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 June 27, 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; 14,204,455 shares outstanding as
of July 25, 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 -
June 27, 1997 (Unaudited) and December 31, 1996............3
Condensed Consolidated Statements of Operations
(Unaudited) - Three Months and Six Months Ended
June 27, 1997 and June 28, 1996............................4
Condensed Consolidated Statements of Cash Flows
(Unaudited) - Six Months Ended June 27, 1997 and
June 28, 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...........................................15
Item 6. Exhibits and Reports on Form 8-K........................... 15
2
<PAGE>
PART I Financial Information
- ------ ---------------------
Item 1. Financial Statements
--------------------
ATL ULTRASOUND, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------------------------------
(In thousands) 6/27/97 12/31/96
- --------------------------------------------------------------------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 81,528 $ 63,262
Receivables, net 106,357 126,924
Inventories 89,493 89,911
Prepaid expenses 4,111 2,777
Deferred income taxes, net 18,283 18,246
--------------------------------
Total current assets 299,772 301,120
PROPERTY, PLANT AND EQUIPMENT, NET 71,358 72,400
OTHER ASSETS, NET 5,703 6,681
--------------------------------
$ 376,833 $ 380,201
================================
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term borrowings $ 1,473 $ 507
Current portion of long-term debt 525 584
Accounts payable and accrued expenses 68,206 69,855
Accrual for litigation claim 36,635 35,636
Deferred revenue 14,715 19,351
Taxes on income 7,029 8,893
--------------------------------
Total current liabilities 128,583 134,826
LONG-TERM DEBT 12,532 12,936
OTHER LONG-TERM LIABILITIES 23,036 21,189
SHAREHOLDERS' EQUITY 212,682 211,250
================================
$ 376,833 $ 380,201
- -------------------------------------------------------------------------
Common shares outstanding 14,215 14,023
- -------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
ATL ULTRASOUND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months Six months
ended ended
- ----------------------------------------------------------------------------
(In thousands, except per 6/27/97 6/28/96 6/27/97 6/28/96
share data)
- ----------------------------------------------------------------------------
REVENUES
Product sales $ 78,148 $76,450 $ 155,862 $ 149,927
Service 22,660 22,143 45,064 43,465
----------------------------------------
100,808 98,593 200,926 193,392
----------------------------------------
COST OF SALES
Cost of product sales 37,657 38,072 77,473 75,170
Cost of service 13,725 12,768 26,247 25,372
----------------------------------------
51,382 50,840 103,720 100,542
----------------------------------------
GROSS PROFIT 49,426 47,753 97,206 92,850
OPERATING EXPENSES, NET
Selling, general and
administrative 31,140 30,490 61,346 59,517
Research and development 15,216 12,898 29,980 25,123
Provision for litigation claim - 29,557 - 29,557
Other expense, net 60 303 416 657
---------------------------------------
46,416 73,248 91,742 114,854
---------------------------------------
INCOME (LOSS) FROM OPERATIONS 3,010 (25,495) 5,464 (22,004)
Interest income 1,083 864 1,937 1,532
Interest expense (908) (579) (1,650) (1,026)
---------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES 3,185 (25,210) 5,751 (21,498)
Income tax expense (benefit) 636 (6,031) 1,150 (5,289)
---------------------------------------
NET INCOME (LOSS) $ 2,549 $(19,179) $ 4,601 $(16,209)
=======================================
Net income (loss) per share $ .17 $(1.37) $ .30 $(1.17)
Weighted average common shares
and equivalents outstanding 15,162 14,026 15,179 13,885
- ----------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
ATL ULTRASOUND, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
- ----------------------------------------------------------------------------
(In thousands) 6/27/97 6/28/96
- ----------------------------------------------------------------------------
OPERATING ACTIVITIES
Net income (loss) $ 4,601 $(16,209)
Adjustments to reconcile net income (loss)
to cash provided by operating activities:
Depreciation and amortization 8,040 7,284
Deferred income tax benefit (37) (7,014)
Changes in operating assets and liabilities,
excluding the effects of the sale of image
management business:
Receivables, net 16,474 18,873
Inventories (4,506) (1,243)
Accounts payable and accrued expenses 679 (8,485)
Accrual for litigation claim 999 29,632
Deferred revenue (2,691) (947)
Taxes on income (1,774) (1,130)
Other (914) (36)
----------------------
Cash provided by operations 20,871 20,725
INVESTING ACTIVITIES
Investment in property, plant and equipment (7,096) (6,098)
Proceeds from sale of image management business 4,500 -
Proceeds from maturing short-term investments - 4,988
----------------------
Cash used by investing activities (2,596) (1,110)
FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings 965 (236)
Repayment of long-term debt (463) (377)
Repurchase of common shares (4,393) -
Exercise of stock options 3,983 6,950
----------------------
Cash provided by financing activities 92 6,337
Effect of exchange rate changes (101) (45)
----------------------
Increase in cash and cash equivalents 18,266 25,907
Cash and cash equivalents, beginning of period 63,262 30,666
----------------------
Cash and cash equivalents, end of period $ 81,528 $ 56,573
======================
- ----------------------------------------------------------------------------
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
6/27/97 12/31/96
--------- ----------
Materials and work in process $32,747 $30,132
Finished products 16,845 20,481
Demonstrator equipment 20,918 19,643
Customer service 18,983 19,655
--------- ----------
$89,493 $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 has appealed the amount of damages awarded and
has posted a supersedeas bond secured by a letter of credit
collateralized by cash and cash equivalents. The Company will
continue accruing interest during the appeal process.
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 during the quarter.
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 Six months ended
- -----------------------------------------------------------------------------
(In millions except
per share data) 6/27/97 6/28/96 % Change 6/27/97 6/28/96 % Change
- -----------------------------------------------------------------------------
Revenues $100.8 $98.6 2.2% $200.9 $193.4 3.9%
Gross Profit $49.4 $47.8 3.4% $97.2 $92.9 4.7%
Operating Expenses;
excluding non-
recurring items $46.4 $43.7 6.2% $91.7 $85.3 7.6%
Provision for
litigation claim - $29.6 - $29.6
Net Income (Loss) $2.5 $(19.2) $4.6 $(16.2)
Net Income (Loss) per $0.17 $(1.37) $0.30 $(1.17)
- -----------------------------------------------------------------------------
Net Income, excluding
non-recurring items $2.5 $3.5 $4.6 $6.4
Net Income per Share,
excluding non-
recurring items $0.17 $0.23 $0.30 $0.43
- -----------------------------------------------------------------------------
The Company reported net income of $2.5 million or $0.17 per
share in the second quarter of 1997 compared with a net loss of
$19.2 million or $1.37 per share in the second quarter of 1996.
Excluding non-recurring items, net income would have been $3.5
million or $0.23 per share for the second quarter of 1996. For
the first six months, the Company reported net income of $4.6
million or $0.30 per share in 1997 compared with a net loss of
$16.2 million or $1.17 per share in 1996. Excluding non-
recurring items, net income for the first six months would have
been $6.4 million or $0.43 per share for 1996. There were no non-
recurring items during the first six months of 1997.
REVENUES AND GROSS PROFIT
- -------------------------
The Company's worldwide revenues increased 2.2% to $100.8 million
in the second quarter of 1997 compared with $98.6 million in the
second quarter of 1996. The majority of this growth was
attributable to product sales which increased by $1.7 million or
2.2% in the second quarter of 1997 over the same period in the
prior year. The increase in product revenues resulted primarily
from the continued success of the Company's HDI(R) 3000 product
family in both the U.S. and international markets as well as the
introduction of the HDI 1000 system in the second quarter of
1997. The worldwide installed base of HDI 3000 systems now
exceeds 3,500 systems.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
The two factors described above helped offset the transition of older
products (Apogee CX/CX200 and UM9 HDI) from the product line as
well as the loss of revenues caused by the sale of the Company's
image management business to Eastman Kodak. Service revenues
increased $0.5 million or 2.3% compared with the second quarter
of 1996, primarily due to growth in international markets.
International service revenues continue to increase as a result
of growth in the worldwide installed base of ATL's products.
For the first six months of 1997, worldwide revenues increased
3.9% to $200.9 million compared with $193.4 million in the prior
year for the reasons noted above.
Gross profit was $49.4 million in the second quarter of 1997, an
increase of $1.6 million compared with gross profit of $47.8
million in the same quarter of the prior year. Total gross margin
for the second quarter of 1997 increased to 49.0% compared with
48.4% in the prior year. Expanding gross margins reflect
continued efficiency gains resulting from product cost reductions
in the HDI product family as well as a favorable shift in product
mix to the Company's higher margin product lines. For the first
six months of 1997, gross profit was $97.2 million compared to
$92.9 million for the same period of 1996. Year-to-date gross
margin increased to 48.4% from 48.0% in 1996 for the reasons
noted above.
In October 1996, the Company announced a technology transfer
agreement with Shantou Institute of Ultrasonic Instruments
(SIUI), a major manufacturer of ultrasound systems in the
People's Republic of China (PRC). In accordance with the
agreement, 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 technology transfer began in fourth quarter 1996 and will
continue throughout 1997. The Company will continue to
manufacture and distribute the Apogee 800PLUS system for
worldwide distribution outside of China.
OPERATING EXPENSES, NET
- -----------------------
Operating expenses, excluding non-recurring items, increased to
$46.4 million in the second quarter of 1997 from $43.7 million in
the same period of 1996. Selling, general and administrative
expenses were $31.1 million, an increase of 2.1% over the second
quarter of 1996, primarily due to increased personnel and selling
expenses as well as some additional HDI 1000 product launch
costs. Research and development expenses increased 18.0% to
$15.2 million in the second quarter of 1997 compared with $12.9
million in the second quarter of 1996. The increase in R&D
expenses is primarily a result of new product development
programs, including costs related to the premium performance HDI
5000 introduced on July 14, 1997, as well as the HDI 1000 and
handheld systems. For the first six months of 1997, operating
expenses, excluding non-recurring items, increased to $91.7
million or 45.7% of total revenues compared with operating
expenses of $85.3 million or 44.1% 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 has 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.
INTEREST INCOME AND EXPENSE
- ---------------------------
The Company earned net interest income of $0.2 million during the
second quarter of 1997 compared with net interest income of $0.3
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 SRI appeal is completed and
the final claim is paid.
TAXES AND NET INCOME (LOSS)
- ---------------------------
For the second quarter of 1997, the Company reported income tax
expense of $0.6 million, which represents a 20% effective tax
rate for U.S. federal, state and foreign income. For the second
quarter of 1996, the Company reported an income tax benefit of
$6.0 million, which represents the net of a 20% effective tax
rate for U.S. federal, state and foreign income taxes and a $6.9
million deferred income tax benefit related to the previously
discussed accrual for litigation claim.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations (Continued)
-----------------------------------
CAPITAL RESOURCES AND LIQUIDITY
-------------------------------
----------------------------------------------------
(In millions) 6/27/97 12/31/96
----------------------------------------------------
Cash and cash equivalents $81.5 $ 63.3
Total Assets $376.8 $380.2
Long-term Debt $12.5 $ 12.9
Shareholders' Equity $212.7 $211.3
----------------------------------------------------
Cash and cash equivalents totaled $81.5 million at June 27, 1997
compared with $63.3 million at December 31, 1996 and $75.2
million at the end of the first quarter of 1997. As shown in the
Condensed Consolidated Statement of Cash Flows, during the first
six months of 1997, the Company generated $20.9 million from
operating activities. At June 27, 1997, receivables, net,
decreased $16.5 million from December 31, 1996 reflecting the
Company's committment to developing strong asset management
programs as well as seasonally high activity levels in the fourth
quarter of 1996. The exercise of employee stock options,
included on the Condensed Consolidated Statement of Cash Flows as
a financing activity, generated $4.0 million for the Company
during the first six months of 1997.
During the quarter ended June 27, 1997, the Company repurchased
95,000 shares of its own stock bringing total shares repurchased
to 436,800 as of the first half of 1997. No further repurchases
will be made under this May 6, 1996 authorization. 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. No new shares were repurchased under this new program
during the second quarter of 1997.
The Company has an accrued liability of $36.6 million as of June
27, 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
after the appeal process is completed.
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 is scheduled to begin groundbreaking for a new
101,000 square foot building on its corporate campus in August
1997. The building's projected completion date is slated for
June 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 first
quarter of 1997 Form 10-Q, the Company provides the following
information.
As a result of the recent introduction of the HDI 5000 in July
1997, the Company believes that third quarter revenues may fall
within the $90-95 million range as customers pause to review
their purchasing decisions. In addition, operating expenses are
expected to rise in the third quarter over the second quarter of
1997 primarily due to new product introductions. The Company
therefore expects to report a loss in the third quarter of
approximately $0.10 to $0.20 per share. While the third quarter
is projected to be transitional as customers make purchase
decisions in response to ATL's new products, 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 herein 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, the Company's Report
on Form 8-K filed July 9, 1997 and the Company's Quarterly Report
on Form 10-Q for the Quarterly Period Ended March 28, 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. Several of the
Company's competitors announced new ultrasound products in 1996
and may announce additional new ultrasound products in 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 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.
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 - The Company is awaiting the decision
-----------------
of the Federal Circuit Court in its appeal of the damages
awarded to SRI on a patent litigation claim. See Part I -
Item 2 above, ACCRUAL FOR LITIGATION CLAIM. The Company's
appeal was briefed and argued to a three judge panel of
the Federal Circuit Court in January, 1997. The court's
decision may be rendered at any time.
Item 2. Changes in Securities - None.
---------------------
Item 3. Defaults Upon Senior Securities - None.
-------------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
(a) The Annual General Meeting of Shareholders was
held on May 7, 1997.
(c) At the Annual General Meeting of Shareholders
there were four matters submitted to a vote of
security holders. Proxies were solicited pursuant
to Regulation 14 of the Securities and Exchange Act
of 1934 and there was no solicitation in opposition
to management's nominees as listed in the proxy
statement. Each director nominated and proposal
submitted to a vote passed and the voting outcome of
each proposal is as follows:
(1) Election of Directors:
Kirby L. Cramer For: 12,826,361 Withheld: 72,530
Harvey Feigenbaum For: 12,828,234 Withheld: 70,657
Dennis C. Fill For: 12,830,525 Withheld: 68,366
Eugene A. Larson For: 12,766,720 Withheld: 132,171
Ernest Mario For: 12,826,917 Withheld: 71,974
John R. Miller For: 12,826,760 Withheld: 72,131
Phillip M. Nudelman For: 12,831,452 Withheld: 67,439
Harry Woolf For: 12,821,727 Withheld: 77,164
(2) The adoption of the Employee Stock Purchase Plan
to reserve for purchase up to 300,000 shares of
common stock:
For: 11,074,027 Opposed: 1,770,572 Abstained: 54,292 Broker Non-votes: None
(3) Ratification of Auditors - The Company proposal
to approve the appointment of KPMG Peat Marwick LLP
as independent auditors for the Company for 1997:
For: 12,839,417 Opposed: 15,465 Abstained: 44,009
14
<PAGE>
PART II Other Information (Continued)
- ------- -----------------
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:
A report on Form 8-K was filed on July 9, 1997
related to the change of the Company's corporate name
from Advanced Technology Laboratories, Inc. to ATL
Ultrasound,Inc.
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: August 6, 1997 BY:/s/ Harvey N. Gillis
_______________________
Harvey N. Gillis
Senior Vice President
Finance and Administration
and Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXPRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 27, 1997 AND THE
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
JUNE 27, 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> JUN-27-1997
<CASH> 81,528
<SECURITIES> 0
<RECEIVABLES> 106,357
<ALLOWANCES> 0
<INVENTORY> 89,493
<CURRENT-ASSETS> 299,772
<PP&E> 71,358
<DEPRECIATION> 0
<TOTAL-ASSETS> 376,833
<CURRENT-LIABILITIES> 128,583
<BONDS> 12,532
0
0
<COMMON> 0
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<TOTAL-LIABILITY-AND-EQUITY> 376,833
<SALES> 155,862
<TOTAL-REVENUES> 200,926
<CGS> 77,473
<TOTAL-COSTS> 103,720
<OTHER-EXPENSES> 91,742
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,650
<INCOME-PRETAX> 5,751
<INCOME-TAX> 1,150
<INCOME-CONTINUING> 4,601
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,601
<EPS-PRIMARY> .31
<EPS-DILUTED> .30
</TABLE>
