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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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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) July 18, 1997
PICTURETEL CORPORATION
(Exact name of Registrant as specified in its charter)
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<S> <C> <C>
Delaware 1-9434 04-2835972
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)
100 Minuteman Road, Andover, MA. 01810
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number: 508-292-5000
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Item 5. Other Events
On July 15, 1997, the Company released its earnings for the quarter
ended June 29, 1997 in a press release which is incorporated by reference
herein.
Financial Statements and Exhibits
(a) Financial Statements of business acquired
Not applicable
(b) Pro forma financial information
Not applicable
(c) Exhibits:
10(a) Press Release dated July 15, 1997
10(b) Consolidated Statements of Operations (Unaudited)
10(c) Consolidated Balance Sheets (Unaudited)
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SIGNATURE
Pursuant to 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.
PICTURETEL CORPORATION
/s/ Richard B. Goldman
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Richard B. Goldman
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
July 18, 1997
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NEWS RELEASE Exhibit 10(a)
Contact: Kevin Flanagan
PICTURETEL CORPORATION
(508) 292-5178
[email protected]
PICTURETEL CORPORATION ANNOUNCES SECOND-QUARTER FINANCIAL RESULTS
ANDOVER, Mass. -- JULY 15, 1997 -- PictureTel Corporation (NASDAQ: PCTL), the
world leader in videoconferencing, today reported revenue of $112.2 million for
the second quarter, which ended on June 29, 1997. In the second quarter of 1996,
the company posted revenue of $116.1 million.
Net loss for the quarter was $3.0 million or $0.09 per share, compared
to net income of $8.5 million, or $0.24 per share, for last year's second
quarter.
For the first six months of the year, PictureTel posted revenue of
$230.5 million and net income of $55,000. In the first six months of 1996,
PictureTel had revenue of $221.1 million and net income of $16.0 million, or
$0.44 per share.
The company said the decline in revenue and the operating loss were due
to unexpectedly soft demand and lower average selling prices for its
videoconferencing products in both the United States and Europe. However,
customer services revenue rose 27 percent in the quarter, compared to the second
quarter of 1996. PictureTel expects this weakness in product demand will
continue for the next several quarters.
"Our financial performance in the second quarter fell well below our
expectations," said Dr. Norman E. Gaut, PictureTel's chairman and CEO. "Despite
this weakness in the marketplace, which we expect will continue for several
quarters, PictureTel continues to command more than 50 percent of the revenue in
the worldwide videoconferencing market.
- more -
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PICTURETEL Q2 1997 EARNINGS, P. 2
"In view of the reduced revenue stream that we expect for the next few
quarters, the management team is in the process of reducing the company's cost
structure to bring it in line with lower-than-expected revenues. After
thoroughly reviewing the company's operations, we believe we can accomplish our
goals by a targeted reduction in expenses of approximately 10 to 15 percent,"
Gaut said.
The company will take a charge of $10 million to $15 million in the
third quarter relating to a pending reorganization of PictureTel and expenses
associated with the soon-to-be-completed acquisition of MultiLink, Inc., and its
integration into PictureTel.
Despite the downturn in revenue during the second quarter, PictureTel
continued its commitment to technical innovation. In May the company introduced
LiveLAN(TM) 3.0, a complete solution for H.323 standards-based videoconferencing
over local area networks and corporate intranets. With this product PictureTel
is building upon its success in ISDN-based videoconferencing into the emerging
LAN marketplace, which is poised for significant growth. The company also
recently introduced the latest release of its award-winning Live200(TM) adding
T.120 compliance for multipoint data conferencing and optional 384 kbps video
transmission capability.
PictureTel's success in bringing innovative new products to market is
clearly demonstrated by the success of SwiftSite(TM), the world's first compact
videoconferencing system. Since introducing it in late 1996, the company has
shipped more than 6,800 SwiftSite units through the second quarter of this year.
By both developing new products and enhancing existing products, PictureTel is
focused on delivering the highest performing videoconferencing products at the
best prices to its growing list of global customers.
- more -
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PICTURETEL Q2 1997 EARNINGS, P. 3
PictureTel Corporation is the world leader in developing, manufacturing
and marketing a full range of videoconferencing solutions. The company's systems
meet customers' videoconferencing needs from the desktop to the boardroom.
PictureTel also markets network conferencing products and a comprehensive
portfolio of enterprise-wide services. The company provides complete
videoconferencing solutions to customers in the distance learning, health care
and financial services market segments. Additional PictureTel information is
available on the Internet at www.picturetel.com. PictureTel videoconferencing
eliminates the barrier of distance, enabling people to be Anywhere Now(TM).
This release includes projections and other forward-looking statements
about the company's 1997 revenues, earnings, and other measures of economic
performance. Actual results could differ materially from forecasts due to
factors such as, for example, competitive pressures, changes in technology and
the difficulty of forecasting in overseas markets and indirect channels.
Additional information concerning risks that could cause actual results to
differ are contained in the company's annual report on Form 10K and its
registration statement on Form S4 in connection with the MultiLink acquisition,
each as filed with the SEC.
- End -
PictureTel is a registered trademark and LiveLAN, Live200, SwiftSite and
Anywhere Now are trademarks of PictureTel Corporation.
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Exhibit 10(b)
PICTURETEL CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
Three Months Ended
(Unaudited)
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6/29/97 6/29/96
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Revenues $112,238 $116,082
Cost of sales $ 63,395 $ 60,343
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Gross margin $ 48,843 $ 55,739
Operating expenses:
Research and development $ 18,822 $ 14,041
Selling, general and administrative $ 35,255 $ 31,076
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Total operating expenses $ 54,077 $ 45,117
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Income (loss) from operations $ (5,234) $ 10,622
Other income (expense), net $ 589 $ 2,239
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Income (loss) before taxes $ (4,645) $ 12,861
Income tax expense (benefit) $ (1,625) $ 4,373
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Net income (loss) $ (3,020) $ 8,488
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Net income (loss) per common share $ (0.09) $ 0.24
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Weighted average number of
common shares outstanding 34,162 36,053
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PICTURETEL CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
Six Months Ended
(Unaudited)
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6/29/97 6/29/96
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Revenues $230,460 $221,083
Cost of sales $125,763 $114,452
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Gross margin $104,697 $106,631
Operating expenses:
Research and development $ 38,279 $ 27,965
Selling, general and administrative $ 68,583 $ 58,815
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Total operating expenses $106,862 $ 86,780
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Income (loss) from operations $ (2,165) $ 19,851
Other income (expense), net $ 2,250 $ 3,993
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Income before taxes $ 85 $ 23,844
Income tax expense $ 30 $ 7,887
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Net income $ 55 $ 15,957
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Net income per common share $ 0.00 $ 0.44
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Weighted average number of
common shares outstanding 35,105 36,087
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Exhibit 10(c)
PICTURETEL CORPORATION
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CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<CAPTION>
6/29/97 12/31/96
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ASSETS
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Current assets:
Cash and marketable securities $ 73,879 $101,875
Accounts receivable, net $128,510 $147,350
Inventories $ 62,655 $ 43,320
Deferred taxes, net $ 6,008 $ 5,950
Other current assets $ 11,933 $ 5,506
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Total current assets $282,985 $304,001
Marketable securities $ 0 $ 9,118
Deferred taxes, net $ 5,088 $ 5,088
Property and equipment, net $ 45,375 $ 44,217
Capitalized software costs, net $ 8,482 $ 6,832
Other assets $ 11,603 $ 6,791
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Total assets $353,533 $376,047
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
Short-term borrowing $ 0 $ 519
Accounts payable $ 35,705 $ 53,329
Accrued expenses $ 28,280 $ 26,803
Current portion of capital leases $ 3,347 $ 3,294
Deferred revenue $ 18,292 $ 19,110
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Total current liabilities $ 85,624 $103,055
Long-term borrowing $ 1,454 $ 9,242
Capital lease obligations $ 2,660 $ 4,692
Total liabilities $ 89,738 $116,989
Total stockholders' equity $263,795 $259,058
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Total liabilities and stockholders' equity $353,533 $376,047
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