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 (Date of Earliest Event Reported)
FEBRUARY 3, 1997 (JANUARY 30, 1997)
AST RESEARCH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-13941 95-3525565
(Commission File Number) (IRS Employer Identification No.)
16215 ALTON PARKWAY
IRVINE, CALIFORNIA 92718
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(714) 727-4141
NOT APPLICABLE
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
On January 30, 1997, AST Research, Inc. ("the Company") announced that
Samsung Electronics Co, Ltd.("Samsung") has proposed to commence negotiations
with respect to the acquisition of all of the outstanding shares of common
stock of the Company not currently owned by Samsung, or its affiliates, at a
price of $5.10 per share. Samsung currently owns approximately 46 percent of
the outstanding shares, and owns options which, if exercised, would result
in ownership of approximately 49 percent of the outstanding shares. Pursuant
to the terms of a Stockholder Agreement between the Company and Samsung,
Samsung's ability to purchase shares and engage in other transactions with the
Company is subject to certain restrictions. The Company's board of directors
has formed a special committee, consisting of three independent directors, to
evaluate Samsung's proposal, and to consider other options that may be
available to the Company. A copy of the press release is attached to this
report, and is incorporated herein by this reference.
On January 30, 1997, the Company also announced that Hyeon-Gon Kim and Hee Dong
Yoo resigned from the board of directors and that Samsung appointed Yong-Ro Song
and Ho Moon Kang as replacements. In addition, the Company reported a net loss
of $68.0 million ($1.18 per share), and $417.7 million ($8.22 per share), for
the quarter and year ended December 28, 1996, respectively. A copy of the press
release is attached to this report, and is incorporated herein by this
reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit
Number Description
99.1 Press Release dated January 30, 1997 announcing that Samsung has
proposed to commence negotiations with respect to the acquisition
by Samsung of all of the outstanding shares of common stock of the
Company not currently owned by Samsung or its affiliates.
99.2 Press Release dated January 30, 1997 announcing the Company's
fourth quarter results and changes to its board of directors.
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.
AST Research, Inc.
_______________________________________
(Registrant)
By /s/ WON S. YANG
Won S. Yang
Senior Vice President
and Chief Financial Officer (Acting)
Date: February 3, 1997
Press Contact: Emory Epperson
(714) 727-7958
Analyst Contact: Mariann Ohanesian
(714) 727-7728
AST RESEARCH, INC. ANNOUNCES SAMSUNG BUY-OUT PROPOSAL
IRVINE, Calif., January 30, 1997 -- AST Research, Inc. (ASTA --NASDAQ) today
announced that Samsung Electronics Co., Ltd. has proposed to commence
negotiations with respect to the acquisition by Samsung Electronics of all of
the outstanding shares of common stock of AST not currently owned by Samsung
Electronics or its affiliates at a price of $5.10 per share.
Samsung Electronics currently owns approximately 46 percent of the
outstanding shares, and owns options which, if exercised, would result in
ownership of approximately 49 percent of the outstanding AST shares.
Pursuant to the terms of a Stockholder Agreement between AST and Samsung,
Samsung's ability to purchase shares and engage in other transactions with
AST is subject to certain restrictions.
AST's board of directors has formed a special committee, consisting of
three independent directors, to evaluate Samsung's proposal, and to consider
other options that may be available to AST, after consultation with
appropriate legal and financial advisors. There is no assurance that any
transaction will ultimately occur.
AST Research, Inc. develops and markets a broad spectrum of desktop,
mobile and server PC products that are sold in more than 100 countries
worldwide. AST systems meet a wide range of customer needs, ranging from
corporate business applications to advanced home and home office use.
Corporate headquarters is located at 16215 Alton Parkway, P.O.
Box 57005, Irvine, Calif. 92619-7005. Telephone (714) 727-4141 or
(800) 876-4278. Fax: (714) 727-9355. Information about AST and its products
can be found on the World Wide Web at http://www.ast.com.
# # #
FOR IMMEDIATE RELEASE
Media Contact: Emory Epperson
(714) 727-7958
Analyst Contact: Mariann Ohanesian
(714) 727-7728
AST REPORTS FOURTH QUARTER RESULTS
IRVINE, Calif., Jan. 30, 1997 -- AST Research, Inc. (ASTA-NASDAQ) today
announced revenues of $611.4 million for the fourth quarter of fiscal year 1996,
ended Dec. 28, 1996, compared with revenues of $612.9 million reported during
the prior year period. Net loss was $68.0 million ($1.18 per share), compared
to a net loss of $128.6 million ($2.88 per share) reported during the prior year
period.
Total revenues for fiscal year 1996 were $2.104 billion, versus $2.348
billion for the previous calendar year. Net loss for fiscal year 1996 was 417.7
million ($8.22 per share) versus 263.2 million ($7.01 per share) in calendar
year 1995. In 1995 AST changed its fiscal year end from June to December.
Therefore, fiscal year 1996 comparisons to the prior calendar year period
include the third and fourth quarters of fiscal year 1995 and the first and
second quarters of transition year 1995.
In a separate announcement issued earlier today, the company also stated it
has received a proposal from Samsung to commence negotiations with respect to
the acquisition by Samsung Electronics of all of outstanding shares of common
stock of AST not currently owned by Samsung Electronics or its affiliates, at a
price of $5.10 per share.
AST's achieved total worldwide shipments of 402,000 units during the fourth
quarter Shipments of the company's desktop systems increased 16 percent to
350,000 in the fourth quarter, compared to the prior year's corresponding
quarter. Desktop shipments increased 45 percent compared to the immediately-
preceding third quarter of fiscal year 1996 and increased 27 percent compared to
the second quarter of 1996.
Shipments of the company's notebook systems increased 37 percent to 52,000
notebooks, compared to the prior year's quarter. This included the sale of
approximately 7,600 private-label notebooks to Samsung. Notebook shipments
increased 68 percent compared to the immediately-preceding third quarter of
fiscal year 1996.
Americas region sales of $314.9 million in the fourth quarter were
approximately 21 percent higher than in the prior calendar year period because
of strong retail channel sales and higher demand for notebook systems. Sales of
$286.5 million within the company's international regions declined approximately
19 percent compared to the prior calendar year period due to slower than
expected European demand and the impact of the company's continued
reorganization activities in the Asia/Pacific region. Compared to the
immediately-preceding third quarter, fourth quarter sales in the Americas and
international regions grew 38 percent and 58 percent, respectively.
Worldwide revenues for fiscal year 1996 declined approximately 10 percent
compared to the previous calendar year and included $35 million received from
Samsung related to sales of intellectual properties and agreements involving
server technologies and strategic marketing consulting, of which $10 million was
received in the fourth quarter. Sales of $1.141 billion in the Americas and
$927.8 million in international regions represented declines of approximately
one percent and 22 percent, respectively, over the immediately preceding 12-
month period.
The company also announced changes to its board of directors. Effectively
immediately, Yong-Ro Song and Ho Moon Kang, have joined the board, replacing
Hyeon-Gon Kim and Hee Dong Yoo who have left to pursue other assignments within
the Samsung Group. Mr. Song, 50, is executive vice president and general
manager in charge of Samsung Electronic's strategic planning office. Mr. Kang,
46, presently serves as senior executive managing director of Samsung
Electronic's computer division.
BALANCE SHEET SUMMARY
Total net inventory was $139.0 million at Dec. 28, 1996, down from $192.3
million at Sept. 28, 1996 and represented inventory turns of 16.3. For fiscal
year 1996, AST achieved inventory turns of 15.0, compared with inventory turns
of 8.8 achieved during calendar year 1995.
At Dec. 28, 1996, accounts receivable totaled $400.1 million, which
represented 59 days sales outstanding, down from 76 at Sept. 28, 1996. Total
cash and cash equivalents were $61.1 million, with $175.0 million in short-term
borrowings, compared with $30.0 million and $124.0 million, respectively, at
Sept. 28.
During the quarter, the company announced a $200 million increase in bank
credit guarantees through December 1998 and an extension of its existing $200
million bank credit guarantee from Samsung Electronics from Dec. 1997 to Dec.
1998.
FORWARD-LOOKING STATEMENTS
Statements contained in this press release which are not historical
information are forward-looking statements as defined within the Private
Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and uncertainties
which could cause results to differ materially from those projected. Such
potential risks and uncertainties include, but are not limited to: the level of
competitive pricing pressures in the computer industry; the company's ability to
continue to develop, produce and deliver new products that incorporate leading-
edge PC technologies on a timely basis, that are competitively priced and
achieve significant market acceptance; the effect of any continued losses on the
company's supplier and customer relationships; and its ability to fund
continuing operations.
Additional factors which could affect the company's financial results are
included in the company's report on Form 10-K for Transition Period 1995, which
is filed with the Securities and Exchange Commission.
CORPORATE BACKGROUND
AST Research Inc., a member of the Fortune 500 list of America's largest
industrial and service companies, is one of the world's leading personal
computer manufacturers. The company develops a broad spectrum of desktop,
mobile and server PC products that are sold in more than 100 countries
worldwide. AST systems meet a wide range of customer needs, ranging from
corporate business applications to advanced home and home office use. Corporate
headquarters is located at 16215 Alton Parkway, P.O. Box 57005, Irvine, Calif.
92619-7005. Telephone (714) 727-4141 or (800) 876-4278. Fax: (714) 727-9355.
Information about AST and its products can be found on the World Wide Web at
http://www.ast.com.
# # #
AST(R), Advantage!(R), Ascentia and Bravo are trademarks of AST Research, Inc.
Intel and Pentium are registered trademarks, and Pentium Pro is a trademark of
Intel Corp. Windows is a registered trademark and Windows NT is a trademark of
Microsoft Corp.
AST RESEARCH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 28, December 30,
(In thousands) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 61,063 $ 125,387
Accounts receivable, net 400,061 392,598
Inventories 139,007 252,339
Other current assets 38,762 67,297
- --------------------------------------------------------------------------------
Total current assets 638,893 837,621
Property and equipment, net 91,612 98,725
Other assets 100,552 119,696
- --------------------------------------------------------------------------------
Total assets $ 831,057 $ 1,056,042
================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities 679,942 614,075
Long-term debt 131,737 125,540
Other non-current liabilities 7,238 5,545
- --------------------------------------------------------------------------------
Total liabilities 818,917 745,160
Preferred stock 27,780 -
Common stock and additional capital 506,375 415,182
Retained earnings (deficit) (522,015) (104,300)
- --------------------------------------------------------------------------------
Total shareholders' equity 12,140 310,882
Total liabilities and shareholders' equity $ 831,057 $1,056,042
================================================================================
</TABLE>
AST RESEARCH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Three Months Ended Year Ended
----------------------------- ------------------------------
December 28, December 30, December 28, December 30,
(In thousands, except per share amounts) 1996 1995 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 601,429 $ 612,926 $ 2,068,643 $ 2,348,461
Revenue from related party 10,000 - 35,000 -
- ----------------------------------------------------------------------------------------------------------------------
Total revenue 611,429 612,926 2,103,643 2,348,461
Cost of sales 566,755 623,032 2,078,775 2,223,279
- ----------------------------------------------------------------------------------------------------------------------
Gross profit (loss) 44,674 (10,106) 24,868 125,182
Selling, general and administrative expenses 92,733 90,553 336,367 327,377
Engineering and development expenses 11,670 10,041 40,702 37,441
Restructuring charge - 12,967 6,527 12,967
Other charges - - 26,380 -
- ----------------------------------------------------------------------------------------------------------------------
Total operating expenses 104,403 113,561 409,976 377,785
- ----------------------------------------------------------------------------------------------------------------------
Operating loss (59,729) (123,667) (385,108) (252,603)
Financing and other expense, net (8,228) (4,957) (32,607) (19,829)
- ----------------------------------------------------------------------------------------------------------------------
Loss before income taxes (67,957) (128,624) (417,715) (272,432)
Income tax provision (benefit) - - - (9,248)
- ----------------------------------------------------------------------------------------------------------------------
Net loss $ (67,957) $ (128,624) $ (417,715) $ (263,184)
Net loss per share $ (1.18) $ (2.88) $ (8.22) $ (7.01)
======================================================================================================================
Weighted average common shares outstanding 57,741 44,679 50,827 37,552
=======================================================================================================================
</TABLE>
AST RESEARCH, INC.
COMPUTATION OF NET LOSS PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Three Months Ended Year Ended
--------------------------- --------------------------
December 28, December 30, December 28, December 30,
(In thousands, except per share amounts) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Primary loss per share
Shares used in computing primary loss per share:
Weighted average shares of common stock
outstanding 57,741 44,679 50,827 37,552
Effect of stock options treated as common stock equivalents
under the treasury stock method - - - -
Weighted average common and common equivalent shares
outstanding 57,741 44,679 50,827 37,552
Net loss $ (67,957) $ (128,624) $ (417,715) $ (263,184)
Loss per share - primary $ (1.18) $ (2.88) $ (8.22) $ (7.01)
Fully diluted loss per share
Shares used in computing fully diluted loss per share:
Weighted average shares of common stock outstanding 57,741 44,679 50,827 37,552
Effect of stock options treated as common stock equivalents
under the treasury stock method - - - -
Shares assumed issued on conversion of Liquid Yield
Option Notes (LYONs) - - - -
Total fully diluted shares outstanding 57,741 44,679 50,827 37,552
Net loss - fully diluted earnings per share:
Net loss $(67,957) $ (128,624) $ (417,715) $ (263,184)
Adjustment for interest on LYONs, net of tax - - - -
Adjusted net loss - fully diluted $(67,957) $ (128,624) $ (417,715) $ (263,184)
Loss per share - fully diluted $(1.18) $ (2.88) $ (8.22) $ (7.01)
</TABLE>
