_____________________________________________________________________________
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: JANUARY 22, 1997
COMMISSION FILE NUMBER 1-9026
COMPAQ COMPUTER CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 76-0011617
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
20555 SH 249, HOUSTON, TEXAS 77070
(281) 370-0670
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
=======================================================================
<PAGE>
Item 5. Other Events
The Registrant's news release dated January 22, 1997, with respect to its
financial results for the quarter and year ended December 31, 1996,
including an unaudited consolidated balance sheet as of December 31, 1996,
and an unaudited consolidated statement of income for the quarter and year
ended December 31, 1996 is attached and incorporated herein by reference.
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: January 22, 1997 By: /s/ Earl Mason
------------------
Earl Mason, Senior
Vice President,
Finance and Chief
Financial Officer
COMPAQ COMPUTER CORPORATION P.O. BOX 692000
PUBLIC RELATIONS DEPARTMENT HOUSTON, TX 77269-2000
TEL 281-514-0484
FAX 281-514-4583
HTTP://WWW.COMPAQ.COM
NEWS RELEASE
FOR IMMEDIATE RELEASE
- -----------------------
COMPAQ'S FOURTH QUARTER EARNINGS INCREASE 43 PERCENT;
SALES SET QUARTERLY RECORD AT $5.4 BILLION
HOUSTON, Jan. 22, 1997 - Compaq Computer Corporation (NYSE:CPQ) today
announced net income of $462 million for the fourth quarter ended December 31,
1996, an increase of 43 percent over the 1995 fourth quarter. Earnings per
share rose to $1.64,compared with $1.17(1)reported in the fourth quarter of
1995. Compaq's worldwide sales grew 15 percent to $5.4 billion, compared with
$4.7 billion reported in the fourth quarter of 1995.
Net income for 1996 was $1.3 billion, an increase of 28 percent(1)over
1995. Earnings per share rose to $4.66, compared with $3.74(1) reported last
year. Compaq's worldwide sales grew 23 percent to $18.1 billion, compared
with $14.8 billion reported in 1995.
"These results reflect an excellent fourth quarter and outstanding year
for Compaq," 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 24.4 percent in the fourth quarter."
Earl Mason, Senior Vice President and Chief Financial Officer, said,
"Our continued emphasis on asset management reduced Compaq's inventory by $1.0
billion, compared with the fourth quarter of 1995, increased inventory turns
from 6.5 to 12.4, and decreased Days Sales Outstanding from 60 to 53. Taken
together, these operational improvements lifted our cash balance 436 percent
from $745 million in the previous year to $4.0 billion. These excellent
results contributed to fourth quarter return on invested capital of
59 percent, providing a continued increase in shareholder value."
(1)Excludes a $241 million ($.87) non-recurring,non-tax deductible charge for
purchased in-process technology in connection with the acquisitions during the
fourthquarter of 1995.
OUTLOOK
"We expect strong growth throughout 1997," said Pfeiffer. "Compaq is in a
position to gain market share and increase profits. We enter 1997 with the
strongest, broadest, most Internet-enabled, and cost-effective product line in
our history. We're clearly focused on the high-growth segments of the
information technology industry with products like our new industry-standard
NT-based professional workstations-a market segment that's forecast to grow
more than 40 percent a year out to 2000. Just as important, we've integrated
more and more of our hardware, management software, and enterprise services
into complete solutions. We will continue to improve our product mix as we
expand our ability to compete effectively in distributed enterprise and
Internet-based computing. 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 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 September 30, 1996, and
the Form 10-K for the year 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 281-514-0484
[email protected]
Miller/Shandwick Technologies Donna Ruane 617-536-0470
[email protected]
<TABLE>
<CAPTION>
COMPAQ COMPUTER CORPORATION
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
ASSETS
DECEMBER 31, DECEMBER 31,
(IN MILLIONS)
<S> <C> <C>
1996 1995
------- ------
Current assets:
Cash and cash equivalents $ 2,920 $ 745
Short-term investments 1,073
Accounts receivable, net 3,168 3,141
Inventories 1,152 2,156
Deferred income taxes 761 365
Prepaid expenses and other current assets 95 120
------- ------
Total current assets 9,169 6,527
Property, plant, and equipment, less accumulated depreciation 1,172 1,110
Other assets 185 181
$10,526 $7,818
======= ======
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Accounts payable $ 1,962 $1,379
Income taxes payable 322 190
Other current liabilities 1,568 1,111
------- ------
Total current liabilities 3,852 2,680
------- ------
Long-term debt 300 300
------- ------
Deferred income taxes 230 224
------- ------
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:
273.6 million shares at December 31, 1996 and
267.1 million shares at December 31, 1995) 1,107 890
Retained earnings 5,037 3,724
Total stockholders' equity 6,144 4,614
$10,526 $7,818
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</TABLE>
<TABLE>
<CAPTION>
COMPAQ COMPUTER CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED QUARTER ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
1996 1995 1996 1995
---- ---- ---- ----
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Sales $18,109 $14,755 $5,422 $4,701
Cost of sales 13,913 11,367 4,099 3,682
4,196 3,388 1,323 1,019
------- ------- ------- ------
Selling, general, and administrative expense 1,912 1,594 572 469
Research and development costs 407 270 105 81
Purchased in-process technology (1) 241 241
Other income and expense, net 1 95 (15) 21
2,320 2,200 662 812
------- ------- ------- ------
Income before provision for income taxes 1,876 1,188 661 207
Provision for income taxes 563 399 199 125
Net income $ 1,313 $ 789 $ 462 $ 82
======= ======= ======= ======
Earnings per common and common equivalent share:
Primary $ 4.72 $ 2.88 $ 1.64 $ 0.30
======= ======= ======= ======
Assuming full dilution $ 4.66 $ 2.87 $ 1.64 $ 0.30
======= ======= ======= ======
Shares used in computing earnings per common
and common equivalent share:
Primary 278.3 273.6 282.1 276.0
======= ======= ======= ======
Assuming full dilution 281.4 275.0 282.1 276.0
======= ======= ======= ======
<FN>
(1) Represents a $241 million ($.87 per share) non-recurring, non-tax
deductible charge for purchased in-process technology in connection
with the NetWorth and Thomas-Conrad acquisitions during the fourth
quarter of 1995.
</TABLE>
