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: APRIL 16, 1997
COMPAQ COMPUTER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-9026 76-0011617
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
20555 SH 249, HOUSTON, TEXAS 77070-2698
(Address of Principal Executive Offices)
(281) 370-0670
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
The Registrant's news release dated April 16, 1997, with respect to its
financial results for the period ended March 31, 1997, including an unaudited
consolidated balance sheet as of March 31, 1997, and an unaudited consolidated
statement of income for the period ended March 31, 1997 is attached as Exhibit
99.
Item 7. Exhibit - Index
Exhibit 99 -- News Release dated April 16, 1997.
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.
Compaq Computer Corporation
Date: April 16, 1997 By: /s/ Earl Mason
----------------
Earl Mason
Senior Vice President and
Chief Financial Officer
COMPAQ COMPUTER CORPORATION P.O. BOX 692000 NEWS RELEASE
PUBLIC RELATIONS DEPARTMENT HOUSTON, TEXAS
77269-2000
TEL 281-514-0484
FAX 281-514-4583
HTTP://WWW.COMPAQ.COM
[Logo of Compaq Computer Corporation appears here]
FOR IMMEDIATE RELEASE
COMPAQ'S FIRST QUARTER EARNINGS INCREASE 66 PERCENT;
EVA MORE THAN TRIPLES
HOUSTON, April 16, 1997 - Compaq Computer Corporation (NYSE:CPQ) today
announced net income of $387 million for the first quarter ended March 31,
1997, an increase of 66 percent over the 1996 first quarter. Earnings per
share rose to $1.36, compared with $.85 reported in the same period of 1996.
Compaq's worldwide sales grew 14.3 percent to $4.8 billion, compared with $4.2
billion reported in the first quarter of 1996.
"These results reflect an excellent first quarter for Compaq, our customers
and shareholders," said Eckhard Pfeiffer, President and Chief Executive
Officer, Compaq Computer Corporation. "We're very pleased with the
consistency of our financial progress, especially with the improvements in
earnings and the growth of gross margins to 24.5 percent in the first
quarter."
Earl Mason, Compaq Senior Vice President and Chief Financial Officer, said,
"Our ongoing focus on asset management reduced Compaq's inventory by $666
million, compared with the first quarter of 1996, increased inventory turns
from 6.5 to 12.0, and decreased Days Sales Outstanding from 65 to 51. Taken
together, these operational improvements lifted our cash balance 358 percent
from the previous year to $4.7 billion. These excellent results more than
tripled EVA (Economic Value Added) ending the quarter at $292 million,
providing a continued increase in shareholder value."
OUTLOOK
"We expect strong growth throughout 1997," said Pfeiffer. "Compaq is
positioned to gain market share and increase profits. We are clearly focused
on what customers are looking for. Recently, we announced new Internet
solutions and communication products, demonstrating our commitment to provide
end-to-end computer solutions at the lowest cost of ownership. We are also
working with our channel partners to fully implement a new manufacturing and
delivery model that will create the most efficient fulfillment process for the
lowest delivered cost in the industry which will translate into lower prices
for our customers. Just as important, our continued focus on asset management
will give us the ability to take advantage of our competitive position and
global leadership to benefit customers and shareholders."
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 over a million servers. In 1996, the
company reported worldwide sales of $18.1 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 operational integration associated with mergers and acquisitions;
market responses to pricing actions and promotional programs; the
implementation of operations and systems improvements; timely development,
production, and acceptance of new products; 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-K for the year ended December 31, 1996, and the Form
10-Q for the quarter ended March 31, 1997, 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 281-514-0484
[email protected]
Miller/Shandwick Technologies Donna Ruane 617-536-0470
[email protected]
For further financial information, contact:
Investor Relations Department 281-514-9549
For financial publications, contact: 800-433-2391
<PAGE>
<TABLE>
<CAPTION>
COMPAQ COMPUTER CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
ASSETS
<S> <C> <C>
March 31, December 31,
--------- ------------
1997 1996
--------- --------
(in millions)
Current assets:
Cash and cash equivalents $ 4,554 $ 2,920
Short-term investments 194 1,073
Accounts receivable, net 2,710 3,168
Inventories 1,268 1,152
Deferred income taxes 760 761
Other current assets 100 95
---------- ----------
Total current assets 9,586 9,169
Property, plant and equipment, less accumulated depreciation 1,195 1,172
Other assets 192 185
---------- ----------
$ 10,973 $ 10,526
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,158 $ 1,962
Income taxes payable 245 322
Other current liabilities 1,493 1,568
---------- ----------
Total current liabilities 3,896 3,852
---------- ----------
Long-term debt 300 300
---------- ----------
Deferred income taxes 227 230
---------- ----------
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:
274.5 million shares at March 31, 1997 and
273.6 million shares at December 31, 1996) 1,126 1,107
Retained earnings 5,424 5,037
---------- ----------
Total stockholders' equity 6,550 6,144
---------- ----------
$ 10,973 $ 10,526
========== ==========
</TABLE>
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<TABLE>
<CAPTION>
COMPAQ COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<S> <C> <C>
Quarter ended
March 31,
--------------
1997 1996
------ ------
(in millions, except
per share amounts)
Sales $ 4,805 $ 4,205
Cost of sales 3,627 3,320
---------- ----------
1,178 885
---------- ----------
Selling, general and administrative expense 499 431
Research and development costs 122 103
Other income and expense, net (12) 17
---------- ----------
609 551
---------- ----------
Income before provision for income taxes 569 334
Provision for income taxes 182 100
---------- ----------
Net income $ 387 $ 234
========== ==========
Earnings per common and common equivalent share:
Primary $ 1.36 $ 0.85
========== ==========
Assuming full dilution $ 1.36 $ 0.85
========== ==========
Shares used in computing earnings per common
and common equivalent share:
Primary 284.0 276.1
========== ==========
Assuming full dilution 284.0 276.1
========== ==========
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