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Previous: SAFEGUARD HEALTH ENTERPRISES INC, 10-Q, 1995-05-15 |
Next: SPECTRASCIENCE INC, 10QSB, 1995-05-15 |
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
- - - - ------------ THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
- - - - ------------ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------------- ---------------------------
Commission File Number: 0-13244
-----------------------------------------
ZYCAD CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 41-1404495
- - - - -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
47100 Bayside Parkway, Fremont, California 94538
- - - - -------------------------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: 510-623-4400
---------------------------------------
Indicate by check mark whether 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
----- -----
On May 10, 1995, there were 19,358,748 shares of the Registrant's common stock
outstanding.
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1: Financial Statements
ZYCAD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, 1995 December 31, 1994
-------------- -----------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 3,903 $ 2,861
Short-term investments 225 225
Accounts receivable, net 10,427 12,481
Inventories 880 948
Other current assets 1,316 1,134
------- -------
Total current assets 16,751 17,649
Property and equipment, net 6,578 7,224
Purchased technology 1,310 1,370
Other assets 3,529 3,582
------- -------
Total assets $28,168 $29,825
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank borrowings under line of credit $ 897 $ 2,897
Current portion of debt obligations 980 998
Accounts payable 2,717 2,516
Accrued expenses 4,249 4,368
Asset write-downs and staff reductions 987 1,792
Deferred revenues 3,675 3,457
------- -------
Total current liabilities 13,505 16,028
Other long-term liabilities 400 408
Non-current portion of debt obligations 1,664 1,874
------- -------
Total liabilities 15,569 18,310
------- -------
Stockholders' equity:
Common stock, par value $.10 1,907 1,903
Additional paid-in capital 46,782 46,739
Notes Receivable from Stock Option (900) (900)
Accumulated translation adjustments 201 (156)
Accumulated deficit (35,391) (36,071)
--------- --------
Total stockholders' equity 12,599 11,515
-------- --------
Total liabilities and
stockholders' equity $28,168 $29,825
------- -------
------- -------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE>
ZYCAD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER-SHARE DATA)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------
1995 1994
---- ----
<S> <C> <C>
Revenues:
Product $ 7,333 $ 7,204
Service 5,231 5,041
-------- --------
Total revenues 12,564 12,245
-------- --------
Cost of revenues:
Product 1,808 2,265
Service 2,598 2,700
-------- --------
Total cost of revenues 4,406 4,965
-------- --------
Gross profit 8,158 7,280
-------- --------
Operating expenses:
Sales and marketing 3,781 4,240
Research and development 2,721 2,470
General and administrative 719 566
-------- --------
Total operating expenses 7,221 7,276
-------- --------
Operating income 937 4
-------- --------
Other income (expense):
Interest income 58 17
Interest expense (191) (26)
Other (124) 70
--------- --------
Other income (expense), net (257) 61
--------- --------
Net income $ 680 $ 65
-------- --------
-------- --------
Net income per share $ .04 $ ---
-------- --------
Average common and common
equivalent shares outstanding 19,348 18,231
-------- --------
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
ZYCAD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1995 1994
---- ----
<S> <C> <C>
Operating activities:
Net income $ 680 $ 65
-------- --------
Adjustments to reconcile income to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,286 1,019
Sales under capital leases --- (50)
Changes in assets and liabilities:
Accounts receivable 2,422 (3,178)
Inventories 68 20
Other assets, net (392) (718)
Accounts payable and accrued expenses (93) 320
Asset write-downs and staff reductions (805) ---
Deferred revenue 93 (62)
-------- --------
Total adjustments 2,579 (2,649)
-------- --------
Net cash provided by (used in) operating activities 3,259 (2,584)
-------- --------
Investing activities:
Capital expenditures (238) (646)
Collections from capital leases 253 142
Capitalized software (200) (450)
Short-term investment proceeds, net --- 136
--------- --------
Net cash used by investing activities (185) (818)
--------- --------
Financing activities:
Proceeds from issuance of common stock 47 3,160
Decrease in bank debt (2,000) ---
Increase (reduction) of equipment financing debt (228) 1,323
--------- --------
Net cash provided by (used in) financing activities (2,181) 4,483
--------- --------
Effect of exchange rate changes on cash and cash equivalents 149 (16)
-------- --------
Net increase in cash and cash equivalents 1,042 1,065
Cash and cash equivalents beginning of period 2,861 3,790
-------- --------
Cash and cash equivalents end of period $ 3,903 $ 4,855
-------- --------
-------- --------
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
4
<PAGE>
ZYCAD CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Financial Statements:
The unaudited condensed consolidated financial statements of Zycad
Corporation for the three months ended March 31, 1995 and 1994
reflect, in the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to fairly state the
results of operations for the interim period. The results of
operations for any interim period are not necessarily indicative of
results for the full year. The unaudited condensed consolidated
interim financial statements should be read in conjunction with the
consolidated financial statements and notes thereto contained in the
Company's December 31, 1994 Annual Report on Form 10-K.
2. Net Income Per Share:
Per-share data is computed by using the weighted average number of
shares of common stock and dilutive common stock equivalents
outstanding, as applicable during each period.
3. Inventories consisted of (in 000's):
<TABLE>
<CAPTION>
March 31, 1994 December 31, 1994
-------------- -----------------
<S> <C> <C>
Finished goods $ 221 $ 211
Raw materials 659 737
------- ------
$ 880 $ 948
------- ------
------- ------
</TABLE>
5
<PAGE>
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
REVENUES
Total revenues for the first quarter 1995 were $12.6 million, an
increase of 3% compared to the first quarter 1994. Product revenue
increased 2%, however excluding the revenues reported in 1994 for the
Paradigm ViP product discontinued in December 1994, product revenue
increased 10% compared to last year principally due to increased
demand for the Paradigm XP. Service revenue increased 4% compared to
first quarter 1994, primarily due to higher average prices per service
contract.
GROSS PROFIT
Overall gross profit for the first quarter 1995 was $8.2 million and
65% compared to $7.3 million and 60% in the same period in 1994.
Product gross profit increased $.6 million primarily due to a more
margin favorable product mix in 1995 compared to 1994. Service gross
profit increased $.3 million principally due to an increase in service
revenue and maintaining cost levels.
OPERATING EXPENSES
SALES AND MARKETING
Sales and marketing expenses declined $.5 million or 11% in the first
quarter of 1995 compared to the same period in 1994 primarily due to lower
levels of staffing, particularly in marketing.
RESEARCH AND DEVELOPMENT
Research and development expenses increased $.3 million in the first
quarter 1995 compared to the first quarter 1994 principally due to a lower
level of capitalized software development costs in 1995 compared to last
year.
GENERAL AND ADMINISTRATIVE
General and administrative expense in first quarter 1995 increased $.2
million in 1995 compared to the same period in 1994 primarily due to
increased staffing and consulting expenses related to research projects in
the FPGA market.
6
<PAGE>
OTHER INCOME/EXPENSE
Other expense increased $.3 million in 1995 compared to the first quarter
of 1994 primarily due to higher interest payments resulting from an
increase in borrowings under the Company's bank line of credit and a higher
level of equipment financing debt.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995 the Company's working capital was $3.2 million compared
to $1.6 million at December 31, 1994. Combined cash and short-term
investments increased $1.0 million during the first three months of 1994
primarily due to income from operations and a $2.1 million reduction in
accounts receivable, partially offset by a $2.0 million paydown of bank
debt and payments related to the year-end restructuring accruals. The
decline in accounts receivable is principally due to a higher level of
collections related to first quarter revenue compared to collections during
the fourth quarter.
Management believes that the current level of working capital, together
with the funds generated from operations and the availability of funds
under the Company's $4.0 million bank line-of-credit will be adequate to
finance the Company's operating needs in the foreseeable future. See Note
5 of Notes to Consolidated Financial Statements in the Company's 1994
Annual Report to Shareholders .
7
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
None.
(b) Reports on Form 8-K:
None.
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ZYCAD CORPORATION
/s/ Peter J. Cassidy
-----------------------------------
Peter J. Cassidy
Executive Vice President and
Chief Financial Officer
Authorized Officer of the Registrant
Dated: May 10, 1995
9
<PAGE>
Exhibit (11)
ZYCAD CORPORATION
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
<S> <C> <C>
1995 1994
---- ----
Weighted average shares outstanding 19,064 18,231
Effect of dilutive stock options
and warrants based on
treasury stock method 284 ---
------- -------
Average common and common
equivalent shares 19,348 18,231
------- -------
------- -------
Net income $ 680 $ 65
------- -------
------- -------
Net income per share $ .04 $ ---
------- -------
------- -------
</TABLE>
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 3903
<SECURITIES> 225
<RECEIVABLES> 10723
<ALLOWANCES> 296
<INVENTORY> 880
<CURRENT-ASSETS> 16751
<PP&E> 6578
<DEPRECIATION> 0
<TOTAL-ASSETS> 28128
<CURRENT-LIABILITIES> 13505
<BONDS> 0
<COMMON> 1907
0
0
<OTHER-SE> 10692
<TOTAL-LIABILITY-AND-EQUITY> 28168
<SALES> 7333
<TOTAL-REVENUES> 12564
<CGS> 1808
<TOTAL-COSTS> 4406
<OTHER-EXPENSES> 7221
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 191
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 680
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
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