<PAGE> 1
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
/ /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 0-21484
THE SANTA CRUZ OPERATION, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN THIS CHARTER)
CALIFORNIA 94-2549086
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
400 ENCINAL STREET, SANTA CRUZ, CALIFORNIA 95060
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (408) 425-7222
Indicate by check mark whether the registrant (1) has filed all reports 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 / /
The number of shares outstanding of the registrant's common stock as of
March 31, 1996 was 37,128,912.
<PAGE> 2
Part I. Financial Information
Item 1. Financial Statements
THE SANTA CRUZ OPERATION, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except earnings per share)
- - ------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995 1996 1995
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET REVENUES:
Licenses $46,291 $47,115 $89,466 $89,743
Services 4,444 6,159 9,183 11,513
---------------------------------------------------------------------------------------------------------------------
NET REVENUES 50,735 53,274 98,649 101,256
---------------------------------------------------------------------------------------------------------------------
COST OF REVENUES:
Licenses 7,770 8,106 15,477 16,070
Services 4,374 5,137 8,945 9,966
---------------------------------------------------------------------------------------------------------------------
Total cost of revenues 12,144 13,243 24,422 26,036
---------------------------------------------------------------------------------------------------------------------
GROSS MARGIN 38,591 40,031 74,227 75,220
---------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
Research and development 9,376 8,300 17,321 15,751
Sales and marketing 19,676 20,665 39,398 39,498
General and administrative 6,044 5,168 10,974 9,535
Non-recurring charges -- -- 38,363 14,095
---------------------------------------------------------------------------------------------------------------------
Total operating expenses 35,096 34,133 106,056 78,879
---------------------------------------------------------------------------------------------------------------------
OPERATING EARNINGS (LOSSES) 3,495 5,898 (31,829) (3,659)
OTHER INCOME (EXPENSE):
Interest income (expense), net 480 604 1,109 1,503
Other income (expense) (94) (143) (288) (74)
---------------------------------------------------------------------------------------------------------------------
Profit (loss) before income taxes 3,881 6,359 (31,008) (2,230)
---------------------------------------------------------------------------------------------------------------------
Income taxes 970 1,764 (1,216) 2,503
---------------------------------------------------------------------------------------------------------------------
NET PROFIT (LOSS) $ 2,911 $ 4,595 $(29,792) $ (4,733)
---------------------------------------------------------------------------------------------------------------------
NET PROFIT (LOSS) PER SHARE $ 0.08 $ 0.14 $ (0.85) $ (0.15)
---------------------------------------------------------------------------------------------------------------------
COMMON AND COMMON EQUIVALENTS USED IN
COMPUTING NET PROFIT (LOSS) PER 38,164 33,744 35,077 30,904
SHARE
---------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 3
THE SANTA CRUZ OPERATION, INC.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS MARCH 31, SEPTEMBER 30,
(In thousands, except for share data) 1996 1995
- - ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 29,666 $ 32,074
Short-term investments 19,652 14,816
Receivables, net 40,010 45,009
Deferred tax asset 3,896 3,896
Other current assets 17,533 8,544
---------------------------------------------------------------------------------------------------------
Total current assets 110,757 104,339
---------------------------------------------------------------------------------------------------------
Property and equipment, net 15,508 14,991
Other assets 33,971 12,540
---------------------------------------------------------------------------------------------------------
TOTAL ASSETS $160,236 $131,870
---------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Royalties payable $ 5,971 $ 6,852
Trade accounts payable 9,885 10,207
Income taxes payable 3,334 31
Accrued expenses and other current liabilities 28,615 18,991
Customer deposits and deferred revenues 8,985 6,086
---------------------------------------------------------------------------------------------------------
Total current liabilities 56,790 42,167
---------------------------------------------------------------------------------------------------------
Other long-term liabilities 8,463 7,521
---------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Common stock, net, authorized 100,000,000 shares
Issued and outstanding 37,128,912 and 30,844,003 shares 126,328 83,146
Cumulative translation adjustment (673) (84)
Accumulated deficit (30,672) (880)
---------------------------------------------------------------------------------------------------------
Total shareholders' equity 94,983 82,182
---------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $160,236 $131,870
---------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 4
THE SANTA CRUZ OPERATION, INC.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
- - -----------------------------------------------------------------------------------------------------------------------------
Six Months Ended
March 31,
1996 1995
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(29,792) $ (4,733)
Adjustments to reconcile net loss to net cash
provided by operating activities -
Depreciation and amortization 6,880 4,877
Fixed assets received in lieu of payment -- (460)
Non-recurring charges 38,363 11,177
Changes in assets and liabilities -
Receivables 4,999 (5,598)
Deferred tax assets (3,055) --
Other current assets (6,563) (2,111)
Royalties payable (881) (1,196)
Trade accounts payable (322) 2,267
Income taxes payable 388 (1,697)
Accrued expense and other current liabilities 2,515 740
Customer deposits and deferred revenue 474 949
Other accrued expense and other liabilities 3,289 1,193
Stock option income tax benefit 175 --
----------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 16,470 5,408
----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (3,251) (5,678)
Proceeds from (purchases of) maturing short term investments (4,836) 7,854
Purchase of Visionware -- (13,675)
Changes in other assets (8,919) (3,333)
----------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (17,006) (14,832)
----------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations, term loan and bank line of credit (515) (811)
Net proceeds from sale of common stock 1,328 2,050
Payments on stock repurchases (2,094) (2,889)
Payments on notes receivable from sale of common stock (2) --
----------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities (1,283) (1,650)
----------------------------------------------------------------------------------------------------------------------
Effects of exchange rate changes on cash and cash equivalents (589) 503
----------------------------------------------------------------------------------------------------------------------
Change in cash and cash equivalents (2,408) (10,571)
Cash and cash equivalents at beginning of period 32,074 27,703
----------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 29,666 $ 17,132
----------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income tax payments $ 1,593 $ 2,853
Interest payments $ 153 $ 144
----------------------------------------------------------------------------------------------------------------------
</TABLE>
Supplemental disclosure-In December 1995, the Company issued $43,773,000
of newly issued non-registered common stocks for the acquisition of
certain assets related to the UnixWare business including the core
intellectual property from Novell, Inc.
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
THE SANTA CRUZ OPERATION,INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the opinion of management, the accompanying statements of operations,
balance sheets and statements of cash flows include all material
adjustments necessary for their fair presentation. The interim results
presented are not necessarily indicative of results to be expected for a
full year. Certain reclassifications have been made for consistent
presentation.
2. ACQUISITION
In December 1995, the Company acquired certain assets related to the
UnixWare business including the core intellectual property from Novell. The
consideration consisted of 6,127,500 of newly issued non-registered common
stock. Additionally, cash payments to Novell with a present value of $84
million will be paid periodically by SCO to Novell provided certain unit
volumes of UNIX distribution is achieved. Such payments terminate at the
end of calendar year 2002. The acquisition has been accounted for using the
purchase method of accounting and, therefore, accompanying financial
statements include the UnixWare business since the date of the acquisition.
The Company incurred non-recurring charges including $35,959,000 of
purchased research and development for UnixWare product which have not yet
reached technological feasibility and other charges including severance and
acquisition related costs.
In December 1994, the Company acquired Visionware Limited (Visionware) for
consideration of $14,750,000. The consideration consisted of $13,675,000 in
cash and $1,075,000 (114,342 shares) of newly issued common stock. The
acquisition has been accounted for using the purchase method of accounting
and, therefore, accompanying financial statements include the accounts of
Visionware since the date of acquisition. The Company incurred a write-off
of $11,177,000 of purchased research and development for Visionware
products, which have not yet reached technological feasibility, has been
expensed as non-recurring charges in the Company's consolidated statements
of operations. Other non-recurring charges include redundant facilities,
severance and various other acquisition related charges.
3. NET PROFIT (LOSS) PER SHARE
Net profit (loss) per share is computed based on weighted average number of
common shares outstanding.
4
<PAGE> 6
RESULTS OF OPERATIONS
NET REVENUES
Net revenues for the three months ended March 31, 1996 were $50,735,000 as
compared to $53,274,000 for the same period in fiscal 1995. For the six months
ended March 31, 1996, net revenues decreased 3% to $98,649,000 as compared to
$101,256,000 for the six month period ended March 31, 1995. Net revenues derived
from UnixWare packaged product shipments and SVRX source license revenue
relating to the acquisition of the UNIX business Novell, Inc. (Novell) are
included in the three and six month periods ending March 31, 1996. No one
customer accounted for more than 10% of total net revenues in both the second
quarter and the six months ended March 31, 1996 and 1995.
License revenues decreased to $46,291,000 for the three months ended March 31,
1996 from $47,115,000 for the same period during fiscal 1995, representing a 2%
decrease. For the six months ended March 31, 1996, license revenues were
$89,466,000 as compared to $89,743,000, or relatively flat. License revenue
decrease in the second quarter of fiscal 1996 as compared to fiscal 1995 was
primarily due to decreased unit volume of the Company's core Unix, OpenServer 5,
and Client Integration product offerings. These decreases were partially offset
by increased unit volume of UnixWare packaged product shipments, SVRX source
license, and layered product offerings.
Service revenues, consisting of support, consulting, engineering services,
custom development and training decreased to $4,444,000, or 9% of net revenues
for the second quarter of fiscal 1996 from $6,159,000, or 12% of net revenues
for the same period of fiscal 1995. For the six months ended March 31, 1996, the
service revenues decreased 20% to $9,183,000 from $11,513,000 for the same
period of fiscal 1995. The decreases in service revenues in fiscal 1996 are
mainly due to decreases in support, customer development, and training revenue
streams. The service revenues represented 9% and 11% for fiscal year to date
1996 and 1995, respectively.
International revenues continue to represent a significant portion of total net
revenues. In the second quarter of fiscal 1996, international revenues accounted
for approximately 51% compared to approximately 56% of total net revenues
recorded for the same period in fiscal 1995. For the six months ended March 31,
1996, the international revenues accounted for approximately 51% compared to
approximately 52% for the same period in fiscal 1995.
A substantial portion of the Company's international revenues are denominated in
the U.K. pound sterling and operating results can vary with changes in the U.S.
dollar exchange rate for such currency. The Company's revenues can also be
affected by general economic conditions in the United States, Europe and other
international markets.
COSTS AND EXPENSES
The overall cost of revenues can be affected by mix changes in net revenue
contribution between licenses and services, product families, geographic regions
and channels of distribution, as the costs associated with these revenues may
have substantially different cost characteristics. The Company can also
experience a change in margin as net revenues increase or decrease since
technology costs, service costs and production costs are fixed within certain
volume ranges. The Company's results of operations could be adversely affected
if it lowered its prices significantly. In the event the Company reduced product
prices, the Company's standard terms for selected distributors provide credit
for inventory ordered in the previous 60 days, such credits to be applied
against future purchases. Distributors may not return products for a refund.
Cost of revenues as a percentage of net revenues decreased to 24% for the second
quarter of fiscal 1996 compared to 25% in the second quarter of fiscal 1995. For
the six months ended March 31, 1996, the cost of revenues represented 25% of net
revenues compared to 26% for the same period of fiscal 1995. The overall
improvement in cost of revenues resulted primarily from a decrease in product
costs. Reduced third party royalty payments associated with the purchase of the
UNIX business from Novell and the purchase of TCP/IP technology (which occurred
in the Company's second fiscal quarter) were primary factors in the year to year
decreased license costs. This cost improvement was partially offset by an
overall decrease in service margin contribution.
5
<PAGE> 7
Research and development expenses increased by 13% to $9,376,000 in the second
quarter of fiscal 1996 from $8,300,000 in the comparable quarter of fiscal 1995.
For the six months ended March 31, 1996, research and development expenses
amounted to $17,321,000 or 18% of revenues, representing 10% increase compared
to $15,751,000 or 16% of net revenues for the comparable period of fiscal 1995.
The absolute spending increase in the second fiscal quarter of 1996 compared to
the same quarter of fiscal 1995 was primarily attributable to increased
personnel related costs associated with the purchase of the UNIX business from
Novell and spending associated with the Company's development and release of
client integration product offerings.
Sales and Marketing expenses decreased by 5% to $19,676,000 in the
second quarter of fiscal 1996 from $20,665,000 for the comparable quarter of
the prior year. For the six months ended March 31, 1996, sales and marketing
expenses decreased to $39,398,000 from $39,498,000 for the same period of
fiscal 1995. Sales and marketing expenses represented 40% of net revenues for
the first six months of fiscal 1996 and 39% in fiscal 1995. The quarter to
quarter expense decrease was primarily due to decreased project related
corporate marketing spending.
General and administrative expenses increased by 17% to $6,044,000 for the
second quarter of fiscal 1996 from $5,168,000 for the same period of the prior
year and by 15% to $10,974,000 for the six months ended March 31, 1996 from
$9,535,000 for the comparable fiscal 1995 period. General and administrative
expenses represented 11% and 9% of net revenues in the first six months of
fiscal 1996 and 1995, respectively. The increase in general and administrative
expenses was primarily attributable to increased amortization and personnel
expenses associated with the Company's acquisition of the UNIX business from
Novell as well as increased legal expenses associated with litigation.
Non-recurring charges of $38,363,000 were incurred in the first quarter of
fiscal 1996 for costs associated with the Company's acquisition of the UNIX
business from Novell. Of the non-recurring charges, $35,958,000 related to
purchased research and development for products that had not yet reached
technological feasibility. The remaining $2,405,000 primarily related to payroll
and severance related charges associated with the acquisition.
Other net income consists of net interest income, foreign exchange gain (loss)
and other miscellaneous income (expense) items. For the second quarter of fiscal
1996, other net income was $386,000 compared to $461,000 for the same quarter of
fiscal 1995. For the six months ended March 31, 1996, other net income was
$821,000 compared to $1,429,000 for the comparable fiscal 1995 period. The
decrease in other income in the first and second quarter of fiscal 1996 was due
primarily to a decrease of interest income due to reduced cash and short-term
investment balances In addition, the Company's U.K. subsidiary recognized a
foreign exchange loss due to unfavorable rate changes on settlement of U.S.
dollar based transactions during the fiscal 1996.
The provision for income taxes decreased to $970,000 for the second quarter of
fiscal 1996 from $1,764,000 for the second quarter of fiscal 1995 and to a
benefit of $1,216,000 for the six months ended March 31, 1996 from a provision
of $2,503,000 for the corresponding fiscal 1995 period. The decreased provision
for income taxes resulted primarily from reduced operating earnings offset by
one-time tax benefits of approximately $3,055,000 and $830,000 recorded in the
first quarters of fiscal 1996 and 1995, respectively, associated with
non-recurring charges relating to the UnixWare product acquisition in 1996 and
the Visionware acquisition in 1995.
Net profit for the second quarter of fiscal 1996 was $2,911,000 representing a
37% decrease compared to $4,595,000 for 1995. For the six months ended March 31,
1996, net loss was $29,792,000 compared to $4,733,000 for the same period of the
prior year. Excluding non-recurring charges of $38,363,000 ($35,308,000 net of
tax), net profit for the first six months of fiscal 1996 would have decreased
35% to $5,516,000 from $8,532,000 (excluding the after-tax impact of
non-recurring charges) for the same period of the prior year. The second quarter
net profit decrease was mainly attributable to increased spending and
amortization expense associated with the purchase of UNIX business from Novell
as well as decreased revenue resulting in reduced gross margin from the
Company's core Unix, OpenServer 5, and Client Integration product offerings.
6
<PAGE> 8
The Company's future operating results may be affected by various uncertain
trends and factors which are beyond the Company's control. These include adverse
changes in general economic conditions and rapid or unexpected changes in the
technologies affecting UNIX Operating Systems. The industry has become
increasingly competitive and, accordingly, the Company's results may also be
adversely affected by the actions of existing or future competitors, including
the development of new technologies, the introduction of new products and the
reduction of prices by such competitors to gain or retain market share. The
Company's results of operations could be adversely affected if it were required
to lower its prices significantly.
The Company participates in a highly dynamic industry and future results could
be subject to significant volatility, particularly on a quarterly basis. The
Company's revenues and operating results may be unpredictable due to the
Company's shipment patterns. The Company operates with little backlog of orders
because its products are generally shipped as orders are received. In general, a
substantial portion of the Company's revenues has been booked and shipped in the
third month of the quarter, with a concentration of these revenues in the latter
half of that third month. In addition, the timing of closing of large license
contracts and the release of new products and product upgrades increase the risk
of quarter-to-quarter fluctuations and the uncertainty of quarterly operating
results. The Company's staffing and operating expense levels are based on an
operating plan and are relatively fixed throughout the quarter. As a result, if
revenues are not realized in the quarter as expected, the Company's expected
operating results could be adversely affected, and such effect could be
substantial and could result in an operating loss.
The Company continually evaluates potential candidates for acquisitions. Such
candidates are selected based on products or markets which are complimentary to
those of the Company's. The Company's operations and financial results could be
significantly affected by such an acquisition.
The Company's operations and financial results could be significantly affected
by international factors such as changes in foreign currency exchange rates. The
Company's operating strategy and pricing take into account changes in exchange
rates over time. However, the Company's results of operations may be
significantly affected in the short term by fluctuations in foreign currency
exchange rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and short-term investments totaled $49,318,000 at March 31,
1996, representing 31% of total assets. The six month increase in cash and
short-term investments of $2,428,000 was primarily attributable to a decrease in
receivables partially offset by technology purchases and purchases of property
and equipment. At March 31, 1996, the Company had available lines of credit of
approximately $15,000,000 under which the Company had no outstanding borrowings.
The Company believes that its existing cash and short-term investments, funds
generated from operations and available borrowing capabilities will be
sufficient to meet its operating requirements through at least fiscal 1996.
7
<PAGE> 9
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In December 1995, an action was filed in the Superior Court of Santa Cruz
County, California by a former employee against the Company and one former
employee alleging employment discrimination, wrongful termination and related
claims. The Company does not believe any of these lawsuits are meritorious or
that they will either individually or in the aggregate have a material adverse
impact on the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Santa Cruz Operation, Inc. held an annual meeting of shareholders
on February 20, 1996. The following matters were approved by the
shareholders by the votes indicated:
<TABLE>
<CAPTION>
NUMBER OF SHARES
MATTER FOR WITHHELD
------ ---------------- --------
<S> <C> <C>
ELECTION OF DIRECTORS:
Jean-Francois Heitz 34,547,793 582,072
Ronald Lachman 34,457,555 672,310
Robert M. McClure 34,460,204 669,661
Douglas L. Michels 34,399,231 730,634
Alok Mohan 34,479,123 650,742
R. Duff Thompson 34,429,750 700,115
Enzo Torresi 34,438,339 691,526
Gilbert Williamson 34,532,378 597,487
</TABLE>
<TABLE>
<CAPTION>
OTHER MATTERS: FOR AGAINST ABSTAIN NO VOTE
-------------- --- ------- ------- -------
<S> <C> <C> <C> <C>
Amendment of the Company's 33,534,139 593,249 77,325 925,152
Bylaws to increase the range of
the allowable number of directors.
Amendment of the Company's 1994 24,617,251 1,634,858 158,562 8719,194
Incentive Stock Option Plan to
increase the Plan share reserve by
2,000,000 shares.
Amendment of the Company's 1993 26,876,311 661,684 172,270 7,419,600
Director Option Plan to increase the
Plan share reserve by 150,000 shares.
Amendment of the Company's 1993 27,175,865 387,298 147,102 7,419,600
Employee Stock Purchase Plan to
increase the Plan share reserve by
500,000 shares.
Ratification of KPMG Peat Marwick, 34,459,592 635,069 35,204 -0-
LLP as independent certified public
accountants of the Company.
</TABLE>
8
<PAGE> 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11. Computation of Earnings (Loss) Per Share is on page 10.
(b) Reports on Form 8-K
The registrant filed a Report on Form 8-K on December 13, 1995, reporting an
event under Item 2, and furnishing exhibits under Item 7 (c). The date of such
report was December 13, 1995.
The registrant filed a Report on Form 8-K/A-1 on or about February 16, 1996,
reporting an event under Item 2, providing pro forma financial information in
accordance with Items 7 (b). The date of such report was February 13, 1996.
ITEMS 2, 3 AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED.
9
<PAGE> 11
THE SANTA CRUZ OPERATION, INC. EXHIBIT 11
<TABLE>
<CAPTION>
COMPUTATION OF NET PROFIT (LOSS) PER SHARE
(In thousands, except earnings (loss) per share)
- - -------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
March 31, March 31,
1996 1995 1996 1995
- - -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Weighted average number of common shares outstanding 37,186 31,053 35,077 30,904
Common equivalent shares from outstanding stock options (1) 978 2,691 -- --
- - -------------------------------------------------------------------------------------------------------------------------------
Average common and common equivalent shares outstanding 38,164 33,744 35,077 30,904
- - -------------------------------------------------------------------------------------------------------------------------------
Net profit (loss) $ 2,911 $ 4,595 $(29,792) $(4,733)
- - -------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share (2) $ 0.08 $ 0.14 $ (0.85) $ (0.15)
- - -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Common equivalent shares from outstanding stock options are not included in
six months ended March 31, 1996 calculations as they are antidilutive.
(2) Fully diluted earnings per share have not been presented because the
effects are not material.
10
<PAGE> 12
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.
The Santa Cruz Operation, Inc.
/s/ Alok Mohan
Date: May 13, 1996 By: ___________________________________
Alok Mohan
President
and Chief Executive Officer
11
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 29,666
<SECURITIES> 19,652
<RECEIVABLES> 41,345
<ALLOWANCES> 1,335
<INVENTORY> 2,208
<CURRENT-ASSETS> 110,757
<PP&E> 46,463
<DEPRECIATION> 30,955
<TOTAL-ASSETS> 160,236
<CURRENT-LIABILITIES> 56,790
<BONDS> 0
0
0
<COMMON> 126,328
<OTHER-SE> 31,345
<TOTAL-LIABILITY-AND-EQUITY> 160,236
<SALES> 89,466
<TOTAL-REVENUES> 98,649
<CGS> 15,477
<TOTAL-COSTS> 24,422
<OTHER-EXPENSES> 106,056
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 821
<INCOME-PRETAX> 31,008
<INCOME-TAX> 1,216
<INCOME-CONTINUING> 29,792
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,792
<EPS-PRIMARY> .85
<EPS-DILUTED> .85
</TABLE>
