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 June 30, 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 August 11, 1997
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(Common Stock, $.01 par value) 28,626,685
<PAGE>
SIMTEK CORPORATION
INDEX
For Quarter Ended June 30, 1997
PART 1. FINANCIAL INFORMATION
ITEM 1 Page
Balance Sheets as of June 30, 1997 and
December 31, 1996 3
Statements of Operations for the three months and six
months ended June 30, 1997 and 1996 4
Statements of Cash Flows for the six months ended
June 30, 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
<PAGE>
<TABLE>
<CAPTION>
SIMTEK CORPORATION
BALANCE SHEETS
ASSETS
------
June 30, 1997 December 31, 1996
------------- -----------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................................... $ 1,158,187 $ 964,456
Accounts receivable - trade, net........................................ 804,017 593,378
Inventory, net ......................................................... 529,096 327,221
Prepaid expenses and other.............................................. 19,149 25,850
-----------------------------------
Total current assets................................................ 2,510,449 1,910,905
EQUIPMENT AND FURNITURE, net............................................... 177,027 229,008
-----------------------------------
TOTAL ASSETS............................................................... $ 2,687,476 $ 2,139,913
===================================
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable:
ZMD................................................................. $ 500,618 $ 290,957
Other............................................................... 270,692 212,279
Accrued expenses........................................................ 427,014 349,654
Accrued wages........................................................... 221,475 222,136
Accrued vacation payable................................................ 75,530 86,444
Payable to ZMD.......................................................... 130,153 130,153
-----------------------------------
Total current liabilities........................................... 1,625,482 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,
28,626,685 shares issued and outstanding............................ 286,267 285,067
Additional paid-in capital.............................................. 29,745,873 29,730,728
Accumulated deficit..................................................... (28,970,146) (29,167,505)
----------------------------------
Shareholder's equity.................................................... 1,061,994 848,290
----------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................................. $ 2,687,476 $ 2,139,913
==================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
SIMTEK CORPORATION
STATEMENTS OF OPERATIONS
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES.................................................. $ 1,536,243 $ 1,158,624 $ 3,301,761 $ 1,969,718
Cost of sales......................................... 834,337 712,707 1,922,568 1,268,519
---------------------------------------------------------------------
GROSS MARGIN............................................... 701,906 445,917 1,379,193 701,199
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE:
Design, research and development...................... 336,932 227,524 666,041 474,875
Administrative........................................ 60,145 78,111 143,424 203,535
Marketing............................................. 218,798 137,838 403,664 264,204
---------------------------------------------------------------------
Total selling, general and administrative
expenses..................................... 615,875 443,473 1,213,129 942,614
INCOME (LOSS) FROM OPERATIONS.............................. 86,031 2,444 166,064 (241,415)
---------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest income, net.................................. 14,800 3,124 27,044 6,524
Other income (expense), net........................... (1,252) 6,554 4,251 12,307
---------------------------------------------------------------------
Total other income (expense)...................... 13,548 9,678 31,295 18,831
---------------------------------------------------------------------
NET INCOME (LOSS).......................................... $ 99,579 $ 12,122 $ 197,359 $ (222,584)
=====================================================================
NET INCOME (LOSS) PER COMMON SHARE......................... $ 0.00 $ (0.00) $ 0.01 $ (.01)
=====================================================================
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING.............................................. 28,521,740 26,978,311 28,521,740 26,978,311
=====================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
SIMTEK CORPORATION
STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
-------------------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................................ $ 197,359 $ (222,584)
Adjustments to reconcile net income (loss) to net cash from
operating activities:
Depreciation and amortization.............................. 60,013 77,760
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable.................................... (210,639) (266,319)
Inventory.............................................. (201,875) 13,490
Prepaid expenses and other ............................ 6,701 (14,575)
Increase (decrease) in:
Accounts payable....................................... 268,074 37,980
Accrued expenses....................................... 65,785 41,959
------------------------------
Net cash provided by (used in) operating activities........... 185,418 (332,289)
-------------------------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of equipment and furniture.............................. (8,032) (244)
-------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of stock Options........................................ 16,345 --
Proceeds from research and development arrangement............... -- 378,551
------------------------------
Net cash provided by financing activities..................... 16,345 378,551
------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS........................................................ 193,731 46,018
------------------------------
CASH AND CASH EQUIVALENTS, beginning of period........................ 964,456 311,872
------------------------------
CASH AND CASH EQUIVALENTS, end of period.............................. $ 1,158,187 $ 357,890
==============================
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.
-6-
<PAGE>
SIMTEK CORPORATION
Item 2: Management's Discussion and Analysis of Financial Condition and Results
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of Operations
-------------
RESULTS OF OPERATIONS:
Simtek Corporation ("Simtek" or the "Company") recorded net product sales
of $1,536,243 for the second quarter of 1997 and $3,301,761 for the six months
ended June 30, 1997 up from the $1,158,624 recorded for the second quarter 1996
and the $1,969,718 for the six months ended 1996. The product sales were from
the Company's 4 kilobit, 16 kilobit, 64 kilobit and 256 kilobit nvSRAM product
families. These increases were due to increased customer acceptance of nvSRAM
products from various markets including telecommunications, industrial control,
military and office automation. Two distributors and one direct customer of the
Company's nvSRAM products account for more than 60% of the Company's net sales
for the second quarter 1997.
In the second quarter 1997, the Company purchased commercial 64 kilobit and
256 kilobit nvSRAM finished units based on 0.8 micron technology from Zentrum
Mikroelektronik Dresden GmbH ("ZMD"), sales from these products accounted for
approximately 58% of the Company's revenue for the second quarter 1997. The
balance of the Company's revenue for the second quarter 1997, was primarily from
the sales of 64 kilobit 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").
In the second quarter 1997, the Company increased its gross margins as a
percent of revenue from approximately 38% for the second quarter 1996 to
approximately 46% for the second quarter 1997. The Company also saw an increase
in its gross margins as a percent of revenue from approximately 36% for the six
months ended June 30, 1996 to approximately 42% for the six months ended June
30, 1997. These increases in gross margin are due to the Company shipping 64
kilobit commercial product based on 0.8 micron technology as compared to
shipping 64 kilobit commercial product based on 1.2 micron technology in the
same periods in 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 a dollar increase
for the second quarter 1997 as compared to the second quarter 1996, the expenses
as a percent of revenue remained at approximately 39% for the quarters. These
expenses also saw a dollar increase for the six months ended June 30, 1997 as
compared to the six months ended June 30, 1996, however, the expenses as a
percent of revenue were approximately 37% for the six months ended June 30, 1997
as compared to 48% for the six months ended June 30, 1996. The dollar increase
was due primarily to increased advertising, printing, sales commissions and
basic overhead.
The Company recorded a net income of $99,579 in the second quarter of 1997
and a net income of $197,359 for the six months ended June 30, 1997 as compared
to a net income of $12,122 for the second quarter of 1996 and a net loss of
$222,584 for the six months ended June 30, 1996. This was because of increased
product sales and increased gross margins.
The change in cash flows from operating activities was primarily a result
of the change in net income (loss).
FUTURE RESULTS OF OPERATIONS
The Company's ability to remain profitable will depend primarily on its
ability to continue reducing manufacturing costs and to increase net product
sales by increasing the availability of existing products and by the
introduction of new products. In the second quarter 1997, the Company began
shipping qualified 256 kilobit nvSRAM products based upon 0.8 micron technology.
The Company anticipates shipping production volumes of this product in the
fourth quarter 1997. The Company is currently working with ZMD to decide which
derivative nvSRAM product to develop next.
-7-
<PAGE>
SIMTEK CORPORATION
As of June 30, 1997, the Company's backlog of unshipped customer orders
expected to be filled within the next six months was approximately $1,250,000.
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 third 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.
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
Exhibit 11.1 - Computation of per share earnings
Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K
Form 8-K filed May 22, 1997 announcing "Simtek Announces First
Quarter 1997 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)
August 11, 1997 By /s/ RICHARD L. PETRITZ
-----------------------------------------
RICHARD L. PETRITZ
Chief Executive Officer and
Chief Financial Officer (acting)
August 11, 1997 By /s/ DOUGLAS MITCHELL
------------------------------------------
DOUGLAS MITCHELL
Chief Operating Officer and Executive Vice
President
-10-
SIMTEK CORPORATION
Exhibit 11.1
<TABLE>
<CAPTION>
Computation of Per Share Earnings
SHARES WEIGHTED AVG
BALANCE DAYS FROM SHARE SHARES OF
DATE ISSUED INCREASE OUTSTANDING 1/1/97 DAYS COMMON STOCK
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jan 1, 1997 -- 28,506,685 155 4,418,536,175
June 5, 1997 50,000 28,556,685 1 28,556,685
June 6, 1997 45,000 28,601,685 13 371,821,905
June 19, 1997 25,000 28,626,685 12 343,520,220
Balance 6/30/97 28,626,685 181 5,162,434,985 28,521,740
============================================================================
</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 JUNE 30, 1997 AND IS QUALIFIED IN
ITS ENTIRETY TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,158,187
<SECURITIES> 0
<RECEIVABLES> 936,526
<ALLOWANCES> (132,509)
<INVENTORY> 529,096
<CURRENT-ASSETS> 2,510,449
<PP&E> 1,663,599
<DEPRECIATION> (1,486,572)
<TOTAL-ASSETS> 2,687,476
<CURRENT-LIABILITIES> 1,625,482
<BONDS> 0
0
0
<COMMON> 286,267
<OTHER-SE> 29,745,873
<TOTAL-LIABILITY-AND-EQUITY> 2,687,476
<SALES> 3,301,761
<TOTAL-REVENUES> 3,301,761
<CGS> 1,668,220
<TOTAL-COSTS> 1,922,568
<OTHER-EXPENSES> 1,213,129
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 794
<INCOME-PRETAX> 197,359
<INCOME-TAX> 0
<INCOME-CONTINUING> 197,359
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 197,359
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
