SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
JULY 23, 1996
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(Date of earliest event reported)
ADVANCED TECHNOLOGY LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Washington 0-15160 91-1353386
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(State or other (Commission (I.R.S. Employer
jurisdiction or File Identification No.)
organization) Number)
22100 Bothell Everett Highway
P.O. Box 3003, Bothell, Washington 98041-3003
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (206) 487-7000
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ITEM 5. OTHER EVENTS
Legal Proceedings.
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As an update to the announcement of May 20, 1996 that the
Company would appeal the amount of damages awarded by the
U.S. District Court for the Northern District of California
to SRI International in a patent infringement lawsuit, the
Company provides the following information.
As announced, the Company has filed its appeal of the above
identified damages award with the United States Court of
Appeals for the Federal Circuit in Washington, D.C., the
court having jurisdiction over patent appeals in the United
States. The Company deferred any payment of damages in the
case until the appeal has been decided by posting a
supersedeas bond with the California District Court. The
Company will be filing its appeal briefs during the third
and fourth quarters of 1996. The Federal Circuit will
schedule oral argument on the appeal after the briefs have
been filed.
As stated in the May 20, 1996 announcement and reiterated in
the Company's press release of second quarter results on
July 23, 1996, a copy of which is attached hereto as Exhibit 20,
the Company does not expect the decision in this lawsuit to
impact the operations of the Company. The decision has no
product implications as the patent in suit has expired, all
of the products which allegedly contained the subject matter
of the patent have been discontinued, and the circuit at
issue has never been used in any of the Company's current
products. The Company has accrued $34.6 million against the
full amount of the District Court award, including a 1994
accrual of $5 million and an accrual in the second quarter
of 1996 of $29.6 million. Beginning with the second quarter
of 1996 the Company is accruing interest going forward on
the full amount of the accrual, $34.6 million, at the
commercial paper rate. This interest accrual is expected to
amount to approximately $0.5 million per quarter and, when
aggregated with interest income on the Company's cash
balances and other interest income and expense items, is
expected to result in a net interest expense of approximately
$0.3 million for the next few quarters, if present conditions
continue.
The Company expects to pay any damage award ultimately
determined at the end of the appeal process from its cash
and short-term investments, which were $56.6 million on June
28, 1996. This payment is not expected to limit the ability
of the Company to conduct its plans and operations as
currently contemplated in any material way.
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The above statements are forward looking statements that
involve a number of risks and uncertainties and should be
read in conjunction with the 1995 Annual Report which is
incorporated by reference in the Company's 1995 Form 10-K,
the Company's news releases of February 15, April 23, May
20, and July 23, 1996, and the Company's Quarterly Report on
Form 10-Q for the Quarterly Period Ended March 29, 1996.
There are certain important factors that could cause actual
results to differ materially from those anticipated by the
Company, including but not limited to interest rate changes,
changes in the value of the U.S. dollar in relation to
foreign currencies, changes in the Company's investment
portfolio, cash needs beyond those which are currently
foreseen by the Company, changes in the buying plans or
intentions of customers, releases of competitive product
offerings by others, unanticipated adverse sales trends with
respect to the Company's products, and other significant
unanticipated events.
ITEM 7 EXHIBITS
c. Exhibits
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20 ATL Press Release dated July 23, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Commission
Act of 1934, the restrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
ADVANCED TECHNOLOGY
LABORATORIES, INC.
DATE: July 30, 1996 BY: /s/ Harvey N. Gillis
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Harvey N. Gillis
Sr. Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Exhibit
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20 ATL Press Release dated July 23, 1996.
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Advanced Technology Laboratories
PRESS RELEASE
_________________________________________________
[ATL LOGO]
For Immediate Release
Contact: Pamela Dull, (206) 487-7427
ATL NET INCOME TRIPLES IN SECOND QUARTER
BEFORE NON-RECURRING LEGAL CHARGE
BOTHELL, Washington, July 23, 1996--ATL (Advanced Technology
Laboratories, Inc.) (Nasdaq:ATLI) reported today financial
results for the second quarter ended June 28, 1996 and the
first half of 1996.
Worldwide revenues grew 8.0% in the second quarter of 1996
to $98.6 million compared with $91.3 million in the same
quarter of 1995. Gross margin rose to 48.4% compared with
46.6% in the second quarter of 1995. Expenses for selling,
general and administrative and research and development
increased 4.6% compared to the same quarter in 1995.
Net income in the second quarter of 1996 was $3.5 million or
$0.23 per share, excluding the non-recurring charge for
damages accrued by the Company for a patent lawsuit as
announced May 20, 1996. Including this charge, ATL reported
a net loss of $19.2 million or $1.37 per share. In the
second quarter of 1995, net income was $l.2 million or $0.09
per share, excluding a non-recurring charge of $335,000 or
$0.03 per share for the consolidation of ATL's Interspec
operations, completed by the end of 1995. Including the
consolidation charge, ATL reported net income of $836,000 or
$0.06 per share in the second quarter of 1995.
"We continue to make progress on the Company's strategic
initiatives," said Dennis C. Fill, ATL Chairman and CEO.
"Our growth is led by the worldwide success of our HDI(R) 3000
and its proven ability to offer new levels of clinical
performance while reducing health care costs. We are
honored by the recent selection of the HDI 3000 as the
ultrasound system for the NASA space station, which we
believe is a further indication of the strength of our
technology."
Fill also commented that ATL's agreement with Kodak had made
notable progress. Kodak and ATL are marketing a jointly
developed image management system for hospital and clinical
ultrasound departments. The integration of the Kodak
Digital Science(TM) medical imaging system and ATL's Access(TM)
System for ultrasound image management enables ultrasound
departments to improve productivity, reduce examination time
and enhance consultation within and between hospitals. The
ATL and Kodak image management system is installed at the
Olympic Village Polyclinic to electronically transmit
ultrasound images to hospitals consulting with the Olympic
physicians to facilitate rapid diagnosis and treatment of
injured athletes.
For the first half of 1996, ATL's worldwide revenues grew to
$193.4 million, rising 4.2% over the same period in 1995.
Gross margin was 48.0% compared with 46.3% in the first half
of 1995 due to improved product mix and cost reduction
programs. Net income was $6.4 million or $0.43 per share
compared with $2.1 million or $0.16 per share in the first
half of 1995, excluding non-recurring items in both periods.
Including the charge for the previously mentioned lawsuit, ATL
reported a net loss of $16.2 million or $1.17 per share in
the first half of 1996. In the first half of 1995, ATL
reported net income of $562,000 or $0.04 per share which
included non-recurring items that netted to a $1.5 million
charge or $0.12 per share for consolidation of the Company's
Interspec operations and an operating expense benefit from a
favorable Washington State sales tax audit.
ATL issued a press release on May 20, 1996 announcing that
the Company would vigorously appeal the amount of damages
awarded by the U.S. District Court for Northern California
to SRI International in a patent infringement lawsuit. ATL
accrued a charge of $29.6 million in the second quarter for
this litigation. This decision will not impact the
operations of ATL as it involves a patent that has expired
on an electrical circuit allegedly used in three ATL
products, sold primarily in the 1980s and since
discontinued. The circuit in dispute has never been used in
any of ATL's current product lines. As of the end of the
second quarter of 1996, ATL had $56.6 million in cash and
short-term investments. Shareholders' equity at the end of
the same period was $201.8 million, which incorporates the
non-recurring accrual for the patent lawsuit.
ATL, with headquarters in Bothell, Washington, is a
worldwide leader in the development, manufacture,
distribution and service of diagnostic medical ultrasound
systems. The Company reported revenues of approximately
$400 million in 1995. Press releases and other corporate
information are available on ATL's web site at
http://www.atl.com.
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