UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
SIMTEK CORPORATION
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(Exact name small business issuer as specified in its charter)
Colorado 84-1057605
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1465 Kelly Johnson Blvd. Suite 301; Colorado Springs, Colorado 80920
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(Address of principal executive offices)
(719) 531-9444
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(issuer's telephone number)
N/A
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 ____
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class Outstanding at May 9, 1997
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(Common Stock, $.01 par value) 28,506,685
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SIMTEK CORPORATION
INDEX
For Quarter Ended March 31, 1997
PART 1. FINANCIAL INFORMATION
ITEM 1 Page
----
Balance Sheets as of March 31, 1997 and
December 31, 1996 3
Statements of Operations for the three months ended
March 31, 1997 and 1996 4
Statements of Cash Flows for the three months ended
March 31, 1997 and 1996 5
Notes to Financial Statements 6
ITEM 2
Management's Discussion and Analysis of Results of
Operations and Financial Condition 7-8
PART II. OTHER INFORMATION
ITEM 1 Legal Proceedings 9
ITEM 2 Changes in Securities 9
ITEM 3 Defaults upon Senior Securities 9
ITEM 4 Matters Submitted to a Vote of Securities Holders 9
ITEM 5 Other Information 9
ITEM 6 Exhibits and Reports on Form 8-K 9
SIGNATURES 10
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<CAPTION>
SIMTEK CORPORATION
BALANCE SHEETS
ASSETS
------
March 31, 1997 December 31, 1996
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<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents.......................... $ 1,352,049 $ 964,456
Accounts receivable - trade, net................... 612,746 593,378
Inventory, net .................................... 489,713 327,221
Prepaid expenses and other......................... 23,272 25,850
------------------------------------
Total current assets........................... 2,477,780 1,910,905
EQUIPMENT AND FURNITURE, net.......................... 199,867 229,008
------------------------------------
TOTAL ASSETS.......................................... $ 2,677,647 $ 2,139,913
====================================
LIABILITIES AND SHAREHOLDERS'EQUITY
-----------------------------------
CURRENT LIABILITIES:
Accounts payable:
ZMD............................................ $ 654,674 $ 290,957
Other.......................................... 274,431 212,279
Accrued expenses................................... 382,761 349,654
Accrued wages...................................... 221,475 222,136
Accrued vacation payable........................... 68,083 86,444
Payable to ZMD..................................... 130,153 130,153
------------------------------------
Total current liabilities...................... 1,731,577 1,291,623
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $1.00 par value,
2,000,000 shares authorized and
none issued and outstanding ................... - -
Common stock, $.01 par value, 40,000,000
shares authorized, 28,506,685 shares
issued and outstanding......................... 285,067 285,067
Additional paid-in capital......................... 29,730,728 29,730,728
Accumulated deficit................................ (29,069,725) (29,167,505)
-----------------------------------
Shareholder's equity............................... 946,070 848,290
-----------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............ $ 2,677,647 $ 2,139,913
===================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SIMTEK CORPORATION
STATEMENTS OF OPERATIONS
For the quarters ended March 31,
--------------------------------
1997 1996
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<S> <C> <C>
NET SALES.......................................................... $ 1,765,518 $ 811,094
Cost of sales................................................ 1,088,231 555,812
-----------------------------
GROSS MARGIN....................................................... 677,287 255,282
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE:
Design, research and development.............................. 329,109 247,351
Administrative................................................ 83,279 125,424
Marketing..................................................... 184,866 126,365
-----------------------------
Total selling, general and administrative expenses........ 597,254 499,140
INCOME (LOSS) FROM OPERATIONS...................................... 80,033 (243,858)
-----------------------------
OTHER INCOME (EXPENSE):
Interest income, net.......................................... 12,244 3,400
Other income (expense), net................................... 5,503 5,752
-----------------------------
Total other income (expense).............................. 17,747 9,152
-----------------------------
NET INCOME (LOSS).................................................. $ 97,780 $ (234,706)
=============================
NET INCOME (LOSS) PER COMMON SHARE................................. $ 0.00 $ (0.01)
=============================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING............................................... 28,506,685 26,978,311
=============================
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<TABLE>
<CAPTION>
SIMTEK CORPORATION
STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
----------------------------
1997 1996
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)......................................... $ 97,780 $ (234,706)
Adjustments to reconcile net income
(loss) to net cash from
operating activities:
Depreciation and amortization....................... 29,985 42,402
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable............................. (19,368) (168,603)
Inventory....................................... (162,492) (43,603)
Prepaid expenses and other ..................... 2,578 (10,381)
Increase (decrease) in:
Accounts payable................................ 425,870 25,653
Accrued expenses................................ 14,084 28,699
-------------------------------
Net cash provided by (used in) operating activities.... 388,437 (360,539)
-------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of equipment and furniture....................... (844) (244)
-------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from research and development arrangement........ - 209,491
-------------------------------
Net cash provided by financing activities.............. - 209,491
-------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................................ 387,593 (151,292)
-------------------------------
CASH AND CASH EQUIVALENTS, beginning of period................. 964,456 311,872
-------------------------------
CASH AND CASH EQUIVALENTS, end of period....................... $ 1,352,049 $ 160,580
===============================
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
SIMTEK CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
The financial statements included herein are presented in accordance
with the requirements of Form 10-QSB and consequently do not include all of the
disclosures normally made in the registrant's annual Form 10-KSB filing. These
financial statements should be read in conjunction with the financial statements
and notes thereto included in Simtek Corporation's Annual Report and Form 10-KSB
filed on March 19, 1997 for fiscal year 1996.
In the opinion of management, the unaudited financial statements
reflect all adjustments of a normal recurring nature necessary to present a fair
statement of the results of operations for the respective interim periods. The
year-end balance sheet data was derived from audited financial statements, but
does not include all disclosures required by generally accepted accounting
principles.
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<PAGE>
SIMTEK CORPORATION
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
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RESULTS OF OPERATIONS:
Simtek Corporation ("Simtek" or the "Company") recorded net product
sales of $1,765,518 for the first quarter of 1997 up over 100 percent from the
$811,094 recorded for the first quarter 1996. The product sales were from the
Company's 4 kilobit, 16 kilobit and 64 kilobit nvSRAM product families. This
increase was due to increased customer acceptance of nvSRAM products from
various markets including telecommunications, industrial control, military and
office automation and better product availability. Two distributors and one
direct customer of the Company's nvSRAM products account for more than 51% of
the Company's net sales for the first quarter 1997.
In the first quarter 1997, the Company purchased commercial 64
kilobit finished units based on 0.8 micron technology from Zentrum
Mikroelektronik Dresden GmbH ("ZMD"), sales from these products accounted for
approximately 53% of the Company's revenue for the first quarter 1997. The
balance of the Company's revenue for the first quarter 1997, was primarily from
the sales of high end industrial, military devices and 16 kilobit devices built
on 1.2 micron technology wafers purchased from Chartered Semiconductor
Manufacturing Plc. of Singapore ("Chartered").
The Company increased its gross margin over 150 percent in the first
quarter 1997 over the first quarter 1996. The increase in gross margin was due
to the Company shipping 64 kilobit commercial product based on 0.8 micron
technology in the first quarter 1997 as opposed to 1.2 micron technology that
the Company was using for commercial product in the first quarter 1996. The
Company continued to ship its high end industrial and military business from
product built on 1.2 micron technology.
While selling, general and administrative expenses saw an increase of
approximately $98,000 for the first quarter 1997 as compared to the first
quarter 1996 it decreased approximately 28% of revenues. The dollar increase was
due primarily to increased advertising, printing, sales commissions and basic
overhead.
The Company recorded a net income of $97,780 in the first quarter of
1997 as compared to a net loss of $234,706 for the first quarter of 1996. This
was because of increased product sales and increased gross margins.
FUTURE RESULTS OF OPERATIONS
The Company's ability to remain profitable will depend primarily on
its ability to continue reducing manufacturing costs and increase net product
sales by increasing the availability of existing products and by the
introduction of new products. The Company believes that with the cooperation of
ZMD it will expedite the introduction and production of its 256 kilobit nvSRAM
products based upon 0.8 micron technology. As of the date of this filing, the
Company has begun shipping pre-qualified 256 kilobit product based on 0.8 micron
technology. The two companies are currently deciding which derivative nvSRAM
products to develop next.
As of March 31, 1997, the Company's backlog of unshipped customer
orders expected to be filled within the next six months was approximately
$1,340,000.. About 9% of this backlog is due to delinquencies from lack of the
Company's 256 kilobit product. The Company believes that the majority of this
delinquency will be filled in the second quarter of 1997. Orders are cancelable
prior to 30 days before the scheduled shipping date and, therefore, should not
be used as a measure of future product sales.
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<PAGE>
SIMTEK CORPORATION
LIQUIDITY AND CAPITAL RESOURCES
ZMD continues to own approximately 30% of the Company's Common Stock
and may not exceed 30% without approval of Simtek's Board of Directors.
The Company may require additional capital to fund production and
marketing of its 0.8 micron 256 kilobit nvSRAM and the development of other new
products. The Company does not have any commitments for such additional capital
as of the date of this report.
-8-
<PAGE>
SIMTEK CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Matters Submitted to a Vote of Securities Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Computation of per share earnings (Exhibit 99.1).
Financial Data Schedule (Exhibit 27).
(b) Reports on Form 8-K
Form 8-K filed January 28, 1997 announcing "Simtek Announces 1996
Preliminary Financial Results"
-9-
<PAGE>
SIMTEK CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SIMTEK CORPORATION
(Registrant)
May 9, 1997 By /s/ RICHARD L. PETRITZ
----------------------------------------
RICHARD L. PETRITZ
Chief Executive Officer and
Chief Financial Officer (acting)
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<CAPTION>
SIMTEK CORPORATION
Exhibit 99.1
Computation of Per Share Earnings
---------------------------------
SHARES WEIGHTED AVG
BALANCE DAYS FROM SHARE SHARES OF
DATE ISSUED INCREASE OUTSTANDING 1/1/97 DAYS COMMON STOCK
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<S> <C> <C> <C> <C> <C>
Jan 1, 1997 - 28,506,685 90 2,565,601,650
------------------------------------------------------------------------
Balance 3/31/97 28,506,685 90 2,565,601,650 28,506,685
========== ========================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997 AND IS QUALIFIED IN
ITS ENTIRETY TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 1,352,049
<SECURITIES> 0
<RECEIVABLES> 735,426
<ALLOWANCES> (122,680)
<INVENTORY> 489,713
<CURRENT-ASSETS> 2,477,780
<PP&E> 1,656,411
<DEPRECIATION> 1,456,544
<TOTAL-ASSETS> 2,677,647
<CURRENT-LIABILITIES> 1,731,577
<BONDS> 0
0
0
<COMMON> 285,067
<OTHER-SE> 29,730,728
<TOTAL-LIABILITY-AND-EQUITY> 2,677,647
<SALES> 1,765,518
<TOTAL-REVENUES> 1,765,518
<CGS> 951,627
<TOTAL-COSTS> 1,088,231
<OTHER-EXPENSES> 597,254
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 776
<INCOME-PRETAX> 97,780
<INCOME-TAX> 0
<INCOME-CONTINUING> 97,780
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 97,780
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>LESS THAN $.01 PER SHARE.
</FN>
</TABLE>
