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): January 22, 1997
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
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On January 22, 1997, California Micro Devices Corporation
(the "Company") released certain information regarding the Company's
third 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: January 23, 1997 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] California Micro Devices
For Further Information Contact:
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Jeffrey Kalb, President and CEO
(408) 934-3106
John Trewin, Vice President and CFO
(408) 934-3103
CALIFORNIA MICRO DEVICES REPORTS
REDUCED SALES AND EARNINGS, INCREASED ORDERS FOR THIRD FISCAL QUARTER
Milpitas, CA, January 22, 1997 -- California Micro Devices Corporation
("CMD") (NASDAQ NMS: CAMD) today reported net income of $79,000, or
$0.01 per share, on revenues of $7.6 million, for the quarter ended
December 31, 1996, the third quarter of its fiscal year 1997. This
compares with net income of $2,681,000, or $0.24 per share, on revenues
of $10.6 million, for the quarter ended December 31, 1995, which
included a one time gain of $1.6 million, or $0.14 per share, from the
sale of CMD's interest in Cell Access. Average share and share
equivalents outstanding were 10,444,000 compared to 10,946,000 for the
three months ended December 31, 1995.
For the nine months ended December 31, 1996, the Company reported net
income of $551,000, or $0.05 per share, on revenues of $25.3 million.
This compares with net income of $4,033,000, or $0.38 per share,
(including the Cell Access gain) for the nine months ended December 31,
1995, on revenues of $28.9 million. Average share and share equivalents
outstanding were 10,791,000 compared to 10,553,000 for the nine months
ended December 31, 1995.
According to Jeffrey Kalb, CMD's President and Chief Executive Officer,
"This was a challenging quarter which saw significant changes in the mix
and geography of product shipments compared to the prior quarter,
including decreased sales into the Taiwan personal computer market,
partly offset by increased sales to the US telecommunications market.
The Company also reported a book-to-bill ratio of 1.1 to 1 for the third
quarter ended December 31, 1996. Our orders increased 22% sequentially
from the second quarter to the third quarter. We increased our backlog
for the first time this fiscal year. However, compared to a year ago,
we still see short lead times from our customers and depend more on new
orders for current quarter shipments than we did then. This, plus the
changing mix continues to make forecasting and inventory management
difficult."
Kalb noted that "Margins declined by about 5 percentage points from the
previous quarter ended September 30, 1996, mostly caused by lower
factory utilization and a lower proportion of sales of the Company's
higher margin thin film products. The net decrease in sales had an
unfavorable impact on factory efficiencies, which was further compounded
by a power outage in our Tempe factory in December that hampered
production for about a week. The decline in margin was largely offset
by reduced operating expenses and, with some small one time gains, we
realized a small profit for the quarter."
According to Kalb, "Compared to both the year ago quarter and the nine
months ended December 31, 1995, margins are down about 10 percentage
points, a trend that began earlier this year with a significant shift in
product mix. There has also been significant pricing pressure in some
markets due to the significant price reductions being absorbed by the
semiconductor and passives industries. This margin decline has been
partially offset by reduced operating expenses, especially in the area
of general and administrative expense."
Kalb continued, "As I have said before, while we continue to control
costs, we are not neglecting our future. We continue to invest in R&D.
Year-to-date R&D expenditures increased 28%, to $3.2 million compared to
$2.5 million a year ago. We continue to invest in our new P/Active(TM)
family of termination and filtering products, as well as some new
potentially high volume semiconductor devices. Additionally, we have
continued to upgrade our manufacturing processes, installing new,
efficient equipment to improve yields and productivity. This will have
a very beneficial impact as the business begins to turn around."
In closing, Kalb noted that "This quarter we also made real progress
towards resolving the legal issues that have plagued our Company for the
last two years. The new proposed settlement of shareholder class action
lawsuits
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was tentatively approved by the Court this quarter and is reflected in
the December 31, 1996 balance sheet. This had no income statement
impact but resulted in a reduction of both cash and equity. We have
also classified as restricted cash the $2.0 million of cash that will be
put in escrow as a guarantee against the $11.50 Contingent Value Right
which is part of the new settlement."
Shares outstanding at December 31, 1995 included 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.
At December 31, 1996 the 1,500,000 shares have been replaced by 608,696
shares as required by the new settlement of these lawsuits. This
settlement was tentatively approved by the Court on December 16, 1996.
Therefore the calculation of average shares outstanding reflects the
reduction in shares outstanding implicit in this settlement starting
December 16, and had minimal impact on the overall calculation. The next
quarter will reflect the full impact of this share reduction. A final
hearing on the settlement is scheduled for March 6, 1997.
During the quarter the Company also settled other major legal matters
which had been outstanding since 1993. The elimination of all of this
legal activity should not only reduce the Company's G&A expense by over
$200,000 per quarter, but will eliminate a significant drain on
management resources.
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 Nine Months Ended
December 31, December 31,
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<S> <C> <C> <C> <C>
1996 1995 1996 1995
---- ---- ---- ----
Revenues:
Net product sales $ 7,231 $10,252 $24,264 $27,918
Technology related revenues 350 380 1,030 990
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Total revenues 7,581 10,632 25,294 28,908
Cost and expenses:
Cost of sales 4,955 5,912 16,100 15,979
Research and development 986 822 3,187 2,483
Selling, marketing and
administrative 1,796 2,837 5,957 8,039
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Total costs and expenses 7,737 9,751 25,244 26,501
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Operating income (loss) (156) 1,061 50 2,407
Other (income) expense, net (235) (1,620) (501) (1,626)
------- ------- ------- -------
Income before income taxes 79 2,681 551 4,033
Income taxes - - - -
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Net income $ 79 $ 2,681 $ 551 $ 4,033
======= ======= ======= =======
Net income per share $ 0.01 $ 0.24 $ 0.05 $ 0.38
======= ======= ======= =======
Weighted average common shares
and share equivalents
outstanding 10,444 10,946 10,791 10,553
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</TABLE>
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CALIFORNIA MICRO DEVICES CORPORATION
BALANCE SHEET
(Amounts in thousands, except share data)
<TABLE>
December 31, March 31,
1996 1996
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(Unaudited)
<S> <C> <C>
ASSETS:
Current assets:
Cash and short-term securities $ 8,212 $22,150
Accounts receivable, less allowance for
doubtful accounts of $681 and $960 3,450 4,500
Inventories 8,394 6,940
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Total current assets 20,746 34,175
Property, plant & equipment, net 14,450 9,314
Restricted cash 3,223 905
Other long term assets 425 534
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Total assets $38,844 $44,928
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LIABILITIES & SHAREHOLDERS' EQUITY:
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Current liabilities:
Accounts payable $ 3,948 $ 2,832
Accrued salaries and benefits 997 1,250
Other accrued liabilities 1,821 4,279
Deferred margin on shipments to
distributors 664 1,039
Current maturities of long-term debt
and capital lease obligations 488 1,282
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Total current liabilities 7,918 10,682
Long-term debt, less current maturities 7,490 7,490
Capital lease obligations, less
current maturites 79 299
Deferred income - 107
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Total liabilities 15,487 18,578
Shareholders' equity:
Common stock - no par value;
authorized 25,000,000; issued and
outstanding 9,720,159 shares 51,876 55,442
Retained earnings (28,519) (29,092)
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Total shareholders' equity 23,357 26,350
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Total liabilities and shareholders'
equity $38,844 $44,928
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</TABLE>
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