<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the quarterly period ended December 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ______________
Commission File Number 0-14686
PYRAMID TECHNOLOGY CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-2781589
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
3860 NORTH FIRST STREET, SAN JOSE, CALIFORNIA 95134
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 428-9000.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Class Shares Outstanding at February 3, 1995
------------------------- --------------------------------------
<S> <C>
Common Stock, $0.01 par value 15,644,971
</TABLE>
<PAGE> 2
PYRAMID TECHNOLOGY CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C>
PART I. FINANCIAL INFORMATION
---------------------
Item 1. Financial Statements
Consolidated Statement of Income
Three months ended December 30, 1994 and December 31, 1993 3
Condensed Consolidated Balance Sheet
December 30, 1994 and September 30, 1994 4
Condensed Consolidated Statement of Cash Flows
Three months ended December 30, 1994 and December 31, 1993 5
Notes to Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II. OTHER INFORMATION
-----------------
Item 1. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Index to Exhibits 16
</TABLE>
2
<PAGE> 3
PART 1. FINANCIAL INFORMATION
PYRAMID TECHNOLOGY CORPORATION
Consolidated Statement of Income
(In thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
--------------------
Dec. 30 Dec. 31
1994 1993
-------- ---------
<S> <C> <C>
Revenues:
Product revenues $44,223 $43,978
Service revenues 17,896 16,040
------- -------
62,119 60,018
Cost of sales:
Cost of products sold 21,765 23,167
Cost of services 13,126 11,882
------- -------
34,891 35,049
Gross profit 27,228 24,969
Operating expenses:
Research and development 6,007 6,643
Sales, marketing, general and administrative 20,001 17,441
------- -------
Total operating expenses 26,008 24,084
Operating income 1,220 885
Interest income 518 121
Interest expense (97) (159)
Loss on investment in joint venture (112) -
------- -------
Income before income taxes 1,529 847
Provision for income taxes 229 212
------- -------
Net income $ 1,300 $ 635
======= =======
Net income per common and common equivalent share $ 0.08 $ 0.05
======= =======
Shares used in computing net income per
common and common equivalent share 15,644 13,584
======= =======
</TABLE>
See accompanying notes
3
<PAGE> 4
PYRAMID TECHNOLOGY CORPORATION
Condensed Consolidated Balance Sheet
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Dec. 30 Sept. 30
1994 1994
--------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 17,747 $ 21,558
Short-term investments 36,334 20,651
Accounts receivable, net 46,982 49,310
Inventories 30,432 25,840
Prepaid expenses and deposits 13,868 15,270
--------- ---------
Total current assets 145,363 132,629
Property and equipment, at cost 105,110 101,998
Less accumulated depreciation and amortization 77,961 74,386
--------- ---------
27,149 27,612
Capitalized software development costs 18,016 18,381
Service spare parts and other assets 12,468 12,091
--------- ---------
$ 202,996 $ 190,713
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 22,468 $ 16,398
Accrued payroll and related liabilities 6,309 4,493
Accrued commissions 2,823 2,424
Deferred revenue 11,517 8,272
Other accrued liabilities 10,478 10,932
Restructuring accruals 2,882 3,075
Income taxes payable 3,891 3,678
Current portion of long-term debt 1,320 1,440
--------- ---------
Total current liabilities 61,688 50,712
Noncurrent portion of long-term debt 1,233 1,563
Deferred income taxes payable 2,400 2,400
Shareholders' equity:
Common stock 156 156
Additional paid-in capital 174,899 174,652
Accumulated deficit (36,628) (37,927)
Accumulated translation adjustment (752) (843)
--------- ---------
Total shareholders' equity 137,675 136,038
--------- ---------
$ 202,996 $ 190,713
========= =========
</TABLE>
See accompanying notes
4
<PAGE> 5
PYRAMID TECHNOLOGY CORPORATION
Condensed Consolidated Statement of Cash Flows
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
---------------------
Dec. 30 Dec. 31
1994 1993
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,300 $ 635
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 6,947 7,597
Changes in:
Accounts receivable, net 2,328 (6,011)
Inventories (4,592) (1,788)
Prepaid expenses and deposits and income tax receivable 1,402 855
Accounts payable, accrued liabilities, and other 11,212 (1,943)
-------- -------
Net cash provided by (used for) operating activities 18,597 (655)
-------- -------
Cash flows from investing activities:
Purchase of short-term investments (15,683) -
Investment in property and equipment (3,535) (3,337)
Increase in capitalized software development costs (1,596) (2,403)
Increase in other assets (1,391) (1,169)
-------- -------
Net cash used for investing activities (22,205) (6,909)
Cash flows from financing activities:
Principal payments on capital lease obligations (450) (546)
Net borrowings under loan agreement - 2,364
Issuance of common stock, net of repurchases 247 262
-------- -------
Net cash provided by (used for) financing activities (203) 2,080
-------- -------
Decrease in cash and cash equivalents (3,811) (5,484)
Cash and cash equivalents, at the beginning of the period 21,558 31,358
-------- -------
Cash and cash equivalents, at the end of the period $ 17,747 $25,874
======== =======
Supplemental disclosures of cash flow information:
Cash paid for interest $ 97 $ 159
Cash paid (received) for income taxes $(2,199) $ 531
</TABLE>
See accompanying notes
5
<PAGE> 6
PYRAMID TECHNOLOGY CORPORATION
Notes to Consolidated Financial Statements
(unaudited)
Basis of Presentation
The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries after elimination of all significant intercompany
transactions.
While the financial information furnished is unaudited, the statements in this
report reflect all adjustments, consisting of normal recurring accruals, which,
in the opinion of management, are necessary for a fair statement of the results
of operations for the interim periods covered and of the financial condition of
the Company at the dates of the balance sheets. The operating results for the
interim periods presented are not necessarily indicative of the results to be
expected for the entire year.
Certain footnotes normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
These financial statements should be read in conjunction with the Company's
audited financial statements and notes thereto for the fiscal year ended
September 30, 1994.
Accounting for Certain Investments in Debt and Equity Securities
Effective September 30, 1994, the Company adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities". This statement addresses the accounting and reporting for
investments in marketable equity securities that have readily determinable fair
values and for all investments in debt securities. These securities are
required to be classified at the time of purchase and re-evaluated at each
reporting date as either (1) held-to-maturity, (2) trading, or (3)
available-for-sale. The Company classifies its investment in commercial paper
and money market funds ($7,819,000 in cash equivalents and $36,334,000 in
short-term investments) as held-to-maturity given the Company's positive intent
and ability to hold the securities to maturity. In accordance with the
statement, held-to-maturity securities are carried at amortized cost which
approximates fair value.
Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market and
consist of the following (in thousands):
<TABLE>
<CAPTION>
Dec. 30 Sept. 30
1994 1994
-------- --------
<S> <C> <C>
Raw materials $ 11,582 $ 10,617
Work-in-process 11,589 8,320
Finished goods 7,261 6,903
-------- --------
$ 30,432 $ 25,840
======== ========
</TABLE>
6
<PAGE> 7
PYRAMID TECHNOLOGY CORPORATION
Notes to Consolidated Financial Statements
(unaudited)
Related Party Transactions
Siemens Nixdorf Informationssyteme AG (Siemens Nixdorf), which owns
approximately 17% of the Company's Common Stock, accounted for $6,587,000, or
11% of the Company's revenue during the first quarter of fiscal 1995 and
$1,707,000, or 3% of the Company's revenue during the first quarter of fiscal
1994. Siemens Nixdorf also holds a warrant to purchase 1,330,000 shares of the
Company's Common Stock at $10.00 per share. The warrant expires on September
30, 1995.
A senior executive of a major customer and vendor of the Company is a member of
the Company's board of directors. The related party accounted for $1,136,000,
or 2% of the Company's revenue during the first quarter of fiscal 1995 and
$2,539,000, or 4% of the Company's revenue during the first quarter of fiscal
1994. The Company purchased services from the vendor totaling $2,323,000
during the first quarter of fiscal 1995 and $1,532,000 during the first quarter
of fiscal 1994.
Net Income per Common and Common Equivalent Share
Net income per common and common equivalent share is computed using the
weighted average number of common and dilutive common equivalent shares
outstanding during the period. Common equivalent shares consist of the
dilutive shares issuable upon the exercise of stock options using the treasury
stock or modified treasury stock method (whichever applies). For the three
month period ended December 30, 1994, no common equivalent shares were included
in the computation as the modified treasury stock method applied and the effect
would be anti-dilutive. For the three month period ended December 31, 1993,
common equivalent shares were computed using the treasury stock method.
<TABLE>
<CAPTION>
Three Months Ended
--------------------
Dec. 30 Dec. 31
(in thousands, except per share amounts) 1994 1993
------- -------
<S> <C> <C>
Average shares outstanding 15,644 13,240
Net effect of dilutive stock options - 344
------ ------
Shares used in computing net income per
common and common equivalent share 15,644 13,584
Net income $1,300 $ 635
Net income per common and common equivalent share $ 0.08 $0.05
</TABLE>
7
<PAGE> 8
PYRAMID TECHNOLOGY CORPORATION
Notes to Consolidated Financial Statements
(unaudited)
Subsequent Event
On January 23, 1995, Pyramid and Siemens Nixdorf jointly announced that they
had entered into an agreement pursuant to which a wholly-owned subsidiary of
Siemens Nixdorf will acquire all of the outstanding Common Stock of Pyramid not
currently owned by Siemens Nixdorf for an aggregate purchase price of
approximately $207 million. Under the agreement, Siemens Nixdorf's subsidiary
will commence a tender offer for all outstanding Common Stock of Pyramid for
$16.00 per share in cash. The tender offer will be followed by a merger in
which any shares not acquired by Siemens Nixdorf's subsidiary in the tender
offer will be acquired for the same amount of cash. Siemens Nixdorf currently
owns over 17% of the outstanding Common Stock of Pyramid. The tender offer,
which was approved by Pyramid's board of directors, commenced January 27, 1995
and is conditioned on a majority of the outstanding shares of Pyramid being
tendered as well as other customary conditions, including regulatory approvals.
8
<PAGE> 9
PYRAMID TECHNOLOGY CORPORATION
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion should be read in conjunction with the attached
consolidated financial statements and notes thereto, and with the Company's
audited financial statements and notes thereto for the year ended September 30,
1994.
Results of Operations
Total revenues for the first quarter of fiscal 1995 increased 4% to $62,119,000
from $60,018,000 in the first quarter of fiscal 1994. While product revenues
were at approximately the same level as the first quarter of fiscal 1994,
Pyramid experienced an increase in service revenues. The Company found that
many of the customer orders for Pyramid Nile Series systems received during the
first quarter of fiscal 1995 included more professional services than had been
requested on system sales for previous Pyramid products.
Product revenues for the first quarter of fiscal 1995 were $44,223,000 as
compared to $43,978,000 in the first quarter of fiscal 1994. Included in
product revenues were nonrecurring software and manufacturing license fees of
$3,744,000 in the first quarter of fiscal 1995 and $3,500,000 in the first
quarter of fiscal 1994. Shipments of Pyramid's Nile Series systems increased
in the first quarter of fiscal 1995 as compared to the first quarter of fiscal
1994 while shipments of MIServer ES Series systems remained steady and
shipments of the older MIS Server S and T Series systems decreased
substantially. Direct product revenues as a percentage of total product
revenues were 60% of revenue in the first quarter of fiscal 1995 compared to
57% in the first quarter of fiscal 1994. This can be attributed to the
Company's strategy to increase the number of worldwide direct sales
representatives.
North America product revenues as a percentage of total product revenues were
67% in the first quarter of fiscal 1995 compared to 63% in the first quarter of
fiscal 1994. The dollar value of North America product revenues increased 5%
from the first quarter of fiscal 1994 to the first quarter of fiscal 1995 as an
increase in sales to commercial end-user customers exceeded the decline in
sales to OEM partners. Total revenues from AT&T were $9,010,000 or 15% of
total revenue for the first quarter of fiscal 1995 compared to $13,733,000 or
23% in the first quarter of fiscal 1994. The decrease was attributed mainly to
a decline in sales for internal use at AT&T, and to a lesser extent, to
decreased shipments in connection with the Treasury Multiuser Acquisition
Contract (TMAC), which was awarded to AT&T with Pyramid as the major
subcontractor. The Company believes that revenues from AT&T will continue to
fluctuate as purchase quantities vary in connection with TMAC.
International product revenues as a percentage of total product revenues were
33% in the first quarter of fiscal 1995 compared to 37% in the first quarter of
fiscal 1994. The dollar value of international revenues decreased 8% from the
first quarter of fiscal 1994 to the first quarter of fiscal 1995 as an increase
in sales to Siemens Nixdorf was more than offset by sizeable decreases in sales
to International Computers Limited and to other international customers.
Siemens Nixdorf accounted for $6,587,000, or 11% of the Company's revenue
during the first quarter of fiscal 1995 as compared to $1,707,000, or 3% of the
Company's revenue during the first quarter of fiscal 1994.
9
<PAGE> 10
PYRAMID TECHNOLOGY CORPORATION
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Gross profit as a percentage of revenues in the first quarter of fiscal 1995
was 44% compared to 42% in the first quarter of fiscal 1994. The increase in
gross profit was due to increased direct revenues, which historically have
yielded higher margins, a higher mix of Nile revenues, which yield higher
margins than other Pyramid systems, and lower manufacturing and service
overhead costs. In the future, gross profit as a percentage of revenues may be
adversely affected by a higher mix of indirect revenues, which historically
have higher discounts, a decrease in nonrecurring software and manufacturing
license fees, significant fluctuations in currency exchange rates, and
intensified competitive pressures.
Research and development expenses as a percentage of revenues were 10% in the
first quarter of fiscal 1995 compared to 11% in the first quarter of fiscal
1994. The percentage decrease was principally due to a lower number of
research and development personnel as well as higher revenues in the first
quarter of fiscal 1995. In accordance with Statement of Financial Accounting
Standards No. 86, the Company capitalized $1,596,000 of software development
costs in the first quarter of fiscal 1995 compared to $2,402,000 in the first
quarter of fiscal 1994. The Company believes the enhancement of existing
products and the development of new products is essential to maintaining a
competitive position. Accordingly, the Company is committed to a high level of
research and development expenditures. However, because of the inherent
uncertainties of product development projects in the Company's
technology-intensive industry, there can be no assurance that research and
development efforts will result in successful product enhancements or
introductions, or, ultimately in increased revenues. The Company expects total
research and development expenses to increase slightly during fiscal 1995 as
the Company increases the number of its research and development personnel.
Sales, marketing, and general and administrative expenses as a percentage of
revenues were 32% in the first quarter of fiscal 1995 compared to 29% in the
first quarter of fiscal 1994. In absolute dollars, these expenses increased
$2,560,000 from the first quarter of fiscal 1994 to the first quarter of fiscal
1995 due primarily to increases in sales and marketing personnel and commission
expense resulting from higher revenue. The Company expects total sales,
marketing, general and administrative expenses to increase during fiscal 1995
as the Company continues to increase the number of revenue-producing direct
sales people and marketing personnel.
The amount of interest income for the first quarter of fiscal 1995 was $518,000
compared to $121,000 in the first quarter of fiscal 1994. The increase was the
result of approximately $25,000,000 more of average daily cash balances in the
first quarter of fiscal 1995 as compared to the year-ago period. Additionally,
the investments earned a higher rate of interest due to having longer
maturities than in the first quarter of fiscal 1994. The Company intends to
continue investing its available funds in short-term, highly-liquid income
producing obligations. The amount of interest expense for the first quarter of
fiscal 1995 was $97,000 compared to $159,000 in the first quarter of fiscal
1994. The decrease was primarily due to a lower debt balance.
The Company recorded an income tax provision of 15%, or $229,000, in the first
quarter of fiscal 1995 compared to a provision of 25%, or $212,000, in the
first quarter of fiscal 1994. The tax rate of 15% is less than the statutory
rate of 34% primarily due to the utilization of net operating loss
carryforwards. The Company expects its fiscal 1995 effective income tax rate
to remain at 15%; however, this rate could change based on the Company's
results during the remainder of fiscal 1995.
10
<PAGE> 11
PYRAMID TECHNOLOGY CORPORATION
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The Company's agreements with its OEMs and distributors, including its TMAC
agreement through AT&T, do not require minimum purchase quantities and
therefore there can be no assurance that the Company will receive future
revenues under these agreements. A substantial portion of the Company's
revenues in each quarter generally results from shipments during the last month
of that quarter, and principally for that reason, the Company's revenues are
subject to quarterly fluctuations. In addition, the Company establishes its
expenditure-level targets based on expected revenues. If anticipated orders
and shipments in any quarter do not occur when expected, expenditure levels
could be disproportionately high and the Company's operating results for that
quarter could be adversely affected. The Company's operating results may also
be subject to quarterly fluctuations as a result of a number of factors
including the timing of orders from and shipments to major customers, product
mix, availability of product components, variations in product costs, the mix
of revenues, nonrecurring license fees, increased competition, customer
acceptance of new products, and general economic conditions.
Liquidity and Capital Resources
The Company has financed its operating expenses and working capital needs
primarily through a combination of internally generated cash and cash balances,
and an equity issuance. Cash and cash equivalents decreased during the quarter
from $21,558,000 at September 30, 1994 to $17,747,000 at December 30, 1994.
Net cash provided by operating activities during the first quarter of fiscal
1995 was $18,597,000 compared to net cash used for operating activities of
$655,000 during the same period of fiscal 1994. This resulted primarily from
increases in accounts payable and accrued liabilities. The Company's investing
activities used $22,205,000 in cash during the first fiscal quarter of 1994 as
compared to $6,909,000 during the same period of fiscal 1994. During the first
quarter of fiscal 1995, the Company invested $15,683,000 in short-term
investments with maturities ranging from three to six months. Financing
activities used $203,000 in cash during the first fiscal quarter of 1995 as
compared to financing activities providing $2,080,000 during the same period of
fiscal 1994. The difference is attributed to the Company borrowing $2,364,000
under a loan agreement during the first quarter of fiscal 1994.
During October 1994, the Company entered into a new revolving line of credit
agreement with a bank which provides it with the ability to borrow up to
$10,000,000. The facility expires on December 31, 1995. Amounts borrowed
under the line of credit are secured by the Company's accounts receivable and
inventory. At December 30, 1994, there were no borrowings outstanding under
the revolving line of credit. The above credit agreement does not permit the
Company to pay cash dividends and sets limitations on the Company with regard
to other indebtedness, pledging of assets, guarantees, mergers and
acquisitions, and annual capital expenditure levels as well as requiring the
Company to maintain certain financial requirements.
11
<PAGE> 12
PYRAMID TECHNOLOGY CORPORATION
Management's Discussion and Analysis of Financial
Condition and Results of Operations
In order to reduce the impact of currency fluctuations on intercompany
balances, the Company enters into foreign currency forward exchange contracts,
which require the Company to exchange foreign currencies for U.S. dollars at
rates agreed to at the inception of the contracts. The contracts generally
have maturities that do not exceed one month. The objective of these contracts
is to neutralize the impact of foreign currency exchange rate movements on the
Company's operating results. These contracts do not subject the Company to
significant market risk from exchange rate movements because the contracts
offset gains and losses on the balances being hedged. At December 30, 1994,
the Company had foreign exchange contracts outstanding to sell the equivalent
of $1,261,000, which approximates fair value, in Japanese and Swedish
currencies, and to buy the equivalent of $9,772,000, which approximates fair
value, in Australian, British, and German currencies.
Based upon its current operating plan, the Company anticipates that internally
generated funds and cash balances, together with existing credit facilities,
capital leases, and loan agreements, will be sufficient to satisfy capital
requirements through fiscal 1995. However, the Company may raise additional
capital through debt or equity financing to take advantage of market
opportunities.
Siemens Nixdorf Tender Offer
On January 23, 1995, Pyramid and Siemens Nixdorf jointly announced that they
had entered into an agreement pursuant to which a wholly-owned subsidiary of
Siemens Nixdorf will acquire all of the outstanding Common Stock of Pyramid not
currently owned by Siemens Nixdorf for an aggregate purchase price of
approximately $207 million. Under the agreement, Siemens Nixdorf's subsidiary
will commence a tender offer for all outstanding Common Stock of Pyramid for
$16.00 per share in cash. The tender offer will be followed by a merger in
which any shares not acquired by Siemens Nixdorf's subsidiary in the tender
offer will be acquired for the same amount of cash. Siemens Nixdorf currently
owns over 17% of the outstanding Common Stock of Pyramid. The tender offer,
which was approved by Pyramid's board of directors, commenced January 27, 1995
and is conditioned on a majority of the outstanding shares of Pyramid being
tendered as well as other customary conditions, including regulatory approvals.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On January 9, 1995, a purported class action complaint entitled Pohli v.
Pyramid Technology et al., CA No. 13961 (the "Pohli Complaint") was filed
against the Company and its directors in the Court of Chancery of the State of
Delaware in and for New Castle County. The Pohli Complaint alleges, among
other things, that the Company's directors breached their fiduciary duties by
failing to disclose the true value of the Company's assets and earning power
and by refusing to seek a purchaser of the Company at the best obtainable
price. The plaintiff seeks damages and a court order compelling the Company to
conduct an auction of the Company and to form a committee of disinterested
directors to review all offers received as a result of the auction. The
Company believes that the Pohli Complaint is without merit and intends to
contest the matter vigorously.
On January 11, 1995, a purported class action complaint entitled Meade v.
Pyramid Technology et al., C.V. No. 746621 (the "Meade Complaint") was filed
against the Company and its directors in the Superior Court of California in
and for the County of Santa Clara. The Meade Complaint alleges, among other
things, that the Company's directors breached their fiduciary duties by failing
to conduct an active auction or implement open bidding procedures. The
plaintiff seeks damages, an injunction barring the sale of the Company to
Siemens Nixdorf Information Systems, AG, and a court order compelling the
Company to conduct a public auction. The Company believes that the Meade
Complaint is without merit and intends to contest the matter vigorously.
On January 12, 1995 and January 13, 1995, respectively, two purported class
action complaints entitled, respectively, Velonis v. Pyramid Technology et al.,
C.V. No. 746669 (the "Velonis Complaint") and Defeo v. Pyramid Technology et
al., C.V. No. 746801 (the "Defeo Complaint") were filed against the Company and
its directors and Siemens Nixdorf Information Systems, AG in the Superior Court
of California in and for the County of Santa Clara. The Velonis Complaint and
the Defeo Complaint allege, among other things, that the Company's directors
breached their fiduciary duties by failing to conduct an active auction,
implement open bidding procedures, or encourage outside bidders for the
potential sale of the Company. The plaintiffs seek damages, an injunction
barring the sale of the Company to Siemens Nixdorf Information Systems, AG, and
a court order compelling the Company to conduct a public auction. The Company
believes that the Velonis Complaint and the Defeo Complaint are without merit
and intends to contest these matters vigorously.
13
<PAGE> 14
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders was held on January 26, 1995. The following
matters were voted upon at the meeting with the result of the voting being as
shown:
<TABLE>
<CAPTION>
Shares Voted
----------------------
In Favor Withheld
---------- --------
<S> <C> <C> <C>
1. Election of eight directors of the Corporation
to serve the ensuing year and until their
successors are elected.
Richard H. Lussier 14,211,396 232,662
John S. Chen 14,258,727 185,331
Dr. Rudolf Bodo 14,286,035 158,023
Paul J. Chiapparone 14,291,442 152,616
Donald E. Guinn 14,290,027 154,031
Jack L. Hancock 14,278,728 165,330
Clarence W. Spangle 14,280,051 164,007
George D. Wells 14,289,971 154,087
</TABLE>
<TABLE>
<CAPTION>
Shares Voted
----------------------------------
In Favor Opposed Withheld
---------- -------- --------
<S> <C> <C> <C> <C>
2. Approval of an amendment of the Amended
1987 Employee Stock Purchase Plan to
increase the number of shares reserved for
issuance thereunder by 700,000. 13,440,988 733,501 157,119
3. Ratification of the appointment of
Ernst & Young LLP as the independent
auditors for the Corporation for the fiscal
year ending September 30, 1995. 14,267,234 70,134 106,690
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
(27.1) Financial Data Schedule.
b. There were no reports on Form 8-K filed during the quarter ended
December 30, 1994.
14
<PAGE> 15
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.
PYRAMID TECHNOLOGY CORPORATION
Dated: February 10, 1995 By /s/ Kent L. Robertson
-------------------------------
Kent L. Robertson
Senior Vice President,
Chief Financial Officer &
Secretary
Dated: February 10, 1995 By /s/ James J. Nelson
-------------------------------
James J. Nelson
Vice President,
Corporate Controller
(Principal Accounting Officer)
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ---------------------------- --------------
<S> <C> <C>
27.1 Financial Data Schedule 17
</TABLE>
16
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> 0
[DESCRIPTION] ART. 5 FDS FOR 1st QUARTER 10-Q
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> DEC-30-1994
<EXCHANGE-RATE> 1
<CASH> 17,747
<SECURITIES> 36,334
<RECEIVABLES> 48,691
<ALLOWANCES> 1,709
<INVENTORY> 30,432
<CURRENT-ASSETS> 145,363
<PP&E> 105,110
<DEPRECIATION> 77,961
<TOTAL-ASSETS> 202,996
<CURRENT-LIABILITIES> 61,688
<BONDS> 1,233
<COMMON> 156
0
0
<OTHER-SE> 137,519
<TOTAL-LIABILITY-AND-EQUITY> 202,996
<SALES> 44,223
<TOTAL-REVENUES> 62,119
<CGS> 21,765
<TOTAL-COSTS> 34,891
<OTHER-EXPENSES> 26,008
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 97
<INCOME-PRETAX> 1,529
<INCOME-TAX> 229
<INCOME-CONTINUING> 1,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,300
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
</TABLE>
