<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
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 21, 1996
MYLEX CORPORATION
(Exact name of registrant as specified in its charter)
Florida 0-13381 59-2291597
(State or other jurisdiction (Commission (IRS Employer
or incorporation) File Number) Identification No.)
34551 Ardenwood Boulevard
Fremont, California 94555
(Address of principal executive offices) (Zip code)
(510) 796-6100
(Registrant's telephone number, including area code)
<PAGE>
Item 7. FINANCIAL STATEMENTS, PRO-FORM FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS
(i) Audited financial statements of BusLogic Inc. for its
fiscal years ended January 31, 1994 and 1995; and
(ii) Unaudited financial statements of BusLogic Inc. as of,
and for the eleven month period ended, December 31, 1995.
(b) PRO-FORMA FINANCIAL INFORMATION
Pro forma combined condensed financial information respecting the
Registrant's acquisition of a business as described in Item 2 of
this Form 8-K.
(c) EXHIBITS
Agreement and Plan of Reorganization, dated December 14, 1995,
among Mylex Corporation, BusLogic Inc., BusLogic Acquisition
Corp. and certain principal shareholders of BusLogic Inc.
4
<PAGE>
BUSLOGIC INC.
CONSOLIDATED FINANCIAL STATEMENTS
JANUARY 31, 1995 AND 1994
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
March 3, 1995
To the Board of Directors and Shareholders of
BusLogic Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of BusLogic
Inc. and its subsidiaries at January 31, 1995 and 1994, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Price Waterhouse LLP
<PAGE>
BUSLOGIC INC.
CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
January 31,
----------------------
ASSETS 1995 1994
------- -------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,922 $ 4,049
Accounts receivable, net of allowance for doubtful
accounts of $250 and $201 3,926 3,664
Inventories 3,534 2,701
Deferred income taxes 1,028 515
Prepaid expenses and other current assets 281 168
------- -------
Total current assets 13,691 11,097
Property and equipment, net 1,322 1,199
Deferred income taxes - 16
------- -------
$15,013 $12,312
------- -------
------- -------
LIABILITIES, MANDATORILY REDEEMABLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,899 $ 1,813
Accrued employee compensation 478 492
Accrued sales returns and allowances 725 400
Other accrued expenses and liabilities 762 313
Income taxes payable 838 300
------- -------
Total current liabilities 4,702 3,318
------- -------
Commitments (Note 8)
Mandatorily redeemable convertible Series A preferred
stock, no par value, 800 shares authorized;
800 shares issued and outstanding 2,128 2,048
------- -------
Shareholders' equity:
Common stock, no par value, 15,000 shares authorized;
9,115 and 9,100 shares issued and outstanding 2,238 2,225
Retained earnings 5,945 4,721
------- -------
Total shareholders' equity 8,183 6,946
------- -------
$15,013 $12,312
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
BUSLOGIC INC.
CONSOLIDATED STATEMENT OF INCOME
(in thousands)
<TABLE>
<CAPTION>
Year ended January 31,
----------------------
1995 1994
------- -------
<S> <C> <C>
Net sales $30,076 $24,240
Cost of sales 15,837 12,053
------- -------
Gross profit 14,239 12,187
------- -------
Selling and administrative expenses 8,135 6,504
Research and development 4,334 3,433
------- -------
Total operating expenses 12,469 9,937
------- -------
Operating income 1,770 2,250
Interest income 147 163
------- -------
Income before income taxes 1,917 2,413
Provision for income taxes 613 893
------- -------
Net income $ 1,304 $ 1,520
------- -------
------- -------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
BUSLOGIC INC.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(in thousands)
<TABLE>
<CAPTION>
Common Stock
---------------- Retained
Shares Amount Earnings Total
----- ------ -------- ------
<S> <C> <C> <C> <C>
Balance at January 31, 1993 9,101 $2,227 $3,281 $5,508
Repurchase of shares (1) (2) - (2)
Accretion of mandatorily
redeemable convertible
preferred stock redemption
value - - (80) (80)
Net income - - 1,520 1,520
----- ------ ------ ------
Balance at January 31, 1994 9,100 2,225 4,721 6,946
Issuance of common stock
pursuant to exercise of
employee stock options 15 13 - 13
Accretion of mandatorily
redeemable convertible
preferred stock redemption
value - - (80) (80)
Net income - - 1,304 1,304
----- ------ ------ ------
Balance at January 31, 1995 9,115 $2,238 $5,945 $8,183
----- ------ ------ ------
----- ------ ------ ------
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
BUSLOGIC INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year ended January 31,
---------------------
1995 1994
------ -------
<S> <C> <C>
Cash flows from operating activities:
Net income $1,304 $ 1,520
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 364 213
Deferred income taxes (497) (89)
Changes in assets and liabilities:
Accounts receivable, net (262) (1,007)
Inventories (833) (710)
Prepaid expenses and other assets (113) (781)
Accounts payable 86 906
Accrued sales returns allowance 325 179
Accrued expenses and other liabilities 435 321
Income taxes payable 538 1,047
------ -------
Net cash provided by operating activities 1,347 1,599
------ -------
Cash flows used in investing activities
acquisition of property and equipment (487) (756)
------ -------
Cash flows provided by (used in) financing activities
issuance (repurchase) of common stock pursuant
to exercise of employee stock options 13 (2)
------ -------
Net increase in cash and cash equivalents 873 841
Cash and cash equivalents at beginning of period 4,049 3,208
------ -------
Cash and cash equivalents at end of period $4,922 $ 4,049
------ -------
------ -------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for income taxes $ 515 $ 748
</TABLE>
The accompanying notes are an integral part
of these financial statements.
<PAGE>
BUSLOGIC INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES:
BusLogic Inc. (the Company) commenced operations on February 1, 1990 and is
engaged principally in the business of designing, developing, manufacturing and
marketing enhancement products for the personal computer market. Current
products include AT, EISA, Micro-Channel, and Local Bus SCSI host adapters for
high performance storage solutions.
Export sales, primarily to customers in Europe and Far East Asia, were
$6,508,000 and $4,358,000, respectively, in fiscal 1995 and $5,474,000 and
$3,163,000, respectively, in fiscal 1994.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less at the date of purchase to be cash equivalents.
INVENTORIES
Inventories are stated at the lower of cost or market, cost being determined on
a first-in first-out basis.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is computed on the
straight-line method over estimated useful lives of the related assets of three
to seven years.
REVENUE RECOGNITION
Revenue from product sales to customers is recognized upon shipment. Revenue
from sales to certain distributors is subject to agreements allowing certain
rights of return and price protection on unsold merchandise held by those
distributors. Accordingly, reserves for estimated future returns, exchanges and
credits for price protection are provided upon shipment. Revenue from sale of
packaged software products is recognized when significant vendor obligations are
fulfilled, which is generally upon shipment.
INCOME TAXES
The Company records income taxes under the asset and liability method, whereby
the expected future tax consequences of temporary differences between the book
and tax basis of assets and liabilities are recognized as deferred tax assets
and liabilities.
<PAGE>
Page 2
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to significant
concentrations of credit risk consist principally of cash and cash equivalents
and trade accounts receivable. The Company places its cash and cash equivalents
primarily in market rate accounts and certificates of deposit. The Company, by
policy, limits the amount of credit exposure to any one financial institution.
The Company sells its products to distributors and original equipment
manufacturers throughout the world. Ongoing credit evaluations are performed of
its customers' financial condition. The Company maintains an allowance for
uncollectible accounts receivable based upon the expected collectibility of all
accounts receivable.
NOTE 2 - BALANCE SHEET COMPONENTS:
<TABLE>
<CAPTION>
January 31,
---------------------
1995 1994
------ -------
(in thousands)
<S> <C> <C>
Inventories:
Raw materials $1,949 $1,214
Work-in-process 1,208 1,300
Finished goods 377 187
------ ------
$3,534 $2,701
------ -------
------ -------
Property and equipment:
Technical and office equipment $1,786 $1,339
Furniture and fixtures 268 208
------ -------
2,054 1,547
Less accumulated depreciation (732) (348)
------ -------
$1,322 $1,199
------ -------
------ -------
</TABLE>
NOTE 3 - LINES OF CREDIT:
On May 31, 1994, the Company signed a line of credit agreement with a bank
expiring May 31, 1995 allowing borrowings of up to $2,500,000. Borrowings under
the line are limited to a percentage of eligible accounts receivable, except for
the first $1,000,000 in borrowings which are excluded from this provision.
Borrowings under the line carry interest at prime rate plus one quarter percent
and are secured by accounts receivable, inventories, and property and equipment
of the Company. The agreement requires compliance with financial covenants
concerning financial ratios, net worth and profitability. As of January 31,
1995 and 1994, no amounts were outstanding under the line.
<PAGE>
Page 3
NOTE 4 - INCOME TAXES:
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
Year ended January 31,
---------------------
1995 1994
------ ----
(in thousands)
<S> <C> <C>
Current:
Federal $ 868 $762
State 242 220
------ ----
1,110 982
------ ----
Deferred:
Federal (377) (59)
State (120) (30)
------ ----
(497) (89)
------ ----
$ 613 $893
------ ----
------ ----
</TABLE>
Deferred tax assets consist of the following:
<TABLE>
<CAPTION>
January 31,
---------------------
1995 1994
------ ----
(in thousands)
<S> <C> <C>
Accounts receivable reserves $ 111 $ 89
Accrued expenses 708 254
Inventory reserves 148 114
State income taxes 61 58
Depreciation - 16
------ ----
$1,028 $531
------ ----
------ ----
</TABLE>
A reconciliation of the statutory U.S. federal income tax rate to the Company's
effective income tax rate follows:
<TABLE>
<CAPTION>
Year ended January 31,
---------------------
1995 1994
------ ----
(in thousands)
<S> <C> <C>
Provision at statutory rate 35.0% 35.0%
State taxes, net of federal benefit 6.0 5.1
Research and development credits (6.6) (2.7)
Foreign sales corporation benefit (3.4) (1.4)
Other, net 1.0 0.7
------ ----
Effective income tax rate 32.0% 36.7%
------ ----
------ ----
</TABLE>
<PAGE>
Page 4
NOTE 5 - MANDATORILY REDEEMABLE CONVERTIBLE SERIES A PREFERRED STOCK:
In January 1993 the Company issued 800,000 shares of redeemable convertible
Series A preferred stock at $2.50 per share. Holders of Series A preferred
stock have certain registration rights.
DIVIDENDS
Holders of Redeemable Convertible Series A preferred stock are entitled to
receive a noncumulative, preferential dividend of $0.125 when and if declared by
the Board of Directors.
REDEMPTION
After January 1998, upon written request of the holders of more than 50% of the
then outstanding Redeemable Convertible Series A preferred stock, the Company
would be required to repurchase the Series A preferred shares at $3 plus any
declared but unpaid dividends.
CONVERSION
At the option of holders, each share of redeemable convertible preferred stock
is convertible into fully paid shares of common stock. The number of shares of
common stock is to be determined by dividing the original issue price for the
series of redeemable convertible preferred stock by the conversion price at the
time in effect for such shares. The conversion price will be the original issue
price subject to adjustments for the issue of additional common stock.
Furthermore, such conversion is automatic upon the effective date of a public
offering of common stock for which the aggregate proceeds exceed $7,500,000 and
the per share offering price is not less than $5.
LIQUIDATION
In the event of liquidation, Series A shareholders are entitled to a per share
distribution in preference to common shareholders of $2.50 plus any declared but
unpaid dividends. If the assets and funds thus distributed among the holders of
the Series A redeemable convertible preferred stock shall be insufficient to
permit the payment of the preferential amounts, then the entire assets and funds
of the corporation legally available for the distribution shall be distributed
ratably among the holders of the Series A redeemable convertible preferred stock
in proportion to the aggregate preferential amounts owed to the holders.
In the event funds are sufficient to make a complete distribution to the
preferred shareholders as described above, the common stock shareholders are
then entitled to a per share distribution of $1.25 plus any declared but unpaid
dividend. Remaining assets, if any, will then be distributed to holders of
Series A redeemable convertible preferred stock and common stock pro rata based
upon the number of shares of common stock held by each (assuming conversion of
all Series A redeemable convertible preferred stock).
<PAGE>
Page 5
VOTING RIGHTS
The holder of each share of Series A redeemable convertible preferred stock
shall have the right to one vote for each share of common stock into which the
preferred stock could be converted. The holders of Series A redeemable
convertible preferred stock have full voting rights and powers equal to the
voting rights and powers of the holders of common stock.
NOTE 6 - COMMON STOCK:
In connection with the sale of common stock in March 1992, the Company issued
warrants to purchase 300,000 shares of common stock at $2 per share. As of
January 31, 1995, 300,000 shares of the Company's common stock have been
reserved for the issuance upon exercise of the warrants. Warrants generally
expire on April 8, 1995 except under certain agreed upon conditions.
NOTE 7 - EMPLOYEE BENEFIT PLANS:
STOCK OPTION PLAN
In January 1991, the Company adopted an incentive stock plan (the Plan) under
which 2,969,500 shares of common stock have been reserved for issuance. Stock
options are granted at prices of not less than 100% of the fair market value of
the Common Stock at the time of grant, as determined by the Board of Directors,
except that stock options granted to any employee who owns stock representing
more than 10% of total voting power must have an exercise price of not less than
110% of fair market value. Options granted under the Plan are for periods not
to exceed ten years, except for optionees, who at the time the options are
granted own more than 10% of all outstanding stock, in which case the term is
reduced to five years. As of January 31, 1995, options for a total of 1,702,047
common shares were exercisable.
The following table summarizes activity under the Plan:
<TABLE>
<CAPTION>
Shares
available Options Price per
for grant outstanding share
--------- ----------- ----------
<S> <C> <C> <C>
Balance at January 31, 1993 236,708 1,757,116 $0.13-1.25
Additional shares reserved 969,500
Options granted (579,350) 579,350 $ 1.25
Options canceled 28,543 (28,543) $0.40-1.25
-------- ---------
Balance at January 31, 1994 655,401 2,307,923 $0.13-1.25
Options granted (180,650) 180,650 $ 1.25
Options exercised - (15,386) $0.13-1.25
<PAGE>
Page 6
Options canceled 136,141 (136,141) $0.40-1.25
-------- ---------
Balance at January 31, 1995 610,892 2,337,046 $0.13-1.25
-------- ---------
-------- ---------
</TABLE>
401(k) SAVINGS PLAN
In December 1990 the Company adopted a 401(k) plan (the "Savings Plan") covering
substantially all of its employees. Under the Savings Plan, eligible employees
may contribute up to 15% of their compensation to the Savings Plan. The
Company's contributions to the Savings Plan are comprised of the amounts
allocated from the profit sharing plan. Until the third quarter of fiscal 1994,
the Company's contributions to the Savings Plan vested ratably over five years.
Beginning with the contributions made in the fourth quarter of fiscal 1994, the
Company's contributions are now immediately fully vested.
During the years ended January 31, 1995 and 1994, the Company's contributions
were $88,000 and $144,000, respectively.
PROFIT SHARING PLAN
The Company has a profit sharing plan which provides for additional compensation
to all its employees in the form of cash bonuses based on various employee
performance measures. The additional compensation is determined on a quarterly
basis based upon a certain percentage of the operating profits. A portion of
the profit sharing is contributed to the 401(k) Savings plan by the Company and
the remaining balance is paid to the employees. Charges to income for the plan,
including the amounts contributed to the 401(k) Savings Plan, during the years
ended January 31, 1995 and 1994 were $361,000 and $603,000, respectively.
NOTE 8 - COMMITMENTS:
The Company leases its principal facilities under an operating lease expiring
August 31, 1995. The Company also leases certain other facilities and equipment
under various noncancelable operating lease agreements. At January 31, 1995,
future minimum lease payments under operating leases were $175,000 for the year
ending January 31, 1996. Rent expense for all operating leases was $371,000 and
$301,000 for the years ended January 31, 1995 and 1994, respectively.
<PAGE>
BUSLOGIC INC.
Financial Statements
December 31, 1995
<PAGE>
BUSLOGIC INC.
Balance Sheet
December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
ASSETS
(Unaudited)
<S> <C>
Current assets:
Cash and equivalents $ 5,287
Account receivable, net 3,274
Inventories 2,383
Prepaid expenses and other current assets 1,913
---------
Total current assets 12,857
Property and equipment, net 1,305
---------
Total assets $ 14,162
---------
---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,013
Accrued liabilities 2,452
---------
Total current liabilities 3,465
Mandatorily redeemable preferred stock 2,128
Stockholders' equity:
Common stock 2,387
Retained earnings 6,182
---------
Total stockholders' equity 8,569
---------
Total liabilities, mandatorily redeemable preferred
and stockholders' equity $ 14,162
---------
---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BUSLOGIC INC.
Statements of Operations
Eleven months ended December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Net sales $ 24,567 $ 27,605
Cost of sales 13,009 14,453
--------- ---------
Gross profit 11,558 13,152
Operating expenses:
Selling and marketing 5,948 6,183
Research and development 4,023 4,045
General and administrative 1,424 1,290
--------- ---------
Total operating expenses 11,395 11,518
--------- ---------
Operating profit 163 1,634
Other income 179 129
--------- ---------
Income before taxes 342 1,763
Income tax expense 120 656
--------- ---------
Net income $ 222 $ 1,107
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BUSLOGIC INC.
Statement of Cash Flows
Eleven months ended December 31, 1995
(In thousands)
<TABLE>
<CAPTION>
1995 1994
---- ----
(Unaudited)
<S> <C> <C>
Net cash provided operating activities $ 742 $1,313
Cash flows from investing activities - capital expenditures (527) (446)
------ ------
Net cash used by investing activities (527) (446)
Cash flows from financing activities - exercise of stock options 149 10
------ ------
Net cash provided by financing activities 149 10
Net increase in cash 364 877
------ ------
Cash and cash equivalents at beginning of period $ 4,922 $4,049
------ ------
------ ------
Cash and cash equivalents at end of period $ 5,286 $4,926
------ ------
------ ------
Cash paid during the period:
Cash paid for income taxes $ 130 $ --
------ ------
------ ------
</TABLE>
See accompanying note to financial statements.
<PAGE>
BUSLOGIC INC.
Notes to Financial Statements
December 31, 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICES
BASIS OF PRESENTATION
In the opinion of the Company, the accompanying financial statements
contain all adjustments (consisting only of normal recurring adjustments)
necessary to fairly present the Company's financial position and its
results of operations and cash flows as of the dates and for the period
indicated.
(2) INVENTORIES
<TABLE>
<S> <C>
Raw materials $ 1,057
Work in process 1,006
Finished goods 320
--------
Total $ 2,383
--------
--------
</TABLE>
<PAGE>
SIGNATURE
Pursuant to the requirement 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.
MYLEX CORPORATION
Dated: May 7, 1996 By: /s/ Colleen Gray
------------------
Colleen Gray
Vice President Finance and
Chief Financial Officer
