<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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 0-21366
TRICORD SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 41-1590621
------------------------------- -----------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2800 NORTHWEST BOULEVARD, PLYMOUTH, MINNESOTA 55441
--------------------------------------------- ------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(612) 557-9005
----------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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
--- ---
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.
OUTSTANDING AT
CLASS MARCH 31, 1997
----- --------------
Common Stock,
$.01 par value 13,407,130
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<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
TRICORD SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
----------------------------
(in thousands, except per share data) 1997 1996
---------- ---------
Revenues $ 4,873 18,450
Cost of goods sold 4,916 12,608
---------- ---------
Gross margin (43) 5,842
---------- ---------
Operating expenses:
Research and development 1,783 1,974
Sales and marketing 2,394 4,890
General and administrative 720 999
---------- ---------
4,897 7,863
---------- ---------
Operating loss (4,940) (2,021)
---------- ---------
Other income (expense):
Interest income 55 128
Interest expense - -
Other, net (264) (30)
---------- ---------
(209) 98
---------- ---------
Net loss $ (5,149) (1,923)
---------- ---------
---------- ---------
Net loss per share $ (0.38) (0.14)
---------- ---------
---------- ---------
Average common shares outstanding 13,407 13,275
---------- ---------
---------- ---------
See accompanying notes to consolidated financial statements.
1
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TRICORD SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, December 31,
(in thousands, except per share data) 1997 1996
----------- -----------
(unaudited)
Current assets:
Cash and cash equivalents $ 4,168 5,711
Accounts receivable, net 1,781 4,636
Inventories 4,659 4,984
Other current assets 478 572
----------- -----------
Total current assets 11,086 15,903
Equipment and improvements, net 4,258 5,717
Other assets 258 318
----------- -----------
Total Assets $ 15,602 21,938
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,422 2,897
Accrued payroll, benefits and related taxes 799 1,275
Deferred revenue 1,053 1,045
Other accrued expenses 1,810 2,546
----------- -----------
Total current liabilities 6,084 7,763
Stockholders' equity:
Common stock, $.01 par value; 27,000 shares
authorized, 13,407 shares issued and
outstanding 134 134
Additional paid-in capital 77,538 77,522
Cumulative translation adjustments 220 (256)
Accumulated deficit (68,374) (63,225)
----------- -----------
Total stockholders' equity 9,518 14,175
----------- -----------
Total Liabilities and Stockholders' Equity $ 15,602 21,938
----------- -----------
----------- -----------
See accompanying notes to consolidated financial statements.
2
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TRICORD SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended March 31,
----------------------------
(In thousands) 1997 1996
----------- -----------
Cash flows from operating activities:
Net loss $ (5,149) (1,923)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,279 1,182
Loss on disposal of equipment 247 -
Provision for losses on accounts receivable 75 60
Provision for losses on inventories 416 83
Other 330 (1)
Changes in operating assets and liabilities:
Accounts receivable 2,780 (983)
Inventories (91) 493
Other current assets 94 (335)
Accounts payable (475) 41
Accrued payroll, benefits and related taxes (476) 111
Deferred revenues and other accrued expenses (728) 18
----------- -----------
Net cash used in operating activities (1,698) (1,254)
----------- -----------
Cash flows from investing activities:
Purchase of short-term investments - (1,000)
Proceeds from maturities of short-term
investments - 1,000
Capital expenditures (381) (748)
Change in other assets 60 (110)
----------- -----------
Net cash used in investing activities (321) (858)
----------- -----------
Cash flows from financing activities:
Stock option transactions - 3
----------- -----------
Net cash provided by financing activities - 3
----------- -----------
Effect of exchange rate changes on cash 476 311
----------- -----------
Net decrease in cash and cash equivalents (1,543) (1,798)
Cash and cash equivalents at beginning of period 5,711 11,456
----------- -----------
Cash and cash equivalents at end of period $ 4,168 9,658
----------- -----------
----------- -----------
See accompanying notes to consolidated financial statements.
3
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TRICORD SYSTEMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated statements of operations, balance
sheet and statements of cash flows reflect all adjustments of a normal
recurring nature, which are, in the opinion of management, necessary for a
fair statement of the consolidated financial position at March 31, 1997, and
of consolidated results of operations and cash flows for the interim periods
ended March 31, 1997 and 1996. The unaudited consolidated financial
statements should be read in conjunction with Tricord Systems Inc.'s (the
"Company's") audited consolidated financial statements for the year ended
December 31, 1996, which were incorporated by reference in its 1996 Form 10-K
Annual Report. The year-end balance sheet data included herein is derived
from audited financial statements, but does not include all disclosures
required by generally accepted accounting principles. The results of
operations for the interim period ended March 31, 1997 are not necessarily
indicative of the results to be expected for the full year or any future
quarters.
2. BALANCE SHEET INFORMATION
March 31, 1997 December 31, 1996
-------------- -----------------
(unaudited)
Accounts receivable, net:
Accounts receivable $ 4,595 7,480
Allowance for doubtful accounts (2,814) (2,844)
-------- ------
$ 1,781 4,636
-------- ------
-------- ------
Inventories:
Raw materials $ 3,080 3,658
Work-in-process 3,791 4,696
Finished goods 2,525 3,194
Evaluation units 81 11
Spare parts 2,574 755
Inventory reserves (7,392) (7,330)
-------- ------
$ 4,659 4,984
-------- ------
-------- ------
3. CHANGE IN BUSINESS FOCUS
In February 1997, the Company announced that its effort to find strategic
alternatives, including the possibility of finding a strategic partner, to
strengthen the Company's
4
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probability of success in the server market was not successful. The Company
also announced that it would not bring its next generation server to market
because the costs associated with bringing future server products through
final development to market exceeded the available resources of the Company.
Instead, the Company will focus its resources on developing and marketing
distributed data access and management products for the Windows NT
environment that will incorporate the Company's distributed file system
software technology and related I/O ("input/output") technology.
Specialization in distributed data access and management products represents
a natural evolution for the Company and combines the Company's historical I/O
technology and related expertise with the distributed file system technology
that the Company has been developing since its acquisition of such additional
technology in 1996. This evolution in the Company's strategy necessitated a
reduction in the Company's workforce, affecting approximately 90 employees.
The Company intends to manufacture and sell its Pentium-based enterprise
server product line through 1997, and to honor its warranty, service and
support agreements. The Company does not expect any significant charges for
the remainder of 1997 as a result of this action.
The Company does not anticipate any significant revenues from the development
of products related to the distributed data access and management products in
1997.
Because of the Company's announcement in February 1997 that it was
discontinuing development of its next generation enterprise server and would
sell its current line of enterprise servers only through 1997, the Company is
currently evaluating its cash requirements. If the Company's operations
progress as currently anticipated, of which there can be no assurance, the
Company believes that its existing cash and cash equivalents, together with
funds generated from the sale of its current line of enterprise servers, will
be sufficient to fund its operations for the remainder of 1997. The Company
expects to seek additional capital through a number of different sources,
including sales of assets and technology and OEM or other strategic
investments or alliances.
4. MAJOR CUSTOMERS
Memorex Telex Corporation ("Memorex Telex") accounted for 6.4% of the
Company's revenues for the first quarter of 1997 compared to 27.8% in the
first quarter of 1996. First quarter 1997 Memorex Telex revenues were
primarily from European foreign subsidiaries due to the fourth quarter 1996
Chapter 11 bankruptcy filing of the Memorex Telex domestic operations. There
were no revenues from Toshiba Corporation in the first quarter of 1997
compared to 21.7% of the Company's revenues for the first quarter of 1996.
Sales to Connect Computer Corporation, a reseller, were 3.1% of revenues for
the first quarter of 1997 compared to 11.5% for the first quarter of 1996.
5. LEGAL PROCEEDING - MEMOREX TELEX CORPORATION CHAPTER 11 BANKRUPTCY
In May 1997 the Company received a notice that a complaint had been filed
against the Company in the U.S. Bankruptcy Court in Delaware regarding
certain payments made to the Company by Memorex Telex Corporation ("Memorex
Telex") within 90 days prior to the October 15, 1996 Chapter 11 bankruptcy
filing by Memorex Telex. The complaint
5
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alleges that these payments are avoidable transfers under the Bankruptcy code
and seeks return of approximately $1,300,000 from the Company, together with
interest and attorney's fees and expenses. The Company believes that certain
defenses are available to it with respect to all or some of these amounts,
and has instructed its counsel to defend this action vigorously. If the
Company is required to return all or some of these payments, depending on the
amount and the timing, any such repayments could have a material adverse
effect on the Company's future operations, cash flows and financial
condition. Given the early stage of this action, no provision has been made
for this matter as of March 31, 1997.
6. REVOLVING CREDIT FACILITY
As of March 31, 1997, the Company was in default of the covenant under its
revolving credit facility that required the Company to maintain not less than
$10,000,000 of tangible net worth. As of March 31, 1997, the Company has no
borrowings under the revolving credit facility and has had no borrowings
under the revolving credit facility in 1997 and 1996. The revolving credit
facility is based on eligible accounts receivable balances, and, based on the
change in business focus announced by the Company in February 1997, is not
estimated to be available to the Company at any time during the remainder of
1997.
7. NEW ACCOUNTING STANDARD
The Company plans to adopt the requirements of Statement of Financial
Accounting Standards No. 128, "Earnings Per Share", in the fourth quarter of
1997. The Company does not believe that the adoption of this new accounting
standard will have a significant impact on its financial statements.
6
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ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
GENERAL
The Company historically engaged in the business of designing, manufacturing,
marketing and supporting high-performance enterprise servers for use in
mission critical applications, principally running on Microsoft Windows NT
and Novell NetWare. The Company's enterprise servers are characterized by an
open-system design, emphasizing system management, high availability, high
performance and scalability.
In February 1997, the Company announced that its effort to explore strategic
alternatives, including the possibility of finding a strategic partner, to
strengthen the Company's probability of success in the server market was not
successful. The Company also announced that it would therefore not bring its
next generation server to market because the costs associated with bringing
future server products through final development to market exceeded the
available resources of the Company. Instead, the Company is focusing its
resources on developing and marketing distributed data access and management
products for the Windows NT environment that will incorporate the Company's
distributed file system software technology and related I/O ("input/output")
technology. I/O technology is a core competency of the Company and was one
of the key differentiators of its enterprise server product line.
Accordingly, specialization in distributed data access and management
products represents a natural evolution for the Company and combines the
Company's expertise in I/O technology with the distributed file system
technology that the Company has been developing since the Company acquired
such technology in August 1996. This evolution in the Company's strategy
necessitated a reduction in the Company's workforce in February 1997,
affecting approximately 90 employees. The Company intends to manufacture and
sell its Pentium-based enterprise server product line through 1997, and will
honor its warranty, service and support agreements. The Company does not
expect any significant charges for the remainder of 1997 as a result of this
action.
In addition to the factors described below, the Company's operating results
could materially differ from those anticipated by the Company based upon the
following factors: the continued growth and acceptance of the Windows NT
operating system and the growth in demand for attached storage; the Company's
ability to develop, test and release its new products for this market on a
timely basis; the ability of the Company to anticipate changes in technology
and industry standards on a timely basis; the Company's ability to generate
adequate cash to fund operations, which in turn will depend on its ability to
sell a sufficient amount of its remaining enterprise server inventory and
control operating expenses; the Company's ability to successfully establish
one or more OEM relationships in order for the Company to introduce and
market its distributed data access and management products; and competition
from other companies in the Windows NT storage products market.
7
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RESULTS OF OPERATIONS
The following table sets forth the percentage increase (decrease) and the
percentage of revenues represented by certain line items in the Company's
unaudited Consolidated Statements of Operations for the periods indicated:
Percentage Percentage of Revenues
Increase (Decrease) ----------------------
1996 to 1997 Three Months
- ------------------- Ended March 31
Three ----------------------
Months 1997 1996
-------- ------ ------
(74)% Revenues. . . . . . . . . . . . . 100% 100%
(61) Cost of goods sold. . . . . . . . 101 68
------- ------ ------
(101) Gross margin. . . . . . . . . . . (1) 32
------- ------ ------
Operating expenses:
(10) Research and development. . . . 37 11
(51) Sales and marketing . . . . . . 49 27
(28) General and administrative. . . 15 5
------- ------ ------
(38) Total operating expenses. . . 101 43
------- ------ ------
(144) Operating loss. . . . . . . . . (102) (11)
313 Other income (expense), net.. . . (4) 1
------- ------ ------
(168)% Net loss. . . . . . . . . . . . . (106)% (10)%
------- ------ ------
------- ------ ------
REVENUES
Revenues for the first quarter ended March 31, 1997 were $4,873,000 compared
to $18,450,000 for the first quarter ended March 31, 1996. The decrease in
product revenues for the first quarter of 1997 compared to the first quarter
of 1996 is primarily due to the Company's announcement, as discussed above,
that it would not bring its next generation server to market; a $9,200,000
reduction in the ES Series product line, primarily due to increased
competition in the enterprise server market; a $2,400,000 reduction in
associated add-on products such as disk drives, memory and expansion
products; and a $2,000,000 reduction in the discontinued DS and Model Series
product lines. The decrease in revenues for the first quarter of 1997
compared to the first quarter of 1996 occurred across all distribution
channels: a reduction of approximately $4,100,000 in the reseller channel and
a $9,500,000 reduction in the OEM channel. Memorex Telex Corporation
("Memorex Telex") accounted for 6.4% of the Company's revenues for the first
quarter of 1997 compared to 27.8% in the first quarter of 1996. First
quarter 1997 Memorex Telex revenues were primarily from European foreign
subsidiaries due to the fourth quarter 1996 Chapter 11 bankruptcy filing of
the Memorex Telex domestic operations. There were no revenues from Toshiba
Corporation ("Toshiba") in the first quarter of 1997 compared to 21.7% of the
Company's revenues for the first quarter of 1996. Sales to Connect Computer
Corporation, a reseller, were
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3.1% of revenues for the first quarter of 1997 compared to 11.5% for the
first quarter of 1996.
The Company currently anticipates that revenues will be significantly less in
1997 compared to the corresponding 1996 periods as the Company focuses its
resources on developing its distributed data access and management products
and enterprise server sales are basically limited to the Company's remaining
inventory. The Company intends to manufacture its enterprise server product
line through 1997 as long as there is sufficient customer demand and
materials are available. In addition, the Company will sell spares and
expansion products as long as materials are available. The Company does not
anticipate any significant revenues in 1997 from the sale or license of its
distributed data access and management products, which have yet to be fully
developed. Actual 1997 revenues could materially differ from those expressed
in the foregoing forward-looking statements, depending on a number of
factors, including whether anticipated demand in 1997 for the Company's
enterprise server products differs from the Company's expectations and the
ability of the Company to purchase components to satisfy customer demand.
GROSS MARGIN
Gross margin, as a percent of revenues, decreased to (1%) in the first
quarter of 1997 compared to 32% in the first quarter of 1996. The decrease
in gross margin for the first quarter of 1997 compared to 1996 was due
primarily to a significant decrease in the Company's sales volume, which
lowered the amount over which costs could be allocated.
Production planning for 1997 has been set at levels which the Company
believes it can attain and recover remaining assets. The Company currently
anticipates that gross margin will continue to be significantly less in 1997
compared to the corresponding 1996 periods, both in dollars and as a percent
of revenue, because of the significant decrease in revenues in 1997 as
discussed above. Actual 1997 gross margin results could materially differ
from those expressed in the foregoing forward-looking statement, depending on
a number of factors, including the achievement of the Company's 1997
anticipated revenue level and the ability of the Company to purchase quality
components in order to satisfy customer demand.
RESEARCH AND DEVELOPMENT
Expenses for research and development consist primarily of compensation and
related benefit costs, project expenses and depreciation on capital equipment
used in the research and development process. Research and development
expenses decreased 10% to $1,783,000 for the first quarter of 1997 from
$1,974,000 for the first quarter of 1996, primarily due to a decrease in
salary and benefit costs associated with fewer team members, although this
was offset somewhat by salary costs incurred in the first quarter of 1997 in
connection with the workforce reduction.
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The Company currently anticipates that research and development costs will be
a key expense during 1997 as the Company focuses on the development of
distributed data access and management products. The Company does not,
however, anticipate that research and development costs in 1997 will reach
the levels of the last several years. Actual 1997 research and development
expenses could materially differ from those expressed in the foregoing
forward-looking statements, depending on a number of factors, including the
ability of the Company to achieve its business plan and obtain and commit the
required resources to research and development and the ability to hire and
train quality research and development team members as well as retain current
research and development team members.
SALES AND MARKETING
Sales and marketing expenses include compensation and benefits, sales
commissions, travel, trade shows, marketing materials and programs and
facility costs associated with worldwide sales offices. Sales and marketing
expenses decreased 51% to $2,394,000 for the first quarter of 1997 from
$4,890,000 for the first quarter of 1996, primarily due to the reduction of
commissions related to reduced revenues, lower salaries and benefits due to
fewer team members, the closing of certain of the Company's domestic sales
offices and the ongoing closing and consolidation of the Company's foreign
subsidiaries and sales offices. This decrease in the first quarter of 1997
was offset somewhat by salary costs incurred in such quarter in connection
with the workforce reduction.
The Company currently anticipates that sales and marketing expenses will
continue to be significantly less in 1997 compared to the corresponding 1996
periods as the Company focuses on the development of distributed data access
and management products. Actual 1997 sales and marketing expenses could
materially differ from those expressed in the foregoing forward-looking
statement, depending on a number of factors, including the ability of the
Company to complete development and release commercially its distributed data
access and management products in accordance with its currently anticipated
timetable.
GENERAL AND ADMINISTRATIVE
General and administrative expenses decreased 28% to $720,000 for the first
quarter of 1997 from $999,000 for the first quarter of 1996, primarily due to
a decrease in legal and accounting fees.
The Company currently anticipates that general and administrative expenses
will continue to be significantly less in 1997 compared to the corresponding
1996 periods due to the February 1997 workforce reduction and the related
support necessary for fewer team members.
OTHER INCOME (EXPENSE)
Other expense was $209,000 for the first quarter of 1997 compared to other
income of $98,000 for the first quarter of 1996. The increase in other
expense for the first quarter is
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primarily related to the loss on disposal of certain assets of the Company's
equipment due to the redirection of the Company's efforts to supporting
distributed data access and management product development.
LIQUIDITY AND CAPITAL RESOURCES
The aggregate net decrease in cash and cash equivalents during the first
three months of 1997 was $1,543,000, including $1,698,000 of cash used in
operating activities, due to the net loss for the first three months of 1997,
partially offset by depreciation and a reduction of the Company's accounts
receivable. As of March 31, 1997 and December 31, 1996, accounts receivable
were $1,781,000 and $4,636,000, respectively. The average days sales
outstanding ("DSO") at March 31, 1997, excluding Memorex Telex, was 29 days
compared to 32 days at December 31, 1996. As of March 31, 1997 and December
31, 1996, inventories were $4,659,000 and $4,984,000, respectively. The
Company turned inventory on an annualized basis approximately 4.1 times in
the first three months of 1997 compared to approximately 5.4 times in 1996.
Net cash used in investing activities was $321,000 in the first three months
of 1996, primarily due to capital expenditures of $381,000, partially offset
by a decrease in other assets of $60,000. Capital expenditures were
primarily related to capitalization of internally-developed equipment systems
and upgrades to existing systems for demonstration equipment prior to the
Company's announcement of a change in its business focus and for the purchase
of computer equipment. The Company currently plans purchases of capital
equipment of approximately $400,000 during the last nine months of 1997,
primarily for research and development. The Company has no material
commitments for the purchase of capital equipment.
As of March 31, 1997, the Company had approximately $4,168,000 in cash and
cash equivalents. Because of the Company's announcement in February 1997 that
it was discontinuing development of its next generation enterprise server and
would sell its current line of enterprise servers only through 1997, the
Company is continuing to evaluate its cash requirements. The Company's
revolving credit facility is based on eligible accounts receivable balances
and is not estimated to be available to the Company as 1997 progresses. In
addition, the Company is currently in default under, and believes that in the
near term it will continue to be in default under, the covenant under its
revolving credit facility that requires the Company to maintain not less than
$10,000,000 of tangible net worth. If the Company's operations progress as
currently anticipated, of which there can be no assurance, the Company
believes that its existing cash and cash equivalents together with the funds
generated from the continued sale of enterprise servers and related components,
will be sufficient to fund its operations for the remainder of 1997. Actual
cash requirements could materially differ from those expressed in the foregoing
forward-looking statement, depending on a number of factors, including the
ability of the Company to develop, test and release distributed data access
and management products in accordance with its currently anticipated
timetable, the development of the attached-storage market for Windows NT
computing environments in the manner anticipated by the Company, the ability
of the Company to achieve anticipated revenue levels from the
11
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continued sale of enterprise servers and related components through the end
of 1997, and the ability of the Company to maintain its cost structure in
accordance with its operating plan. In addition, if the Company is required
to return all or some of the payments made by Memorex Telex, depending on the
amount and timing, any such repayments could have a material adverse effect
on the Company's future operations, cash flows and financial condition.
The Company expects to seek additional capital through a number of different
sources, including sales of assets and technology and OEM or other strategic
investments or alliances. There can be no assurance, however, that
additional capital will be available on acceptable terms or at all.
12
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In May 1997 the Company received a notice that a complaint had been filed
against the Company in the U.S. Bankruptcy Court in Delaware regarding
certain payments made to the Company by Memorex Telex within 90 days prior to
the October 15, 1996 Chapter 11 bankruptcy filing by Memorex Telex. The
complaint alleges that these payments are avoidable transfers under the
Bankruptcy code and seeks return of approximately $1,300,000 from the
Company, together with interest and attorney's fees and expenses. The Company
believes that certain defenses are available to it with respect to all or
some of these amounts, and has instructed its counsel to defend this action
vigorously. If the Company is required to return all or some of these
payments, depending on the amount and the timing, any repayments could have a
material adverse effect on the Company's future operations, cash flows and
financial condition. Given the early stage of this action, no provision has
been made for this matter as of March 31, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial data schedule
(b) Reports on Form 8-K
The Company filed a Report on Form 8-K on February 12, 1997 under Item 5
of such Report to announce that it will not bring its next generation server
to market and instead will redirect the focus of its resources on developing
its unique distributed file system software technology and related IO
expertise. No financial statements were filed as part of this Report.
13
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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.
TRICORD SYSTEMS, INC.
(REGISTRANT)
By: /s/ Gregory T. Barnum
------------------------
Gregory T. Barnum, Vice President
of Finance & Administration
(Principal Financial Officer)
By: /s/ Jeff A. Stewart
------------------------
Jeff A. Stewart, Corporate Controller
(Principal Accounting Officer)
Date: May 15, 1997
14
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INDEX TO EXHIBITS
Exhibit Page
Number Number
------- ------
27.1 Financial data schedule 16
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 1 AND 2 OF THE COMPANY'S FORM 10-Q FOR THE THREE MONTHS ENDED MARCH 31,
1997, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,168
<SECURITIES> 0
<RECEIVABLES> 4,595
<ALLOWANCES> (2,814)
<INVENTORY> 4,659
<CURRENT-ASSETS> 11,086
<PP&E> 10,912
<DEPRECIATION> (6,654)
<TOTAL-ASSETS> 15,602
<CURRENT-LIABILITIES> 6,084
<BONDS> 0
0
0
<COMMON> 134
<OTHER-SE> 9,384
<TOTAL-LIABILITY-AND-EQUITY> 15,602
<SALES> 4,873
<TOTAL-REVENUES> 4,873
<CGS> 4,916
<TOTAL-COSTS> 4,916
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 75
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,149)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,149)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,149)
<EPS-PRIMARY> (0.38)
<EPS-DILUTED> (0.38)
</TABLE>
