<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(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, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-15135
TEKELEC
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-2746131
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26580 W. AGOURA ROAD, CALABASAS, CALIFORNIA 91302
(Address and zip code of principal executive offices)
(818) 880-5656
(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 [ ]
As of May 2, 1995, there were 9,331,072 shares of the registrant's
common stock, without par value, outstanding.
Total number of pages in this report: 16
Index to Exhibits is on Page: 15
<PAGE> 2
TEKELEC
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I -- FINANCIAL INFORMATION
- -------------------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets at March 31, 1995
and December 31, 1994 3
Consolidated Income Statements for the three
months ended March 31, 1995 and 1994 4
Consolidated Statements of Cash Flow for the three
months ended March 31, 1995 and 1994 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II -- OTHER INFORMATION
- ----------------------------
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
- ----------
</TABLE>
2
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
TEKELEC
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, December 31,
1995 1994
--------- ------------
(thousands, except share data)
ASSETS (unaudited) (audited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . $ 6,962 $ 6,653
Restricted cash . . . . . . . . . . . . . . . . . 1,000 1,000
Accounts and notes receivable, less
allowances of $336 and $318, respectively . . . 14,408 14,215
Inventories . . . . . . . . . . . . . . . . . . . 6,164 4,391
Amounts due from related parties . . . . . . . . . 2,023 1,538
Prepaid expenses . . . . . . . . . . . . . . . . . 597 704
-------- --------
Total current assets . . . . . . . . . . . . . 31,154 28,501
Property and equipment, net . . . . . . . . . . . . . . 4,946 4,794
Technology, net . . . . . . . . . . . . . . . . . . . . 228 423
Other assets . . . . . . . . . . . . . . . . . . . . . 726 691
-------- --------
Total assets . . . . . . . . . . . . . . . . . $ 37,054 $ 34,409
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings and current portion
of long-term debt . . . . . . . . . . . . . . $ 1,270 $ 1,366
Trade accounts payable . . . . . . . . . . . . . . 4,557 4,005
Accrued expenses . . . . . . . . . . . . . . . . . 3,901 3,213
Accrued payroll and related expenses . . . . . . . 2,145 4,132
Deferred revenues . . . . . . . . . . . . . . . . 1,805 1,412
Current portion of other obligations . . . . . . . 217 312
Income taxes payable . . . . . . . . . . . . . . . 441 595
-------- --------
Total current liabilities . . . . . . . . . . 14,336 15,035
Long-term debt . . . . . . . . . . . . . . . . . . . . 560 620
Long-term portion of other obligations . . . . . . . . 15 34
-------- --------
Total liabilities . . . . . . . . . . . . . . 14,911 15,689
-------- --------
SHAREHOLDERS' EQUITY:
Common stock, without par value,
50,000,000 shares authorized; 9,322,682 and
9,022,612 shares issued and outstanding,
respectively . . . . . . . . . . . . . . . . . . 16,964 15,940
Retained earnings . . . . . . . . . . . . . . . . 1,547 79
Cumulative translation adjustment . . . . . . . . 3,632 2,701
-------- --------
Total shareholders' equity . . . . . . . . . . 22,143 18,720
-------- --------
Total liabilities and shareholders' equity . . $ 37,054 $ 34,409
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
TEKELEC
CONSOLIDATED INCOME STATEMENTS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------
1995 1994
------- -------
(thousands, except per share data)
<S> <C> <C>
REVENUES (including sales to related parties of
1995 - $1,836 and 1994 - $927) . . . . . . . . . . . . $18,630 $12,986
COSTS AND EXPENSES:
Cost of goods sold . . . . . . . . . . . . . . . . . . 6,207 4,740
Research and development . . . . . . . . . . . . . . . 3,357 2,772
Selling, general and administrative . . . . . . . . . 6,776 4,943
------- -------
Total costs and expenses . . . . . . . . . . . . . 16,340 12,455
Income from operations . . . . . . . . . . . . . . . . . . 2.290 531
Interest and other income (expense), net . . . . . . . (170) (288)
------- -------
Income before provision for income taxes . . . . . . . . . 2,120 243
Provision for income taxes . . . . . . . . . . . . . . 652 117
------- -------
NET INCOME . . . . . . . . . . . . . . . . . . . . $ 1,468 $ 126
======= =======
EARNINGS PER SHARE . . . . . . . . . . . . . . . . . . . .
Primary . . . . . . . . . . . . . . . . . . . . . . . $ 0.14 $ 0.01
Fully diluted . . . . . . . . . . . . . . . . . . . . 0.13 0.01
WEIGHTED AVERAGE NUMBER OF SHARES . . . . . . . . . . . . .
Primary . . . . . . . . . . . . . . . . . . . . . . . 10,795 8,558
Fully diluted . . . . . . . . . . . . . . . . . . . . 10,913 8,558
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
TEKELEC
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1995 1994
------- -------
(thousands)
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 1,468 $ 126
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization . . . . . . . . . . . . . . 1,095 1,112
Changes in current assets and liabilities:
Accounts and notes receivable . . . . . . . . . . . . . 108 (1,597)
Inventories . . . . . . . . . . . . . . . . . . . . . . (1,633) 1,154
Amounts due from related parties . . . . . . . . . . . . (485) 18
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 123 589
Trade accounts payable . . . . . . . . . . . . . . . . . 423 (1,462)
Accrued expenses . . . . . . . . . . . . . . . . . . . . 650 (579)
Accrued payroll and related expenses . . . . . . . . . . (2,029) (1,471)
Deferred revenues . . . . . . . . . . . . . . . . . . . 393 (87)
Income taxes payable . . . . . . . . . . . . . . . . . . (199) (484)
------- -------
Total adjustments . . . . . . . . . . . . . . . . . . (1,554) (2,807)
------- -------
Net cash (used in) operating activities . . . . . . . (86) (2,681)
------- -------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment . . . . . . . . . . . . (912) (215)
Decrease (Increase) in other assets . . . . . . . . . . . (17) 38
-------- -------
Net cash (used in) investing activities . . . . . . . (929) (177)
-------- -------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from (Payments of) short-term borrowings . . . . (96) 1,046
Repayment of long-term debt . . . . . . . . . . . . . . . (60) ---
Repayment of other obligations . . . . . . . . . . . . . . (115) (71)
Proceeds from issuance of common stock . . . . . . . . . . 1,024 157
-------- -------
Net cash provided by financing activities . . . . . . 753 1,132
-------- -------
Effect of exchange rate changes on cash . . . . . . . . . . . . 571 374
-------- -------
Net change in cash and cash equivalents . . . . . . . . . 309 (1,352)
Cash and cash equivalents at beginning of period . . . . . . . 6,653 3,669
-------- -------
Cash and cash equivalents at end of period . . . . . . . . . . $ 6,962 $ 2,317
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD FOR
Interest . . . . . . . . . . . . . . . . . . . . . . . . . $ 85 $ 89
Income taxes . . . . . . . . . . . . . . . . . . . . . . . 872 549
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
TEKELEC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
A. BASIS OF PRESENTATION
The consolidated financial statements are unaudited, other than the
consolidated balance sheet at December 31, 1994, and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion of
Management, necessary for a fair presentation of the Company's financial
condition, operating results and cash flows for the interim periods.
The results of operations for the current interim period are not
necessarily indicative of results to be expected for the current year. Certain
items shown in the prior financial statements have been reclassified to conform
with the presentation of the current period.
The Company operates under a thirteen-week calendar quarter. However,
for financial statement presentation purposes, the reporting periods are
referred to as ended on the last calendar day of the quarter. The accompanying
financial statements for the three months ended March 31, 1995 and 1994 are for
the thirteen weeks ended March 31, 1995 and April 1, 1994, respectively.
Earnings per share are computed using the weighted average number of
shares outstanding and dilutive common stock equivalents (options and
warrants).
On March 17, 1995, the Company effected a two-for-one split of its
common stock. All references to numbers of shares and per share amounts have
been restated to reflect the stock split.
These consolidated financial statements should be read in conjunction
with the consolidated financial statements for the year ended December 31, 1994
and the notes thereto in the Company's Annual Report to Shareholders for the
year ended December 31, 1994.
B. RESTRICTED CASH
At March 31, 1995, the Company's Japanese subsidiary had $1.0 million
of restricted cash included in current assets, which represents cash on deposit
at a bank in Japan as collateral for outstanding short-term borrowings in the
U.S. under a $2.0 million line of credit. See Note F.
6
<PAGE> 7
TEKELEC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
C. CERTAIN BALANCE SHEET ITEMS
The components of inventories are:
<TABLE>
<CAPTION>
MARCH 31, December 31,
1995 1994
--------- ------------
(thousands)
<S> <C> <C>
Raw materials..................................... $3,256 $2,197
Work in process................................... 1,727 1,246
Finished goods.................................... 1,181 948
------ ------
$6,164 $4,391
====== ======
</TABLE>
Property and equipment consist of the following:
<TABLE>
<S> <C> <C>
Manufacturing and development equipment........... $ 8,776 $ 8,567
Furniture and office equipment.................... 5,058 5,022
Demonstration equipment........................... 3,735 3,249
Leasehold improvements............................ 1,330 1,257
-------- --------
18,899 18,095
Less, accumulated depreciation and amortization... (13,953) (13,301)
-------- --------
Property and equipment, net....................... $ 4,946 $ 4,794
======== ========
</TABLE>
D. RELATED PARTY TRANSACTIONS
The following is a summary of the transactions between the Company and
a foreign affiliate controlled by the Company's Chairman of the Board:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1995 1994
------ -----
(thousands)
<S> <C> <C>
Product sales .................................. $1,836 $927
Purchases of inventory ......................... 2 2
</TABLE>
E. INCOME TAXES
For the three months ended March 31, 1995, the Company had an
effective tax rate of 31%, compared to 48% in the first quarter of 1994. The
provisions for both periods were principally foreign taxes on the income of the
Company's Japanese subsidiary. In both periods, the Company was able to
utilize a portion of its prior years' U.S. loss carryforwards, and consequently
provided for taxes on its U.S. taxable income at the federal alternative
minimum tax rate and applicable state tax rates.
7
<PAGE> 8
TEKELEC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
F. BORROWINGS
The Company has a $7.5 million line of credit and a $2.0 million line
of credit with U.S. banks and lines of credit aggregating $3.9 million
available to the Company's Japanese subsidiary from various Japan-based banks.
The Company's $7.5 million line of credit with a U.S. bank is
collateralized by substantially all of the Company's assets, bears interest at
the U.S. prime rate (9.0% at March 31, 1995) plus 2.5% per annum and expires
September 30, 1995, if not renewed. Maximum borrowings available under the
line of credit are based on eligible accounts receivable and amounted to $6.7
million at March 31, 1995, of which $30,000 was then outstanding. This line of
credit includes a $1.0 million long-term credit facility payable in 47 monthly
installments of $20,000 each which began in June 1994 and a final installment
of $60,000 due in May 1998, or upon the expiration of the underlying $7.5
million line of credit, if not renewed. At March 31, 1995, $800,000 was
outstanding under this long-term facility, of which $560,000 was included under
long-term debt.
In February 1994, the Company established a $2.0 million line of
credit with a U.S. bank, collateralized by restricted cash deposits in Japan,
with interest at the U.S. prime rate plus 0.375% per annum. This line of
credit expires May 31, 1995, if not renewed. Borrowings at any time may not
exceed the cash amount on deposit. At March 31, 1995, $1.0 million was
outstanding under this line of credit.
The Company's Japanese subsidiary has collateralized yen-denominated
lines of credit with Japan-based banks, primarily available for use in Japan,
amounting to the equivalent of $3.9 million with interest at the Japanese prime
rate (3% at March 31, 1995) plus 0.125% per annum which expire between May 29,
1995, and March 31, 1996, if not renewed. There have been no borrowings under
these lines of credit.
G. MAJOR CUSTOMERS
Sales to Nippon Telegraph & Telephone amounted to 17% and 14% of
revenues for the first quarter of 1995 and 1994, respectively. Sales to AT&T
including sales under the Company's distribution agreement with AT&T amounted
to 11% of revenues for the first quarter of 1995.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with, and is
qualified in its entirety by, the consolidated financial statements and the
notes thereto included in Item 1 of this Quarterly Report and by the
consolidated financial statements and notes thereto and Management's Discussion
and Analysis of Financial Condition and Results of Operations contained in the
Company's Annual Report to Shareholders for the year ended December 31, 1994.
Historical results and percentage relationships among any amounts in the
financial statements are not necessarily indicative of trends in operating
results for any future periods.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentages that income statement items bear to total revenues:
<TABLE>
<CAPTION>
Percentage of Revenues
----------------------
Three Months Ended
March 31,
---------------------
1995 1994
---- ----
<S> <C> <C>
Revenues . . . . . . . . . . . . . . . . 100.0% 100.0%
Cost of goods sold . . . . . . . . . . . 33.3 36.5
----- -----
Gross profit . . . . . . . . . . . . . . 66.7 63.5
Research and development . . . . . . . . 18.0 21.3
Selling, general & administrative . . . 36.4 38.1
----- -----
Total operating expenses . . . . . . . . 54.4 59.4
----- -----
Income from operations . . . . . . . . . 12.3 4.1
Interest and other income (expense), net (0.9) (2.2)
----- -----
Income before provision for
income taxes. . . . . . . . . . . . . 11.4 1.9
Provision for income taxes . . . . . . . 3.5 0.9
----- -----
Net income . . . . . . . . . . . . . . . 7.9% 1.0%
===== =====
</TABLE>
The following table sets forth, for the periods indicated, the
revenues by principal product line as a percentage of total revenues:
<TABLE>
<CAPTION>
Percentage of Revenues
----------------------
Three Months Ended
March 31,
----------------------
1995 1994
---- ----
<S> <C> <C>
Network diagnostic products . . . . . . . . . 74% 74%
Network switching products . . . . . . . . . 26 26
--- ---
Total . . . . . . . . . . . . . . . 100% 100%
=== ===
</TABLE>
9
<PAGE> 10
The following table sets forth, for the periods indicated, the
revenues by geographic territories as a percentage of total revenues:
<TABLE>
<CAPTION>
Percentage of Revenues
----------------------
Three Months Ended
March 31,
-----------------
1995 1994
---- ----
<S> <C> <C>
North America . . . . . . . . . . . . . 59% 53%
Japan . . . . . . . . . . . . . . . . . 22 21
Europe . . . . . . . . . . . . . . . . . 12 11
Rest of the World . . . . . . . . . . . 7 15
--- ---
Total . . . . . . . . . . . . . . . 100% 100%
=== ===
</TABLE>
THREE MONTHS ENDED MARCH 31, 1995 COMPARED WITH THE
THREE MONTHS ENDED MARCH 31, 1994
Revenues. The Company's revenues increased by $5.6 million or 43%
during the first quarter of 1995 due to higher sales of both switching and
diagnostic products.
Revenues from switching products increased by $1.4 million or 41% in
the first quarter of 1995 due to increased EAGLE STP sales. Revenues from
diagnostic products increased by $4.2 million or 44% primarily attributable to
higher worldwide signalling/wireless diagnostic product sales. Although
sales of the Chameleon Open were slightly lower than the prior year's
first quarter due to lower sales in Japan, the Company expects that 1995 sales
of its Chameleon Open will represent a higher percentage of diagnostic
product revenues when compared with 1994.
Revenues in North America increased by $4.0 million or 59% primarily
as a result of higher switching and signalling/wireless diagnostic product
sales. Sales in Japan increased by $1.3 million or 46% of which $468,000 was
the result of exchange rate fluctuations on currency translations. Other
international revenues increased by $329,000 or 10% primarily due to higher
diagnostic product sales, partially offset by lower switching product sales.
The impact of exchange rate fluctuations on currency translations
increased revenues by $428,000 or 2% and increased net income by $41,000 or 3%
in the first quarter of 1995.
Gross Profit. Gross profit as a percentage of revenues increased from
64% in the first quarter of 1994 to 67% in the first quarter of 1995, primarily
due to lower per unit manufacturing overhead costs and higher margins on EAGLE
sales.
10
<PAGE> 11
Research and Development. Research and development expenses increased
by $585,000 or 21% in the first quarter of 1995 but decreased as a percentage
of revenue from 21% in the first quarter of 1994 to 18% in the first quarter of
1995. The increase in expenses was primarily attributable to the hiring of
additional personnel and contractors.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by $1.8 million or 37% in the first quarter
of 1995 principally as a result of the hiring of additional personnel, higher
commissions due to higher sales and increased tradeshow and travel expenses.
Such expenses, however, decreased as a percentage of revenues from 38% in the
first quarter of 1994 to 36% in the first quarter of 1995.
Income Taxes. For the three months ended March 31, 1995, the Company
had an effective tax rate of 31%, compared to 48% in the first quarter of 1994.
The provisions for both periods were principally foreign taxes on the income of
the Company's Japanese subsidiary. In both periods, the Company was able to
utilize a portion of its prior years' U.S. loss carryforwards, and consequently
provided for taxes on its U.S. taxable income at the federal alternative
minimum tax rate and applicable state tax rates.
LIQUIDITY AND CAPITAL RESOURCES
During the three-month period ended March 31, 1995, the Company
financed its net working capital and capital expenditure requirements
principally from operations, available cash and proceeds from the issuance of
Common Stock resulting from the exercise of options and warrants. At March 31,
1995, the Company had $7.0 million of cash and cash equivalents, representing a
increase of $309,000 from the balance at December 31, 1994.
Accounts receivable, including amounts due from related parties,
increased by 4% during the first three months of 1995 due primarily to a higher
concentration of sales in the last month of the first quarter of 1995 compared
to the fourth quarter of 1994. Inventories increased by 40% during the first
quarter of 1995 primarily due to the need to maintain additional inventory to
meet anticipated demand for EAGLE and Chameleon Open products. Accrued payroll
and related expenses decreased by 48% principally due to the payment of 1994
employee bonuses.
Capital expenditures amounted to $912,000 during the first three
months of 1995 for planned replacement and addition of equipment principally
for research and development and sales demonstration.
The net cash provided by financing activities in the first quarter of
1995 was $753,000 which represented $1.0 million in proceeds from the issuance
of Common Stock resulting from the exercise of options and warrants, partially
offset by repayments of short-term borrowings and other obligations.
The Company has a $7.5 million line of credit and a $2.0 million line
of credit with U.S. banks and lines of credit aggregating $3.9 million
available to the Company's Japanese subsidiary from various Japan-based banks.
11
<PAGE> 12
The Company's $7.5 million line of credit with a U.S. bank is
collateralized by substantially all of the Company's assets, bears interest at
the U.S. prime rate (9.0% at March 31, 1995) plus 2.5% per annum and expires
September 30, 1995, if not renewed. Maximum borrowings available under the
line of credit are based on eligible accounts receivable and amounted to $6.7
million at March 31, 1995, of which $30,000 was then outstanding. This line of
credit includes a $1.0 million long-term credit facility payable in 47 monthly
installments of $20,000 each which began in June 1994 and a final installment
of $60,000 due in May 1998, or upon the expiration of the underlying $7.5
million line of credit, if not renewed. At March 31, 1995, $800,000 was
outstanding under this long-term facility, of which $560,000 was included under
long-term debt.
In February 1994, the Company established a $2.0 million line of
credit with a U.S. bank, collateralized by restricted cash deposits in Japan,
with interest at the U.S. prime rate plus 0.375% per annum. This line of
credit expires May 31, 1995, if not renewed. Borrowings at any time may not
exceed the cash amount on deposit. At March 31, 1995, $1.0 million was
outstanding under this line of credit.
The Company's Japanese subsidiary has collateralized yen-denominated
lines of credit with Japan-based banks, primarily available for use in Japan,
amounting to the equivalent of $3.9 million with interest at the Japanese prime
rate (3% at March 31, 1995) plus 0.125% per annum which expire between May 29,
1995, and March 31, 1996, if not renewed. There have been no borrowings under
these lines of credit.
Upon the expiration of the above-described credit facilities, the
Company believes that, if necessary, it would be able to arrange for credit
facilities on terms generally no less favorable than those described above.
The Company believes that funds generated from operations, existing
working capital, and its current bank lines of credit should be sufficient to
satisfy anticipated operating requirements for 1995. In addition, in
April 1995, the Company filed a Registration Statement for a public offering
of its Common Stock with the Securities and Exchange Commission which is
expected to raise net proceeds in excess of $30 million. If the Company does
not consummate this offering, it may seek additional sources of capital, as
necessary or appropriate, to finance its operations and growth; however, there
can be no assurance that such funds will be available on favorable terms,
if at all.
12
<PAGE> 13
PART II -- OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Statement of Computation of Earnings Per Share for the
Three Months Ended March 31, 1995 and 1994
(b) Reports
No reports on Form 8-K were filed by the Company during the
three months ended March 31, 1995.
13
<PAGE> 14
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.
TEKELEC
May 15, 1995
/s/ Philip J. Alford
-------------------------------
Philip J. Alford
President
(Duly authorized officer)
/s/ Gilles C. Godin
------------------------------
Gilles C. Godin
Chief Financial Officer and
Vice President, Finance
(Principal financial and chief
accounting officer)
14
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ----
<S> <C>
11.1 Statement of Computation of Earnings Per Share
for the Three Months Ended March 31, 1995 and 1994
</TABLE>
<PAGE> 1
TEKELEC
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31,
PRIMARY -----------------------
(thousands, except per share data)
1995 1994
------- ------
<S> <C> <C>
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,468 $ 126
======= ======
Basis for computation of primary earnings
per common and common equivalent share:
Weighted average number of shares
outstanding during period . . . . . . . . . . . . . . . . . . 9,155 8,558
Weighted average (incremental) common
share equivalent after considering the
effects of options exercised and canceled
during the period and after assumed
repurchase of treasury shares--treasury
stock method . . . . . . . . . . . . . . . . . . . . . . . . . 1,640 --
------- ------
10,795 8,558
======= ======
Earnings per share . . . . . . . . . . . . . . . . . . . . . . $ 0.14 $ 0.01
======= ======
Three Months Ended
March 31,
FULLY DILUTED -----------------------
(thousands, except per share data)
1995 1994
------- ------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,468 $ 126
======= ======
Basis for computation of fully diluted earnings
per common and common equivalent share:
Weighted average number of shares
outstanding during period . . . . . . . . . . . . . . . . . . 9,155 8,558
Weighted average (incremental) common
share equivalent after considering the
effects of options exercised and canceled
during the period and after assumed
repurchase of treasury shares -- treasury
stock method . . . . . . . . . . . . . . . . . . . . . . . . . 1,758 --
------- ------
10,913 8,558
======= ======
Earnings per share . . . . . . . . . . . . . . . . . . . . . . $ 0.13 $ 0.01
======= ======
</TABLE>
TEKELEC EXHIBIT 11.1
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 6,962
<SECURITIES> 0
<RECEIVABLES> 16,767
<ALLOWANCES> 336
<INVENTORY> 6,164
<CURRENT-ASSETS> 31,154
<PP&E> 18,899
<DEPRECIATION> 13,953
<TOTAL-ASSETS> 37,054
<CURRENT-LIABILITIES> 14,336
<BONDS> 0
<COMMON> 16,964
0
0
<OTHER-SE> 5,179
<TOTAL-LIABILITY-AND-EQUITY> 37,054
<SALES> 18,630
<TOTAL-REVENUES> 18,630
<CGS> 6,207
<TOTAL-COSTS> 6,207
<OTHER-EXPENSES> 10,133
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85
<INCOME-PRETAX> 2,120
<INCOME-TAX> 652
<INCOME-CONTINUING> 1,468
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,468
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.13
</TABLE>
