U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 23, 1996
California Micro Devices Corporation
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(Exact name of registrant as specified in its charter)
California 33-399-77 94-2672609
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(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
215 Topaz Street, Milpitas, CA 95035-5430
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408)263-3214
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 7. Financial Statements and Exhibits
On October 23, 1996, California Micro Devices Corporation (the
"Company") released certain information regarding the Company's second
quarter 1997 financials attached hereto.
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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 hereunto duly authorized.
Dated: October 25, 1996 CALIFORNIA MICRO DEVICES CORPORATION
By:
/s/ John E. Trewin
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John E. Trewin
Vice President and Chief Financial Officer
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NEWS RELEASE
[logo CALIFORNIA MICRO DEVICES CORPORATION]
California Micro Devices For Further Information Contact:
Jeffrey Kalb, President and CEO
(408) 934-3106
John Trewin, Vice President and CFO
(408) 934-3103
Roberta Silverstein, Press and Media
(408) 934-3141
For Release at 1:00 PM Pacific Time
CALIFORNIA MICRO DEVICES SECOND FISCAL QUARTER
SHOWS PROFIT ON REDUCED SALES
Milpitas, CA, October 23, 1996 -- California Micro Devices Corporation
(NASDAQ NMS: CAMD) (CMD) today reported net income of $140,000, or $0.01
per share, on revenues of $8.1 million, for the quarter ended September 30,
1996, the second quarter of its fiscal year 1997. This compares with net
income of $836,000, or $0.08 per share, on revenues of $9.6 million, for
the quarter ended September 30, 1995. Average share and share equivalents
outstanding were 10,908,000 compared to 10,866,000 at September 30, 1995.
For the six months ended September 30, 1996, the Company reported net
income of $472,000, or $0.04 per share, on revenues of $17.7 million. This
compares with net income of $1,353,000, or $0.13 per share, for the six
months ended September 30, 1995, on revenues of $18.3 million.
According to Jeffrey Kalb, CMD's president and chief executive officer,
"This has been a tough quarter for CMD and most of the semiconductor and
related industries. As we said earlier this year, many customers are
reducing their inventories, and giving us significantly shorter lead times
than this time a year ago. Also, some customers, in addition to correcting
inventory levels, have lost market share in certain key areas, and some
customers have delayed production on products where CMD has design wins.
All this has resulted in a 16% reduction in revenues compared to both the
year ago quarter and the quarter ended June 30, 1996. Revenues for the six
months ended September 30, 1996, however, were just 3% below the same
period last year."
Kalb noted that "Margins improved by about 3 percentage points over the
previous quarter ended June 30, 1996 but have dropped approximately 7
percentage points compared to the same quarter a year ago. The drop from a
year ago was primarily due to a significant change in product mix. We took
many steps during the quarter to reduce costs, including company-wide
shutdowns during the first weeks of July and September. As a result, we
were able to improve margins and, with interest income, stay in the black
in spite of the reduction in revenue. Additional cost reductions are being
executed, including shutdowns scheduled at the end of November and at the
end of December."
As Kalb noted, "While we are controlling costs, we are not neglecting our
future. We increased our R&D spending by over 50%, to $1,214,000 compared
to $795,000 a year ago, emphasizing our confidence in the future of the
business. Much of this increase related to our new P/Active(TM) family of
termination and filtering products, as well as some new potentially high
volume semiconductor devices. While the P/Active(TM) family of
solutions is still small and was only recently announced, we have already
begun to see significant interest in these new products. A key factor is
that by interacting closely with our customers and doing not only the
design but applications characterization, CMD is providing our customers
with real solutions to their problems, not just another bag of parts.
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This approach is very akin to that pursued by the chip set providers in the
semiconductor industry some years ago, but it has been generally foreign to
the passive components business. For product developers to meet today's
short time to market requirements, they have to be able to access devices
they know will work in their application. CMD is pioneering this approach
to termination and filtering applications."
"Our increased R&D investment was more than offset by reduced
administrative expenses. Although legal costs continue to be very high, we
have significantly reduced the unusual consultant, audit and other costs
that increased expenses last year. And due to reduced profits, management
and other bonuses are much lower than a year ago. We are keeping a very
tight rein on general expenses, but making strategic investments in people
and materials to expand our marketing and sales activities. We have also
been making changes in our indirect sales activities to strengthen their
ability to focus on our new generation of passive solutions."
Kalb noted that "We are also very pleased with the progress we have made in
our internal systems and procedures. We now have in place the
infrastructure needed to support significant growth and meet customer
requirements without adding much additional administrative cost. We have
also completed the transfer of most of our testing operations to Far East
assemblers, reducing cost and lead times, while improving our ability to
respond to customer requirements. These steps have positioned us to
respond quickly when our business recovers."
In closing, Kalb noted that "The Company's balance sheet remains strong.
Receivables continue to be in line with industry norms. And although
inventory grew, nearly all the growth was in raw materials to replenish our
supply of wafers, while we kept current production spending in line with
demand. We have made significant investment in equipment primarily to
upgrade our manufacturing capabilities, improve efficiencies, and increase
responsiveness to customer requirements."
The Company noted that shares outstanding at both September 30, 1996 and
1995 include 1,500,000 shares issued in 1995 and held in trust in
connection with a proposed, but not approved, February 1995 settlement of
shareholder class action lawsuits. A new proposed settlement of these
lawsuits was announced in September, 1996, and is subject to court
approval. However, until such time as the new settlement is funded, the
previous settlement remains as recorded in the fiscal year ended March 31,
1995. The overall cost of this settlement is the same as the earlier one
expensed in fiscal 1995, but the new settlement involves the issuance of
608,696 shares combined with $6 million in cash, compared with 1,500,000
shares and $1 million in cash under the previously proposed settlement.
When and if the new settlement is funded, the Company's cash will be
reduced by $5 million dollars and the number of shares outstanding reduced
by 891,304 shares.
Forward-looking statements involve a number of risks and uncertainties
including, but not limited to, product demand, pricing, market acceptance,
risk of dependence on third party suppliers, intellectual property rights
and litigation, risks in product and technology development and other risk
factors detailed in CMD's Securities and Exchange Commission filings.
Statements contained herein which are not historical facts are forward-
looking statements. The forward-looking statements in this release are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Due to the risk factors discussed herein,
the Company's future actual results could differ materially from those
discussed above.
Headquartered in Milpitas, California, California Micro Devices (CMD)
designs, manufactures and markets integrated thin-film, silicon-based
termination and filtering passive components and active electronic
circuitry. CMD's products target the requirements of computer, networking
and communication-based customers for smaller, densely integrated devices
that operate at higher frequencies with superior performance and
functionality.
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CALIFORNIA MICRO DEVICES CORPORATION
STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
<TABLE>
Three Months Ended Six Months Ended
September 30, September 30,
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1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Revenues:
Net product sales $7,738 $9,322 $17,033 $17,666
Technology related revenues 380 307 680 610
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Total revenues 8,118 9,629 17,713 18,276
Cost and expenses:
Cost of sales 4,921 5,314 11,145 10,067
Research and development 1,214 795 2,201 1,661
Selling, marketing and
administrative 2,009 2,729 4,161 5,203
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Total costs and expenses 8,144 8,838 17,507 16,931
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Operating income (loss) (26) 791 206 1,345
Other (income) expense, net (166) (45) (266) (8)
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Income before income taxes 140 836 472 1,353
Income taxes - - - -
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Net income $140 $836 $472 $1,353
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Net income per share $0.01 $0.08 $0.04 $0.13
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Weighted average common shares and
share equivalents outstanding 10,908 10,866 10,964 10,324
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</TABLE>
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CALIFORNIA MICRO DEVICES CORPORATION
BALANCE SHEET
(Amounts in thousands, except share data)
<TABLE>
September 30, March 31,
1996 1996
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<S> <C> <C>
ASSETS: (Unaudited)
Current assets:
Cash and short-term securities $16,341 $22,150
Accounts receivable, less allowance for
doubtful accounts of $796 and $900 3,700 4,500
Inventories 8,079 6,940
Other assets 752 585
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Total current assets 28,872 34,175
Property, plant & equipment, net 12,878 9,314
Restricted cash 984 905
Other long term assets 443 534
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Total assets $43,177 $44,928
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LIABILITIES & SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 2,804 $ 2,832
Accrued salaries and benefits 896 1,250
Other accrued liabilities 2,748 4,279
Deferred margin on shipments to distributors 748 1,039
Current maturities of long-term debt and
capital lease obligations 583 1,282
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Total current liabilities 7,779 10,682
Long-term debt, less current maturities 7,490 7,490
Capital lease obligations, less current maturites 164 299
Deferred income - 107
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Total liabilities 15,433 18,578
Shareholders' equity:
Common stock - no par value; authorized 25,000,000; issued
and outstanding 10,507,645 shares 56,392 55,442
Retained earnings (28,648) (29,092)
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Total shareholders' equity 27,744 26,350
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Total liabilities and shareholders' equity $43,177 $44,928
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</TABLE>
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