<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended March 31, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from to
------ ------
Commission file number: 0-18391
ASPECT TELECOMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
California 94-2974062
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1730 Fox Drive, San Jose, California 95131-2312
(Address of principal executive offices and zip code)
Registrant's telephone number: (408) 325-2200
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
--- ---
The number of shares outstanding of the Registrant's Common Stock, $.01 par
value, was 49,022,416 at April 30, 1997.
<PAGE> 2
ASPECT TELECOMMUNICATIONS CORPORATION
INDEX
<TABLE>
<CAPTION>
Description Page Number
----------- -----------
<S> <C>
Cover Page 1
Index 2
Part I: Financial Information
Item 1: Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Income
for the Three Month Periods Ended March
31, 1997 and 1996 4
Condensed Consolidated Statements of Cash
Flows for the Three Month Periods Ended
March 31, 1997 and 1996 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
Part II: Other Information
Item 1: Legal Proceedings 12
Item 6: Exhibits and Reports on Form 8-K 13
Signature 14
</TABLE>
2
<PAGE> 3
ASPECT TELECOMMUNICATIONS CORPORATION
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
1997 1996
----------- ------------
(unaudited) **
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 58,820 $ 47,996
Short-term investments 68,086 67,801
Accounts receivable, net 63,272 53,211
Inventories 13,311 15,485
Other current assets 13,253 14,731
--------- ---------
Total current assets 216,742 199,224
Property and equipment, net 53,325 51,348
Intangible assets, net 27,929 28,888
Other assets 3,680 3,633
--------- ---------
Total assets $ 301,676 $ 283,093
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,393 $ 8,187
Accrued compensation and related benefits 10,565 8,896
Other accrued liabilities 26,668 22,581
Customer deposits and deferred revenue 18,624 19,481
--------- ---------
Total current liabilities 67,250 59,145
Note payable 4,500 4,500
Shareholders' equity:
Preferred stock, $.01 par value:
2,000,000 shares authorized, none outstanding in 1997 and 1996 -- --
Common stock, $.01 par value:
100,000,000 shares authorized, shares outstanding:
48,972,936 in 1997 and 48,806,580 in 1996 129,211 128,186
Net unrealized gain on available-for-sale securities 2,055 2,534
Accumulated translation adjustments (1,339) (45)
Retained earnings 99,999 88,773
--------- ---------
Total shareholders' equity 229,926 219,448
--------- ---------
Total liabilities and shareholders' equity $ 301,676 $ 283,093
========= =========
** Derived from audited financial statements.
</TABLE>
See accompanying notes.
3
<PAGE> 4
ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited - in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
------- -------
<S> <C> <C>
Net revenues:
Product $67,552 $50,574
Customer support 24,066 16,451
------- -------
Total net revenues 91,618 67,025
Cost of revenues:
Cost of product revenues 23,205 16,537
Cost of customer support revenues 17,226 11,804
------- -------
Total cost of revenues 40,431 28,341
------- -------
Gross margin 51,187 38,684
Operating expenses:
Research and development 10,962 7,337
Selling, general and administrative 23,384 18,189
------- -------
Total operating expenses 34,346 25,526
------- -------
Income from operations 16,841 13,158
Interest income, net 1,413 237
------- -------
Income before income taxes 18,254 13,395
Provision for income taxes 7,028 4,970
------- -------
Net income $11,226 $ 8,425
======= =======
Primary earnings per share:
Net income per share (a) $ 0.21 $ 0.18
======= =======
Shares used in per share computations (a) 52,471 45,953
======= =======
Fully diluted earnings per share:
Net income per share (a) $ 0.21 $ 0.17
======= =======
Shares used in per share computations (a) 52,471 51,843
======= =======
</TABLE>
(a) Share and per share data for all periods presented reflect a two-for-one
stock split effective January 28, 1997.
See accompanying notes.
4
<PAGE> 5
ASPECT TELECOMMUNICATIONS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited - in thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 11,226 $ 8,425
Reconciliation of net income to cash provided by
operating activities:
Depreciation and amortization 3,862 3,078
Changes in:
Accounts receivable (10,776) (5,229)
Inventories 2,180 (1,942)
Other current assets and other assets 376 (416)
Accounts payable 3,229 1,613
Accrued compensation and related benefits 1,686 (156)
Other accrued liabilities 4,896 3,802
Customer deposits and deferred revenue (690) 1,799
-------- --------
Cash provided by operating activities 15,989 10,974
Cash flows from financing activities:
Common stock transactions 1,025 1,471
-------- --------
Cash provided by financing activities 1,025 1,471
Cash flows from investing activities:
Short-term investment purchases (19,903) (16,430)
Short-term investment sales and maturities 19,790 24,431
Property and equipment purchases (5,972) (4,887)
-------- --------
Cash provided by (used in) investing activities (6,085) 3,114
Effect of exchange rate changes on cash and cash equivalents (105) 781
-------- --------
Increase in cash and cash equivalents 10,824 16,340
Cash and cash equivalents:
Beginning of period 47,996 22,102
-------- --------
End of period $ 58,820 $ 38,442
======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
ASPECT TELECOMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The consolidated financial statements include the accounts of Aspect
Telecommunications Corporation and its wholly-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated.
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31, 1997
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1997. For further information, refer to the consolidated
financial statements and notes thereto included in the Company's 1996 Annual
Report to Shareholders.
Per Share Information
Per share information for the periods presented is computed using the weighted
average number of common and common-equivalent shares outstanding. For primary
earnings per share calculations, common-equivalent shares consist of the
incremental shares issuable upon the assumed exercise of dilutive stock options
using the treasury stock method.
The fully diluted earnings per share calculation for the three months ended
March 31, 1997 is computed in a manner similar to the primary earnings per share
calculations. For the fully diluted earnings per share calculation for the three
months ended March 31, 1996, common-equivalent shares also include the dilutive
effect of incremental shares issuable upon the conversion of the 5% convertible
subordinated debentures, and net income is adjusted for the interest expense,
net of income taxes, related to the debentures. On October 15, 1996, the Company
converted all $55 million of its convertible subordinated debentures into
approximately 5.7 million shares of the Company's common stock.
Inventories
Inventories, valued at the lower of cost (first-in, first-out) or market,
consist of:
<TABLE>
<CAPTION>
(in thousands)
March 31, December 31,
1997 1996
------- -------
<S> <C> <C>
Raw materials $10,549 $ 9,598
Work-in-progress 457 541
Finished goods 2,305 5,346
------- -------
Total $13,311 $15,485
======= =======
</TABLE>
New Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in
6
<PAGE> 7
ASPECT TELECOMMUNICATIONS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
the fourth quarter of fiscal 1997 and will restate at that time earnings per
share (EPS) data for prior periods to conform with SFAS 128. Earlier application
is not permitted.
SFAS 128 replaces current EPS reporting requirements and requires 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.
If SFAS 128 had been in effect during the current and prior year periods, basic
EPS would have been $0.23 and $0.20 for the quarters ended March 31, 1997 and
1996, respectively. Diluted EPS under SFAS 128 would have been the same as the
fully diluted EPS currently reported for the periods.
Contingencies
Periodically, the Company negotiates with third parties to establish patent
license or cross-license agreements, and the Company is currently in such
negotiations. There can be no assurance that current or future negotiations
will result in the Company obtaining a license on satisfactory terms or at all.
On March 5, 1997, Lucent Technologies Inc. ("Lucent") filed a lawsuit in the
United States District Court for the Eastern District of Pennsylvania alleging
that the Company infringes four of Lucent's patents (the "Lucent patents"). In
its complaint, Lucent is seeking to enjoin the Company from allegedly
continuing to infringe the Lucent patents and is seeking an unspecified amount
of compensatory damages, treble damages for alleged willful infringement, and
interest, expenses and attorneys' fees. On May 2, 1997, the Company filed an
answer in response to the Lucent complaint, asserting that the Lucent patents
are invalid and denying the alleged patent infringement. The Company believes
that it has meritorious defenses to the asserted claims and intends to defend
the litigation vigorously. Although the Company does not believe that any of
its products infringe any valid claims of the Lucent patents, the outcome of
litigation is inherently unpredictable, and there can be no assurance that the
results of these proceedings will be favorable to the Company or that they will
not have a material adverse effect on the Company's business, operating results
or financial condition. Regardless of the ultimate outcome, the Lucent
litigation could result in substantial expense to the Company and significant
diversion of effort by the Company's technical and managerial personnel. If the
court determines that the Company infringes the Lucent patents and that the
Lucent patents are valid and enforceable, it could issue an injunction
prohibiting the Company from making, using or selling certain products and it
could assess significant damages against the Company. Accordingly, an adverse
determination in the proceeding could subject the Company to significant
liabilities and require the Company to seek a license from Lucent. Although
intellectual property disputes are often settled through licensing or similar
arrangements, costs associated with such arrangements may be substantial, and
there can be no assurance that a license from Lucent, if required, would be
available to the Company on acceptable terms or at all.
7
<PAGE> 8
ASPECT TELECOMMUNICATIONS CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in Part I
- -- Item 1 of this Quarterly Report and the audited consolidated financial
statements and notes thereto and Management's Discussion and Analysis in the
Company's 1996 Annual Report to Shareholders.
Aspect Telecommunications Corporation (the Company) is a global provider of
comprehensive business solutions for companies with mission-critical call
centers that exist to generate revenue, service customers, and handle inquiries.
The Company's products include automatic call distributors, interactive response
systems, call center management information and reporting tools, call center
planning and forecasting packages, and computer-telephony integration tools and
software. The Company also provides services vital to call center environments,
including business applications consulting, systems integration, and training.
In 1996, the Company completed two acquisitions: Envoy Holdings Limited (Envoy)
on September 30, 1996, and Prospect Software, Inc. (Prospect), on October 21,
1996. Envoy provides call center and telebusiness solutions designed to improve
customer service through consulting services, software, and systems integration.
Prospect is a provider of application development tools for building
connectivity to a variety of call center systems and network-based computer
applications. Both acquisitions were accounted for as pooling of interests and
all financial results for 1996 reflect the acquisitions. As the historical
operations of Envoy and Prospect were not significant to any year presented, the
Company's financial statements for years prior to 1996 have not been restated
and the financial effects of the prior years' results of operations for both
acquired companies have been accounted for as increases to retained earnings in
1996.
On December 20, 1996, the Company announced that its Board of Directors approved
a two-for-one stock split effective January 28, 1997, for shareholders of record
as of January 6, 1997. All share and per share amounts in this Form 10-Q reflect
the stock split.
The Company desires to take advantage of the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995. Specifically, the Company
wishes to alert readers that, except for the historical information contained
herein, the following discussion contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, including without limitation, statements
regarding the Company's expectations, beliefs, intentions, or future strategies,
which are dependent on certain risks and uncertainties that may cause actual
results to differ materially from those expressed in these or any other
forward-looking statements made by or on behalf of the Company. These risks and
uncertainties include variability and uncertainty of revenues and operating
results; volatility of stock price; product concentration, technological change,
and new products; competition; intellectual property/litigation; management of
growth; dependence on key personnel; limited sources of component supply;
licenses from third parties; geographic concentration; acquisitions and
investments; international operations; regulatory requirements; and expansion of
distribution channels. For a more detailed description of these risks and
uncertainties, see the section titled "Management's Discussion and Analysis -
Risk Factors" in the Company's 1996 Annual Report to Shareholders.
8
<PAGE> 9
ASPECT TELECOMMUNICATIONS CORPORATION
RESULTS OF OPERATIONS
Net Revenues
Total net revenues for the first quarter of 1997 were $92 million, representing
an increase of 37% when compared with total net revenues of $67 million for the
same period of 1996.
Product revenues for the first quarter of 1997 were $68 million, representing an
increase of 34% when compared with product revenues of $51 million for the same
period of 1996. The increase in product revenues was primarily attributable to
increased demand for the Company's products, as both the volume of new system
sales and the volume of add-ons and upgrades increased from the same period of
1996. Average selling prices on new systems remained relatively unchanged across
the periods.
Customer support revenues for the first quarter of 1997 were $24 million,
representing an increase of 46% when compared with customer support revenues of
$16 million for the same period of 1996. The increase in customer support
revenues resulted primarily from the growth in the Company's installed base.
Customer support revenues include charges for providing contractually
agreed-upon ongoing system service and maintenance, which typically commences
twelve months from the date a system is first installed; charges to install
products at customer sites; consulting and systems integration revenue; and
other support services provided to the Company's customers. Contract support
revenues are largely dependent on renewable customer support contracts and will
be primarily affected by the general growth in the installed base. Installation
revenue will generally follow product revenue fluctuations, although no
installation revenue is ordinarily received for product sales to the Company's
distributors. In 1996, the Company established the Aspect Consulting and Systems
Integration (C&SI) business unit. C&SI revenues are dependent on the Company's
ability to obtain contracts for suitable projects and successfully complete
these projects. Since most of the costs associated with providing customer
support are fixed, quarterly fluctuations in customer support revenues can have
a significant impact on the related gross margin.
Gross Margin on Product Revenues
Product gross margin decreased to 66% for the first quarter of 1997 from 67% for
the same period of 1996. The decrease in product gross margin primarily reflects
higher revenues from sales to the United States government, which typically have
lower than average margins, and other factors. On a forward-looking basis, the
Company expects that the following factors, among others, could have a material
impact on product gross margins: the mix of products sold; the channel of
distribution; the portion of systems revenues related to accounts purchasing
multiple systems; the mix and level of third-party product included as part of
systems integration projects; and the results of newly acquired subsidiaries and
newly established business units.
Gross Margin on Customer Support Revenues
Customer support gross margin was 28% for both the first quarter of 1997 and the
same period of 1996. On a forward-looking basis, the Company anticipates that
customer support margins will vary from quarter to quarter due to fluctuations
in customer support revenues, since most of the costs associated with providing
customer support are fixed, the expansion of its customer support
infrastructure, and the Company's ability to build a successful C&SI business
unit.
9
<PAGE> 10
ASPECT TELECOMMUNICATIONS CORPORATION
Research and Development Expenses
Research and development ("R&D") expenses were $11 million for the first quarter
of 1997, representing an increase of 49% when compared with R&D expenses of $7
million for the same period of 1996. The increase primarily reflects increased
personnel and other infrastructure costs. As a percentage of net revenues,
R&D spending was 12% for the first quarter of 1997 compared to 11% for the same
period of 1996. The Company continues to believe that significant investment in
R&D is required to remain competitive and anticipates, on a forward-looking
basis, that such expenses will increase in terms of absolute dollars for 1997 as
a whole, when compared to 1996, although such expenses as a percentage of net
revenues may fluctuate on a quarterly basis.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses were $23 million for the
first quarter of 1997, representing an increase of 29% when compared with SG&A
expenses of $18 million for the same period of 1996. The increase was primarily
related to increased personnel, costs related to the expansion of the Company's
foreign and domestic operations, and increased infrastructure costs. As a
percentage of net revenues, SG&A decreased to 26% for the first quarter of 1997
from 27% for the same period of 1996. SG&A expenses for the first quarter of
1997 decreased 1% when compared to SG&A expenses of $24 million for the fourth
quarter of 1996. The decrease reflects fluctuations in costs for facilities and
corporate development activities, as well as the donation of appreciated equity
securities in lieu of cash to fund the Company's corporate giving program. The
Company anticipates, on a forward-looking basis, that SG&A expenses will
increase in terms of absolute dollars for 1997 as a whole, when compared to
1996, although such expenses as a percentage of net revenues may fluctuate on a
quarterly basis. In addition, on a forward-looking basis, legal expenses are
expected to increase in future periods due to the Lucent Technologies Inc.
litigation (see Part II, Item 1. Legal Proceedings).
Net Interest Income
Net interest income (interest income, net of interest expense) increased to $1.4
million for the first quarter of 1997 from $0.2 million for the same period of
1996. The increase was primarily due to higher earning balances and the
conversion of the Company's $55 million of convertible subordinated debentures
in October 1996.
Income Taxes
The Company's effective income tax rate for the first quarter of 1997 was 38.5%,
up from 37.1% for the same period of 1996. The increase reflects expanding
international operations, the anticipated expiration of the R&D tax credit, and
other factors.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company's principal source of liquidity consisted of
cash, cash equivalents, and short-term investments totaling $127 million, which
represented 42% of total assets. The primary sources of cash during the first
quarter of 1997 consisted of cash provided by operating activities of $16
million and proceeds from the issuance of common stock under various stock plans
of $1 million. The primary use of cash during the first quarter of 1997
consisted of $6 million for purchases of property and equipment.
10
<PAGE> 11
ASPECT TELECOMMUNICATIONS CORPORATION
As of March 31, 1997, the Company's outstanding borrowings consisted of a $4.5
million note payable incurred in connection with the acquisition of TCS (see
Note 2 to the Company's 1996 Consolidated Financial Statements).
The Company believes, on a forward-looking basis, that its cash, cash
equivalents, and short-term investments and anticipated cash flow from
operations will be sufficient to meet the Company's presently anticipated cash
requirements during at least the next twelve months.
NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). The
Company is required to adopt SFAS 128 in the fourth quarter of fiscal 1997 and
will restate at that time earnings per share (EPS) data for prior periods to
conform with SFAS 128. Earlier application is not permitted. The requirements of
SFAS 128 and the pro forma effect of adopting SFAS 128 are disclosed in the
Notes to Condensed Consolidated Financial Statements.
11
<PAGE> 12
ASPECT TELECOMMUNICATIONS CORPORATION
Part II: Other Information
ITEM 1. LEGAL PROCEEDINGS
The segment of the telecommunications market that includes the Company's
products has been characterized by extensive litigation regarding patents and
other intellectual property rights. As is common in the telecommunications
industry, the Company has been in the past and may in the future be notified of
claims that its products or services are subject to patents or other
proprietary rights of other parties. Although the Company attempts to ensure
that its products and processes do not infringe such third-party patents or
proprietary rights, there can be no assurance that infringement or invalidity
claims (or claims for indemnification resulting from infringement claims) will
not be asserted or prosecuted against the Company. Periodically, the Company
negotiates with third parties to establish patent license or cross-license
agreements, and the Company is currently in such negotiations. There can be no
assurance that current or future negotiations will result in the Company
obtaining a license on satisfactory terms or at all. Moreover, license
agreements with third parties may not include all intellectual property rights
that may be issued to or owned by the licensors, and thus future disputes with
these companies are possible. In the event an intellectual property dispute is
not settled through a license, litigation could ensue. Any litigation, or
interference proceedings that may be declared by the United States Patent and
Trademark Office to determine the priority of inventions, could result in
substantial expense to the Company and significant diversion of effort by the
Company's technical and managerial personnel. An adverse determination in such
litigation or proceeding, including without limitation the Lucent litigation
discussed below, could prevent the Company from making, using or selling
certain of its products, and subject the Company to damage assessments, all of
which could have a material adverse effect on the Company's business, operating
results or financial condition.
On March 5, 1997, Lucent Technologies Inc. ("Lucent") filed a lawsuit in the
United States District Court for the Eastern District of Pennsylvania alleging
that the Company infringes four of Lucent's patents (the "Lucent patents"). In
its complaint, Lucent is seeking to enjoin the Company from allegedly
continuing to infringe the Lucent patents and is seeking an unspecified amount
of compensatory damages, treble damages for alleged willful infringement, and
interest, expenses and attorneys' fees. On May 2, 1997, the Company filed an
answer in response to the Lucent complaint, asserting that the Lucent patents
are invalid and denying the alleged patent infringement. The Company believes
that it has meritorious defenses to the asserted claims and intends to defend
the litigation vigorously. Although the Company does not believe that any of
its products infringe any valid claims of the Lucent patents, the outcome of
litigation is inherently unpredictable, and there can be no assurance that the
results of these proceedings will be favorable to the Company or that they will
not have a material adverse effect on the Company's business, operating results
or financial condition. Regardless of the ultimate outcome, the Lucent
litigation could result in substantial expense to the Company and significant
diversion of effort by the Company's technical and managerial personnel. If the
court determines that the Company infringes the Lucent patents and that the
Lucent patents are valid and enforceable, it could issue an injunction
prohibiting the Company from making, using or selling certain products and it
could assess significant damages against the Company. Accordingly, an adverse
determination in the proceeding could subject the Company to significant
liabilities and require the Company to seek a license from Lucent. Although
intellectual property disputes are often settled through licensing or similar
arrangements, costs associated with such arrangements may be substantial, and
there can be no assurance that a license from Lucent, if required, would be
available to the Company on acceptable terms or at all.
In the future, the Company could become involved in other types of litigation,
such as shareholder lawsuits for alleged violations of securities laws, claims
asserted by current or former employees, and product liability claims. An
adverse outcome in such litigation could have a material adverse effect on the
Company's business, operating results or financial condition. Regardless of
merit, source, or outcome of the litigation, it could result in substantial
cost to and diversion of effort by the Company.
12
<PAGE> 13
ASPECT TELECOMMUNICATIONS CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
Exhibit 11.1 Statement re: Computation of Earnings Per Share
Exhibit 27 Financial Data Schedule
B. REPORTS ON FORM 8-K
Reports on Form 8-K filed during the quarter ended March 31, 1997:
Form 8-K dated January 15, 1997
Item 5. Other Events - Announcement of earnings and results of operations for
the quarter and fiscal year ended December 31, 1996.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits - Aspect Telecommunications Corporation Press Release dated
January 15, 1997.
Form 8-K dated March 10, 1997
Item 5. Other Events - Announcement of notification of patent infringement
complaint filed by Lucent Technologies Inc.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits - Aspect Telecommunications Corporation Press Release dated
March 6, 1997.
13
<PAGE> 14
ASPECT TELECOMMUNICATIONS CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Aspect Telecommunications Corporation
(Registrant)
Date: May 14, 1997
By
/s/ Eric J. Keller
--------------------------------------------
Eric J. Keller
Vice President, Finance and Chief
Financial Officer (Duly Authorized and
Principal Financial and Accounting
Officer)
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ------- -----------
<S> <C>
11.1 Statement re: Computation of Earnings Per Share
27 Financial Data Schedule
</TABLE>
<PAGE> 1
ASPECT TELECOMMUNICATIONS CORPORATION
EXHIBIT 11.1:
Statement re: Computation of Earnings Per Share
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
------- -------
<S> <C> <C>
Primary:
Weighted average common shares
outstanding during the period 48,893 42,452
Common share equivalents:
Dilutive effect of stock options 3,578 3,501
------- -------
Total 52,471 45,953
======= =======
Net income $11,226 $ 8,425
======= =======
Primary earnings per share $ 0.21 $ 0.18
======= =======
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------
1997 1996
------- -------
<S> <C> <C>
Fully Diluted:
Weighted average common shares
outstanding during the period 48,893 42,452
Common share equivalents:
Dilutive effect of stock options 3,578 3,732
Weighted average shares issuable
upon assumed conversion of debt - 5,659
------- -------
Total 52,471 51,843
======= =======
Net income $11,226 $ 8,425
Interest expense during the period on
convertible subordinated debentures,
net of tax - 461
------- -------
Net income adjusted for
fully diluted calculations $11,226 $ 8,886
======= =======
Fully diluted earnings per share $ 0.21 $ 0.17
======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A)
THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF INCOME
INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDING MARCH 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 58,820
<SECURITIES> 68,086
<RECEIVABLES> 64,886
<ALLOWANCES> 1,614
<INVENTORY> 13,311
<CURRENT-ASSETS> 216,742
<PP&E> 101,557
<DEPRECIATION> 48,232
<TOTAL-ASSETS> 301,676
<CURRENT-LIABILITIES> 67,250
<BONDS> 4,500
0
0
<COMMON> 129,211
<OTHER-SE> 100,715
<TOTAL-LIABILITY-AND-EQUITY> 301,676
<SALES> 67,552
<TOTAL-REVENUES> 91,618
<CGS> 23,205
<TOTAL-COSTS> 40,431
<OTHER-EXPENSES> 34,346
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27
<INCOME-PRETAX> 18,254
<INCOME-TAX> 7,028
<INCOME-CONTINUING> 11,226
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,226
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0.21
</TABLE>
