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 26, 1997
[ ] 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
ATL ULTRASOUND, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1353386
(State of incorporation) (IRS Employee Identification No.)
22100 Bothell-Everett Highway
Post Office Box 3003
Bothell, Washington 98041-3003
(Address of principal executive offices) (Zip Code)
(425) 487-7000
(Telephone number)
Common stock, $0.01 par value; 14,252,760 shares outstanding as
of October 24, 1997
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 [ ]
<PAGE>
ATL ULTRASOUND, INC.
TABLE OF CONTENTS
PART I Financial Information Page No.
- ------ --------------------- --------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
September 26, 1997 (Unaudited) and December 31, 1996.....3
Condensed Consolidated Statements of Operations
(Unaudited) - Three Months and Nine Months Ended
September 26, 1997 and September 27,1996.................4
Condensed Consolidated Statements of Cash Flows
(Unaudited) - Nine Months Ended September 26, 1997
and September 27, 1996...................................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
--------------------
ATL ULTRASOUND, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
- -----------------------------------------------------------------------------
(In thousands) 9/26/97 12/31/96
- -----------------------------------------------------------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 68,296 $ 63,262
Receivables, net 102,229 126,924
Inventories 100,344 89,911
Prepaid expenses 3,669 2,777
Deferred income taxes, net 18,340 18,246
-------------------------
Total current assets 292,878 301,120
PROPERTY, PLANT AND EQUIPMENT, NET 71,872 72,400
OTHER ASSETS, NET 6,415 6,681
-------------------------
$ 371,165 $ 380,201
=========================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 788 $ 507
Current portion of long-term debt 443 584
Accounts payable and accrued expenses 71,438 69,855
Accrual for litigation claim 37,148 35,636
Deferred revenue 15,014 19,351
Taxes on income 4,949 8,893
-------------------------
Total current liabilities 129,780 134,826
LONG-TERM DEBT 12,430 12,936
OTHER LONG-TERM LIABILITIES 23,176 21,189
SHAREHOLDERS' EQUITY 205,779 211,250
-------------------------
$ 371,165 $ 380,201
=========================
- -----------------------------------------------------------------------------
Common shares outstanding 14,201 14,023
- -----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
ATL ULTRASOUND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
- -----------------------------------------------------------------------------
(In thousands, except per share data) 9/26/97 9/27/96 9/26/97 9/27/96
- -----------------------------------------------------------------------------
REVENUES
Product sales $ 69,898 $ 77,916 $225,760 $227,843
Service 23,090 22,349 68,154 65,814
----------------------------------------
92,988 100,265 293,914 293,657
----------------------------------------
COST OF SALES
Cost of product sales 35,112 38,076 112,585 113,246
Cost of service 13,233 12,935 39,480 38,307
----------------------------------------
48,345 51,011 152,065 151,553
----------------------------------------
GROSS PROFIT 44,643 49,254 141,849 142,104
OPERATING EXPENSES, NET
Selling, general and
administrative 32,711 29,754 94,057 89,271
Research and development 13,848 14,223 43,828 39,346
Provision for litigation claim - - - 29,557
Other expense, net 688 488 1,104 1,145
---------------------------------------
47,247 44,465 138,989 159,319
---------------------------------------
INCOME (LOSS) FROM OPERATIONS (2,604) 4,789 2,860 (17,215)
Interest income 1,012 886 2,949 2,418
Interest expense (862) (942) (2,512) (1,968)
---------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES (2,454) 4,733 3,297 (16,675)
Income tax expense (benefit) (492) 946 658 (4,343)
---------------------------------------
NET INCOME (LOSS) $(1,962) $3,787 $2,639 $(12,422)
=======================================
Net income (loss) per share $ (0.14) $ 0.25 $ .17 $ (0.89)
Weighted average common shares
and equivalents outstanding 14,207 15,076 15,226 13,992
- -----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
ATL ULTRASOUND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
- -----------------------------------------------------------------------------
(In thousands) 9/26/97 9/27/96
- -----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) $ 2,639 $(12,422)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation and amortization 12,148 11,032
Deferred income tax benefit (94) (6,982)
Changes in operating assets and liabilities,
excluding the effects of the sale of image
management business:
Receivables, net 19,994 14,923
Inventories (15,806) (4,577)
Accounts payable and accrued expenses 4,204 (8,833)
Accrual for litigation claim 1,512 30,139
Deferred revenue (2,297) (1,987)
Taxes on income (3,797) (719)
Other (887) 498
--------------------
Cash provided by operations 17,616 21,072
INVESTING ACTIVITIES
Investment in property, plant and equipment (11,178) (10,065)
Proceeds from sale of image management business 4,500 -
Proceeds from maturing short-term investments - 4,988
--------------------
Cash used by investing activities (6,678) (5,077)
FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings 280 (522)
Repayment of long-term debt (647) (520)
Repurchase of common shares (11,888) (2,330)
Exercise of stock options 6,572 8,357
--------------------
Cash provided (used) by financing activities (5,683) 4,985
Effect of exchange rate changes (221) (237)
--------------------
Increase in cash and cash equivalents 5,034 20,743
Cash and cash equivalents, beginning of period 63,262 30,666
--------------------
Cash and cash equivalents, end of period $68,296 $51,409
====================
- -----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
ATL ULTRASOUND, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
1. Basis of Presentation
The accompanying condensed consolidated financial statements
include the accounts of ATL Ultrasound, 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.
On July 2, 1997, ATL announced it had completed its name change
to ATL Ultrasound, Inc. to better reflect the Company's dedicated
focus on diagnostic ultrasound. The Company was formerly known
as Advanced Technology Laboratories, Inc. ATL will continue to
trade under the NASDAQ symbol ATLI. The action by the Company is
a corporate name change only.
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 incorporated by reference
in the Company's 1996 Form 10-K.
The information furnished reflects, in the opinion of 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 Cash Equivalents
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.
3. Inventories
9/26/97 12/31/96
--------- ---------
Materials and work in process $37,344 $30,132
Finished products 20,828 20,481
Demonstrator equipment 23,679 19,643
Customer service 18,493 19,655
--------- ---------
$100,344 $89,911
6
<PAGE>
ATL ULTRASOUND, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands)
4. 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 underlying lawsuit 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 District
Court awarded damages to SRI of $27,948 plus interest and legal
fees. The Company appealed the amount of damages awarded and
posted a supersedeas bond secured by a letter of credit
collateralized by cash and cash equivalents. On October 24,
1997, the Company was informed that the U.S. Court of Appeals
affirmed the lower court judgment in favor of SRI in the patent
lawsuit. The decision in this lawsuit does not adversely affect
current or future product shipments. The Company believes its
accrual for litigation claim is adequate to cover the liability
to SRI and that the Court's decision will have no impact on its
reported results, nor will it have any effect on the sale, use or
service of any current or past products. The Company will
continue to accrue interest expense on the patent litigation
claim until the final claim is paid.
5. 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 substantially equal for all periods presented.
6. Sale of Image Management Business
Effective May 12, 1997, the Company sold its image management
business, Nova MicroSonics, to Eastman Kodak. The sale did not
result in a material financial impact to the consolidated
operating results of the Company.
7. Reclassifications
Certain amounts reported in previous years have been reclassified
to conform to the 1997 presentation.
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) 9/26/97 9/27/96 %Change 9/26/97 9/27/96 %Change
- ------------------------------------------------------------------------------
Revenues $93.0 $100.3 (7.3)% $293.9 $293.7 0.1%
Gross Profit $44.6 $49.3 (9.4)% $141.8 $142.1 (0.2)%
Operating Expenses;
excluding non-recurring items $47.2 $44.5 6.3% $139.0 $129.8 7.1%
Provision for litigation claim - - - $29.6
Net Income (Loss) $(2.0) $3.8 $2.6 $(12.4)
Net Income (Loss) per Share $(0.14) $0.25 $0.17 $(0.89)
- ------------------------------------------------------------------------------
Net Income (Loss), excluding
non-recurring items $(2.0) $3.8 $2.6 $10.2
Net Income (Loss) per Share,
excluding non-recurring $(0.14) $0.25 $0.17 $0.68
items
- ------------------------------------------------------------------------------
The Company reported a net loss of $2.0 million or $0.14 per
share in the third quarter of 1997 compared with net income of
$3.8 million or $0.25 per share in the third quarter of 1996.
The results were consistent with guidance provided by the Company
in a press release dated July 14, 1997. For the first nine
months, the Company reported net income of $2.6 million or $0.17
per share in 1997 compared with a net loss of $12.4 million or
$0.89 per share in 1996. Excluding non-recurring items, net
income for the first nine months of 1996 would have been $10.2
million or $0.68 per share. There were no non-recurring items
during the first nine months of 1997.
REVENUES AND GROSS PROFIT
- -------------------------
The Company's worldwide revenues decreased 7.3% to $93.0 million
in the third quarter of 1997 compared with $100.3 million in the
third quarter of 1996. Product sales decreased by $8.0 million
or 10.3% in the third quarter of 1997 compared to the same period
in the prior year. The decline in product sales is largely
attributable to delays in customer order placements associated
with the introduction of the Company's new HDI(R) 5000 system,
the foreign exchange impact of the stronger U.S. dollar on
international business, primarily in Europe, and the loss of
revenues caused by the sale of the Company's image management
business to Eastman Kodak. The transition of older products
(Apogee(R) CX/CX200 and UM9 HDI) from the product line also
impacted product revenues in comparison to the third quarter of
1996.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
Service revenues increased $.7 million or 3.3% compared with the
third quarter of 1996, primarily due to growth in the worldwide
installed base of ATL's products. Despite the factors noted
above, worldwide revenues were essentially level with the prior
year at $293.9 million for the first nine months of 1997,
primarily due to the continued success of the Company's HDI 3000
product family in both the U.S.and international markets.
Gross profit was $44.6 million in the third quarter of 1997, a
decrease of $4.7 million compared with gross profit of $49.3
million in the same quarter of the prior year. Total gross
margin for the third quarter of 1997 decreased to 48.0% compared
with 49.1% in the prior year. These decreases reflect the impact
of a stronger U.S. dollar as well as delays in customer order
placements associated with the introduction of new products as
discussed above. For the first nine months of 1997, gross profit
was $141.8 million compared to $142.1 million for the same period
of 1996. Year-to-date gross margin decreased to 48.3% from 48.4%
in 1996 for the reasons noted above.
OPERATING EXPENSES, NET
- -----------------------
Operating expenses, excluding non-recurring items, increased to
$47.2 million in the third quarter of 1997 from $44.5 million in
the same period of 1996. Selling, general and administrative
expenses were $32.7 million, an increase of 9.9% over the third
quarter of 1996. The increase in selling, general, and
administrative expenses reflects product launch costs associated
with the introduction of the Company's premium performance HDI
5000 system, partially offset by a favorable foreign exchange
impact in Europe and the sale of the Company's image management
business. Research and development expenses decreased 2.6% to
$13.8 million in the third quarter of 1997 compared with $14.2
million in the third quarter of 1996. The decrease in R&D
expenses is primarily due to the timing of new product
development programs, including costs related to both the HDI
5000 and HDI 1000 systems, as well as the sale of the Company's
image management business. For the first nine months of 1997,
operating expenses, excluding non-recurring items, increased to
$139.0 million or 47.3% of total revenues compared to $129.8
million or 44.2% of total revenues in 1996.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
ACCRUAL FOR LITIGATION CLAIM
- ----------------------------
ATL 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 which had been accrued in 1994. The underlying
lawsuit 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 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 District Court
awarded damages to SRI of $27.9 million plus interest and legal
fees. The Company appealed the amount of damages awarded and
posted a supersedeas bond in June, 1996 secured by a letter of
credit collateralized by cash and cash equivalents. On October
24, 1997, the Company was informed that the U.S. Court of Appeals
affirmed the lower court judgment in favor of SRI in the patent
lawsuit. The decision in this lawsuit does not adversely affect
current or future product shipments. The Company believes its
accrual for litigation claim is adequate to cover the liability
to SRI and that the Court's decision will have no impact on its
reported results, nor will it have any effect on the sale, use or
service of any current or past products.
INTEREST INCOME AND EXPENSE
- ---------------------------
The Company earned net interest income of $0.2 million during the
third quarter of 1997 compared with net interest expense of $0.1
million during the same period in 1996. Net interest income
includes interest income earned on cash balances available for
investment and extended term receivables, offset by post-judgment
interest expense accrued on the damages awarded for the patent
litigation claim discussed above as well as interest expense on
long-term debt. Interest expense will continue to be accrued on
the patent litigation claim until the final claim is paid.
TAXES AND NET INCOME (LOSS)
- ---------------------------
For the third quarter of 1997, the Company reported an income tax
benefit of $0.5 million, which represents a 20% effective tax
rate for U.S. federal, state and foreign income. For the third
quarter of 1996, the Company reported income tax expense of $0.9
million.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
CAPITAL RESOURCES AND LIQUIDITY
-------------------------------
-----------------------------------------------------
(In millions) 9/26/97 12/31/96
-----------------------------------------------------
Cash and cash equivalents $68.3 $ 63.3
Total Assets $371.2 $380.2
Long-term debt $ 12.4 $ 12.9
Shareholders' Equity $205.8 $211.3
-----------------------------------------------------
Cash and cash equivalents totaled $68.3 million at September 26,
1997 compared with $63.3 million at December 31, 1996. As shown
in the Condensed Consolidated Statement of Cash Flows, during the
first nine months of 1997, the Company generated $17.6 million
from operating activities and used $5.7 million for financing
activities. At September 26, 1997, receivables, net, decreased
$20.0 million from December 31, 1996 reflecting seasonally high
activity levels in the fourth quarter of 1996. Inventory levels
increased by $15.8 million primarily in anticipation of
increasing sales activity levels in the fourth quarter and for
the shipments of the new HDI 5000 and HDI 1000 products. During
the first nine months of 1997, the Company used $11.9 million to
repurchase shares of its common stock, which was partially offset
by $6.6 million generated from the exercise of employee stock
options.
On May 7, 1997, the Company's Board of Directors authorized a new
repurchase program to acquire up to 1,000,000 shares of common
stock. During the third quarter of 1997, the Company repurchased
195,200 shares of its own stock under this new program. Under a
previous authorization, the Company repurchased a total of
436,800 shares as of the first half of 1997. A combined total of
632,000 shares have been repurchased under both authorizations as
of September 26, 1997.
The Company has an accrued liability of $37.1 million as of
September 26, 1997 for the patent litigation claim discussed
previously. The supersedeas bond posted by the Company during the
appeal process is secured by a letter of credit collateralized by
cash and cash equivalents. The Company will utilize its cash and
cash equivalents to pay the damages from the patent litigation
claim (see Accrual for Litigation Claim).
In addition to its cash 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 existing cash,
available credit lines and funds from operations to be sufficient
to meet the Company's operating requirements for 1997 (see
Forward Looking Information).
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
--------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
The Company began construction of a new 101,000 square foot
building on its corporate campus in August 1997. The building's
projected completion date is scheduled for July 1998 and has an
estimated cost of $15-16 million. Initial funding for the
project will come from working capital with a transition to long-
term debt as the building reaches completion in 1998.
FORWARD LOOKING INFORMATION
- ---------------------------
As an update to the forward looking information provided in the
Company's 1996 Annual Report to Shareholders and the Form 10-Q
filings for the first and second quarters of 1997, the Company
provides the following information.
The Company expects revenues in the fourth quarter of 1997 to
fall within an approximate range of $140-145 million with a gross
margin at or above 50%. Total operating expenses are anticipated
to be about $50-52 million. Total earnings per share for the
full year is expected to be in line with, or somewhat below,
figures reported for fiscal year 1996, excluding non-recurring
items in 1996. The Company believes it will continue to make
progress towards its goal of achieving a return on equity of
15.0% by the end of 1998.
The above statements and other statements in this report
identified by cross reference to this section are forward looking
statements that involve a number of risks and uncertainties and
should be read in conjunction with the Company's 1996 Annual
Report to Shareholders, which is incorporated by reference to the
Company's 1996 Form 10-K, the Company's news releases, and the
Company's SEC filings during 1997. 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 Company and several of the Company's competitors
announced new ultrasound products and features in 1996 and 1997,
which may cause potential customers to alter or defer their
buying plans and intentions. Increased competition in the
ultrasound market 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, 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. The estimated cost and/or completion date of the
building under construction depends to a large degree on
contractor performance and could be adversely affected by factors
such as construction delays or cost overruns, adverse weather
conditions, contractor labor disputes or other factors inherent
in construction projects.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
IMPACT OF NEW ACCOUNTING STANDARD
- ---------------------------------
In February 1997, the Financial Accounting Standards Board issued
FAS 128, Earnings Per Share, which establishes standards for the
computation, presentation, and disclosure of earnings per share
(EPS). FAS 128 is designed to improve the EPS information
provided in financial statements by simplifying the existing
computational guidelines, revising the disclosure requirements
and increasing the comparability of EPS data. FAS 128 is
effective for financial statements for periods ending after
December 15, 1997. The adoption of FAS 128 is not expected to
have a material effect on the Company's consolidated financial
statements.
13
<PAGE>
PART II Other Information
- ------- -----------------
Item 1. Legal Proceedings - On October 24, 1997, the Company was
-----------------
informed that the U.S. Court of Appeals affirmed the
lower court judgment in favor of SRI in the patent
lawsuit. See Part 1-Item 2 above, ACCRUAL FOR LITIGATION
CLAIM. The decision in this lawsuit does not adversely
affect current or future product shipments. The Company
believes its accrual for litigation claim is adequate to
cover the liability to SRI and that the Court's decision
will have no impact on its reported results, nor will it
have any effect on the sale, use or service of any
current or past products. The Company will continue to
accrue interest expense on the patent litigation claim
until the final claim is paid.
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 of Form 8-K - None.
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.
ATL ULTRASOUND, INC.
(Registrant)
Date: November 6, 1997 BY:/s/ Harvey N. Gillis
----------------------------
Harvey N. Gillis
Senior Vice President
Finance and Administration
and Chief Financial Officer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 26, 1997 AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 26, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS
</LEGEND>
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<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-26-1997
<CASH> 68,296
<SECURITIES> 0
<RECEIVABLES> 102,229
<ALLOWANCES> 0
<INVENTORY> 100,344
<CURRENT-ASSETS> 292,878
<PP&E> 71,872
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<TOTAL-ASSETS> 371,165
<CURRENT-LIABILITIES> 129,780
<BONDS> 12,430
0
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<SALES> 225,760
<TOTAL-REVENUES> 293,914
<CGS> 112,585
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<OTHER-EXPENSES> 138,989
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,512
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<INCOME-TAX> 658
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<EPS-PRIMARY> .18
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