<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarter ended September 27, 1997 Commission file number 000-18404
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TRUEVISION, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 77-0161747
(State of Incorporation) (I.R.S. Employer Identification No.)
2500 WALSH AVENUE, SANTA CLARA, CALIFORNIA 95051
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (408) 562-4200
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 .
------- -------
Number of shares of Common Stock outstanding as of September 27, 1997:
12,797,729
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<PAGE>
INDEX
TRUEVISION, INC.
Page
PART I - FINANCIAL INFORMATION Number
- ------------------------------ ------
Item 1: Consolidated Interim Financial Statements
Consolidated Interim Balance Sheets -
September 27, 1997 and June 28, 1997 2
Consolidated Interim Statements of Operations -
Three months ended September 27, 1997
and September 28, 1996 3
Consolidated Interim Statements of Cash Flows -
Three months ended September 27, 1997
and September 28, 1996 4
Notes to Consolidated Interim Financial Statements 5
Item 2: Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
- ---------------------------
Item 4: Submission of Matters to a Vote of Security Holders 11
Item 6: Exhibits and Reports on Form 8-K 11
SIGNATURES 12
- ----------
1
<PAGE>
PART I - FINANCIAL INFORMATION
TRUEVISION, INC.
CONSOLIDATED INTERIM BALANCE SHEETS
(Unaudited)
Sept. 27, June 28,
1997 1997
- ------------------------------------------------ ----------- ----------
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents $ 1,558 $ 4,549
Accounts receivable, net 4,440 4,630
Inventory (Note 2) 6,136 7,746
Prepaid expenses and other assets 1,005 555
Income taxes receivable 33 73
--------- ---------
Total current assets 13,172 17,553
Property and equipment, net (Note 3) 2,421 2,757
Other assets, net 163 178
--------- ---------
Total assets $ 15,756 $ 20,488
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit $ -- $ 3,738
Accounts payable 2,139 2,475
Accrued employee compensation 1,421 1,492
Accrued restructuring and other costs (Note 5) 948 1,531
Advances on inventory held by
distributors (Note 4) 348 644
Other accrued liabilities 2,373 2,581
Current portion of long-term obligations 81 65
--------- ---------
Total current liabilities 7,310 12,526
Long-term obligations 74 86
--------- ---------
Total liabilities 7,384 12,612
--------- ---------
Stockholders' equity:
Preferred stock -- --
Common stock 53,159 53,015
Accumulated deficit (44,787) (45,139)
--------- ---------
Total stockholders' equity 8,372 7,876
--------- ---------
Total liabilities and stockholders' equity $ 15,756 $ 20,488
--------- ---------
--------- ---------
See accompanying notes to Consolidated Interim Financial Statements.
2
<PAGE>
TRUEVISION, INC.
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
----------------------------
Sept. 27, Sept. 28,
1997 1996
- -------------------------------------------------------- ------------ -------------
(In thousands, except per share data)
<S> <C> <C>
Net sales (Note 4) $ 10,092 $ 10,048
Cost of sales 5,857 7,372
--------- ---------
Gross profit 4,235 2,676
--------- ---------
Operating expenses:
Research and development 1,405 1,743
Selling, general and administrative 2,384 4,290
--------- ---------
Total operating expenses 3,789 6,033
--------- ---------
Income (loss) from operations 446 (3,357)
Interest income 28 3
Interest expense (89) (56)
Other income (expense), net (22) (148)
--------- ---------
Income (loss) before provision for income taxes
and cumulative effect of change in accounting principle 363 (3,558)
Provision for income taxes 11 --
--------- ---------
Income (loss) before cumulative effect of change
in accounting principle 352 (3,558)
Cumulative effect of change in accounting principle (Note 4) -- (4,858)
--------- ---------
Net income (loss) $ 352 $ (8,416)
--------- ---------
--------- ---------
Per common share:
Income (loss) before cumulative effect of change
in accounting principle $ 0.03 $ (0.28)
Cumulative effect of change in accounting principle $ -- $ (0.38)
Net income (loss) $ 0.03 $ (0.66)
Weighted average common shares and equivalents 12,903 12,676
</TABLE>
See accompanying notes to Consolidated Interim Financial Statements.
3
<PAGE>
TRUEVISION, INC.
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
---------------------------
Sept. 27, Sept. 28,
1997 1996
- ------------------------------------------------------------ ------------ ------------
(in thousands)
<S> <C> <C>
OPERATING CASH FLOWS:
Net income (loss) $ 352 $ (8,416)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Cumulative effect of change in accounting principle -- 4,858
Provision for doubtful accounts 75 100
Depreciation and other amortization 388 569
Loss on disposal of fixed assets 14 8
Other -- (26)
Changes in assets and liabilities:
Accounts receivable 115 3,312
Inventory 1,610 (1,997)
Prepaid expenses and other assets (450) 208
Income taxes receivable 40 --
Accounts payable (336) 1,314
Accrued employee compensation (71) 407
Accrued restructuring and other costs (583) --
Advances on inventory held by distributors (296) --
Other accrued liabilities (208) 151
-------- --------
Net cash provided by operating activities 650 488
-------- --------
INVESTING CASH FLOWS:
Acquisitions of property and equipment (51) (132)
Acquisitions of other assets -- (160)
-------- --------
Net cash used in investing activities (51) (292)
-------- --------
FINANCING CASH FLOWS:
Borrowings (payments) on line of credit, net (3,738) 47
Borrowings (payments) on debt obligations, net 4 (135)
Issuance of common stock, net 144 190
-------- --------
Net cash provided by (used in) financing activities (3,590) 102
-------- --------
Net increase (decrease) in cash and cash equivalents (2,991) 298
Cash and cash equivalents, beginning of period 4,549 6,101
-------- --------
Cash and cash equivalents, end of period $ 1,558 $ 6,399
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURE:
Cash paid during the period for:
Interest $ 89 $ 56
Income taxes $ 3 $ 79
Noncash investing and financing activities:
Property and equipment acquired under capital leases $ 27 $ --
</TABLE>
See accompanying notes to Consolidated Interim Financial Statements.
4
<PAGE>
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. Basis of Presentation
The consolidated interim financial statements presented in this Quarterly
Report on Form 10-Q are unaudited. However, in the opinion of management,
all adjustments have been made for a fair presentation of the interim periods
presented. The consolidated interim financial statements should be read in
conjunction with the audited consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 28, 1997.
The results of operations for the three month period ended September 27,
1997 are not necessarily indicative of the results that may be expected for
the fiscal year ending June 27, 1998.
The Company's fiscal calendar and its operating year ends on the Saturday
closest to June 30.
NOTE 2. Inventory
A summary of inventory follows (in thousands):
Sept. 27, June 28,
1997 1997
-------- --------
Purchased parts and subassemblies $ 2,533 $ 2,675
Work-in-progress 1,763 2,039
Finished goods 945 2,031
Finished goods held by distributors 895 1,001
-------- --------
Total $ 6,136 $ 7,746
-------- --------
-------- --------
NOTE 3. Property and Equipment
A summary of property and equipment follows (in thousands):
Sept. 27, June 28,
1997 1997
-------- --------
Computer equipment and machinery $ 9,456 $ 9,535
Furniture and fixtures 775 775
Leasehold improvements 111 111
-------- --------
Subtotal 10,342 10,421
Less: Accumulated depreciation (7,921) (7,664)
-------- --------
Total $ 2,421 $ 2,757
-------- --------
-------- --------
NOTE 4. Accounting Change - Recognition of Distributor Revenue
Revenue from product sales to dealers, OEMs, VARs and end users is
recognized upon shipment. In the quarter ended September 28, 1996, the
Company changed its accounting method for recognizing distributor revenue,
whereby the Company defers recognizing revenue, and does not relieve
inventory on shipments to distributors, until shipment by the distributor.
Previously, the Company recognized revenue, after recording appropriate
reserves for sales returns from distributors and allowances granted to them,
at the time of shipment to the distributor. Distributor agreements allow
certain rights of return and price protection on products held by
distributors. Cash received in advance of recognizing distributor revenue is
recorded as advances on inventory held by distributors. The Company believes
that deferral of distributor sales and related gross margins until the
product is shipped by the distributors results in a more meaningful
measurement of operations and is a
5
<PAGE>
preferable method of accounting for distributor revenue. The cumulative
effect on prior years of changing the accounting method was $4,858,000 or
$0.38 per share. This amount was reflected in the quarter ended September
28, 1996.
NOTE 5. Restructuring and Other Costs
During the quarter ended June 28, 1997, the Company recorded a charge for
restructuring and other costs of $1,680,000. This charge primarily consisted
of costs associated with downsizing facilities and reduction in headcount.
The Company had remaining reserves of $1,531,000 and $948,000 as of June 28,
1997 and September 27, 1997, respectively, relating to this restructuring. A
summary of restructuring activities along with the respective remaining
reserves follows (in thousands):
Reserve Reserve
balance @ balance @
June 28, Sept. 27,
1997 Payments 1997
--------- -------- ---------
Downsizing facilities $ 1,063 $ (198) $ 865
Reduction in headcount 385 (368) 17
Other 83 (17) 66
-------- ------- ------
Total $ 1,531 $ (583) $ 948
-------- ------- ------
-------- ------- ------
NOTE 6. Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128, EARNINGS PER SHARE. This
Statement is effective for financial statements issued for periods ending
after December 15, 1997. This Statement replaces the presentation of primary
EPS with a presentation of "basic" EPS. Basic EPS is calculated by dividing
the income or loss available to common stockholders by the weighted average
number of common shares outstanding for the period, without consideration for
common stock equivalents. "Fully diluted" EPS is replaced by "diluted" EPS
and is computed similarly to fully diluted EPS under the provisions of
Accounting Principles Board Opinion No. 15. Basic EPS and diluted EPS for the
three months ended September 27, 1997 and September 28, 1996, calculated in
accordance with SFAS No. 128, are the same as the per common share amounts
computed using the existing rules.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the Consolidated
Interim Financial Statements and the Notes thereto, and the Annual Report on
Form 10-K for the year ended June 28, 1997. The following discussion contains
forward-looking statements which are subject to certain risks and
uncertainties. Actual results may differ materially from those described
herein, depending on such factors as are described herein, and those
described under "Certain Factors That May Affect the Company's Future Results
of Operations" in the Company's Annual Report on Form 10-K for the year ended
June 28, 1997.
CURRENT QUARTER COMPARED TO PRIOR QUARTER AND PRIOR YEAR QUARTER
RESULTS OF OPERATIONS
NET SALES. Net sales were $10.1 million for the quarter ended September
27, 1997, compared to $10.0 million for the quarter ended September 28, 1996,
and $10.8 million for the quarter ended June 28, 1997. International net
sales represented 30% of net sales for the quarter ended September 27, 1997,
compared to 29% for the quarter ended September 28, 1996, and 34% for the
quarter ended June 28, 1997.
OEM net sales were $2.7 million for the quarter ended September 27, 1997,
compared to $2.0 million for the quarter ended September 28, 1996, and $2.9
million for the quarter ended June 28, 1997. The OEM business for the
quarters ended September 27, 1997 and June 28, 1997 increased from the
quarter ended September 28, 1996 primarily due to the inclusion of sales of
the DVCPRO-based TARGA 2000 RTX product, which the Company began shipping
during the third quarter of fiscal 1997.
Sales to the retail/distribution channel during the quarter ended
September 27, 1997 were $7.4 million, compared to $8.0 million for the
quarter ended September 28, 1996, and $7.9 million for the quarter ended June
28, 1997. Sales to the retail/distribution channel decreased slightly during
the quarter ended September 27, 1997 primarily due to a decline in
international sales because of slower European business and lower sales of
the Bravado 1000 product line, which has been discontinued. This decrease
was partially offset by increased unit sales of the TARGA 2000 RTX product
line made primarily through the Company's national network of Signature VARs.
In September 1997, the Company began shipping its new MADRAS real-time
transcoder. MADRAS allows a desktop digital video authoring system to fully
support all of the most popular analog and digital interfaces. MADRAS
enhances the Company's award-winning TARGA products and their combination
produces an integral building block for state-of-the-art digital broadcast or
post-production systems. Madras sales were approximately $0.4 million for the
quarter ended September 27, 1997.
The volume and timing of recognition of revenue from distributors and
orders received from other direct customers during a quarter are difficult to
forecast. Truevision's non-OEM customers generally have not placed scheduled
orders in advance and, historically, backlog at the beginning of each quarter
represents only a portion of the product sales anticipated in that quarter.
Quarterly net sales and operating results therefore depend on the volume and
timing of bookings received during a quarter and sales made by distributors
during a quarter, which are difficult to forecast. The absence of backlog has
limited the Company's ability to predict appropriate production and inventory
levels, which has had and could have in the future an adverse effect on
operating results. Truevision's results of operations may fluctuate from
quarter to quarter due to these and other factors, such as announcements by
Truevision, its competitors or the manufacturers of platforms with which
Truevision's products are used.
GROSS PROFIT. The Company had a gross profit of $4.2 million, or 42% of
net sales, for the quarter ended September 27, 1997, compared to $2.7
million, or 27% of net sales, for the quarter ended September 28, 1996, and
$2.1 million, or 20% of net sales, for the quarter ended June 28, 1997.
Although net sales for the quarter ended September 27, 1997 were essentially
the same compared to the quarter ended September 28, 1996 and slightly lower
than the quarter ended June 28, 1997, the
7
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gross profit improved substantially as the Company shifted its focus towards
the high-end of the product line which are higher margin products and reduced
manufacturing expense levels from implementation of the Company's
restructuring plan (see "Special Charges - Fiscal 1997" below). The Company's
gross profit for the quarter ended September 28, 1996 was down 8 percentage
points primarily due to inventory valuation adjustments. Additionally, the
Company's gross profit for the quarter ended June 28, 1997 was down 15
percentage points primarily due to inventory valuation adjustments and
charges for the write-off of certain prepaid royalties no longer having
economic value.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
were $1.4 million for the quarter ended September 27, 1997, compared to $1.7
million for the quarter ended September 28, 1996, and $2.0 million for the
quarter ended June 28, 1997. The decrease in the quarter ended September 27,
1997 was primarily due to reduced expense levels from the implementation of
the Company's restructuring plan (see "Special Charges - Fiscal 1997" below).
Additionally, research and development expenses for the quarter ended June
28, 1997 included charges for the write-off of certain license fees no longer
having economic value. In the absence of any unusual circumstances or events,
the Company expects its research and development spending in absolute dollars
to remain relatively constant in fiscal 1998.
The Company believes that continued investment in research and
development is critical to its future growth and competitive position in its
market for broadcast video and color imaging systems and is directly related
to timely development of new and enhanced products. The Company, therefore,
may experience increased research and development spending in future periods.
Because of the inherent uncertainty of development projects, there can be no
assurance that increased research and development efforts will result in
successful product introductions or enable the Company to maintain or
increase sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses were $2.4 million for the quarter ended September 27,
1997, compared to $4.3 million for the quarter ended September 28, 1996, and
$5.9 million for the quarter ended June 28, 1997. The decrease in the quarter
ended September 27, 1997 was primarily due to reduced expense levels from
implementation of the Company's restructuring plan (see "Special Charges
- - Fiscal 1997" below), which also included a reduction in the Company's sales
and marketing promotions in fiscal 1998. Although the Company has reduced
its sales and marketing promotions in fiscal 1998 and believes that it is
sufficient for the current sales level, there can be no assurance that the
current or increased sales and marketing promotions will enable the Company
to maintain its current level of sales. Additionally, selling, general and
administrative expenses for the quarter ended June 28, 1997 included charges
for the write-off of certain other assets and settlement of pending lawsuits
and other legal costs. In the absence of any unusual circumstances or
events, the Company expects its selling, general and administrative spending
in absolute dollars to remain relatively constant in fiscal 1998.
OTHER INCOME (EXPENSE), NET. Other income (expense), net, for the
quarter ended September 28, 1996 is comprised primarily of residual expenses
associated with the RasterOps product line.
SPECIAL CHARGES
SPECIAL CHARGES - FISCAL 1997. During the quarter ended June 28, 1997,
the Company recorded a charge for restructuring and other costs of $1.7
million. This charge primarily consisted of costs associated with downsizing
facilities and reduction in headcount. Also, as a result of the Company's
decision to close its European offices, the restructuring charge included
costs associated with lease terminations and write-off of fixed assets for
the sales offices located in France and the United Kingdom, and the write-off
of the cumulative translation adjustment balance. The downsizing of
facilities decreased facilities expenses by approximately $0.2 million in the
quarter ended September 27, 1997 and is expected to decrease facilities
expenses by approximately $0.6 million in the remainder of fiscal 1998. The
reduction in headcount decreased employee costs by approximately $0.6 million
in the first quarter of fiscal 1998 and is expected to decrease employee
costs by approximately $1.7 million in the remainder of fiscal 1998.
8
<PAGE>
ACCOUNTING CHANGE
In the quarter ended September 28, 1996, the Company changed its
accounting method for recognizing distributor revenue, whereby the Company
defers recognizing revenue, and does not relieve inventory on shipments to
distributors, until shipment by the distributor. Previously, the Company
recognized revenue, after recording appropriate reserves for sales returns
from distributors and allowances granted to them, at the time of shipment to
the distributor. Distributor agreements allow certain rights of return and
price protection on products held by distributors. Cash received in advance
of recognizing distributor revenue is recorded as advances on inventory held
by distributors. The Company believes that deferral of distributor sales and
related gross margins until the product is shipped by the distributors
results in a more meaningful measurement of operations and is a preferable
method of accounting for distributor revenue. The cumulative effect on prior
years of changing the accounting method was $4.9 million, or $0.38 per share.
This amount was reflected in the quarter ended September 28, 1997.
LIQUIDITY AND CAPITAL RESOURCES
At September 27, 1997, the Company had cash and cash equivalents of $1.6
million, a decrease of $2.9 million from the $4.5 million at June 28, 1997.
This decrease includes the repayment of $3.7 million in borrowings under the
line of credit. Working capital increased to $5.9 million at September 27,
1997 from $5.0 million at June 28, 1996, and reflects the Company's improved
operations.
Net cash provided by operating activities was $0.7 million in the quarter
ended September 27, 1997, compared to $0.5 million in the quarter ended
September 28, 1996. In the quarter ended September 27, 1997, the Company
generated cash flow from operations primarily due to net income of $0.3
million, a reduction in inventory of $1.6 million and the non-cash effect
from depreciation and amortization of $0.4 million. These factors were
partially offset by payments of $0.6 million related to the Company's
restructuring plan (see "Special Charges - Fiscal 1997" above), an increase
in prepaid expenses and other assets of $0.5 million, a reduction in accounts
payable of $0.3 million and a decrease in accrued expenses of $0.3 million.
The inventory levels decreased substantially in the quarter primarily due to
the Company's continuing inventory reduction plan. Although the Company
experienced a net loss of $8.4 million in the quarter ended September 28,
1996 and an increase in inventory of $2.0 million, the Company generated cash
flow from operations of $0.5 million. The net loss and increase in inventory
were offset primarily due to the non-cash effect from the charge for the
change in accounting method of $4.9 million, a reduction in accounts
receivable of $3.3 million, an increase in accounts payable of $1.3 million,
the non-cash effect from depreciation and amortization of $0.6 million and an
increase in accrued expenses of $0.6 million.
The Company's products are sold to end users through dealers and other
authorized resellers, (regional, national and international) distributors,
mail order catalogs, OEMs and VARs. Distributor revenue accounted for $3.3
million, or 32% of the Company's net sales for the quarter ended September
27, 1997, compared to $5.8 million, or 57%, for the quarter ended September
28, 1996, and $4.5 million or 42% for the quarter ended June 28, 1997. While
the Company intends to continue its policy of careful inventory and
receivables management, it believes that in the future somewhat greater
levels of inventory and receivables relative to sales may be needed to serve
its distribution channels.
In August 1997, the Company entered into an agreement with a major
supplier to purchase $1.6 million of a certain component during fiscal 1998
and 1999. The component is used in the majority of the Company's products and
is currently available only from this supplier. The supplier is discontinuing
the component and the purchase commitment represents the Company's
anticipated usage requirements for the next two years. The inability to
obtain sufficient quantities of this key component as required, or to develop
an alternative component, could result in delays or reductions in product
shipments to the Company's customers. However, the Company's future
generation products, which are expected to be released within the next two
years, will not require this component.
Net cash used in investing activities was $51 thousand in the quarter
ended September 27, 1997, compared to $0.3 million in the quarter ended
September 28, 1996. At September 27, 1997, the Company had no material
commitments for the purchase of capital equipment.
9
<PAGE>
Net cash used in financing activities was $3.6 million in the quarter
ended September 27, 1997, compared to $0.1 million provided by financing
activities in the quarter ended September 28, 1996. In the first quarter of
fiscal 1998, the Company repaid $3.7 million in borrowings under the line of
credit.
The Company has a one year revolving line of credit agreement allowing
the Company to borrow up to $7 million based upon percentages of eligible
accounts receivable and inventory. The primary financial covenant of the line
of credit is a tangible net worth covenant. As of September 27, 1997, the
Company had no borrowings and $4.0 million available under the line of
credit. As of November 9, 1997, the Company had no borrowings and $3.5
million available under the line of credit.
The Company's cumulative operating losses in the prior years resulted in
the need to address the Company's liquidity position. Truevision's plans
included cost reductions (during the quarter ended June 28, 1997, the Company
undertook actions to reduce costs and expenses and recorded a charge for
restructuring and other costs of $1.7 million which included primarily costs
associated with downsizing facilities and reduction in headcount, see
"Special Charges - Fiscal 1997" above), and the introduction of new products
during fiscal 1998. Management has also developed production, sales and
financing plans that they believe will result in significantly improved
performance in fiscal 1998 including significant reductions in losses and/or
the achievement of profitable operations. Management believes that these
plans, when coupled with available credit facilities as discussed above, will
enable the Company to continue as a going concern at least through June 27,
1998.
The Company believes that success in its industry requires substantial
capital in order to maintain the flexibility to take advantage of
opportunities as they may arise. The Company may, from time to time, as
market and business conditions warrant, invest in or acquire complementary
businesses, products or technologies. The Company may require additional
equity or debt financing to fund such activities. However, there can be no
assurance that the Company will be able to obtain these funds on terms and
conditions acceptable to the Company. In addition, the sale of additional
equity or convertible debt securities could result in additional dilution in
the equity ownership of the Company's stockholders.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders held on October 28, 1997,
pursuant to the Notice of Annual Meeting of Stockholders and Proxy
Statement dated September 24, 1997, the following matters were submitted
to the Company's stockholders. Set forth after each nominee for director
are the number of votes for and the number of votes withheld and for each
other matter presented are the number of votes for, the number of votes
against, the number of abstentions, and the number of broker non-votes,
respectively:
(1) the election of Walter W. Bregman (11,387,471 : 179,623), Louis J.
Doctor, (11,392,212 : 174,882), William H. McAleer (11,379,691 :
187,403), Keith E. Sorenson (11,335,851 : 231,243), and Conrad J.
Wredberg (11,399,051 : 168,043) as directors of the Company for the
ensuing year and until their successors have been duly elected and
qualified; and
(2) the approval of an amendment to the Company's Amended 1988 Incentive
Stock Plan, as amended, to increase the number of shares of Common
Stock authorized for issuance under such plan by 600,000 shares and
to permit participation by non-employee directors under the plan
(8,898,792 : 2,631,450 : 34,852 : 2,000); and
(3) the ratification of the appointment of Price Waterhouse LLP as the
Company's independent accountants for the fiscal year ending June 27,
1998 (11,522,460 : 16,974 : 25,660 : 2,000).
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the quarter ended
September 27, 1997.
11
<PAGE>
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.
Date: November 10, 1997 by: /s/ R. JOHN CURSON
--------------------------------------
R. John Curson
Senior Vice President, Chief Financial
Officer and Secretary
(signing as duly authorized signatory on
behalf of the registrant and in his
capacity as principal financial
officer of the registrant.)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-START> JUN-29-1997
<PERIOD-END> SEP-27-1997
<CASH> 1,558
<SECURITIES> 0
<RECEIVABLES> 4,803
<ALLOWANCES> 363
<INVENTORY> 6,136
<CURRENT-ASSETS> 13,172
<PP&E> 10,342
<DEPRECIATION> 7,921
<TOTAL-ASSETS> 15,756
<CURRENT-LIABILITIES> 7,310
<BONDS> 0
0
0
<COMMON> 53,159
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 15,756
<SALES> 10,092
<TOTAL-REVENUES> 10,120
<CGS> 5,857
<TOTAL-COSTS> 5,857
<OTHER-EXPENSES> 3,900
<LOSS-PROVISION> 75
<INTEREST-EXPENSE> 89
<INCOME-PRETAX> 363
<INCOME-TAX> 11
<INCOME-CONTINUING> 352
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 352
<EPS-PRIMARY> .03
<EPS-DILUTED> 0
</TABLE>
