UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 12b-25
NOTIFICATION OF LATE FILING
(Check One):
[ ] Form 10-K [ ] Form 20-F [ ] Form 11-K [ X ] Form 10-Q
[ ] Form N-SAR for period ended: April 2, 1995.
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended:
Nothing in this form shall be construed to imply that the Commission
has verified any information contained herein.
If notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates:
PART I -- REGISTRANT INFORMATION
Full Name of Registrant: Encore Computer Corporation
Former Name if Applicable:
Address of Principal Executive Office (Street and Number)
6901 West Sunrise Boulevard
Fort Lauderdale, Florida 33313
<PAGE>
PART II -- RULES 12b-25(b) and (c)
If the subject report could not be filed without unreasonable
effort or expense and the registrant seeks relief pursuant to Rule
12b-25(b), the following should be completed. (Check box if
appropriate) [X]
(a) The reasons described in reasonable detail in Part III of
this form could not be eliminated without unreasonable effort or
expense;
(b) The subject annual report, semi-annual report, transition
report on Form 10-K, Form 20-F, 11-K or Form N-SAR, or portion
thereof, will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly report
or transition report on Form 10-Q, or portion thereof, will be
filed on or before the fifth calendar day following the
prescribed due date; and
(c) The accountant's statement or other exhibit required by
Rule 12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Form 10-K, 20-F, 11-
K, 10-Q, N-SAR or the transition report or portion thereof could
not be filed within the prescribed time period.
On March 17, 1995, the Company completed a significant refinancing of
its debt. Because of the material impact it had on 1994 results, the
Company delayed completion of its 1994 Form 10-K until this
subsequent event could be included in its financial statements. The
efforts involved in completion of the 1994 annual report have led to
delays in the timely completion of the Form 10-Q for the Company's
first fiscal quarter.
PART IV -- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard
to this notification:
Kenneth Silverstein (305) 797-5651
------------------- ----------- ----------------
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13
or 15(d)of the Securities Exchange Act of 1934 or Section 30 of
the Investment Company Act of 1940 during the preceding 12 months
or for such shorter period that the registrant was required to file
such report(s) been filed? If the answer is no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in
results of operations from the corresponding period for the last
fiscal year will be reflected by the earnings statements to be
included in the subject report or portion thereof?
[X] Yes [ ] No
If so: attach an explanation of the anticipated change,
both narratively and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be made.
ENCORE COMPUTER CORPORATION
has caused this notification to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 17, 1995
By: KENNETH G. FISHER KENNETH S. SILVERSTEIN
Kenneth G. Fisher Kenneth S. Silverstein
----------------------- -----------------------
Chief Executive Officer Corporate Controller
Chief Accounting Officer
ENCORE COMPUTER CORPORATION
Attachment per Instructions to Part IV(3)
Net sales for the three months ended April 2, 1995 are expected to be
approximately $13,000,000 compared to net sales for the comparable
period of 1994 of $19,489,000 with significant declines to be
reported in both equipment and service sales. The Company continues
to experience declining computer system sales as well as a delay in
the commencement of sales under its Reseller Agreement with Amdahl
Corporation (the "Amdahl Agreement").
The Amdahl Agreement is a five year agreement entered into in 1994
which allows Amdahl the right to distribute the Company's Infinity SP
product under the Amdahl brand. The agreement provides Amdahl with
the exclusive marketing and distribution rights to the product in
exchange for purchase commitments of specified volumes, except for
sales to the U.S. government agencies, system integrators responding
to government agency bid requests, pre-existing Encore distributors
and in Japan, China, and Malaysia, where Encore retains the right to
market the products on a non-exclusive basis. Sales under the Amdahl
Agreement were anticipated to begin in the second half of 1994 with
significant sales volumes scheduled in the first half of 1995.
However, since entering into the agreement certain significant
contractual issues have arisen delaying the sale of products. In
February 1995 the Company sent a letter to Amdahl notifying Amdahl of
its intent to terminate the Amdahl Agreement. Amdahl filed suit in
the Delaware Chancery Court on March 29, 1995 seeking to prevent
Encore from terminating the agreement. On March 30, 1995, Encore and
Amdahl agreed to a "Stand-Still" Agreement to preserve the status quo
until the companies could more thoroughly discuss the contractual
issues. On April 24, 1995, the companies jointly announced that they
had reached an agreement in principle concerning the contractual
issues and the Stand-Still agreement had been extended to allow
sufficient time to document that agreement. While the companies have
made significant progress toward finalizing the resolution of their
differences, no sales to Amdahl were recorded in fiscal first quarter
revenue.
The Company has invested heavily in the manufacturing and overhead
support capacity necessary to meet the purchase commitments of Amdahl
in the Amdahl Agreement. However, because of the delays in the
commencement of sales under the agreement, the capacity in place has
not been fully absorbed. This has adversely affected all elements of
the Company's results of operations during the three months ended
April 2, 1995.
With regard to declining computer system sales, the decline is due in
large part to the fact that (i) certain of the Company's real-time
products have reached the end of their life cycles and are
increasingly less competitive in today's marketplace and (ii)
acceptance of the Company's new open systems technology products in
the information systems marketplace has been slower than anticipated.
Certain of the Company's principal real-time product offerings are
proprietary architectures developed in the early 1980s. Although
product enhancements were made, over time these older products have
lost some of their technological edge. Accordingly, the Company has
been increasingly less competitive selling into new, long-term
programs. Replacement products based on open systems technology are
available, however, demand for initial versions of the products has
been disappointing. In connection with its open system computer
system sales, the open systems computer market is still in its
infancy. Data processing users are now beginning to adopt the
technology but the migration of a data processing operation to an
open systems technology is generally viewed as a complex and
expensive process. To minimize the perceived risks associated with
this migration, early adopters have often selected larger, more
established companies as their computer hardware provider.
Accordingly, while the Company's products and technology have
received favorable reviews by certain market research firms, Encore
has had difficulty penetrating the marketplace.
The net loss for the three months ended April 2, 1995 will be
significantly greater than the net loss of $8,904,000 reported for
the three months ended April 3, 1994. Contributing to the increased
net loss, in addition to the factors mentioned above, are lower gross
margins due principally to the current period's lower sales;
increased research and development expenses; a one-time, non-cash
charge recorded in connection with the extension of the expiration
date of certain stock option grants and; higher interest expense due
to both higher borrowings and higher interest rates.
