 $ 1,379
Income taxes payable 95 190
Other current liabilities 1,306 1,111
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Total current liabilities 3,283 2,680
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Long-term debt 300 300
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Deferred income taxes 224 224
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Stockholders' equity:-
Preferred stock, $.01 par value
(authorized: 10 million shares; issued: none)
Common stock and capital in excess of $.01 par value
(authorized: 1 billion shares; issued and outstanding:
270.8 million shares at September 30, 1996
and 267.1 million shares at December 31, 1995) 962 890
Retained earnings 4,575 3,724
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Total stockholders' equity 5,537 4,614
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$ 9,344 $ 7,818
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COMPAQ COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Nine months Quarter ended
ended
September 30, September 30,
1996 1995 1996 1995
------- ------- ------ ------
(in millions, except per share amounts)
Sales $12,687 $10,054 $4,481 $3,594
Cost of sales 9,814 7,685 3,414 2,775
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2,873 2,369 1,067 819
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Research and development costs 302 189 105 65
Selling, general, and
administrative expense 1,340 1,125 469 406
Other income and expense, net 16 74 (6) 8
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1,658 1,388 568 479
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Income before provision for
income taxes 1,215 981 499 340
Provision for income taxes 364 274 149 95
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Net income $ 851 $ 707 $ 350 $ 245
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Earnings per common and common
equivalent share:
Primary $ 3.07 $ 2.59 $ 1.26 $ 0.89
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Assuming full dilution $ 3.05 $ 2.57 $ 1.25 $ 0.89
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Shares used in computing
earnings per common
and common equivalent share:
Primary 277.1 272.8 278.4 275.2
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Assuming full dilution 278.8 274.5 279.1 275.2
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