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: June 29, 1996 Commission File Number 1-9853
EMC CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2680009
- ----------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
organization or incorporation)
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 231,525,361
- -------------------------------------- ------------------
Class Outstanding as of June 29, 1996
<PAGE>
Page No.
Part I - Financial Information
Consolidated Balance Sheets
June 29, 1996 and December 30, 1995 3
Consolidated Statements of Operations
for the Three and Six Months Ended
June 29, 1996 and July 1, 1995 4
Consolidated Statements of Cash Flows
for the Six Months Ended June 29, 1996
and July 1, 1995 5
Notes to Interim Consolidated Financial
Statements 6 - 7
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8 - 14
Part II - Other Information 15-16
Signatures 17
Exhibit Index 18
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
(amounts in thousands except share amounts)
<CAPTION>
June 29, 1996 December 30, 1995
ASSETS
<S> <C> <C>
Current assets:
Cash and short-term investments $500,162 $379,628
Trade and notes receivable less
allowance for doubtful accounts
of $7,750 and $7,062, respectively 531,530 550,473
Inventories 282,435 330,160
Deferred income taxes 32,274 44,061
Other assets 25,875 14,633
Total current assets 1,372,276 1,318,955
Long-term investments 185,547 125,276
Notes receivable, net 20,516 26,497
Property, plant and equipment, net 244,215 218,901
Deferred income taxes 8,284 9,200
Intangible assets, net 59,861 20,078
Other assets, net 47,117 26,822
Total assets $1,937,816 $1,745,729
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of
long-term obligations $7,503 $915
Accounts payable 118,047 111,721
Accrued expenses 117,244 130,596
Income taxes payable 96,484 107,717
Deferred revenue 11,279 8,411
Total current liabilities 350,557 359,360
Deferred revenue 2,252 223
Long-term obligations:
4 1/4% convertible subordinated notes
due 2001 229,498 229,598
Notes payable and capital lease
obligations 47,773 16,247
Total liabilities 630,080 605,428
Stockholders' equity:
Series Preferred Stock, par value $.01;
authorized 25,000,000 shares --- ---
Common Stock, par value $.01; authorized
500,000,000 shares; issued 233,532,608
and 232,517,845 shares, in 1996 and
1995, respectively 2,335 2,325
Additional paid-in capital 345,055 350,989
Deferred compensation (1,517) (2,140)
Retained earnings 958,198 786,599
Cumulative translation adjustment 4,603 3,766
Treasury stock, at cost, 2,007,247 and
2,646,453 shares, in 1996 and 1995,
respectively (938) (1,238)
Total stockholders' equity 1,307,736 1,140,301
Total liabilities and stockholders'
equity $1,937,816 $1,745,729
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands except per share amounts)
(unaudited)
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Net sales $533,235 $466,524 $1,042,419 $904,482
Service and rental 11,782 12,029 24,085 22,187
545,017 478,553 1,066,504 926,669
Costs and expenses:
Cost of sales and
service 304,941 231,762 598,105 449,870
Research and
development 39,632 43,951 74,950 83,891
Selling, general and
administrative 87,159 74,495 168,922 146,286
Operating income 113,285 128,345 224,527 246,622
Investment income 8,041 5,876 14,366 12,436
Interest expense (2,997) (3,065) (6,056) (6,574)
Other income/(expense),
net (210) 495 (3) 1,051
Income before taxes 118,119 131,651 232,834 253,535
Income tax provision 31,065 37,540 61,235 73,975
Net income $87,054 $94,111 $171,599 $179,560
Net income per weighted
average share, primary $0.36 $0.39 $0.70 $0.76
Net income per weighted
average share, fully
diluted $0.36 $0.38 $0.70 $0.74
Weighted average number
of common shares
outstanding, primary 248,517 248,061 248,569 241,540
Weighted average number
of common shares
outstanding, fully
diluted 248,574 248,582 248,621 248,537
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(amounts in thousands)
(unaudited)
<CAPTION>
For the Six Months Ended
June 29, July 1,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $171,599 $179,560
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 36,275 26,652
Deferred income taxes 12,703 (1,230)
Net loss on disposal of property and
equipment 290 424
Changes in assets and liabilities:
Trade and notes receivable 24,995 (103,225)
Inventories 47,685 (46,052)
Other assets (33,937) (23,957)
Accounts payable 6,416 (57,623)
Accrued expenses (15,380) (1,882)
Income taxes payable (11,225) 45,537
Deferred revenue 4,863 5,090
Net cash provided by operating activities 244,284 23,294
Cash flows from investing activities:
Additions to property and equipment (56,319) (42,827)
Purchase of patents (6,333) --
Proceeds from disposal of property and
equipment 826 --
Net (purchase)/maturity of long-term
investments (60,271) 18,089
Net cash used by investing activities (122,097) (24,738)
Cash flows from financing activities:
Issuance of common stock 11,269 9,349
Repurchase of shares for treasury (16,370) (368)
Payment of long-term and short-term
obligations (444) (11,828)
Issuance of long-term and short-term
obligations 3,142 545
Net cash used by financing activities (2,403) (2,302)
Effect of exchange rate changes on cash 750 (84)
Net increase/(decrease) in cash and cash
equivalents 119,784 (3,746)
Cash and cash equivalents at beginning of
period 379,628 249,830
Cash and cash equivalents at end of period $500,162 $246,000
Non-cash activity - conversion of notes and
debentures $100 $39,536
- patents acquired by notes and other
payables $37,416 --
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
Company
EMC Corporation and its subsidiaries ("EMC" or the "Company") design,
manufacture, market and support a wide range of storage-related hardware,
software and service products for the mainframe, open systems and network
computer storage markets worldwide. These products are sold as storage
solutions for customers utilizing a variety of computer system platforms,
including, but not limited to, International Business Machines Corporation
("IBM") and IBM-compatible mainframe, Unisys Corporation, Compagnie des
Machines Bull S.A., Hewlett-Packard Company, NCR Corporation and other open
systems platforms.
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 and its 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 June 29, 1996 and
July 1, 1995.
Certain prior year amounts have been reclassified to conform with the 1996
presentation.
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 December 30, 1995, which are contained in the Company's Annual
Report on Form 10-K filed with the Securities and Exchange Commission on March
27, 1996.
2. Inventory
<TABLE>
<CAPTION>
June 29, 1996 December 30, 1995
<S> <C> <C>
Inventories consist of:
Purchased parts $ 10,278,000 $ 22,870,000
Work-in-process 157,322,000 150,216,000
Finished goods 114,835,000 157,074,000
$282,435,000 $330,160,000
</TABLE>
<PAGE>
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
3. Net Income Per Share
Net income per share was computed on the basis of weighted average common and
dilutive common equivalent shares outstanding. Primary weighted average
shares outstanding and earnings used in per share computations for the three
and six months ended June 29, 1996 and July 1, 1995 reflect the dilutive
effects of the 4 1/4% convertible subordinated notes due 2001 (the "Notes")
and outstanding stock options. Fully diluted weighted average shares
outstanding and earnings used in per share computations for the six months
ended July 1, 1995 reflect the dilutive effects of the 6 1/4% convertible
subordinated debentures, which were either converted or redeemed on or prior
to April 1, 1995, in addition to the dilutive effect of the Notes and
outstanding stock options.
4.Litigation
The Company is a party to litigation which it considers routine and incidental
to its business. Management does not expect the results of any of these
actions to have a material adverse effect on the Company's business or
financial condition.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - Second Quarter of 1996 compared to Second Quarter of
1995
- ------------------------------------------------------------------------------
Revenues
Revenues for the quarter ended June 29, 1996 were $545,017,000 compared to
$478,553,000 for the second quarter of 1995, an increase of $66,464,000 or
14%.
The increase in revenues was due primarily to the continued strong demand for
the Company's series of Integrated Cached Disk Array ("ICDA") based products,
particularly the open systems products which include the Symmetrix 3000 series
of products and the Centriplex series of products.
Revenues from products sold into the mainframe storage market, which includes
the Symmetrix 5000 series of products, were $309,494,000 in the second quarter
of 1996, compared to $376,652,000 in the second quarter of 1995, a decrease of
$67,158,000 or 18%.
Revenues from products sold into the open systems storage market, which
includes the Symmetrix 3000 series of products and the Centriplex series of
products, were $169,582,000 in the second quarter of 1996, compared to
$22,060,000 in the second quarter of 1995, an increase of $147,522,000 or
669%.
Revenues from products sold by McDATA Corporation, a wholly-owned subsidiary
of EMC ("McDATA"), which includes the ESCON Director series of products, were
$45,980,000 in the second quarter of 1996, compared to $43,051,000 in the
second quarter of 1995, an increase of $2,929,000 or 7%.
Revenues from all other products, which includes the midrange series of
products, were $8,179,000 in the second quarter of 1996, compared to
$24,761,000 in the second quarter of 1995, a decrease of $16,582,000 or 67%.
Revenues from service and rental income were $11,782,000 in the second quarter
of 1996, compared to $12,029,000 in the second quarter of 1995, a decrease of
$247,000 or 2%.
On October 31, 1995, the Company entered into a reseller agreement with
Hewlett-Packard Company ("HP") wherein HP will market and resell the Symmetrix
3000 family of systems worldwide for connection to HP's 9000 series computers.
This agreement has been expanded to enable HP to also market and resell this
family of systems for connection to HP's 3000 series computers. The agreement
currently extends to June 30, 1997.
<PAGE>
Revenues on sales into the markets of North America and South America were
$330,873,000 in the second quarter of 1996 compared to $291,005,000 in the
second quarter of 1995, an increase of $39,868,000, or 14%. This increase was
due primarily to increased revenue levels from sales of the Symmetrix series
of products in the open systems storage market.
Revenues on sales into the markets of Europe, Africa and the Middle East were
$166,034,000 in the second quarter of 1996 compared to $159,365,000 in the
second quarter of 1995, an increase of $6,669,000, or 4%, due primarily to
increased revenue levels from sales of the Symmetrix series of products in the
open systems storage market.
Revenues on sales into the markets in the Asia Pacific region were $48,110,000
in the second quarter of 1996 compared to $28,183,000 in the second quarter of
1995, an increase of $19,927,000, or 71%, due primarily to increased revenue
levels from sales of the Symmetrix series of products in the mainframe storage
market.
Cost of Sales and Service
Cost of sales and service increased to 56.0% of revenues in the second quarter
of 1996, compared to 48.4% of revenues in the second quarter of 1995. This
increase is primarily attributable to the impact of price declines in the
mainframe and open systems storage markets being greater than the impact of
cost declines in raw material components. The Company currently believes that
price declines will continue.
In May 1996, the Company opened its international Customer Support Center,
based in Ireland, to provide primary response for all technical support issues
related to EMC storage systems installed outside of North America.
Research and Development
Research and development ("R&D") expenses were $39,632,000 and $43,951,000 in
the second quarters of 1996 and 1995, respectively, a decrease of $4,319,000,
or 9.8%. R&D expenses were 7.3% and 9.2% of revenues in the second quarters
of 1996 and 1995, respectively. Dollar decreases in R&D spending reflect the
consolidation of domestic development efforts and the capitalization of
software development costs primarily related to specific software products.
The decrease was partially offset by the cost of additional technical staff
and depreciation expenses associated with capital equipment acquired to
facilitate development. The Company expects to continue to spend substantial
amounts for R&D in 1996.
<PAGE>
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $87,159,000 and
$74,495,000 in the second quarters of 1996 and 1995, respectively, an increase
of $12,664,000 or 17.0%. SG&A expenses were 16.0% and 15.6% of revenues in the
second quarters of 1996 and 1995, respectively. The dollar increase is due
primarily to costs associated with additional worldwide sales and support
personnel and their related overhead costs. These costs are attributable to
the Company's increased revenue levels and the Company's initiative to expand
its open systems storage products, expansion of the international direct sales
force and OEM and strategic alliance programs. SG&A expenses are expected to
increase in dollar terms for the balance of 1996.
Investment Income and Interest Expense
Investment income was $8,041,000 in the second quarter of 1996 compared with
$5,876,000 in the same period a year ago. Interest income was earned from
investments in cash equivalents, and short and long-term investments.
Investment income increased in 1996 primarily due to higher cash and
investment balances in the second quarter of 1996 over the same period in
1995.
Interest expense decreased slightly in the second quarter of 1996 from the
second quarter of 1995.
Provision for Income Taxes
The provision for income taxes was $31,065,000 and $37,540,000 in the second
quarters of 1996 and 1995, respectively, which resulted in an effective tax
rate of 26.3% in the second quarter of 1996 and 28.5% in the second quarter of
1995. The decrease in the effective tax rate is mainly attributable to the
realization of benefits associated with the implementation of the Company's
tax strategies. The Company provides for income taxes based upon its estimate
of full year earnings on a country-by-country basis.
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, (iv) fluctuating
currency exchange rates, (v) competitive pricing pressures in the computer
storage market and (vi) the relative and varying rates of product price and
component cost declines, the Company's period to period revenues and earnings
could, under certain circumstances, fluctuate significantly.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - First Six Months of 1996 compared to First Six Months
of 1995
- ------------------------------------------------------------------------------
Revenues
Revenues for the six months ended June 29, 1996 were $1,066,504,000 compared
to $926,669,000 for the first six months of 1995, an increase of $139,835,000
or 15%.
The increase in revenues was due primarily to the continued strong demand for
the Company's series of Integrated Cached Disk Array ("ICDA") based products,
particularly the open systems products which include the Symmetrix 3000 series
of products and the Centriplex series of products.
Revenues from products sold into the mainframe storage market, which includes
the Symmetrix 5000 series of products, were $618,649,000 in the first six
months of 1996, compared to $742,320,000 in the first six months of 1995, a
decrease of $123,671,000 or 17%.
Revenues from products sold into the open systems storage market, which
includes the Symmetrix 3000 series of products and the Centriplex series of
products, were $316,289,000 in the first six months of 1996, compared to
$40,571,000 in the first six months of 1995, an increase of $275,718,000 or
680%.
Revenues from products sold by McDATA, which includes the ESCON Director
series of products, were $85,276,000 in the first six months of 1996, compared
to $70,232,000 in the first six months of 1995, an increase of $15,044,000 or
21%.
Revenues from all other products, which includes the midrange series of
products, were $22,205,000 in the first six months of 1996, compared to
$51,359,000 in the first six months of 1995, a decrease of $29,154,000 or 57%.
Revenues from service and rental income were $24,085,000 in the first six
months of 1996, compared to $22,187,000 in the first six months of 1995, an
increase of $1,898,000 or 9%.
On October 31, 1995, the Company entered into a reseller agreement with
Hewlett-Packard Company ("HP") wherein HP will market and resell the Symmetrix
3000 family of systems worldwide for connection to HP's 9000 series computers.
This agreement has been expanded to enable HP to also market and resell this
family of systems for connection to HP's 3000 series computers. The agreement
currently extends to June 30, 1997.
<PAGE>
Revenues on sales into the markets of North America and South America
increased by $88,821,000, or 16%, to $641,018,000 in the first six months of
1996 from $552,197,000 in the first six months of 1995. This increase was due
primarily to increased revenue levels from sales of the Symmetrix series of
products in the open systems storage market.
Revenues on sales into the markets of Europe, Africa and the Middle East
increased by $29,794,000, or 10%, to $329,259,000 in the first six months of
1996 from $299,465,000 in the first six months of 1995, due primarily to
increased revenue levels from sales of the Symmetrix series of products in the
open systems storage market.
Revenues on sales into the markets in the Asia Pacific region increased by
$21,220,000, or 28%, to $96,227,000 in the first six months of 1996 from
$75,007,000 in the first six months of 1995, due primarily to increased
revenue levels from sales of the Symmetrix series of products in the mainframe
storage market.
Cost of Sales and Service
Cost of sales and service increased to 56.1% of revenues in the first six
months of 1996, compared to 48.5% of revenues in the first six months of 1995.
This increase is primarily attributable to the impact of price declines in the
mainframe and open systems storage markets being greater than the impact of
cost declines in raw material components. The Company currently believes that
price declines will continue.
In May 1996, the Company opened its international Customer Support Center,
based in Ireland, to provide primary response for all technical support issues
related to EMC storage systems installed outside of North America.
Research and Development
Research and development ("R&D") expenses were $74,950,000 and $83,891,000 in
the first six months of 1996 and 1995, respectively, a decrease of $8,941,000,
or 10.7%. R&D expenses were 7.0% and 9.1% of revenues in the first six months
of 1996 and 1995, respectively. Dollar decreases in R&D spending reflect the
consolidation of domestic development efforts and the capitalization of
software development costs primarily related to specific software products.
The decrease was partially offset by the cost of additional technical staff
and depreciation expenses associated with capital equipment acquired to
facilitate development. The Company expects to continue to spend substantial
amounts for R&D in 1996.
<PAGE>
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses were $168,922,000 and
$146,286,000 in the first six months of 1996 and 1995, respectively, an
increase of $22,636,000 or 15.5%. SG&A expenses were 15.8% of revenues in both
the first six months of 1996 and 1995. The dollar increase is due primarily
to costs associated with additional worldwide sales and support personnel and
their related overhead costs. These costs are attributable to the Company's
increased revenue levels and the Company's initiative to expand its open
systems storage products, expansion of international direct sales force and
OEM and strategic alliance programs. SG&A expenses are expected to increase in
dollar terms for the balance of 1996.
Investment Income and Interest Expense
Investment income was $14,366,000 in the first six months of 1996 compared
with $12,436,000 in the same period a year ago. Interest income was earned
from investments in cash equivalents, and short and long-term investments.
Investment income increased in the first six months of 1996 primarily due to
higher cash and investment balances in the first six months of 1996 over the
same period in 1995.
Interest expense decreased slightly in the first six months of 1996 from the
same period in 1995, primarily due to conversion and redemption of the
Debentures in the first quarter of 1995.
Provision for Income Taxes
The provision for income taxes was $61,235,000 and $73,975,000 in the first
six months of 1996 and 1995, respectively, which resulted in an effective tax
rate of 26.3% and 29.2%, respectively. The decrease in the effective tax rate
is mainly attributable to the realization of benefits associated with the
implementation of the Company's tax strategies. The Company provides for
income taxes based upon its estimate of full year earnings on a country-by-
country basis.
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, (iv) fluctuating
currency exchange rates, (v) competitive pricing pressures in the computer
storage market and (vi) the relative and varying rates of product price and
component cost declines, the Company's period to period revenues and earnings
could, under certain circumstances, fluctuate significantly.
<PAGE>
FINANCIAL CONDITION
Cash and short-term investments were $500,162,000 and $379,628,000 at June 29,
1996 and December 30, 1995, respectively.
Cash and short and long-term investments were $685,709,000 and $504,904,000 at
June 29, 1996 and December 30, 1995, respectively. In the first six months of
1996, cash and short and long-term investments increased by $180,805,000.
Cash provided by operating activities for the first six months of 1996
amounted to $244,284,000. This was primarily generated from net income and
improvements in inventories and receivables. Cash used by investing
activities was $122,097,000, principally for additions to property, plant and
equipment, and the purchase of long-term investments. Cash used by financing
activities was $2,403,000 principally due to repurchases of treasury stock,
offset by proceeds from stock option exercises. The Company currently expects
to generate a further increase in cash and short and long-term investments
over the remainder of 1996.
At June 29, 1996, the Company had available for use its credit lines of
$72,000,000. The Company may elect to borrow at any time from these credit
lines. Based on its current operating and capital expenditure forecasts, the
Company believes funds currently available, funds generated from operations
and its available lines of credit will be adequate to finance its operations.
<PAGE>
PART II.
OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders was held on May 8, 1996. There was no
solicitation in opposition to the management's nominees as listed in the
Company's proxy statement and all such nominees were elected as Class III
directors for a three-year term. In addition, the stockholders approved the
addition of 1,000,000 shares of authorized common stock to the Company's 1989
Employee Stock Purchase Plan and approved certain amendments to the Company's
1992 Stock Option Plan for Directors. The results of the votes for each of
these proposals were as follows:
<TABLE>
<CAPTION>
1. Election of Class III Directors:
For Withheld
<S> <C> <C>
Michael J. Cronin 188,497,452 2,238,121
Maureen E. Egan 188,493,098 2,242,475
W. Paul Fitzgerald 188,514,843 2,220,730
2. To amend the Company's 1989 Employee Stock Purchase Plan:
For: 183,647,478
Against: 5,864,256
Abstain: 1,004,319
Broker Non-Votes: 219,520
3. To amend the Company's 1992 Stock Option Plan for Directors:
For: 165,528,285
Against: 23,187,289
Abstain: 1,800,479
Broker Non-Votes: 219,520
</TABLE>
<PAGE>
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).
27 Financial Data Schedule (filed herewith).
(b) Reports on Form 8-K
On April 24, 1996, the Company filed a report (Date of Report: April
24, 1996) on Form 8-K containing cautionary statements pursuant to the
Private Securities Litigation Reform Act of 1995.
<PAGE>
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: August 12, 1996 By: /s/ Colin G. Patteson
Colin G. Patteson
Vice President
Chief Financial Officer
and Treasurer
(Principal Financial Officer)
By: /s/ William J. Teuber, Jr.
William J. Teuber, Jr.
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit 11.1 Computation of Primary and Fully Diluted Net Income Per Share
Exhibit 27 Financial Data Schedule
<PAGE>
<TABLE>
Exhibit 11.1
Computation of Primary and Fully Diluted Net Income Per Share
(Amounts in thousands except share and per share data)
<CAPTION>
Three Months Ended Six Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
Primary
<S> <C> <C> <C> <C>
Net income $87,054 $94,111 $171,599 $179,560
Add back interest expense
on convertible notes 2,438 2,440 4,878 4,878
Less tax effect on interest
expense on convertible
notes (975) (976) (1,951) (1,951)
Net income for purposes of
calculating primary net
income per share $88,517 $95,575 $174,526 $182,487
Weighted average shares
outstanding during the
period 231,702,179 227,505,239 231,177,705 20,774,837
Common equivalent
shares 16,814,653 20,555,515 17,391,703 20,764,971
Common and common
equivalent shares
outstanding for purpose
of calculating primary
net income per share 248,516,832 248,060,754 248,569,408 241,539,808
Primary net income per
share (Note 3) $0.36 $0.39 $0.70 $0.76
Fully Diluted
Net income $87,054 $94,111 $171,599 $179,560
Add back interest expense
on convertible notes and
debentures 2,438 2,440 4,878 5,495
Less tax effect on interest
expense on convertible notes
and debentures (975) (976) (1,951) (2,198)
Net income for purpose of
calculating fully diluted
net income per share $88,517 $95,575 $174,526 $182,857
Common and common equivalent
shares outstanding for
purpose of calculating
primary net income per
share 248,516,832 248,060,754 248,569,408 241,539,808
Incremental shares to
reflect full dilution,
primarily from convertible
subordinated debentures in
1995 57,210 521,035 51,239 6,997,650
Total shares for purpose of
calculating fully diluted
net income per share 248,574,042 248,581,789 248,620,647 248,537,458
Fully diluted net income
per share (Note 3) $0.36 $0.38 $0.70 $0.74
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from EMC
Corporation financial statements and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 500,162
<SECURITIES> 0
<RECEIVABLES> 531,530
<ALLOWANCES> 7,750
<INVENTORY> 282,435
<CURRENT-ASSETS> 1,372,276
<PP&E> 244,215
<DEPRECIATION> 36,275
<TOTAL-ASSETS> 1,937,816
<CURRENT-LIABILITIES> 350,557
<BONDS> 229,498
<COMMON> 2,335
0
0
<OTHER-SE> 1,305,401
<TOTAL-LIABILITY-AND-EQUITY> 1,937,816
<SALES> 1,042,419
<TOTAL-REVENUES> 1,066,504
<CGS> 598,105
<TOTAL-COSTS> 841,977
<OTHER-EXPENSES> 3
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,056
<INCOME-PRETAX> 232,834
<INCOME-TAX> 61,235
<INCOME-CONTINUING> 171,599
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 171,599
<EPS-PRIMARY> .70
<EPS-DILUTED> .70
</TABLE>
