<PAGE>
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
For quarterly period ended September 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM _______TO _______
Commission File No. 0-14225
EXAR CORPORATION
(Exact Name of registrant as specified in its charter)
Delaware 94-1741481
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
48720 Kato Road, Fremont California 94538
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 668-7000
- --------------------------------------------------------------------------------
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.
Class Outstanding at October 31, 1998
- --------------------------------------------------------------------------------
Common Stock, .0001 par value 9,301,545 shares net of treasury shares
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements . . . . . . . . 3-5
Notes to Condensed Consolidated Financial Statements. . . . 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . 9-12
Item 3. Quantitative and Qualitative Disclosures About
Market Risk . . . . . . . . . . . . . . . . . . . . . . . . 12
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders . . . . 13
Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . 13
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . 14
EXHIBITS
Exhibit 27.0. . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
EXAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
<TABLE>
<CAPTION>
SEPTEMBER 30, MARCH 31,
1998 1998
(UNAUDITED)
------------ ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 70,833 $ 76,167
Short-term investments 3,170 3,140
Accounts receivable, net 14,687 16,764
Inventories 6,898 6,781
Prepaid expenses and other 1,791 1,521
Deferred income taxes 5,217 5,217
------------ ----------
Total current assets 102,596 109,590
PROPERTY AND EQUIPMENT, Net 28,431 26,746
GOODWILL, Net 1,166 1,534
OTHER ASSETS 5,766 5,799
------------ ----------
TOTAL ASSETS $ 137,959 $ 143,669
------------ ----------
------------ ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and other accrued expenses $ 7,870 $ 10,631
Accrued compensation and related benefits 3,232 8,564
Income taxes payable 2,250 -
------------ ----------
Total current liabilities 13,352 19,195
------------ ----------
LONG-TERM LIABILITIES 694 745
------------ ----------
STOCKHOLDERS' EQUITY:
Preferred stock; $.0001 par value; 2,250,000 shares authorized;
no shares outstanding - -
Common stock; $.0001 par value; 25,000,000 shares authorized;
10,589,611 and 10,475,503 shares outstanding 87,767 86,091
Cumulative translation adjustments 46 83
Retained earnings 55,821 51,700
Treasury stock; 1,288,066 and 977,766 shares of common stock at cost (19,721) (14,145)
------------ ----------
Total stockholders' equity 123,913 123,729
------------ ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 137,959 $ 143,669
------------ ----------
------------ ----------
</TABLE>
See notes to condensed consolidated financial statements
3
<PAGE>
EXAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ -----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET SALES $ 19,198 $ 25,935 $ 40,962 $ 50,334
COSTS AND EXPENSES:
Cost of sales 9,146 13,335 19,212 26,282
Research and development 3,576 3,948 6,989 7,722
Selling, general and administrative 4,892 5,873 10,314 11,410
Goodwill amortization 185 293 369 585
--------- --------- --------- ---------
Total costs and expenses 17,799 23,449 36,884 45,999
--------- --------- --------- ---------
OPERATING INCOME 1,399 2,486 4,078 4,335
OTHER INCOME:
Interest income, net 1,025 704 2,042 1,270
Other, net 399 (21) 473 23
--------- --------- --------- ---------
Total other income, net 1,424 683 2,515 1,293
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES 2,823 3,169 6,593 5,628
INCOME TAXES 1,068 1,229 2,472 2,206
--------- --------- --------- ---------
NET INCOME $ 1,755 $ 1,940 $ 4,121 $ 3,422
--------- --------- --------- ---------
--------- --------- --------- ---------
NET INCOME PER SHARE:
BASIC $0.19 $0.21 $0.43 $0.37
--------- --------- --------- ---------
--------- --------- --------- ---------
DILUTED $0.18 $0.20 $0.42 $0.36
--------- --------- --------- ---------
--------- --------- --------- ---------
SHARES USED IN COMPUTATION OF
NET INCOME PER SHARE:
BASIC 9,413 9,304 9,476 9,251
--------- --------- --------- ---------
--------- --------- --------- ---------
DILUTED 9,618 9,812 9,794 9,635
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
EXAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,121 $ 3,422
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization 2,347 2,937
Changes in operating assets and liabilities:
Accounts receivable 2,077 (363)
Inventories (117) (2,202)
Prepaid expenses and other (270) 1,950
Accounts payable and other accrued expenses (2,761) (1,395)
Accrued compensation and related benefits (5,332) 1,545
Income taxes payable 2,250 -
-------- --------
Net cash provided by operating activities 2,315 5,894
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (3,664) (2,353)
Purchases of short-term investments (30) (104)
Sales of short-term investments - 2,000
Purchase of long-term investments - (3,000)
Other assets 33 242
-------- --------
Net cash used in investing activities (3,661) (3,215)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term liabilities (51) (73)
Proceeds from issuance of common stock 1,675 2,807
Acquisition of common stock (5,575) -
-------- --------
Net cash provided by (used in)
financing activities (3,951) 2,734
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (37) 508
-------- --------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (5,334) 5,921
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 76,167 48,479
-------- --------
CASH AND EQUIVALENTS AT END OF PERIOD $ 70,833 $ 54,400
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 250 $ 144
-------- --------
-------- --------
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
EXAR CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
QUARTER AND SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
- --------------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Exar Corporation and its wholly-owned subsidiaries ("Exar" or the
"Company"). Such financial statements have been prepared in conformity with
generally accepted accounting principles consistent with those reflected in
the Company's 1998 annual report on Form 10-K, and include all adjustments
(consisting only of normal, recurring adjustments) necessary for a fair
presentation of financial position, results of operations and cash flows.
The results of operations for the three and six months ended September 30,
1998 are not necessarily indicative of the results of operations to be
expected for the full year. These financial statements should be read in
conjunction with the audited financial statements for the fiscal year ended
March 31, 1998 included in the Company's annual report to security holders
furnished to the Securities and Exchange Commission pursuant to Rule 14a-3(b)
in connection with the Company's 1998 Annual Meeting of Stockholders.
Exar designs, develops and markets analog and mixed-signal application
specific integrated circuits for use in the communications, video and
imaging, silicon microstructures and in other selected product areas.
Principal markets include North America, Asia and Europe.
NOTE 2. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out method) or
market and consist of the following:
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
------------ ------------
<S> <C> <C>
Work-in-process $ 4,340 $ 4,579
Finished goods 2,558 2,202
------------ ------------
$ 6,898 $ 6,781
------------ ------------
------------ ------------
</TABLE>
6
<PAGE>
NOTE 3. NET INCOME PER SHARE
The Company has adopted Statement of Financial Accounting Standards No. 128,
"Earnings Per Share," (SFAS 128). SFAS 128 requires a dual presentation of
basic and diluted EPS. Basic EPS excludes dilution and is computed by
dividing net income by the weighted average of common shares outstanding for
the period. Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock. Prior periods have been restated to conform
with SFAS 128.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET INCOME $ 1,755 $ 1,940 $ 4,121 $ 3,422
-------- -------- -------- --------
-------- -------- -------- --------
SHARES USED IN COMPUTATION:
Weighted average common shares outstanding used in
computation of basic net income per share 9,413 9,304 9,476 9,251
Dilutive effect of stock options 205 508 318 384
-------- -------- -------- --------
Shares used in computation of diluted net income per share 9,618 9,812 9,794 9,635
-------- -------- -------- --------
-------- -------- -------- --------
BASIC NET INCOME PER SHARE $ 0.19 $ 0.21 $ 0.43 $ 0.37
-------- -------- -------- --------
-------- -------- -------- --------
DILUTED NET INCOME PER SHARE $ 0.18 $ 0.20 $ 0.42 $ 0.36
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
Options to purchase 1,259,781 and 649,750 shares of common stock at prices
ranging from $16.09 to $37.25 were outstanding as of September 30, 1998 and
1997, respectively, but not included in the computation of diluted net income
per share because the options' exercise prices were greater than the average
market price of the common shares as of such dates and, therefore, would be
antidilutive under the treasury stock method.
7
<PAGE>
NOTE 4. COMPREHENSIVE INCOME
In the first quarter of fiscal year 1999, the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income,"
which requires an enterprise to report, by major components and as a single
total, the change in net assets during the period from nonowner sources. For
the three and six months ended September 30, 1998 and 1997, comprehensive
income, which was comprised of the Company's net income for the periods and
changes in cumulative translation adjustments, was as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1998 1997 1998 1997
------ ----- ----- -----
<S> <C> <C> <C> <C>
NET INCOME 1,755 1,940 4,121 3,422
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Cumulative translation adjustments 6 (32) (24) 328
------ ----- ----- -----
COMPREHENSIVE INCOME 1,761 1,908 4,097 3,750
------ ----- ----- -----
------ ----- ----- -----
</TABLE>
NOTE 5. RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which establishes annual and interim
reporting standards for an enterprise's business segments and related
disclosures about its products, services, geographic areas and major
customers. The Company has not yet determined its business segments for
purposes of these disclosures. Adoption of this statement will not impact
the Company's consolidated financial position, results of operations or cash
flows. The Company will adopt this statement in its financial statements for
the year ending March 31, 1999.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which defines derivatives, requires that
all derivatives be carried at fair value, and provides for hedging accounting
when certain conditions are met. This statement is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. On a forward looking
basis, although the Company has not fully assessed the implications of this
new statement, the Company does not believe adoption of this statement will
have a material impact on the Company's financial position or results of
operations.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Except for the historical information contained herein, the following
discussion contains forward looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from
those discussed here. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in this section,
as well as in the sections entitled "Business" and "Risk Factors" in the
Company's 1998 Form 10-K, filed with the Securities and Exchange Commission
on June 19, 1998.
GENERAL - The Company derives revenue principally from the sale of integrated
circuits for use in communications, video and imaging, silicon sensing and
other selected areas. The Company has wholly-owned subsidiaries in Japan,
Taiwan and the United Kingdom to support its sales operations in the Far East
and Europe.
RESULTS OF OPERATIONS - Net sales for the second quarter of fiscal 1999 were
$19.2 million compared to $25.9 million for the corresponding period in
fiscal 1998, a decrease of approximately 26%. Net sales for the six month
period ended September 30, 1998 decreased by approximately 19% to $41.0
million compared to $50.3 million for the corresponding period in fiscal
1998. These decreases were primarily due to decreases in sales of
discontinued consumer and custom products in the Company's legacy product
lines. Sales of these discontinued legacy products are expected to further
decline over the next several quarters.
During the three month period ended September 30, 1998, the Company reversed
$1.2 million of accrued medical benefits upon changing from a self insured
plan to a fully insured plan and revising its estimate of the Company's
ultimate liability. This change in estimate had a positive net impact of $.4
million on gross margin, $.4 million on research and development expenses and
$.4 million on selling, general and administrative expenses.
Cost of goods sold for the second quarter and the first six months of fiscal
1999 decreased to approximately 48% and 47% of net sales, respectively,
compared to 51% and 52% of net sales for the same periods in fiscal 1998. The
decrease is due to a greater mix of the Company's newer analog and
mixed-signal products which tend to have higher gross margins than many of
the Company's more mature products. The Company's gross margins from sales of
integrated circuits vary depending on competition from other manufacturers,
the volume of products manufactured and sold, the Company's ability to
achieve certain manufacturing efficiencies and the cost of material procured
from the Company's suppliers. Margins of any particular product may erode
over time.
Research and development expenses in the second quarter and first six months
of fiscal 1999 represented approximately 19% and 17% of net sales,
respectively compared to 15% of net sales in the corresponding periods in
fiscal 1998. Research and development expenses in the second quarter and
first six months of fiscal 1999 decreased by approximately 9% and 10%,
respectively, compared to the same periods in fiscal 1998. The decrease in
research and development expenses is attributable to a decrease in employee
benefits expense and to the reduction of the medical benefits accrual upon
changing from a self insured plan to a fully insured plan as discussed above.
Selling, general and administrative expenses, as a percentage of net sales,
increased from approximately 23% in the second quarter and first six months
of fiscal 1998 to 26% and 25%,
9
<PAGE>
respectively, in the corresponding periods of fiscal 1999. Selling, general
and administrative expenses in the second quarter and first six months of
fiscal 1999 decreased by approximately 17% and 10%, respectively, compared to
the same periods in fiscal 1998. The decrease in selling, general and
administrative expenses is attributable to decreased commissions expense,
decreased employee benefits expense and to the reduction of the medical
benefits accrual upon changing from a self insured plan to a fully insured
plan as discussed above.
Other income in the second quarter and first six months of fiscal 1999
increased by approximately 108% and 95%, respectively, compared to the same
periods in fiscal 1998. These increases are attributable mainly to higher
interest earned on increased cash and equivalents balances as well as gains
on property and equipment disposals.
The Company's provision for income taxes is based on income from operations.
The Company's effective tax rate for the first six months of fiscal 1999 was
approximately 38% compared with the federal statutory rate of 35%. The
difference is due to non-deductible expenses, state income taxes and foreign
income, which is taxed at rates different from U.S. income tax rates,
partially offset by tax advantaged investment income and tax savings
generated from utilization of the Company's foreign sales corporation.
In 1987, one of the Company's subsidiaries identified low-level groundwater
contamination on its principal manufacturing site. Although the area of
contamination appears to have been defined, the source of the contamination
has not been identified. The Company has reached an agreement with another
entity to share in the cost of ongoing site investigations and the operation
of remedial systems to remove subsurface chemicals. The accompanying
financial statements include an accrual for the Company's approximately $.8
million share of estimated remediation costs.
LIQUIDITY AND CAPITAL RESOURCES - During the first six months of fiscal
1999, the Company financed its operations primarily from cash flows from
operations and existing cash and short-term investments. At September 30,
1998, the Company had approximately $74.0 million of cash and short-term
investments. The Company has available a short term, unsecured line of credit
under which it may borrow up to $10 million, none of which was being utilized
at September 30, 1998. In addition, the Company has a credit facility with
certain domestic and foreign banks under which it may borrow up to $25
million in support of its foreign currency transactions. At September 30,
1998, the Company had no outstanding foreign currency forward contracts.
The Company has no material firm capital commitments.
The Company anticipates that it will finance its operations with cash flows
from operations, existing cash and short-term investment balances, borrowings
under existing bank credit lines, and some combination of long-term debt
and/or lease financing and additional sales of equity securities. The
combination and sources of capital will be determined by management based on
the needs of the Company and prevailing market conditions.
10
<PAGE>
YEAR 2000 AND PROXIMATE DATES
Many computer systems are expected to experience problems interpreting dates
around the year 2000. Following is a summary of our activities to address
the ability of our business to operate around these dates:
STATE OF READINESS AND CONTINGENCY PLANS- The Company has completed the
process of identifying the programs and infrastructure that could be affected
by the Year 2000 issue and has developed an implementation plan to resolve
the issue. In 1997, in order to improve access to business information
through common, integrated computing systems across the Company, the Company
began a worldwide business systems replacement project with systems that use
programs primarily from Oracle Corporation (Oracle). The new systems, which
are expected to make the Company's business computer systems Year 2000
compliant, are scheduled for completion in the quarter ended March 31, 1999.
The implementation of the Oracle programs is on schedule and approximately 80%
complete. The Company has developed a contingency plan to capture data
that would otherwise be processed by Oracle programs using PC based systems.
A decision to implement the contingency plan, which is dependent upon the
successful implementation of Oracle, is expected to be made by the end of the
quarter ended December 31, 1998. This contingency plan will allow the Company
to operate its critical business functions at minimum levels of efficiency
until such time that an alternative solution can be developed.
COSTS - The total anticipated cost of the Oracle implementation is estimated
at $4.5 million to $5.5 million dollars. Approximately $4.0 million to $5.0
million dollars will be capitalized and is for the development of software
and installation of hardware. Of the remaining project costs of
approximately $.5 million, the Company has expensed approximately $.3 million
in prior periods and anticipates to expense the residual through the end of
the project in the quarter ended March 31, 1999. The costs of the Oracle
implementation and the date on which the Company plans to complete the
project are based on management's best estimates, which were derived
utilizing numerous assumptions of future events including the continued
availability of certain resources, third parties' Year 2000 readiness and
other factors. The Company believes that the costs to address other
non-critical systems have been and will continue to be immaterial to the
Company's financial results of operations and cash flows.
RISKS - The Company believes that with the implementation of the Oracle
software, it will be able to operate its time sensitive business-application
software programs and infrastructure into and beyond the year 2000. The
Company is in the process of working with certain key suppliers and customers
to assess their year 2000 readiness. The failure by a third party to
adequately address the year 2000 issue could have a material adverse impact
on such third parties ability to furnish products and services to the Company
and, therefore, could have a material adverse effect on the Company.
However, due to the general uncertainty inherent in the Year 2000 problem,
resulting in part from the uncertainty of the Year 2000 readiness of
third-party suppliers and customers, the Company is unable to determine at
this time whether the consequences of Year 2000 failures will have a material
impact on the Company's results of operations, liquidity or financial
condition.
FACTORS THAT MAY AFFECT FUTURE RESULTS - The Company is currently
transferring its remaining test and shipping operations to offshore
sub-contractors to reduce manufacturing expenses. In addition, the Company
has refocused its product strategy to provide analog and mixed-signal
products for the video, imaging, communications and silicon sensor markets
and, therefore, has discontinued certain product offerings. Furthermore, the
semiconductor industry is characterized
11
<PAGE>
by economic downturns resulting in diminished product demand, erosion of
average selling prices, intense competition, rapid technological change,
occasional shortages of materials, dependence upon highly skilled engineering
and other personnel and significant expenditures for product development. In
addition, the cyclical market patterns of the semiconductor industry
periodically result in shortages of wafer fabrication capacity. The Company's
ability to meet future demand for its products is dependent upon obtaining
sufficient supply of raw materials and components. The Company's operations
have reflected, and may in the future reflect, substantial fluctuation from
period-to-period as a result of the above factors, as well as general
economic conditions, the timing of orders from major customers, variations in
manufacturing efficiencies, exchange rate fluctuations, the availability and
cost of products from the Company's suppliers, management decisions to
commence or discontinue certain product lines, the Company's ability to
design, introduce and manufacture new products on a cost-effective and timely
basis and other factors. Exar's future operating results could continue to be
adversely affected by the current downturn in the semiconductor market, the
Asian financial crisis or by the failure of one or more of its customers to
compete successfully in their markets. The markets for components used in the
video, imaging, communications and silicon sensor markets are extremely price
competitive.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information required by this item is not applicable for the Company until the
fiscal year ended March 31, 1999.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of the Stockholders of Exar Corporation was held on
September 10, 1998 in Fremont, California. At the meeting the following
individuals were elected to the Board of Directors of the Company and will
hold office until the 2001 Annual Meeting of Stockholders. The number of
affirmative and negative votes were as follows:
<TABLE>
<CAPTION>
Affirmative Negative
----------- ---------
<S> <C> <C>
Mr. Donald L. Ciffone, Jr. 7,360,242 613,907
Mr. Ronald W. Guire 7,360,204 613,945
</TABLE>
In addition, certain individuals will continue to hold office as directors of
the Company until the Annual Meeting of Stockholders as follows:, Mr. George
D. Wells - 1999 and Mr. Raimon L. Conlisk - 1999, Mr. James E. Dykes - 2000,
Dr. Frank P. Carrubba - 2000
Other matters voted upon at the meeting and the number of affirmative and
negative votes cast with respect to each such matter were as follows:
<TABLE>
<CAPTION>
Affirmative Negative Withheld Abstained
----------- --------- --------- ----------
<S> <C> <C> <C> <C>
Resolution to approve the Amendment
To the Company's 1997 Equity Incentive
Plan 4,502,331 2,557,547 899,120 15,151
Resolution to approve the Amendment
To the Company's 1996 Non-Employee
Directors' Stock Option Plan 4,730,267 1,696,204 872,909 674,769
</TABLE>
ITEM 5. - OTHER INFORMATION
Pursuant to the Company's bylaws, stockholders who wish to bring matters or
propose nominees for director at the Company's 1999 annual meeting of
stockholders must provide specified information to the company prior to March
15, 1999 (unless such matters are included in the Company's proxy statement
pursuant to rule 14A-3 under the Securities Exchange Act of 1934, as amended).
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit Number Description of Document
-------------- -----------------------
<S> <C>
27.0 Financial Data Schedule
</TABLE>
(b) During the quarter for which this report is filed, the Registrant filed
no reports on Form 8-K.
13
<PAGE>
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.
EXAR CORPORATION
By /s/ Donald L. Ciffone, Jr. Date: November 13, 1998
---------------------------
Donald L. Ciffone, Jr.
President
Chief Executive Officer
By /s/ Ronald W. Guire Date: November 13, 1998
---------------------------
Ronald W. Guire
Executive Vice President,
Chief Financial Officer
14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
- -------
<S> <C>
27.0 Financial Data Schedule.
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 70,833
<SECURITIES> 3,170
<RECEIVABLES> 14,687
<ALLOWANCES> 0
<INVENTORY> 6,898
<CURRENT-ASSETS> 102,596
<PP&E> 28,431
<DEPRECIATION> 0
<TOTAL-ASSETS> 137,959
<CURRENT-LIABILITIES> 13,352
<BONDS> 0
0
0
<COMMON> 68,046
<OTHER-SE> 55,867
<TOTAL-LIABILITY-AND-EQUITY> 137,959
<SALES> 40,962
<TOTAL-REVENUES> 40,962
<CGS> 19,212
<TOTAL-COSTS> 36,884
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,593
<INCOME-TAX> 2,472
<INCOME-CONTINUING> 4,121
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> 4,121
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</TABLE>
