<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark one)
[X ] Quarterly report pursuant to section 13 or 15(d) of the Securities Act
of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities Act
of 1934
For The Transition Period From __________ To __________
Commission file number: 0-20784
TRIDENT MICROSYSTEMS, INC.
--------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 77-0156584
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer identification No.)
incorporation or organization)
189 North Bernardo Avenue, Mountain View, CA 94043-5216
-------------------------------------------------------
(Address of principal executive offices) (Zip code)
(415) 691-9211
--------------
(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
_____ _____
The number of shares of the registrant's $0.001 par value Common Stock
outstanding at March 31, 1997 was 12,912,859
This document (including exhibits) contains 17 pages.
<PAGE> 2
TRIDENT MICROSYSTEMS, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
PART I: FINANCIAL INFORMATION
<S> <C>
Item 1: Unaudited Financial Information
Condensed Consolidated Balance Sheet - March 31, 1997 and
June 30, 1996 3
Condensed Consolidated Statement of Operations for the Three Months
and Nine Months Ended March 31, 1997 and 1996 4
Condensed Consolidated Statement of Cash Flows for the Nine Months
Ended March 31, 1997 and 1996 5
Notes to the Unaudited Condensed Consolidated Financial Statements 6
Item 2: Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
PART II: OTHER INFORMATION
Item 1: Legal Proceedings Not Applicable
Item 2: Changes in Securities Not Applicable
Item 3: Defaults upon Senior Securities Not Applicable
Item 4: Submission of Matters to Vote by Security Holders 14
Item 5: Other Information Not Applicable
Item 6: Exhibits and Reports on Form 8-K 15
Signatures 16
</TABLE>
<PAGE> 3
TRIDENT MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
March 31, June 30,
1997 1996
--------- ---------
<S> <C> <C>
Current assets:
Cash, cash equivalents $ 30,176 $ 16,894
Short-term investments 20,000 24,334
Accounts receivable, net 23,639 16,872
Inventories 10,264 26,866
Deferred income taxes 3,767 3,838
Prepaid expenses and other assets 892 7,140
--------- ---------
Total current assets 88,738 95,944
--------- ---------
Property and equipment, net 6,096 5,628
Investment in joint venture 39,631 13,716
Other assets 341 12,222
--------- ---------
Total assets $ 134,806 $ 127,510
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,190 $ 24,084
Accrued expenses and other liabilities 9,546 7,632
Income taxes payable 5,920 5,610
--------- ---------
Total current liabilities 28,656 37,326
--------- ---------
Stockholders' equity:
Capital stock 40,238 38,279
Notes receivable from stockholders -- (585)
Retained earnings 65,912 52,490
--------- ---------
Total stockholders' equity 106,150 90,184
--------- ---------
Total liabilities and stockholders' equity $ 134,806 $ 127,510
========= =========
</TABLE>
-3-
<PAGE> 4
TRIDENT MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
---------------------- -------------------------
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net sales $46,511 $46,007 $143,214 $123,921
Cost of sales 29,064 28,730 92,090 77,572
------- ------- -------- --------
Gross margin 17,447 17,277 51,124 46,349
Research and development expenses 5,423 5,367 16,163 13,522
Sales, general and administrative expenses 5,718 4,245 16,552 12,028
------- ------- -------- --------
Income from operations 6,306 7,665 18,409 20,799
Interest income, net 360 542 1,332 1,615
------- ------- -------- --------
Income before income taxes 6,666 8,207 19,741 22,414
Provision for income taxes 2,134 2,626 6,319 7,172
------- ------- -------- --------
Net income $ 4,532 $ 5,581 $ 13,422 $ 15,242
======= ======= ======== ========
Net income per share $ 0.32 $ 0.42 $ 0.95 $ 1.14
======= ======= ======== ========
Common and common equivalent shares used
in computing per share amount 14,280 13,370 14,128 13,424
======= ======= ======== ========
</TABLE>
-4-
<PAGE> 5
TRIDENT MICROSYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(IN THOUSANDS, UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-----------------
1997 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 13,422 $ 15,242
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation & amortization 1,999 1,321
Provision for doubtful accounts and
sales returns 174 48
Loss on disposal of fixed assets - (112)
Amortization of deferred compensation - 175
Changes in assets & liabilities:
Accounts receivable (6,941) (10,077)
Inventories 16,602 (16,077)
Prepaid expenses and other current assets 6,319 (78)
Other assets (2,519) 663
Accounts payable (10,894) 19,540
Accrued liabilities 1,914 2,103
Income tax payable 310 2,786
-------- --------
Net cash provided by operating activities 20,386 15,534
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment from (to) vendor under capacity
agreement 14,400 (16,800)
Sale of short-term investments, net 4,334 12,256
Purchase of property and equipment (2,467) (2,531)
Payment on Equity Investment in joint venture (25,915) (13,716)
-------- --------
Net cash used in investing activities (9,648) (20,791)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 1,959 3,091
Principal repayment by stockholder of
note receivable 585 49
-------- --------
Net cash provided by financing activities 2,544 3,140
-------- --------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 13,282 (2,117)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 16,894 30,609
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 30,176 $ 28,492
======== ========
</TABLE>
-5-
<PAGE> 6
TRIDENT MICROSYSTEMS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
In the opinion of Trident Microsystems, Inc. (the "Company"), the
consolidated financial statements reflect all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the financial
position, operating results and cash flows for those periods presented. The
condensed consolidated financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission and are not
audited. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
for the year ended June 30, 1996 included in the Company's annual report on Form
10-K filed with the Securities and Exchange Commission.
The results of operations for the interim periods presented are not
necessarily indicative of the results that may be expected for any other period
or for the entire fiscal year which ends June 30, 1997.
NOTE 2: INVENTORIES
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31, 1997 June 30, 1996
-------------- -------------
<S> <C> <C>
Work in process $ 2,106 $ 11,716
Finished goods 8,158 15,150
---------- ----------
$ 10,264 $ 26,866
========== ==========
</TABLE>
NOTE 3: NEW ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 128 ("SFAS No. 128") "Earnings
per Share". SFAS No. 128 establishes financial accounting and reporting
standards for calculation of basic earnings per share and diluted earnings per
share. SFAS No. 128 supersedes APB No. 15 and is effective for the periods
ending after December 15, 1997, including interim periods. On a pro forma basis,
basic earnings per share under SFAS No. 128 for the three months ended March 31,
1997 and 1996 would have been $.35 and $.45 respectively, and $1.06 and $1.25
for the nine months ended March 31, 1997 and 1996, respectively. Diluted
earnings per share as defined by SFAS No. 128 would have been the same as the
reported primary earnings per share.
-6-
<PAGE> 7
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth the results of operations expressed as
percentages of net sales for the three and nine months ended March 31, 1997 and
1996:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------- ---------------------
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of sales 62.5 62.4 64.3 62.6
----- ----- ----- -----
Gross margin 37.5 37.6 35.7 37.4
Research and development 11.7 11.7 11.3 10.9
Selling, general and administrative 12.3 9.2 11.5 9.7
----- ----- ----- -----
Income from operations 13.5 16.7 12.9 16.8
Interest income, net 0.8 1.1 0.9 1.3
----- ----- ----- -----
Income before income taxes 14.3 17.8 13.8 18.1
Provision for income taxes 4.6 5.7 4.4 5.8
----- ----- ----- -----
Net income 9.7% 12.1% 9.4% 12.3%
===== ===== ===== =====
</TABLE>
Net Sales
Net sales for the three months ended March 31, 1997 were $46.5 million
or 1.1% over the $46.0 million reported in the three months ended March 31,
1996. Net sales for the nine months ended March 31, 1997 were $143.2 million or
15.6% over the $123.9 million reported in the nine months ended March 31, 1996.
The increase in net sales, for the nine month period, is attributable to
increases in unit volume of higher performance graphical user interface (GUI)
accelerator products primarily for both desktop and portable computers. Desktop
products accounted for 53% of the Company's sales in the three month period, and
57% in the nine month period, ended March 31, 1997, while portable products
accounted for 41% of sales in the three month period, and 36% in the nine month
period ended March 31, 1997. A mix of higher average selling prices (ASPs) for
portable products also offset much of the effect of declining ASPs from other
products. Sales of portable graphics controllers accounted for 36% of total
sales for the nine months ended March 31, 1997, up from 11% for the same period
a year earlier.
-7-
<PAGE> 8
The Company plans to continuously introduce new and higher performance
desktop and portable graphics controller and multimedia video products which it
will seek to sell to existing customers as well as new customers in Asia, North
America and Europe. The Company's future success depends upon the regular and
timely introduction of these and other new products and upon those products
meeting customer requirements. There can be no assurance that the Company will
be able to successfully complete the development of these products or to
commence shipments of these products in a timely manner, or that product
specifications will not be changed during the development period. In addition,
even if regularly and timely developed and shipped, there can be no assurance
that the products described above will be well accepted in the market place.
Gross Margin
Gross margin remained constant at 38% of net sales for the three months
ended March 31, 1997 unchanged from the three months ended March 31, 1996. Gross
margin decreased to 36% of net sales for the nine months ended March 31, 1997
from 37% for the same prior fiscal year period. The decrease in the gross margin
was primarily the result of price declines in the desktop video graphic products
and standard cost adjustments which are taken to adjust inventory values as the
Company continues to lower the cost of manufacturing its products.
The Company believes that prices of semiconductor products will decline
over time as availability and competition increase and advanced products are
introduced. The Company expects to see particularly intense pressure over the
next few months leading to added pressures on gross margin in the desktop
graphics products. However, the Company expects that the effect of this pressure
to be more than offset with new product introductions, if they are successful,
beginning in the fourth quarter of this fiscal year. The Company continues to
maintain a strategy based on maintaining gross margins through the introduction
of new products with higher margins, reducing manufacturing costs accomplished
through the Company's custom design methodology and the migrating to the newest
process technology. As a result, the Company depends upon the success of new
product development and the timely introduction of new products, as well as upon
the achievement of its manufacturing cost reduction efforts. There can be no
assurance that the Company can successfully or timely develop and introduce new
products or that it can continue to successfully reduce manufacturing costs.
-8-
<PAGE> 9
Research and Development
Research and development expenditures for the three months ended March
31, 1997 remained unchanged from the March 31, 1996 three month period at $5.4
million. In the nine months ended March 31, 1997, research and development
increased to $16.2 million from $13.5 million in the same period in the last
fiscal year. Research and development expenditures increased to 11.3% of net
sales in the nine month period ended March 31, 1997 from 10.9% for the same
period ended March 31, 1996. For the three month period ended March 31, 1997
research and development expenditures remained unchanged from three month period
ended March 31, 1996 at 11.7%. The Company has increased its research and
development efforts to introduce new products and intends to continue making
substantial investments in research and development.
Selling, General and Administrative
Selling, general and administrative expenditures increased to $5.7
million in the three months ended March 31, 1997 from $4.2 million in the three
months ended March 31, 1996. Selling, general and administrative expenditures
increased to $16.6 million for the nine months ended March 31, 1997 from $12.0
million for the nine months ended March 31, 1996. The increases in costs were
primarily due to increased personnel-related costs for additional staff in the
U.S. related to Sales, Marketing, and Administration. Selling, general and
administrative expenditures increased to 12.3% of net sales for the three month
period ended March 31, 1997 from 9.2% of net sales in the three month period
ended March 31, 1996. Selling, general and administrative expenditures increased
to 11.6% of net sales for the nine month period ended March 31, 1997 from 9.7%
of net sales in the nine month period ended March 31, 1996. The Company expects
to continue to increase selling, general and administrative expenditures to
support its broader distribution of product lines to a larger number of
customers and increased sales efforts directed at leading PC systems
manufacturers.
Interest Income, Net
The amount of interest income earned by the Company varies directly
with the amount of its cash, cash equivalents, short-term investments and
long-term investments and the prevailing interest rates. Interest income
decreased to $1.3 million in the nine months ended March 31, 1997 from $1.6
million in the same prior year period primarily as a result of lower average
cash levels invested by the Company and interest payments on a bank line of
credit that was utilized and repaid in the quarter. The overall cash levels were
lower due to the $25.9 million foundry venture contribution that occurred in
January 1997.
Provision for Income Taxes
As a percentage of income before income taxes, the provision for income
taxes was 32% for both the three months and nine month periods ended March 31,
1997 and 1996. The effective income tax rates were below the U. S. statutory
rate primarily because operations in foreign countries were subject to lower
income tax rates and a portion of earned interest was not subject to U. S.
federal income tax.
-9-
<PAGE> 10
CERTAIN FACTORS AFFECTING THE COMPANY'S BUSINESS
Certain statements herein are forward looking statements, including
those regarding the Company's intention to continue to introduce new products,
expected sales to Asian customers, the Company's expectations regarding pricing
pressures and gross margin from new products and the Company's plan to invest in
research and development and in selling, general, and administrative areas. The
actual results could vary from the Company's expectations, and are subject to a
number of risks and dependent on a variety of factors, including those set forth
below.
The Company's business is influenced by a variety of factors which
include the overall market for desktop and portable PC computers, the general
economic climate, the success of the Company's customers and their resultant net
orders, seasonal customer demand, timing of new product introductions,
marketplace acceptance of new product offerings, overall product mix,
competitors' activities and the availability of foundry and assembly capacities.
The Company's future operating results are also influenced by its dynamic
product area and by its planned growth in expenditures and the relation of
planned increased expenses to future operating results as well as by a variety
of global, political, regulatory and foreign exchange factors. These factors
will all affect the Company's results and there can be no assurance of the
Company's future operating results.
The Company supplies components to a variety of OEM customers that in
turn sell their products into the overall PC marketplace. Their success
influences the overall net orders that the Company may receive and attempt to
fill. Should there be a downturn in the overall PC business or should the
existing customers not be in a position to place orders or to accept order
fulfillment, the Company's performance would be adversely impacted and there can
be no assurance that the Company would be successful in achieving offsetting
orders. The success of the Company's marketing and sales efforts can also be
affected by changes in the global graphics marketplace. Because the Company's
customers distribute their products worldwide, such factors as shifts in market
share from Asian clone makers to other manufacturers have in the past affected
the Company's operating results. It is likely that future shifts would continue
to influence the Company's business. Since a substantial portion of the
Company's revenues has been and is expected to continue to be generated from
customers in Asia, it is likely that the Company's operating results will
fluctuate with changes in the Asian economies, particularly those of Taiwan and
Hong Kong. Past performance has indicated that seasonal performance variations
should be expected with the historic slowest PC sales occurring during the
summer. This factor influences when the Company's customers place their orders
and when delivery is required.
Because the Company operates in the increasingly competitive graphics
controller product area, timely introductions of new products are required. In
order to be able to timely introduce new products a number of risk factors have
to be overcome. A fundamental business risk is whether or not the Company can
continue to develop products that will be accepted by a fast-changing
marketplace. The Company attempts to determine which products have a high
likelihood of marketplace acceptance and attempts to create functional and
manufacturable designs for those products. However, the Company can not assure
that product development, the timing of the product introductions the
marketplace acceptance of current products under development and the hiring of
the personnel required to support new product introductions and new customers,
including leading PC systems manufacturers will be successful. Should there be a
shortfall in the Company's business performance form its expected results, the
Company's financial results would be adversely impacted by the planned growth in
expenditures. Additional influences on the Company's performance will be the
actions of existing or future competitors, the development of new technologies,
the incorporation of graphics functionality into other PC system components and
possible claims by third parties of infringement of patent or similar
intellectual property rights.
-10-
<PAGE> 11
The Company relies upon several independent foundries to manufacture
its products either in finished or in wafer form, and orders production either
on contract or spot basis. The Company's ability to supply product to its
customers is thus dependent upon its continuing relationships with those
foundries and in turn upon their uninterrupted ability to supply the Company's
product. In calendar year 1995, there was a worldwide shortage of advanced
process technology foundry capacity. in response to this shortage, the Company
entered into a number of contracts providing for additional capacity. Certain of
such contracts require substantial advance payments. There can be no assurance
that the Company will obtain sufficient foundry capacity to meet customer
demands in the future, particularly if that demand should increase, or that the
additional capacity from current foundries and new foundry sources will be
available and will satisfy the Company's quality, delivery schedule, and/or
price requirements.
The Company's products are assembled and tested by a variety of
independent subcontractors. The Company's reliance on independent assembly and
testing houses to provide these services involves a number of risks, including
the absence of guaranteed capacity and reduced control over delivery schedules,
quality assurance and costs.
Constraints or delays in the supply of the Company's products, whether
due to the factors above or to other unanticipated factors, could have adverse
effects on the Company's results. Such adverse effects could include the Company
electing to purchase products from higher cost sources and which could result in
lower orders, or inability to fulfill orders, resulting in the loss of orders.
The market price of the Company's common stock has been, and may
continue to be, extremely volatile. Factors such as new product announcements by
the Company or its competitors, quarterly fluctuations in the Company's
operating results, the performance of leading PC manufacturers and general
conditions in the high technology and graphics controller markets may have a
significant impact on the market price of the Company's common stock.
The Company has recently experienced a period of significant growth,
which has and could continue to strain its personnel, financial and other
resources. In particular, the sale and distribution of products to numerous
leading PC systems manufacturers in diverse markets and the requirements of such
manufacturers for design support places substantial demands on the Company's
research and development and sales functions. Continued expansion of sales and
distribution of products to numerous large system manufacturing customers,
should it occur, would require expansion of the Company's research and
development, production and marketing and sales capabilities. Sales growth,
should it occur, will require additional foundry capacity and the Company has
contracted to expand available foundry capacity. Future results will in part
depend upon and could be significantly impacted by the Company's ability to
manage its resources to support future activities and upon its ability to
finance further expanded foundry capitalization and production costs.
The Company's future operating results also may be affected by various
factors which are beyond the Company's control. These include adverse changes in
general economic conditions, political instability, governmental regulation or
intervention affecting the personal computer industry, government regulation
resulting from U.S. foreign and trade policy, fluctuations in foreign exchange
rates particularly with regard to the relationship of the U.S. dollar and Asian
currencies. The Company is unable to predict future economic, political,
regulatory and foreign exchange changes and cannot determine their impact on
future performance.
-11-
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company's principal sources of liquidity
included cash and cash equivalents of $30.2 million and short-term investments
of $20.0 million.
In the nine months ended March 31, 1997, $20.4 million of cash was
provided by operating activities mainly as a result of profitable operations and
adjustment of non-cash expenses, an increase in accrued expenses and other
liabilities and decreases in inventories and prepaid expenses; offset in part by
an increase in accounts receivable and decreases in accounts payable. Capital
expenditures were $2.5 million for the nine month period. The decline in
inventory is primarily due to manufacturing less inventory units for older
products, continued reductions in manufacturing cost, and the recording of
inventory reserves against slow-moving product.
The Company has renegotiated its June 1995 wafer purchase agreement
with Taiwan Semiconductor Manufacturing Company (TSMC). In January 1997 TSMC
reimbursed $14.4 million to Trident in conclusion of the agreement. The Company
and TSMC continue to maintain their semiconductor wafer supplier relationship.
In August 1995, the Company entered into a joint venture agreement with
United Microelectronics Corporation ("UMC"), one of the Company's current
foundries, under which the Company was committed to invest approximately $60
million in three installments for certain equity ownership in a joint venture
with UMC and other venture partners to establish a new foundry. The Company made
the first payment amounting to $13.7 million in January 1996. The Company made
an additional contribution of $25.9 million in January 1997. The final payment
under the joint venture agreement is estimated to be $15 million and is
currently scheduled in the third quarter fiscal 1998. Under the agreement, the
new foundry guarantees to the Company a certain percentage of its total wafer
supply. The payments including the final payment are denominated in New Taiwan
dollars, and therefore the Company bears the risk and receives the benefit of
fluctuations in the Taiwanese dollar until the time of the final payment. To
date, the Company has benefited from changes in the exchange rate but there can
be no assurance that the amount of the final payment in U.S. dollars will not be
increased above the expected amount due to future fluctuations in the exchange
rate.
The investment with UMC is intended to secure capacity so that the
Company can meet expected increased demand, should it occur. There are certain
risks associated with such investment including the ability of the Company to
utilize the additional capacity and the ability of UMC, together with its
partners, to successfully build the new foundry. These agreements and the risks
associated with these and other foundry relationships, are described under the
caption "Business-Manufacturing" of the Form 10-K Annual Report.
In May 1996, the Company obtained an unsecured revolving line of credit
of $15 million with a maturity date of December 31, 1997. Under the terms of the
line of credit, the Company may elect to convert a portion or the total credit
into a three-year term loan. The line requires the Company to comply with
certain covenants regarding financial ratios and reporting requirements.
The Company will continue to consider possible transactions to secure
additional foundry capacity when and if circumstances warrant the need. The
aforementioned agreement with UMC has caused the Company to expend a significant
amount of its available capital resources. However, the Company believes its
current resources are sufficient to meet its needs for at least the next twelve
months. In addition to the $15 million line of credit, the Company regularly
considers transactions to finance its activities, including debt and equity
offerings and new credit facilities or other financing transaction.
-12-
<PAGE> 13
SUBSEQUENT EVENT
On April 22, 1997 the Company's Board of Directors has authorized the
Company to repurchase, from time to time, at management's discretion up to
600,000 shares of its own common stock for an aggregate price not exceeding
$9,000,000 at prevailing market prices over the next six months. Purchases will
be made using the Company's own cash resources. Shares repurchased will be held
as stock until reissued. Shares may be reissued to employees pursuant to the
Company's stock option and stock purchase plans or other benefit plans the
Company may adopt in the future or for other corporate purposes.
-13-
<PAGE> 14
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
Not applicable
ITEM 2: CHANGES IN SECURITIES
Not applicable
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4: SUBMISSIONS OF MATTERS TO VOTE BY SECURITY HOLDERS
On December 12, 1996, the Company held its 1996 Annual Meeting of the
Stockholders at the Company in Mountain View, California.
<TABLE>
<CAPTION>
AGAINST / BROKER
FOR WITHHELD ABSTAIN NON-VOTES
---------- --------- ------- ---------
<S> <C> <C> <C> <C>
1. Election of Class I Directors:
Charles Dickinson 10,506,797 210,055 0 0
Yasushi Chikagami 10,685,401 31,451 0 0
2. Ratification of the appointment
of Price Waterhouse LLP as the
Company's independent public
accountants for the fiscal year
ending June 30, 1997: 10,698,096 11,057 0 0
</TABLE>
ITEM 5: OTHER INFORMATION
Not applicable
-14-
<PAGE> 15
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
The following exhibits are filed with this Form:
Exhibit Description
------- -----------
11.1 Statement Re Computation of Per Share Earnings. (1)
27.1 Financial Data Schedule. (2)
(1) Filed herewith.
(2) Filed electronically.
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1997.
-15-
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on May 13, 1997 on its
behalf by the undersigned thereunto duly authorized.
Trident Microsystems, Inc.
(Registrant)
_______________________________________
Frank C. Lin
President, Chief Executive Officer
and Chairman of the Board
(Principal Executive Officer)
_______________________________________
Pete J. Mangan
Vice President, Chief Financial Officer
(Principal Financial and Accounting Officer)
-16-
<PAGE> 1
EXHIBIT 11.1
TRIDENT MICROSYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------- --------------------
1997 1996 1997 1996
------ ------ ------- -------
<S> <C> <C> <C> <C>
Net Income $ 4,532 $ 5,581 $13,422 $15,242
------- ------- ------- -------
Weighted average outstanding stocks 12,815 12,448 12,692 12,159
Weighted average incremental common
equivalents from dilutive stock options 1,465 922 1,436 1,265
------- ------- ------- -------
Weighted average common and common
equivalent shares 14,280 13,370 14,128 13,424
------- ------- ------- -------
Net income per share $ 0.32 $ 0.42 $ 0.95 $ 1.14
======= ======= ======= =======
</TABLE>
-17-
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0
0
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