SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended September 27, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From _____ to _____
Commission File Number 0-15160
ADVANCED TECHNOLOGY LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1353386
(State of incorporation) (IRS Employer Identification No.)
22100 Bothell-Everett Highway
Post Office Box 3003
Bothell, Washington 98041-3003
(Address of principal executive offices) (Zip Code)
(206) 487-7000
(Telephone number)
Common stock, $0.01 par value; 14,158,005 shares outstanding as
of October 25, 1996
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 [ ]
1
<PAGE>
ADVANCED TECHNOLOGY LABORATORIES, INC.
TABLE OF CONTENTS
PART I Financial Information Page No.
- ------ --------------------- --------
Item 1. Financial Statements
--------------------
Condensed Consolidated Balance Sheets -
September 27, 1996 (Unaudited) and December 31, 1995.....3
Condensed Consolidated Statements of Operations
(Unaudited) - Three Months and Nine Months Ended
September 27, 1996 and September 29, 1995................4
Condensed Consolidated Statements of Cash Flows
(Unaudited) - Nine Months Ended September 27, 1996 and
September 29, 1995.......................................5
Notes to Condensed Consolidated Financial Statements.....6
Item 2. Management's Discussion and Analysis of Financial
- ------ -------------------------------------------------
Condition and Results of Operations...................8
-----------------------------------
PART II Other Information
- ------- -----------------
Item 1. Legal Proceedings........................................14
-----------------
Item 2. Changes in Securities................................... 14
---------------------
Item 3. Defaults Upon Senior Securities..........................14
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders......14
---------------------------------------------------
Item 5. Other Information........................................14
-----------------
Item 6. Exhibits and Reports on Form 8-K.........................14
--------------------------------
2
<PAGE>
PART I Financial Information
- ----- ---------------------
Item 1. Financial Statements
--------------------
ADVANCED TECHNOLOGY LABORATORIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------
(In thousands) 9/27/96 12/31/95
- ------------------------------------------------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and short-term investments $ 51,409 $ 35,654
Receivables, net 113,503 129,226
Inventories 98,729 94,877
Prepaid expenses 2,888 3,007
Deferred income taxes, net 16,030 9,048
-----------------------
Total current assets 282,559 271,812
PROPERTY, PLANT AND EQUIPMENT, NET 71,493 71,130
OTHER ASSETS, NET 10,316 10,506
-----------------------
$364,368 $353,448
=======================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 2,389 $ 2,911
Current portion of long-term debt 588 555
Accounts payable and accrued expenses 65,455 74,903
Accrual for litigation claim 35,139 5,000
Deferred revenue 18,124 21,038
Taxes on income 5,118 5,824
-----------------------
Total current liabilities 126,813 110,231
LONG-TERM DEBT 13,071 14,837
OTHER LONG-TERM LIABILITIES 19,283 17,457
SHAREHOLDERS' EQUITY 205,201 210,923
----------------------
$364,368 $353,448
=======================
- ------------------------------------------------------------------
COMMON SHARES OUTSTANDING 14,177 13,610
- ------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
ADVANCED TECHNOLOGY LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
- -----------------------------------------------------------------------------
(In thousands, except per share 9/27/96 9/29/95 9/27/96 9/29/95
data)
- -----------------------------------------------------------------------------
REVENUES
Product sales $ 77,916 $ 73,642 $ 227,843 $ 218,712
Service 22,349 21,087 65,814 61,655
-----------------------------------------
100,265 94,729 293,657 280,367
-----------------------------------------
COST OF SALES
Product sales 38,076 38,703 113,246 113,159
Service 12,935 12,363 38,307 37,567
----------------------------------------
51,011 51,066 151,553 150,726
----------------------------------------
GROSS PROFIT 49,254 43,663 142,104 129,641
OPERATING EXPENSES
Selling, general and adminsitrative 30,174 29,203 90,560 87,059
Research and development 13,803 12,580 38,057 37,439
Provision for litigation claim -- -- 29,557 --
Restructuring and relocation
expenses -- 1,838 -- 4,673
Other (income) expense, net 488 386 1,145 (686)
---------------------------------------
44,465 44,007 159,319 128,485
---------------------------------------
INCOME (LOSS) FROM OPERATIONS 4,789 (344) (17,215) 1,156
Interest Income 886 455 2,418 1,226
Interest Expense (942) (537) (1,968) (1,581)
---------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 4,733 (426) (16,765) 801
Income Tax Expense (Benefit) 946 316 (4,343) 981
---------------------------------------
NET INCOME (LOSS) $ 3,787 $ (742) $ (12,422) $ (180)
=======================================
Net Income (loss) per share $0.25 $(0.06) $(0.89) $(0.01)
Weighted average common shares and
equivalents outstanding 15,076 13,376 13,992 13,359
- -----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements
4
<PAGE>
ADVANCED TECHNOLOGY LABORATORIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
- -----------------------------------------------------------------------
(In thousands) 9/27/96 9/29/95
- -----------------------------------------------------------------------
OPERATING ACTIVITIES
Net loss $(12,422) $ (180)
Adjustments to reconcile net loss to cash
provided (used) by operating activities:
Depreciation and amortization 11,032 11,810
Deferred income taxes (6,982) --
Changes in:
Receivables, net 14,923 1,037
Inventories (4,577) (4,059)
Accounts payable and accrued expenses (8,833) (12,626)
Accrual for litigation claim 30,139 --
Deferred revenue (1,987) 3,014
Taxes on income (719) 1,104
Other 498 (435)
---------------------
Cash provided (used) by operating activities 21,072 (335)
INVESTING ACTIVITIES
Investment in property, plant and equipment (10,065) (10,431)
Proceeds from maturing short-term investments 4,988 --
Other -- (350)
--------------------
Cash used by investing activities (5,077) (10,781)
FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings (522) 2,349
Repayment of long-term debt (520) (2,616)
Repurchase of common shares (2,330) --
Exercise of stock options 8,357 697
-------------------
Cash provided by financing activities 4,985 430
Effect of foreign exchange rate changes (237) (1,078)
-------------------
Net increase (decrease) in cash
and cash equivalents 20,743 (11,764)
Cash and cash equivalents, beginning of period 30,666 22,901
-------------------
Cash and cash equivalents, end of period $51,409 $11,137
===================
- ----------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
ADVANCED TECHNOLOGY LABORATORIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. Basis of Presentation
The accompanying condensed consolidated financial statements
include the accounts of Advanced Technology Laboratories, Inc.
(ATL), which includes its subsidiaries and is referred to as the
"Company". The Company develops, manufactures, markets and
services diagnostic medical ultrasound systems worldwide. The
Company sells its products to hospitals, clinics and physicians
for use in radiology, cardiology, women's health care, vascular,
musculoskeletal and intraoperative applications.
The accompanying condensed consolidated financial statements and
related notes have been prepared pursuant to the Securities and
Exchange Commission rules and regulations for Form 10-Q.
Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. The
accompanying condensed consolidated financial statements and
related notes should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
1995 Form 10-K.
The information furnished reflects, in the opinion of the
management, all adjustments necessary for a fair presentation of
the results for the interim periods presented. Interim results
are not necessarily indicative of results for a full year.
2. Cash and Short-term Investments
The Company considers short-term investments with maturity dates
of three months or less at the date of purchase to be cash
equivalents for purposes of the statement of cash flows.
9/27/96 12/31/95
-------- --------
Cash and cash equivalents $51,409 $30,666
Short-term investments -- 4,988
-------- --------
$51,409 $35,654
======== ========
3. Inventories
9/27/96 12/31/95
-------- --------
Materials and work in process $33,575 $33,198
Finished products 23,570 22,007
Demonstrator equipment 20,678 19,825
Customer service 20,906 19,847
-------- --------
$98,729 $94,877
======== ========
6
<PAGE>
ADVANCED TECHNOLOGY LABORATORIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
4. Long-term debt
On February 1, 1996, the remaining 11% subordinated convertible
debentures totaling $1,213 were converted by the Company into
71,577 shares of the Company's common stock in accordance with
the conversion ratio stated in the debenture agreements.
5. Accrual for Litigation Claim
The Company accrued a provision for a patent litigation claim of
$29,557 in the second quarter of 1996 in addition to $5,000
previously accrued in 1994. The claim was filed by SRI
International (SRI) on July 15, 1991 in the U.S. District Court
for the Northern District of California and concerns a patent on
an electrical circuit allegedly used in three of ATL's
discontinued products. The patent expired in 1994 and the
circuit in dispute has never been used in any of ATL's current
product lines. The court granted a motion by SRI requesting
partial summary judgment on liability in November 1992 and the
U.S. Court of Appeals for the Federal Circuit affirmed the
summary judgment in December 1994. In May 1996, the U.S.
District Court for the Northern District of California awarded
damages to SRI of $27,948 plus interest and legal fees. The
Company has posted a supersedeas bond secured by a letter of
credit and cash and short-term investment and has appealed the
amount of damages awarded. The Company is accruing interest
expense on the full award during the appeal process.
6. Restructuring and Relocation Expenses
During 1995, the Company implemented a new corporate structure
which consolidated the Company's operations located in Ambler,
Pennsylvania with the Company's headquarters operations in
Bothell, Washington. The consolidation has been implemented as
planned and has resulted in the relocation of Ambler
manufacturing, administrative and research and development (R&D)
functions to Bothell and a net reduction of approximately 100
full-time positions. During the first nine months of 1995, the
Company incurred restructuring expenses for severance,
outplacement and employee retention incentives of $2,500 and
relocation expenses of $2,173.
7. Per Share Data
Per share data is based on the weighted average number of common
shares and dilutive common share equivalents outstanding during
each period as presented in the condensed consolidated Statements
of Operations. Dilutive common share equivalents are calculated
under the treasury stock method and consist of unexercised
employee stock options. Primary and fully diluted earnings per
share are equivalent for all periods presented.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-----------------------------------------------------
Condition and Results of Operations
-----------------------------------
RESULTS OF OPERATIONS
---------------------
Three months ended Nine months ended
- -----------------------------------------------------------------------------
(In millions except
per share data) 9/27/96 9/29/95 %Change 9/27/96 9/29/95 %Change
- -----------------------------------------------------------------------------
Revenues $100.3 $94.7 5.8% $293.7 $280.4 4.7%
Gross Profit $49.3 $43.7 12.8% $142.1 $129.6 9.6%
Operating Expenses;excluding
non-recurring items $44.5 $42.2 5.4% $129.7 $125.1 3.7%
Provision for
litigation claim -- -- $29.6 --
Restructuring and
relocation expenses -- $1.8 -- $4.7
Benefit related to
state tax audit -- -- -- $(1.3)
Net Income (Loss) $3.8 $(0.7) $(12.4 $(0.2)
Net Income (Loss) per Share $0.25 $(0.06) $(0.89) $(0.01)
- -----------------------------------------------------------------------------
Net Income, excluding non-
recurring items $3.8 $1.1 $10.2 $3.2
Net Income per Share,
excluding non-
recurring items $0.25 $0.08 $0.68 $0.24
- -----------------------------------------------------------------------------
The Company reported net income of $3.8 million or $0.25 per
share in the third quarter of 1996 compared with a net loss of
$0.7 million or $0.06 per share in the third quarter of 1995.
Excluding non-recurring items in 1995, net income would have been
$1.1 million or $0.08 per share for the third quarter of 1995.
For the first nine months, the Company reported a net loss of
$12.4 million or $0.89 per share in 1996 compared with a net loss
of $180,000 or $0.01 per share in 1995. Excluding non-recurring
items in both periods, net income for the first nine months would
have been $10.2 million or $0.68 per share in 1996 and $3.2
million or $0.24 per share in 1995.
REVENUES AND GROSS PROFIT
- -------------------------
The Company's worldwide revenues grew 5.8% to $100.3 million in
the third quarter of 1996 compared with $94.7 million in the
third quarter of 1995. Total product sales increased by $4.3
million over the third quarter of 1995 to $77.9 million. Third
quarter of 1995 product sales included approximately $2.6 million
from the Ultramark(R) 4 system which was phased out of production
at the end of 1995. Revenues from the Ultramark 4 for the same
period in 1996 were
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
nominal. The increase in product sales reflects the success in
both the U.S. and international markets of the HDI(R) 3000
product family and the Apogee(R) 800PLUS, which was introduced in
the first quarter of 1996. Service revenues increased by $1.3
million over the third quarter of 1995 due to the continuing
growth of the Company's worldwide installed base. For the first
nine months of 1996, total revenues grew by 4.7% to $293.7
million compared with $280.4 million for the same period in 1995.
Revenues from the sale of the Ultramark 4 were approximately
$10.5 million for the first nine months of 1995; for the same
period in 1996, revenues from the sale of the Ultramark 4 were
nominal.
Gross profit was $49.3 million in the third quarter of 1996
compared with $43.7 million in the same quarter of the prior
year. Gross margin increased to 49.1% compared with 46.1% in the
same period of the prior year. The increase in gross margin is
due to the continued shift in product mix to the Company's higher
margin product lines, the consolidation of the Company's
manufacturing operations, efficiencies achieved in international
service operations and progress on the Company's cost reduction
programs. The improvement in gross margin also reflects the
expansion of the HDI 3000 product family. Gross profit was
$142.1 million for the first nine months of 1996 compared to
$129.6 million for the same period of the prior year. Year-to-
date gross margins increased to 48.4% from 46.2% in 1995,
reflecting the impact of the same factors discussed above.
In October 1996, the Company announced an agreement with Shantou
Institute of Ultrasonic Instruments (SIUI), a major manufacturer
of ultrasound systems in the People's Republic of China (PRC).
The Company will transfer the Apogee 800PLUS ultrasound system
manufacturing technology and exclusive distribution rights of the
ultrasound system in the PRC to SIUI. The Company will continue
to manufacture and distribute the Apogee 800PLUS system for
worldwide distribution outside of China. The technology transfer
will begin in the fourth quarter of 1996 and will continue
throughout 1997.
OPERATING EXPENSES, NET
- -----------------------
Total operating expenses, excluding non-recurring items in 1995,
increased to $44.5 million in the third quarter of 1996 compared
with $42.2 million in the third quarter of 1995. Selling,
general and administrative expenses of $30.2 million increased
3.3% over 1995, but declined as a percent of revenues to 30.1%
from 30.8%. Selling, general and administrative expenses
decreased by $0.7 million from the second quarter of 1996,
reflecting the second quarter expenses related to the promotion
of a clinical application using the High Definition(TM) Imaging
(HDI) system for differentiation of solid breast tumors. Research
and development expenses increased 9.7% to $13.8 million in the
third quarter of 1996 from $12.6 million in the third quarter of
1995. Research and development expenses grew primarily due to
planned increases for the Company's product development projects
and expenses related to a joint development project with Vital
Images, Inc. The agreement with Vital Images, Inc. is for the
joint development of 3D ultrasound
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-----------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
imaging utilizing Vital Images' volume rendering technology.
Excluding non-recurring items, operating expenses for the first
nine months of 1996 were $129.8 million compared with $125.1
million for the same period of 1995.
Other (income) expense, net, for the first nine months of 1995
includes a non-recurring credit of $1.0 million for a Washington
State Business and Occupation (B&O) tax refund which resulted
from a favorable tax audit. B&O tax is imposed on gross receipts
for products manufactured in the State of Washington and is
included in other operating expenses.
ACCRUAL FOR LITIGATION CLAIM
- ----------------------------
The Company accrued a non-recurring provision for a patent
litigation claim of $29.6 million in the second quarter of 1996
in addition to $5.0 million previously accrued in 1994. The
claim was filed by SRI International (SRI) on July 15, 1991 in
the U.S. District Court for the Northern District of California
and concerns a patent on an electrical circuit allegedly used in
three of ATL's discontinued products. The patent expired in 1994
and the circuit in dispute has never been used in any of ATL's
current product lines. The court granted a motion by SRI
requesting partial summary judgment on liability in November 1992
and the U.S. Court of Appeals for the Federal Circuit affirmed
the summary judgment in December 1994. In May 1996, the U.S.
District Court for the Northern District of California awarded
damages to SRI of $27.9 million plus interest and legal fees.
The Company has posted a supersedeas bond secured by a letter of
credit and cash and short-term investments and has appealed the
amount of damages awarded. The Company is accruing interest
expense on the full award during the appeal process.
RESTRUCTURING AND RELOCATION EXPENSES
- -------------------------------------
During 1995, the Company implemented a new corporate structure
which consolidated the Company's operations located in Ambler,
Pennsylvania with the Company's headquarters operations in
Bothell, Washington. The consolidation has been implemented as
planned and resulted in the relocation of Ambler manufacturing,
administrative and R&D functions to Bothell and a net reduction
of approximately 100 full-time positions. During the first nine
months of 1995, the Company incurred non-recurring restructuring
expenses for severance, outplacement and employee retention
incentives of $2.5 million and relocation expenses of $2.2
million. The Company incurred no corresponding expenses in 1996.
INTEREST INCOME AND EXPENSE
- ---------------------------
The Company incurred net interest expense of $0.1 million during
the third quarter of 1996, comparable with third quarter of 1995.
Net interest expense includes post-judgment interest expense
accrued on the damages awarded for the patent litigation claim
discussed previously, offset by interest income earned on cash
balances available for investment.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
TAXES AND NET INCOME (LOSS)
- ---------------------------
For the third quarter of 1996, the Company reported income tax
expense of $0.9 million, which represents a 20% effective tax
rate for U.S. federal, state and foreign income. For the third
quarter of 1995, income tax expense of $0.3 million included
primarily foreign and state income taxes. Year-to-date income
taxes include a deferred income tax benefit of $6.9 million
related to the previously discussed accrual for litigation claim.
CAPITAL RESOURCES AND LIQUIDITY
-------------------------------
-----------------------------------------------------------
(In millions) 9/27/96 12/31/95
-----------------------------------------------------------
Cash and short-term investments $51.4 $35.7
Total Assets $364.4 $353.4
Long-term debt $13.1 $14.8
Shareholders' Equity $205.2 $210.9
-----------------------------------------------------------
Cash and investments totaled $51.4 million at September 27, 1996
compared with $35.7 million at December 31, 1995 and $56.6
million at the end of the second quarter of 1996. As shown in
the Condensed Consolidated Statement of Cash Flows, during the
first nine months of 1996, the Company generated $21.1 million of
cash from operating activities. At September 27, 1996,
receivables, net, decreased by $14.9 million and accounts
payables and accrued expenses decreased by $8.8 million from
December 31, 1995 which reflects the seasonally high activity
levels in the fourth quarter of 1995. The decrease in
receivables, net, is partially offset by a higher than normal
level of lease contract receivables which have been sold
to outside parties in the fourth quarter of 1996. Inventory
levels increased by $4.6 million primarily in anticipation of
increasing sales activity levels in the fourth quarter. Normal
additions to property, plant and equipment used $10.1 million.
Cash provided by financing activities totaled $5.0 million during
the first nine months of 1996, primarily the net effect of $8.4
million generated through the exercise of employee stock options
and $2.3 million used to repurchase shares of the Company's
common stock. In the third quarter of 1996, the Company
repurchased 78,000 shares of its own common stock in the open
market for $2.3 million under a share repurchase program intended
to service the Company's benefit plans. The Board of Directors
authorized the Company in May 1996 to purchase up to 1,000,000
shares under this program, subject to certain criteria.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
The Company has an accrued liability of $35.1 million as of the
end of the third quarter of 1996 for a patent litigation claim
discussed previously. In June 1996, the Company posted a
supersedeas bond secured by a letter of credit and cash and short-
term investments. The Company will utilize its cash and short-term
investments to pay any damages from the patent litigation claim
after the appeal process is completed. As of the end of the third
quarter of 1996, the Company had $51.4 million in cash and short-
term investments.
In addition to its cash and investment balances, the Company has
available domestic credit facilities of $25 million, including a
committed line of credit of $15 million. Barring any unforeseen
circumstances or events, management expects cash, available
credit lines and funds from operations to be sufficient to meet
the Company's operating requirements for 1996 and 1997.
FORWARD LOOKING INFORMATION
- ---------------------------
As an update to the forward looking information provided in the
Company's 1995 Annual Report to Shareholders and the Form 10-Q
filings for the first and second quarters of 1996, the Company
provides the following information.
The Company believes that it continues to make progress toward
its goal of a return on equity of 15%, which it hopes to achieve
by the end of 1998. For the fourth quarter of 1996 it is the
current expectation of the Company that revenues for the quarter
should be in the range of $120-$125 million; that total gross
margin should be approximately 50%; that selling, general, and
administrative expenses should be around or slightly above $33
million; and that research and development expenses and other
expenses should be in line with those expense levels for the
third quarter. For the fourth quarter, the Company anticipates
weighted average common shares and equivalents outstanding to be
approximately 15.0 to 15.1 million shares. As a result, it is
the Company's current expectation that earnings for the fourth
quarter should be in line with financial community estimates in
the approximate range of $0.70-$0.75 per share.
The above statements are forward looking statements that involve
a number of risks and uncertainties and should be read in
conjunction with the Company's 1995 Annual Report to
Shareholders, the Company's 1996 news releases, and the Company's
SEC filings during 1996. There are certain important factors
that could cause actual results to differ materially from those
anticipated by the Company, which include the following factors.
The U.S. ultrasound market remains sluggish and may cause
revenues to fall short of expectations. Several of the Company's
competitors have announced or may announce new ultrasound
products in 1996, which may cause potential customers to alter or
defer their buying plans and intentions. These factors could
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
----------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
increase competition in the ultrasound market, which may
adversely impact the Company's sales order volume or timing or
selling prices or all of these factors. Unanticipated events,
such as delays in the company's product development and cost
reduction programs, the unavailability of vendor supplied
components critical to the Company's products, a stronger U.S.
dollar, delays or disruptions in obtaining regulatory approvals
or from other regulatory actions, delays in contractual payments
due the Company, or changes in the Company's strategy resulting
from competitive pressures, reallocation of research and
development or other priorities and resources, or reallocation of
resources for unanticipated opportunities also could affect
operating results.
13
<PAGE>
PART II Other Information
- ------ -----------------
Item 1. Legal Proceedings - In the appeal before the U.S. Court
-----------------
of Appeals for the Federal Circuit of the judgment in
favor of SRI discussed in Note 5 of the Condensed
Consolidated Financial Statements, both parties in the
proceeding have filed briefs with the Court. ATL will
file its reply brief in the appeal by November 15, 1996.
The matter will then be set for the scheduling by the
Court of oral arguments in the case.
Item 2. Changes in Securities - None
---------------------
Item 3. Defaults Upon Senior Securities - None
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders -
----------------------------------------------------
None
Item 5. Other Information - None
-----------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits - Financial Data Schedule
(b) Reports on Form 8-K - None
14
<PAGE>
SIGNATURE
---------
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.
ADVANCED TECHNOLOGY LABORATORIES, INC.
(Registrant)
DATE: November 8, 1996 BY:/s/ Harvey N. Gillis
________________________________________
Harvey N. Gillis
Senior Vice President
Finance and Administration
and Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 27, 1996 AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATION FOR THE NINE MONTHS ENDED
SEPTMBER 27, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
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<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> SEP-27-1996
<CASH> 51,409
<SECURITIES> 0
<RECEIVABLES> 113,503
<ALLOWANCES> 0
<INVENTORY> 98,729
<CURRENT-ASSETS> 282,559
<PP&E> 71,493
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<BONDS> 13,071
0
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<INCOME-PRETAX> (16,765)
<INCOME-TAX> (4,343)
<INCOME-CONTINUING> (12,422)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,422)
<EPS-PRIMARY> (0.89)
<EPS-DILUTED> (0.89)
<FN>
<F1>
Other Expenses included a $29,557 nonrecurring provision for a patent
litigation claim.
</FN>
</TABLE>
