<PAGE> 1
================================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
Commission File No.: 0-14685
GENICOM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 51-0271821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14800 CONFERENCE CENTER DRIVE
SUITE 400, WESTFIELDS
CHANTILLY, VIRGINIA 20151
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 802-9200
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 and (2) has been subject to such
filing requirements for the past 90 days. Yes X No -
--- ---
As of August 2, 1996, there were 10,966,039 shares of Common Stock of
the Registrant outstanding.
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<PAGE> 2
FORM 10-Q INDEX
PART I - FINANCIAL INFORMATION
<TABLE>
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1996 and December 31, 1995 3
Consolidated Statements of Income - Three and Six Months Ended
June 30, 1996 and July 2, 1995 4
Consolidated Statements of Cash Flows - Six Months Ended
June 30, 1996 and July 2, 1995 5
Notes to Consolidated Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 11
</TABLE>
PART II - OTHER INFORMATION
<TABLE>
<S> <C>
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Index to Exhibits E-1
</TABLE>
PAGE 2
<PAGE> 3
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
(In thousands, except share data) 1996 1995
--------------- ---------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,651 $ 4,271
Accounts receivable, less allowance for
doubtful accounts of $1,781 and $1,616 50,710 53,572
Other receivables 7,360 3,767
Inventories 31,743 43,079
Prepaid expenses and other assets 1,488 1,432
--------------- ---------------
TOTAL CURRENT ASSETS 95,952 106,121
Property, plant and equipment 27,410 30,896
Goodwill 19,477 21,632
Intangibles and other assets 3,612 2,890
--------------- ---------------
$ 146,451 $ 161,539
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Debt maturing within one year $ 4,127 $ 7,865
Accounts payable and accrued expenses 42,027 52,115
Deferred income 12,754 11,611
--------------- ---------------
TOTAL CURRENT LIABILITIES 58,908 71,591
Long-term debt, less current portion 40,823 44,474
Other non-current liabilities 10,400 10,941
--------------- ---------------
TOTAL LIABILITIES 110,131 127,006
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; 18,000,000 shares
authorized, 10,946,139 and 10,839,399 shares issued 109 108
Additional paid-in capital 26,141 26,023
Retained earnings 12,195 10,503
Foreign currency translation adjustment (1,355) (1,331)
Pension liability adjustment (770) (770)
--------------- ---------------
TOTAL STOCKHOLDERS' EQUITY 36,320 34,533
--------------- ---------------
$ 146,451 $ 161,539
=============== ===============
</TABLE>
The accompanying notes are an integral part of these financial statements.
PAGE 3
<PAGE> 4
GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED, SIX MONTHS ENDED,
JUNE 30, JULY 2, JUNE 30, JULY 2,
(In thousands, except per share data) 1996 1995 1996 1995
=========== =========== ========== ===========
<S> <C> <C> <C> <C>
REVENUES, NET:
Products $ 40,706 $ 40,674 $ 83,302 $ 83,099
Services 28,433 31,168 59,390 56,877
----------- ----------- ---------- -----------
69,139 71,842 142,692 139,976
----------- ----------- ---------- -----------
OPERATING COSTS AND EXPENSES:
Cost of revenues:
Products 28,092 26,706 58,638 56,431
Services 25,888 25,469 51,588 45,463
Selling, general and administration 12,756 12,440 25,287 25,373
Engineering, research and
product development 1,966 2,299 3,897 4,264
Gain on sale of investment in subsidiary (1,481) (1,481)
Acquisition related costs 1,204 1,204
----------- ----------- ---------- -----------
67,221 68,118 137,929 132,735
----------- ----------- ---------- -----------
OPERATING INCOME 1,918 3,724 4,763 7,241
Interest expense, net 1,000 1,887 2,152 3,645
Other income (90)
----------- ----------- ---------- -----------
Income before income taxes 918 1,837 2,701 3,596
Income tax expense 229 278 591 736
----------- ----------- ---------- -----------
INCOME BEFORE EXTRAORDINARY ITEM 689 1,559 2,110 2,860
EXTRAORDINARY ITEM - LOSS ON EXTINGUISHMENT
OF DEBT, NET OF $258 TAX (8) (422)
----------- ----------- ---------- -----------
NET INCOME $ 681 $ 1,559 $ 1,688 $ 2,860
=========== =========== ========== ===========
Earnings per common share
and common share equivalent
(primary and fully diluted) $ 0.06 $ 0.13 $ 0.14 $ 0.24
=========== =========== ========== ===========
Weighted average number of common shares
and common share equivalents outstanding
Primary 12,270 12,095 12,261 11,859
=========== =========== ========== ===========
Fully diluted 12,270 12,141 12,261 11,882
=========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
PAGE 4
<PAGE> 5
GENICOM CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED,
JUNE 30, JULY 2,
(In thousands) 1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,688 $ 2,860
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation 7,866 6,209
Amortization 1,695 2,155
Gain on sale of Genicom de Mexico (1,481)
Effect of acquisition related costs 1,204
Changes in assets and liabilities net of effects from acquisitions:
Accounts receivable 2,892 (14)
Inventories 13,041 (7,924)
Accounts payable and accrued expenses (14,147) (383)
Deferred income 1,143 404
Other (2,097) 982
------------ ------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 10,600 5,493
------------ ------------
Cash flows from investing activities:
Payment for purchase of businesses, net of cash acquired (8,227)
Sale of Genicom de Mexico 3,950
Additions to property, plant and equipment (6,546) (6,520)
Other (259) (110)
------------ ------------
NET CASH USED IN INVESTING ACTIVITIES (2,855) (14,857)
------------ ------------
Cash flows from financing activities:
Borrowings from long-term debt 53,225 19,382
Payments on long-term debt (59,339) (10,204)
Financing costs and transactions (1,259)
------------ ------------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (7,373) 9,178
------------ ------------
Effect of exchange rate changes on cash and cash equivalent 8 (373)
------------ ------------
Net increase in cash and cash equivalents 380 (559)
Cash and cash equivalents at beginning of period 4,271 673
------------ ------------
Cash and cash equivalents at end of period $ 4,651 $ 114
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
PAGE 5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited consolidated
financial statements of GENICOM Corporation and subsidiaries (the
"Company" or "GENICOM") contain all adjustments (consisting only of
normal recurring accruals) necessary to present fairly the Company's
consolidated financial position as of June 30, 1996, and the results
of operations and cash flows for the periods indicated. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction
with the financial statements and notes thereto included in the
Company's December 31, 1995 Annual Report. The results of operations
for the three and six months ended June 30, 1996, are not necessarily
indicative of the operating results to be expected for the full year.
Certain reclassifications have been made to the 1995 condensed
financial statements in order to conform to the 1996 presentation.
2. Inventories are stated at the lower of cost, determined on the
first-in, first-out method, or market. Inventories consist of, in
thousands:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------ ------------
<S> <C> <C>
Raw Materials $ 2,146 $ 2,594
Work in process 3,720 4,899
Finished goods 25,877 23,327
Atlantic Design inventory 12,259
------------ ------------
$ 31,743 $ 43,079
============ ============
</TABLE>
3. Earnings per share are based upon the weighted average number of
common shares and dilutive common share equivalents (using the
treasury stock method) outstanding during the period.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------- ---------------------
JUNE 30, JULY 2, JUNE 30, JULY 2,
1996 1995 1996 1995
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
SHARES USED IN COMPUTATION:
Weighted average common shares outstanding 10,928 10,734 10,893 10,695
Shares applicable to stock options, net of shares
assumed to be purchased from proceeds at
average market price 1,342 1,361 1,368 1,164
---------- --------- --------- ---------
Total shares for earnings per common share
and common share equivalent (primary) 12,270 12,095 12,261 11,859
Shares applicable to stock options in addition to
those used in primary computation due to the
use of period-end market price when higher
than average market price 46 23
---------- --------- --------- ---------
Total fully diluted shares 12,270 12,141 12,261 11,882
========== ========= ========= =========
</TABLE>
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<PAGE> 7
4. During the first quarter ended March 31, 1996 the Company adopted the
provisions of SFAS No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of". The
implementation of SFAS No. 121 did not have a material effect on the
Company's financial condition or results of operations in 1996.
5. On January 12, 1996, the Company reached an agreement with NationsBank
of Texas, N.A., as agent for a syndicate of banks, ("NationsBank") on
$75 million of credit facilities. The Company used this new credit
agreement with NationsBank to retire all the debt associated with its
former credit agreement with CIT and to retire all of the Company's
outstanding 12.5% Senior Subordinated Notes. As a result of the
retirement of this debt the Company recognized a loss on the
extinguishment of debt of $422,000, net of tax of $258,000.
PAGE 7
<PAGE> 8
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition:
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
==================================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------------------- ------------------------------------------
(in millions) 2ND QTR. 2ND QTR. 2ND QTR. 2ND QTR.
1996 CHANGE 1995 1996 CHANGE 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenues - Enterprising Service Solutions $ 28.4 $ (2.7) $ 31.1 $ 59.4 $ 2.5 $ 56.9
Revenues - Document Solutions 40.7 0.0 40.7 83.3 0.2 83.1
---------- ------------- --------- --------- ----------- -----------
Total Revenues $ 69.1 $ (2.7) $ 71.8 $ 142.7 $ 2.7 $ 140.0
---------- ------------- --------- --------- ----------- -----------
Percentage change (3.8)% 1.9%
==================================================================================================================================
</TABLE>
Revenue in the second quarter of 1996 decreased 3.8% compared to the year-ago
quarter primarily due to a revenue fall off in Enterprising Service Solutions.
Enterprising Service Solutions ("ESS") revenue declined $2.7 million or 8.8% in
the second quarter of 1996. The Multivendor Service revenue decreased $1.4
million as a result of a decline in legacy service business combined with
delays in new service work startups and a significant but temporary reduction
in revenue from a large customer in connection with the customer's inventory
reduction management program. Integrated Network Service revenue decreased
$1.3 million over last year's second quarter due to the winding down of certain
contracts not currently replaced. The Company is continuing to invest in the
business directed at the fast growing network management market.
Document Solutions ("DS") revenues during the second quarter of 1996 were
unchanged from the same period last year. Printer sales declined 7.5% due to
laser printer sales being 30.1% lower than the same period a year ago. Impact
printer sales were flat for the second quarter of 1996 as compared to the
second quarter of 1995. Supply sales partially offset the decline in printer
sales with an increase of 9.9% over the second quarter of 1995.
Relay revenues, which are included as part of Document Solutions, increased by
$0.5 million or 16.0% in the second quarter of 1996 as compared to the prior
year quarter.
Revenues for the first six months of 1996 increased $2.7 million from the same
period in 1995 reflecting a full six months of revenue from the acquisition of
Harris Adacom in March 1995. Revenues for Enterprising Service Solutions
increased $2.5 million for the period. This increase is directly related to
the 1995 acquisition. Document Solutions revenues were flat for the first half
of 1996 as compared to 1995. While printer revenues declined for both laser
and impact printers, parts and supplies revenues increased substantially
offsetting the decline in printer sales. Relay revenues increased 10.1%.
<TABLE>
<CAPTION>
===========================================================================================
(in millions) 2ND QUARTER 4TH QUARTER 2ND QUARTER
1996 1995 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Order backlog $ 39.6 $ 47.5 $ 43.4
Change: 2nd Quarter of 1996 compared to
Amount (7.9) (3.8)
Percentage (16.6)% (8.8)%
===========================================================================================
</TABLE>
The decrease in order backlog from the 1995 fourth and second quarter primarily
reflects the end of life shipment of the 7170 product line and selected
declining legacy business within ESS. In addition, the new service contracts
represent potential revenue versus firm commitments. The backlog reflects only
fixed-price contracts for all orders associated with relays, service, systems
integration, network monitoring and those orders for printers, spare parts and
supplies for which a delivery date within
PAGE 8
<PAGE> 9
approximately six months has been specified by the customer. The Company's
backlog as of any particular date should not be the sole measurement used in
determining sales for any future period.
<TABLE>
<CAPTION>
==========================================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------------- ---------------------------------
(in millions) 2ND QTR. 2ND QTR. 2ND QTR. 2ND QTR.
1996 CHANGE 1995 1996 CHANGE 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gross margin - Enterprising Service Solutions $ 2.5 $ (3.2) $ 5.7 $ 7.8 $ (3.6) $ 11.4
Gross margin - Document Solutions 12.6 (1.3) 13.9 24.7 (2.0) 26.7
-------- ------------- ------- --------- -------- ----------
Total gross margin 15.1 (4.5) 19.6 32.5 (5.6) 38.1
-------- ------------- ------- --------- -------- ----------
As a % of revenue 21.9 % 27.3 % 22.8 % 27.2 %
==========================================================================================================================
</TABLE>
Gross margin, as a percentage of revenue, decreased in the second quarter of
1996 as compared to the prior year quarter. This decrease is primarily
attributable to the consumption of inventory transferred to Atlantic Design
pursuant to the outsourcing agreement and the fixed cost structure of the
service business which was not supported by actual revenue. The inventory
transferred to Atlantic Design was substantially consumed by the end of the
second quarter and the Company has taken steps to better align the service cost
structure to revenues.
For the first six months of 1996, gross margin also declined as a percentage of
revenue when compared to 1995 for the reasons mentioned above and increased
costs associated with the extreme snow conditions which impacted the service
depots in Virginia and Massachusetts for a full week of production in January
1996.
<TABLE>
<CAPTION>
========================================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
--------------------------------- --------------------------------
(in millions) 2ND QTR. 2ND QTR. 2ND QTR. 2ND QTR.
1996 CHANGE 1995 1996 CHANGE 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operating expenses:
Selling, general and
administrative $ 12.8 $ 0.4 $ 12.4 $ 25.3 $ (0.1) $ 25.4
Engineering, research and
product development 2.0 (0.3) 2.3 3.9 (0.4) 4.3
--------- --------- --------- ------- -------- --------
Total $ 14.8 $ 0.1 $ 14.7 $ 29.2 $ (0.5) $ 29.7
As a % of revenue 21.4 % 20.5 % 20.5 % 21.2 %
========================================================================================================
</TABLE>
Operating expenses were flat in the second quarter of 1996 as compared to the
year-ago period, due primarily to management's focus on controlling costs.
Operating expenses have declined $0.5 million and as a percent of revenue for
year-to-date 1996 compared to the first six months of 1995 primarily due to the
cost controls mentioned above.
In July 1996, the Company reached an agreement with Electronic Data Systems
("EDS") to outsource its information systems and data processing activities.
Under the agreement, EDS will operate and service the Company's systems as well
as design, install and service new business systems and global networks. The
agreement is for a period of ten years.
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<PAGE> 10
<TABLE>
<CAPTION>
==============================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------------- --------------------------------
(in millions) 2ND QTR. 2ND QTR. 2ND QTR. 2ND QTR.
1996 CHANGE 1995 1996 CHANGE 1995
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest expense, net $ 1.0 $ (0.9) $ 1.9 $ 2.2 $ (1.4) $ 3.6
Percentage change (47.4)% (38.9)%
==============================================================================================
</TABLE>
The decrease in interest expense in the second quarter of 1996 as compared to
the year-ago quarter and for the six months ended is primarily due to the
Company's retirement of its outstanding 12.5% senior subordinated notes in
February 1996 and the refinancing of the Company's credit facility through
NationsBank of Texas, N.A., as agent for a group of banks, in January 1996. In
addition, the Company has reduced its outstanding debt $7.4 million since
December 31, 1995 and $17.8 million since July 2, 1995.
<TABLE>
<CAPTION>
===============================================================================================
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------------- ---------------------------------
(in millions) 2ND QTR. 2ND QTR. 2ND QTR. 2ND QTR.
1996 CHANGE 1995 1996 CHANGE 1995
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income tax expense $ 0.2 $ (0.1) $ 0.3 $ 0.6 $ (0.1) $ 0.7
Effective tax rate 25.0% 15.1% 21.9% 20.5%
===============================================================================================
</TABLE>
The Company's effective income tax rate for the second quarter of 1996 was
25.0% as compared to 15.1% for the year-ago period. The tax rate for the six
months ended June 30, 1996 was 21.9% as compared to 20.5% for the same period
in 1995. In 1995 and 1996, the rate was significantly affected by foreign
income taxes and tax credits and in 1995, the utilization of net operating
losses, and in 1996, adjustments to true-up tax accounts to amounts actually
owed.
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
=================================================================================================
SIX MONTHS ENDED
--------------------------------------
(in millions) 2ND QUARTER 2ND QUARTER
1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided by operations $ 10.6 $ 5.5
Cash used in investing activities (2.9) (14.9)
Cash (used in) provided by financing activities (7.4) 9.2
=================================================================================================
</TABLE>
<TABLE>
<CAPTION>
=================================================================================================
(in millions) 2ND QUARTER 4TH QUARTER
1996 1995
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Working capital $ 37.0 $ 34.5
Inventories 31.7 43.1
Debt obligations 44.9 52.4
Debt to equity ratio 1.2 to 1 1.5 to 1
=================================================================================================
</TABLE>
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<PAGE> 11
The Company's working capital increased $2.5 million as of June 30, 1996 as
compared to December 31, 1995 due primarily to the reduction in current
liabilities. The reduction in current liabilities was partially offset by a
reduction in inventories. The Company's current debt consists of payments due
within the next year on its term notes with NationsBank and notes associated
with the purchase of Harris Adacom and Printer Systems in 1995. In the second
quarter of 1996, the Company used cash generated by operations to reduce its
outstanding debt.
On January 12, 1996, the Company reached an agreement with NationsBank of
Texas, N.A., as agent for a syndicate of banks, ("NationsBank") on $75 million
of credit facilities. Under the agreement, NationsBank is providing a $35
million revolving credit facility and two term loans totaling $40 million. In
a separate transaction, the Company entered into an interest rate swap
arrangement with NationsBank which fixes the interest rate for five years on a
substantial portion of the debt. The fixed rate at the time of the agreement
was executed averaged 8.25%. In May 1996, the Company renegotiated the term of
the interest rate swap, decreasing the term from five to three years. As a
result of the term change, the Company received a payment of $530,000 resulting
in a gain which is being amortized to income over the remaining life of the
Company's term loans. As of June 30, 1996, the Company had $4.5 million
outstanding and $27.8 million available for borrowing on the revolving credit
facility and $39.1 million outstanding in term loans.
The Company used the new credit agreement to retire all the debt associated
with its former credit agreement with CIT and to retire all of the Company's
outstanding senior subordinated notes. As part of the refinancing, the Company
recognized a loss on extinguishment of debt of $0.4 million net of tax.
At the end of June 1996, the Company sold the stock of its Mexican subsidiary,
whose principal asset was a building in Reynosa, Mexico, receiving net proceeds
of $3.5 million and recognizing a gain of $1.5 million.
On July 22, 1996, the Company signed a definitive agreement to acquire the
assets of Texas Instruments' worldwide printer and related supplies business.
Under the agreement, the Company would acquire design rights, product
intellectual property rights, vendor and customer contracts, production
equipment and working capital, including inventory.
The proposed acquisition is subject to customary due diligence, appropriate
regulatory clearances and other consents. Subject to such conditions, the
transaction is expected to be completed within 60 days. Financing for the
proposed acquisition is expected to be provided through refinancing of the
Company's credit facility through NationsBank of Texas, N.A., as agent for a
group of banks.
GENICOM provides an array of services and products addressing different niches
of the information processing industry, competing against a wide range of
companies from large multinationals to small domestic entrepreneurs. Except
for the historical information contained herein, the matters discussed in this
10Q include forward-looking statements that involve a number of risks and
uncertainties. There are certain important factors and risks, including the
change in hardware and software technology, economic conditions in the North
American and Western European markets, the anticipation of growth of certain
market segments and the positioning of the Company's products and services in
those segments, selective service customers whose business is declining,
seasonality in the buying cycles of certain of the Company's customers, the
timing of product announcements, the release of new or enhanced products and
services, the introduction of competitive products and services by existing or
new competitors, access to and development of product rights and technologies,
the management of growth, GENICOM's ability to retain highly skilled technical,
managerial and sales and marketing personnel, possible litigation related to
the Company's operations, including litigation arising under various
environmental laws, and the other risks detailed from time to time in the
Company's SEC reports, including reports on Form 10K, that could cause results
to differ materially from those anticipated by the statements contained herein.
PAGE 11
<PAGE> 12
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings:
Not applicable.
Item 2. Changes in Securities:
On June 16, 1996, the Board of Directors of the Company approved a
Stockholders' Rights Plan having a 17% share acquisition trigger. The Rights
Plan was executed in the form of a rights dividend with a record date of July
5, 1996. A Form 8-A and Form 8-A/A were filed with the Securities and Exchange
Commission on July 5, 1996 which included a copy of the Rights Agreement.
Item. 3 Defaults Upon Senior Securities:
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders:
Not applicable.
Item 5. Other Information:
On July 22, 1996, the Company signed a definitive agreement to acquire the
assets of Texas Instruments' worldwide printer and related supplies business.
Under the agreement, the Company would acquire design rights, product
intellectual property rights, vendor and customer contracts, production
equipment and working capital, including inventory.
The proposed acquisition is subject to customary due diligence, appropriate
regulatory clearances and other consents. Subject to such conditions, the
transaction is expected to be completed within 60 days. Financing for the
proposed acquisition is expected to be provided through refinancing of the
Company's credit facility through NationsBank of Texas, N.A., as agent for a
group of banks.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
NUMBER DESCRIPTION
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
Not applicable.
PAGE 12
<PAGE> 13
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.
GENICOM Corporation
-----------------------------
Registrant
Date: August 14, 1996
James C. Gale
-----------------------------
Signature
James C. Gale
Senior Vice President Finance and
Chief Financial Officer
(Mr. Gale is the Chief Financial
Officer and has been duly
authorized to sign on behalf of
the Registrant)
PAGE 13
<PAGE> 14
GENICOM CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS TO FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- --------- ------------------------------------------------------------------- ----------------------
<S> <C> <C>
27.1 FINANCIAL DATA SCHEDULE FILED ONLY WITH
EDGAR VERSION
</TABLE>
E - 1
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 4,651
<SECURITIES> 0
<RECEIVABLES> 58,070
<ALLOWANCES> (1,781)
<INVENTORY> 31,743
<CURRENT-ASSETS> 95,952
<PP&E> 90,034
<DEPRECIATION> (62,624)
<TOTAL-ASSETS> 146,451
<CURRENT-LIABILITIES> 58,908
<BONDS> 0
0
0
<COMMON> 109
<OTHER-SE> 36,211
<TOTAL-LIABILITY-AND-EQUITY> 146,451
<SALES> 83,302
<TOTAL-REVENUES> 142,692
<CGS> 58,638
<TOTAL-COSTS> 110,226
<OTHER-EXPENSES> 25,291
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,252
<INCOME-PRETAX> 2,701
<INCOME-TAX> 591
<INCOME-CONTINUING> 2,110
<DISCONTINUED> 0
<EXTRAORDINARY> (422)
<CHANGES> 0
<NET-INCOME> 1,688
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14
</TABLE>
