SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarter Ended: April 2, 1994 Commission File
Number 1-9853
EMC CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2680009
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(State or other jurisdiction of (I.R.S. Employer
organization or incorporation) Identification Number)
171 South Street
Hopkinton, Massachusetts 01748-9103
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(Address of principal executive offices, including zip code)
(508) 435-1000
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(Registrant's telephone number, including area code)
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.
Common Stock, par value $.01 per share 189,271,554
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Class Outstanding as of April 2, 1994
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EMC CORPORATION
Page No.
Part I - Financial Information
Consolidated Balance Sheets
April 2, 1994 and January 1, 1994 3
Consolidated Comparative Statements of Operations
for the Three Months Ended
April 2, 1994 and April 3, 1993 4
Consolidated Statements of Cash Flows
for the Three Months Ended April 2, 1994
and April 3, 1993 5
Notes to Interim Consolidated Financial Statements 6 - 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 13
Part II - Other Information 14
Signatures 15
Exhibit Index 16
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EMC CORPORATION
CONSOLIDATED BALANCE SHEETS
(amounts in thousands except share amounts)
April 2, January 1,
ASSETS 1994 1994
Current assets:
Cash and cash equivalents $231,600 $345,300
Trade and notes receivable less allowance for
doubtful accounts of $6,323 and $5,262,
respectively 205,184 157,225
Inventories 144,763 118,263
Deferred income taxes 27,222 24,199
Other assets 8,873 5,023
Total current assets 617,642 650,010
Long-term investments, at cost 168,030 50,392
Notes receivable, net 19,905 21,808
Property, plant and equipment, net 111,889 96,480
Deferred income taxes 2,881 2,761
Other assets, net 19,363 8,195
Total assets $939,710 $829,646
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $1,209 $1,262
Accounts payable 61,507 44,179
Accrued expenses 62,152 59,755
Income taxes payable 26,471 20,892
Deferred revenue 6,985 7,046
Total current liabilities 158,324 133,134
Deferred revenue 3,393 3,389
Long-term obligations:
4 1/4% Convertible Subordinated Notes due 2001 229,600 200,000
6 1/4% Convertible Sub. Debentures due 2002 58,907 59,260
Notes payable 15,326 14,013
Capital lease obligations 532 756
Minority interest in consolidated subsidiaries 1,081 --
Total liabilities 467,163 410,552
Stockholders' equity:
Series Preferred Stock, par value $.01;
authorized 25,000,000 shares --- ---
Common Stock, par value $.01; authorized
330,000,000 shares; issued 191,879,550
and 189,936,120, respectively;
outstanding 189,271,554 and 187,328,124,
respectively 1,919 1,899
Additional paid-in capital 230,580 226,668
Deferred compensation (3,303) (3,552)
Retained earnings 241,885 193,045
Cumulative translation adjustment 1,969 1,537
Treasury stock, at cost, 2,607,996 shares (503) (503)
Total stockholders' equity 472,547 419,094
Total liabilities and stockholders' equity $939,710 $829,646
The accompanying notes are an integral part of the consolidated
financial statements.
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EMC CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except per share amounts)
(unaudited)
Three Months Ended
April April
2, 1994 3, 1993
Revenues:
Net sales $257,720 $132,853
Service and rental 9,338 5,920
267,058 138,773
Cost and expenses:
Cost of sales and service 124,407 72,293
Research and development 22,348 11,412
Selling, general and
administrative 51,604 32,840
Operating income 68,699 22,228
Investment income 4,979 1,204
Interest expense (3,802) (1,424)
Other expense, net (608) (981)
Income before taxes 69,268 21,027
Income tax provision 20,428 6,114
Net income $48,840 $14,913
Net income per weighted
average share,
primary $0.23 $0.08
Net income per weighted
average share,
fully diluted $0.22 $0.08
Weighted average number of
common shares outstanding,
primary 214,242 182,816
Weighted average number of
common shares outstanding,
fully diluted 233,730 202,381
The accompanying notes are an integral part of the consolidated
financial statements.
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EMC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
For the Three Months Ended
April April
2, 1994 3, 1993
Cash flows from operating activities:
Net income $48,840 $14,913
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 7,034 4,736
Deferred income taxes (2,062) ---
Loss on disposal of property and equipment 146 687
Changes in assets and liabilities:
Trade and notes receivable (46,137) (10,852)
Inventories (26,570) (3,664)
Other assets (15,137) (143)
Accounts payable 17,341 (6,108)
Accrued expenses 2,420 1,332
Income taxes payable 5,579 (1,792)
Deferred revenue (59) (133)
Total adjustments (57,445) (15,937)
Net cash used by operating activities (8,605) (1,024)
Cash flows from investing activities:
Additions to property and equipment, net (22,193) (6,879)
Proceeds from sale of property and equipment --- 57
Purchase of long-term investments (117,638) (7,662)
Net cash used by investing activities (139,831) (14,484)
Cash flows from financing activities:
Issuance of common stock, net of issuance costs 4,181 100,911
Issuance (conversion) of 6 1/4% convertible
subordinated debentures due 2002, net
of issuance costs (353) (83)
Issuance of 4 1/4% convertible subordinated
notes due 2001, net of issuance costs 29,350 ---
Payment of long-term and short-term obligations (312) (1,165)
Issuance of long-term and short-term obligations1,352 ---
Net cash provided by financing activities 34,218 99,663
Effect of exchange rate changes on cash 518 199
Net increase (decrease) in cash
and cash equivalents (114,218) 84,155
Cash and cash equivalents at beginning
of period 345,300 62,103
Cash and cash equivalents at end of period $231,600 $146,457
The accompanying notes are an integral part of the consolidated
financial statements.
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EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Accounting
The accompanying consolidated financial statements are unaudited
and have been prepared in accordance with generally accepted
accounting principles. These statements include the accounts of
EMC Corporation ("EMC" or the "Company") and its wholly-owned subsidiaries.
Certain information and footnote disclosures normally included in the
Company's annual consolidated financial statements have been condensed or
omitted. The interim consolidated financial statements, in the opinion of
management, reflect all adjustments (consisting only of normal
recurring accruals) necessary for a fair statement of the results
for the interim periods ended April 2, 1994 and April 3, 1993.
The results of operations for the interim periods are not
necessarily indicative of the results of operations to be expected
for the entire fiscal year. It is suggested that these interim
consolidated financial statements be read in conjunction with the
audited consolidated financial statements for the year ended
January 1, 1994, which are contained in the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission on
March 24, 1994.
Restatement for Pooling of Interests
On August 31, 1993, EMC acquired, in separate transactions, Epoch
Systems Inc. ("Epoch") of Westborough, Massachusetts and Magna Computer
Corporation ("Magna") of Salem, New Hampshire. Epoch designs,
manufactures, markets and supports high performance client/server
data management software. Magna manufactures and markets IBM
compatible AS/400 tape products. Each of these acquisitions has
been accounted for as a "pooling of interests" for accounting
purposes, and accordingly all periods prior to the acquisition have
been restated to include the results of Epoch and Magna. Epoch and
Magna are now wholly-owned subsidiaries of EMC.
Restatement for Stock Splits
All share data in this document has been adjusted for all stock splits.
Acquisitions and Subsidiaries
Minority interest in consolidated subsidiaries represents the
minority shareowners' proportionate share of the equity of EMC Japan K.K.
("EMC Japan") and Copernique, S.A. ("Copernique"). At April 2, 1994 the
Company owned a 60% interest in EMC Japan and a 93% interest in Copernique.
During the first quarter of 1994, the Company acquired certain assets of
Colorado-based Array Technology Corporation ("Array"), which specializes
in RAID ("Redundant Arrays of Inexpensive Disks") technology, and a
majority interest in Copernique, which specializes in high performance
data management hardware and software systems. At April 2, 1994, Other
assets, non-current included $7,272,000 of patents acquired in the
purchase of Array. These assets are being amortized over 5 years.
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EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Inventories
Inventories consist of: April 2, 1994 January 1, 1994
Purchased parts $ 11,746,000 $ 17,319,000
Work-in-process 76,916,000 46,348,000
Finished goods 56,101,000 54,596,000
$144,763,000 $118,263,000
3.Property, Plant and Equipment
Property, plant and equipment
consist of: April 2, 1994 January 1, 1994
Furniture and fixtures $ 5,149,000 $ 4,278,000
Equipment 128,663,000 102,670,000
Vehicles 975,000 923,000
Buildings and improvements 31,443,000 29,864,000
Land 1,870,000 1,870,000
Construction in progress 5,440,000 4,891,000
173,540,000 144,496,000
Accumulated depreciation
and amortization (61,651,000) (48,016,000)
$ 111,889,000 $96,480,000
4. Long-Term Investments
The Company adopted Statement of Financial Accounting Standards No.
115 "Accounting for Certain Investments in Debt and Equity
Securities" at the beginning of 1994. The Company has investments
primarily in corporate, foreign and government-backed bonds and
notes, in the following amounts: corporate $114,397,000, foreign
$30,000,000 and government-backed $23,633,000. Currently, the
Company intends and is able to hold these investments to maturity.
Accordingly, investments are reported at amortized cost, which
approximates market value. Approximately $165,947,000 will mature
within five years, and $2,083,000 will mature in more than five years.
5. Long-term Obligations
In December 1993, the Company issued $200,000,000 of 4 1/4%
convertible subordinated notes due 2001 (the "Notes"). The Notes
are generally convertible into shares of Common Stock of the Company
at a conversion price of $19.84 per share, subject to adjustment in
certain events. Interest is payable semi-annually and the Notes are
redeemable at the option of the Company at set redemption prices
(which range from 100.61% to 102.43% of principal), plus accrued interest,
commencing January 1, 1997. In January 1994, the Company issued an
additional $29,600,000 of Notes in accordance with overallotment
provisions of this offering.
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EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Convertible Subordinated Debentures
In March 1992, the Company issued $60,000,000 of 6 1/4% convertible
subordinated debentures due 2002 (the "Debentures"). The Debentures
are generally convertible at the option of the holder at any time prior
to maturity into shares of Common Stock of the Company at a conversion
price of $3.063 per share, subject to adjustment in certain events.
Since their issuance, $1,093,000 of Debentures have been converted into
Common Stock. The Debentures are redeemable at the option of the Company
at set redemption prices (which range from 100.63% to 104.38% of
principal), from April 1, 1995 forward.
6. Net Income Per Share
Net income per share was computed on the basis of weighted average
common and dilutive common equivalent shares outstanding. Primary
and fully diluted weighted average shares outstanding for the three
months ended April 2, 1994 considers the dilutive effect of the
Notes. Fully diluted weighted average shares outstanding for the
three months ended April 2, 1994 and April 3, 1993 considers the
dilutive effects of the Debentures.
7. Other Contingencies
On June 10, 1993, Storage Technology Corporation ("STK") filed suit
against EMC in the United States District Court for the District of
Colorado alleging that EMC is infringing three patents. In the complaint,
STK seeks injunctive relief, unspecified damages, including treble damages
plus attorneys' fees and costs. On July 20, 1993, EMC answered the
complaint and denied STK's allegations. In addition, EMC counterclaimed
against STK alleging that the patents in suit are invalid and unenforceable.
In the counterclaim, EMC seeks unspecified damages, attorneys' fees, costs
and interest. Discovery in the matter is currently in process. A scheduling
order has been entered and a trial date has been set for October 1994.
On April 27, 1994, EMC filed a motion for partial summary judgement on the
Dodd patents (U.S. Patent Nos. 4,468,730 and 4,536,836). On May 11, 1994,
EMC filed a motion for partial summary judgement on the third patent
in the litigation, the White patent (U.S. Patent No. 4,467,421).
EMC is involved in other litigation which it considers routine and
incidental to its business. Management does not expect the results
of these actions to have a material adverse effect on EMC's
business or financial condition.
8. Subsequent Events
At the Annual Meeting held May 11, 1994, the Company's stockholders
elected two Class I members to the Board of Directors for a three-year term.
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EMC CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - First Quarter of 1994
compared to First Quarter of 1993
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Revenues
Revenues for the quarter ended April 2, 1994 were $267,058,000
compared to $138,773,000 for the first quarter of 1993, an increase of
$128,285,000 or 92%. Revenues from net sales increased by $124,867,000,
or 94%, while revenue from service and rental income increased by
$3,418,000, or 58%, over the same period in 1993. While the Company
expects revenue to continue to grow in its markets throughout 1994,
such growth may not, on a percentage basis, continue at the levels
experienced in the first quarter of 1994.
The increase in net sales was due primarily to the continued strong
demand for the Company's Symmetrix and Harmonix series of
Integrated Cached Disk Array ("ICDA") based products. Revenues
from the Symmetrix series of products in the IBM Corporation
("IBM"), Unisys Corporation ("Unisys") and Compagnie des Machines
Bull S.A. ("Bull") mainframe markets increased by $110,785,000 or
110%, from $101,152,000 in the first quarter of 1993 to
$211,937,000 in the first quarter of 1994. Revenues from the
Harmonix series of IBM compatible midrange disk products, increased
by $12,107,000 or 63%, from $19,233,000 in the first quarter of
1993 to $31,340,000 in the first quarter of 1994. In the first
quarter of 1994, the Company generated approximately 94% of its
product revenues from sales of ICDA-based products versus
approximately 91% in the same period a year ago. It is expected
that revenues from ICDA-based products for the mainframe and
midrange storage markets will remain a major component of the
Company's revenues throughout 1994.
Revenues on sales into the markets in North and South America
increased by $92,811,000 or 112%, from $82,971,000 in the first
quarter of 1993 to $175,782,000 in the first quarter of 1994. This
increase was due primarily to increased unit sales of the Symmetrix
5500 series of products sold in the IBM mainframe storage market,
from which revenues were approximately $88,000,000 in the first
quarter of 1994 versus $15,000,000 in the first quarter of 1993.
The remainder of the increase was primarily on sales of the
Harmonix series of products.
Revenues on sales into the markets of Europe, Africa, and the
Middle East increased by $30,835,000, or 67%, from $46,295,000 in
the first quarter of 1993 to $77,130,000 in the same period of
1994, due primarily to growth in the unit sales of the ICDA series
of products in the IBM and Bull mainframe storage markets.
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EMC CORPORATION
Revenues on sales into the Asia Pacific region increased by
$4,639,000, or 49% from $9,507,000 in the first quarter of 1993 to
$14,146,000 in the first quarter of 1994. Most of this increase
occurred in the Symmetrix series of products, but the Harmonix
series also contributed nearly $1,000,000 to the increase.
In September 1993, the Company extended its Original Equipment
Manufacturer ("OEM") agreement for the sale of Symmetrix products
to Unisys for up to three years, through December 31, 1996. Revenues
from product sales under this agreement decreased by $6,064,000, or
41% from $14,658,000 in the first quarter of 1993 to $8,594,000 in
the first quarter of 1994.
In February 1993, the Company entered into a three year OEM
agreement with Bull. Pursuant to this agreement, EMC granted Bull
the exclusive worldwide marketing rights, with the exception of
Japan, to EMC's Symmetrix 4800 series of ICDA-based storage
products for Bull mainframe computers. In return, Bull must
purchase all of its requirements for high speed cached disk array
storage devices from EMC. Failure by Bull to purchase at least 45%
of forecasted purchases at designated times, on a cumulative basis,
may result in loss of exclusivity to Bull. Revenues from product
sales under this agreement were $8,945,000 and zero for the first
quarters of 1994 and 1993, respectively.
The Company purchases certain components and products from
suppliers who the Company believes are currently the only suppliers
of those components or products that meet the Company's
requirements. Among the most important components that the Company
uses are high density memory components ("DRAMS") and 5 1/4" and 3
1/2" disk devices, which the Company purchases from a small number
of qualified suppliers, and in some instances, there is only a
single source for such components. A failure by any supplier of
high density DRAMS or disk drives to meet the Company's requirements
for an extended period of time could have a material adverse effect
on the Company. From time to time, the Company has experienced delays in
deliveries of high density DRAMS and disk drives needed to satisfy
orders for ICDA products. If such shortages were to intensify, or the
suppliers were not able to meet the Company's quarterly requirments in a
timely manner, the Company could lose some time-sensitive customer orders.
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EMC CORPORATION
Cost of Sales and Service
As a percentage of revenues, cost of sales and service amounted to
46.6% in the first quarter of 1994 versus 52.1% in the first
quarter of 1993. The improvement in the cost of sales percentage
was due primarily to increased sales of the higher margin Symmetrix
series of products through the Company's direct sales force, and,
to a lesser extent, improved component reliability, and
establishment of key vendor alliances. These improvements were
partially offset by lower product margins in the Company's OEM
business, and pricing pressures in the midrange business,
especially sales through distribution channels. Continuing margin
pressure in the mainframe and midrange markets may require the
Company to adapt and re-assess its cost structure and marketing
strategy.
Research and Development
Research and development ("R&D") expenses were $22,348,000 in the
first quarter of 1994 compared to $11,412,000 in the comparable
period in 1993, an increase of $10,936,000, or 96%. As a percentage
of revenue, such expenses were 8.4% in the first quarter of 1994 and
8.2% in the same period in 1993. Increases in R&D spending reflect
the additional purchases of state-of-the-art CAE/CAD design tools and
the cost of additional technical staff. Increases over first quarter
1993 levels also reflect costs of the Company's R&D facilities at Epoch
and Copernique and at EMC's subsidiary in Israel. The Company expects
to continue to spend substantial amounts for R&D throughout 1994.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were 19.3%
and 23.7% of revenues in the first quarters of 1994 and 1993,
respectively. Total SG&A expenses increased by $18,764,000 or 57%
from the first quarter 1993 level of $32,840,000, to $51,604,000 in
the first quarter of 1994. This increase is due primarily to costs
associated with additional sales and support personnel and their
related overhead costs, both domestically and internationally, in
connection with the Company's increased revenue levels and the
expansion of the Company's OEM and international distribution
programs. SG&A expenses are expected to increase throughout 1994
approximately in proportion to growth in revenues.
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EMC CORPORATION
Investment Income and Interest Expense
Investment income was $4,979,000 in the first quarter of 1994
compared with $1,204,000 in the same period a year ago. Interest
income was earned from investments in cash equivalents and long-
term investments and, to a lesser extent, from sales-type leases of
the Company's products. Investment income increased in 1994
primarily due to higher average cash balances throughout the
quarter, compared to the similar period in 1993, caused primarily
by the availability of funds received in December 1993 and January
1994 from the offering of the Notes.
Interest expense increased from $1,424,000 in the first quarter of
1993 to $3,802,000 in the first quarter of 1994, mainly due to
interest payable on the Notes.
Other Expense, Net
Other expense was $608,000 for the first quarter of 1994 compared
with $981,000 in the first quarter of 1993. Other expense in the first
quarter of 1994 related primarily to currency transaction losses of
$595,000, amortization of charges deferred in the offerings of Notes
and Debentures of $261,000, and miscellaneous expenses totalling
$366,000, net of other income of $614,000 primarily from technology
license fees. Other expense in the first quarter of 1993 was due
primarily to a net loss on the disposal of certain assets of
$488,000, technology license costs of $417,000, currency transaction
losses of $332,000 and miscellaneous expenses totalling $405,000,
net of other income of $661,000 primarily from technology license fees.
Earnings Fluctuations
Due to (i) customers' tendencies to make purchase decisions late in
each fiscal quarter, (ii) the desire by customers to evaluate new,
more expensive products for longer periods of time, (iii) the
timing of product and technology announcements by the Company and
its competitors, and (iv) fluctuating currency exchange rates, the
Company's period-to-period revenues and earnings can fluctuate
significantly.
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EMC CORPORATION
FINANCIAL CONDITION
Since January 1, 1994, cash and cash equivalents decreased by
$113,700,000 caused primarily by the Company's investment of
approximately $117,638,000 of cash into long term investments.
Major sources of cash in the quarter were the Company's issuance
of $29,600,000 of Notes in January 1994 under the overallotment
provision of the December 1993 offering, and an increase in accounts
payable of $17,341,000. Some of the major uses of cash in the first
quarter of 1994 included the stock purchase of Copernique, the acquisition
of certain assets of Array, and purchases of property and equipment
of $22,193,000 needed for the continued growth of the Company.
Working capital decreased by $57,558,000 from $516,876,000 at January 1,
1994 to $459,318,000 at April 2, 1994.
Current net trade and notes receivable increased by $47,959,000, or
31%, during the first three months of 1994. Days sales outstanding
at April 2, 1994 was comparable to that at April 3, 1993.
The increase in inventory, from $118,263,000 at January 1, 1994, to
$144,763,000 at April 2, 1994 was necessary to support revenue
volume increases primarily with respect to the Company's ICDA-based
products. This increase is related to the inventory investment
required to support the extensive test cycles and customer
evaluations for the introduction of new higher cost products.
Based on its current operating and capital expenditure forecasts,
the Company believes its funds currently available and funds generated
from operations, will be adequate to finance its operations for the
balance of the year.
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EMC CORPORATION
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
On June 10, 1993, Storage Technology Corporation ("STK") filed suit
against EMC in the United States District Court for the District of
Colorado alleging that EMC is infringing three patents. In the
complaint, STK seeks injunctive relief, unspecified damages, including
treble damages plus attorney's fees and costs. On July 20, 1993, EMC
answered the complaint and denied STK's allegations. In addition,
EMC counterclaimed against STK alleging the patents in suit are
invalid and unenforceable. In the counterclaim, EMC seeks unspecified
damages, attorneys' fees, costs and interest. Discovery in the matter
is currently in process. A scheduling order has been entered and a
trial date has been set for October 1994. On April 27, 1994, EMC
filed a motion for partial summary judgement on the Dodd patents
(U.S. Patent Nos. 4,468,730 and 4,536,836). On May 11, 1994, EMC
filed a motion for partial summary judgement on the third patent in
the litigation, the White patent (U.S. Patent No. 4,467,421).
EMC is involved in other litigation which it considers routine and
incidental to its business. Management does not expect the results
of these actions to have a material advers effect on EMC's business
or financial condition.
Item 5. Other Information
a.Subsequent Events. See footnote 8 to Notes to Interim
Consolidated Financial Statements in Part I of this report.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Computation of Primary and Fully Diluted Net
Income Per Share (filed herewith).
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company for the
quarter ended April 2, 1994.
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EMC CORPORATION
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.
EMC CORPORATION
Date: May 16, 1994
By:/S/ W. PAUL FITZGERALD
W. Paul Fitzgerald
Senior Vice President, Finance and
Administration, Chief Financial Officer
and Treasurer (Principal Financial Officer)
By:/S/ COLIN G. PATTESON
Colin G. Patteson
Vice President and Controller
(Principal Accounting Officer)
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EMC CORPORATION
EXHIBIT INDEX
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income
Per Share
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EMC CORPORATION
Exhibit 11.1 Computation of Primary and Fully Diluted Net
Income Per Share
(Amounts in thousands except share and per share data)
Three Months Ended
April 2, April, 3
1994 1993
Primary
Net income $48,840 $14,913
Add back interest expense
on convertible notes 2,412 ---
Less tax effect on interest
expense on convertible notes (965) ---
Net income for purpose of calculating
primary net income per share $50,287 $14,913
Weighted average shares
outstanding during the period 188,470,638 168,212,952
Common equivalent shares 25,771,555 14,603,412
Common and common equivalent
shares outstanding for purpose
of calculating primary net income
per share 214,242,193 182,816,364
Primary net income per share $0.23 $0.08
Fully Diluted
Net income $48,840 $14,913
Add back interest expense
on convertible notes and debt 3,332 936
Less tax effect on interest expense
on convertible notes and debt (1,333) (356)
Net income for purpose of
calculating fully diluted
net income per share $50,839 $15,493
Common and common equivalent
shares outstanding for purpose
of calculating primary net income
per share 214,242,193 182,816,364
Incremental shares to reflect full
dilution, primarily from
convertible subordinated
debentures 19,487,994 19,564,736
Total shares for purpose of
calculating fully diluted
net income per share 233,730,187 202,381,100
Fully diluted net income
per share (Note 6) $0.22 $0.08
