<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.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
Commission file number: 0-21432
AUSPEX SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 93-0963760
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
5200 GREAT AMERICA PARKWAY SANTA CLARA, CA 95054
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (408) 986-2000
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR
FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE
SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS
FOR THE PAST 90 DAYS.
YES X
---
NO ---
NUMBER OF SHARES OF COMMON STOCK, $.001 PAR VALUE, OUTSTANDING AS OF
JANUARY 31, 1997: 24,729,122.
<PAGE> 2
- -------------------------------------------------------------------------------
FORM 10-Q
AUSPEX SYSTEMS, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION NUMBER
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Operations 2
Consolidated Statements of Cash Flows 3
Notes to Unaudited Consolidated Financial Statements 4-5
ITEM 2. Management's Discussion and Analysis of Financial 6-10
Condition and Results of Operations
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 11
ITEM 5. Other Information 12
ITEM 6. Exhibits and Reports on Form 8-K 12
SIGNATURES 12
EXHIBIT INDEX 13
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial statements
AUSPEX SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
December 31, 1996 June 30, 1996
-------------- --------------
(In thousands) (Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 21,222 $ 22,169
Short-term investments 34,750 28,349
Trade receivables, net 43,264 37,848
Inventories, net 18,250 16,130
Prepaid expenses and other 11,253 12,447
----------- -----------
Total current assets 128,739 116,943
Property and Equipment, net 15,866 15,577
Other Assets 3,028 3,324
----------- -----------
Total assets $ 147,633 $ 135,844
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, 1996 June 30, 1996
----------------- -------------
Current Liabilities:
Current portion of capital lease obligations $ 75 $ 106
Accounts payable 5,237 6,165
Accrued liabilities 11,160 12,712
Income tax payable 1,941 440
Deferred revenue 7,881 6,578
----------- -----------
Total current liabilities 26,294 26,001
Capital Lease Obligations 59 30
Stockholders' Equity 121,280 109,813
----------- -----------
Total liabilities and stockholders' equity $ 147,633 $ 135,844
=========== ===========
</TABLE>
See notes to consolidated financial statements
Page 1
<PAGE> 4
AUSPEX SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
----------------------------- ----------------------------
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
(In thousands, except per share amounts) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues:
Product revenue $ 44,485 $ 34,159 $ 82,954 $ 64,294
Service revenue 4,597 3,844 9,140 7,245
----------- ----------- ----------- -----------
Total revenues 49,082 38,003 92,094 71,539
----------- ----------- ----------- -----------
Cost of Revenues:
Cost of product revenue 19,089 14,516 35,108 27,743
Cost of service revenue 3,348 2,321 6,429 4,336
----------- ----------- ----------- -----------
Total cost of revenues 22,437 16,837 41,537 32,079
----------- ----------- ----------- -----------
Gross profit 26,645 21,166 50,557 39,460
----------- ----------- ----------- -----------
Operating Expenses:
Selling, general and administrative 13,471 10,231 26,093 19,878
Research and development 6,357 4,319 11,523 8,217
----------- ----------- ----------- -----------
Total operating expenses 19,828 14,550 37,616 28,095
----------- ----------- ----------- -----------
Income from operations 6,817 6,616 12,941 11,365
Other Income, net 786 380 1,282 907
----------- ----------- ----------- -----------
Income before provision for income taxes 7,603 6,996 14,223 12,272
Provision for Income Taxes 2,699 2,309 5,049 4,050
----------- ----------- ----------- -----------
Net Income $ 4,904 $ 4,687 $ 9,174 $ 8,222
=========== =========== =========== ===========
Net Income per Share $ 0.19 $ 0.18 $ 0.36 $ 0.32
=========== =========== =========== ===========
Weighted Average Common Shares and Equivalents 25,541 25,459 25,614 25,443
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
Page 2
<PAGE> 5
AUSPEX SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
December 31, December 31,
Six Months Ended 1996 1995
- ----------------------------------------------------------------------------------------------------------------
(In thousands) (Unaudited) (Unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 9,174 $ 8,222
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 6,008 4,216
Changes in assets and liabilities:
Increase in trade receivables (5,416) (3,838)
Increase in inventories (2,120) (1,321)
(Increase) decrease in prepaid expenses and other 1,194 (1,673)
Increase (decrease) in accounts payable (928) 426
Increase (decrease) in accrued liabilities (1,552) 1,325
Increase (decrease) in income tax payable 1,501 (2,411)
Increase (decrease) in deferred revenue 1,303 (378)
----------- -----------
Net cash provided by operating activities 9,164 4,568
----------- -----------
Cash Flows from Investing Activities:
Purchases of held-to-maturity short-term investments - (15,676)
Purchases of available-for-sale short-term investments (26,781) (1,007)
Proceeds from maturities of held-to-maturity short-term investments - 6,062
Proceeds from sales of held-to-maturity short-term investments - 2,777
Proceeds from sales/maturities of available-for-sale short-term investments 20,404 -
Purchases of property and equipment (5,988) (6,601)
(Increase) decrease in other assets 90 (116)
----------- -----------
Net cash used in investing activities (12,275) (14,561)
----------- -----------
Cash Flows from Financing Activities:
Principal payments on capital lease obligations (105) (224)
Proceeds from sale of common stock, net 2,193 1,785
----------- -----------
Net cash provided by financing activities 2,088 1,561
----------- -----------
Effect of Exchange Rate Changes on Cash 76 (71)
----------- -----------
Net Decrease in Cash and Cash Equivalents (947) (8,503)
Cash and Cash Equivalents, Beginning of Period 22,169 17,568
----------- -----------
Cash and Cash Equivalents, End of Period $ 21,222 $ 9,065
=========== ===========
</TABLE>
See notes to consolidated financial statements
Page 3
<PAGE> 6
AUSPEX SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The accompanying interim consolidated financial statements and related
notes should be read in conjunction with the financial statements and related
notes included in the Company's 1996 Annual Report to Shareholders.
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements
reflect, in the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
position as of the dates and results of operations for the periods indicated.
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 the Securities
and Exchange Commission rules and regulations. Additionally, the preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make assumptions and estimates that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reported
period. While management makes its best effort to achieve its estimates,
actual results could differ from the estimates.
The results of operations for the three months ended December
31, 1996 are not necessarily indicative of the results for the entire fiscal
year ending June 30, 1997. (See "Factors That May Affect Future Operating
Performance" in Management's Discussion and Analysis of Financial Condition and
Results of Operations.)
2. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
Substantially all cash equivalents consist of investments in
certificates of deposit, money market deposits and municipal bonds with initial
maturities of three months or less. Substantially all short-term investments
consist of municipal bonds which the Company intends to hold between three and
twelve months.
3. REVENUE RECOGNITION
Product revenue includes hardware sales and software license fees.
Revenues from system sales to end users are generally recognized when the
equipment has been shipped, installed and accepted by the end user. Revenues
from system sales to distributors, integrators and OEMs, as well as product
upgrades, are generally recognized when the equipment has been shipped.
Revenues under software license agreements with end users are generally
recognized when the software has been shipped and there are no significant
obligations remaining.
Service revenue includes installation, maintenance and training, and
is recognized ratably over the contractual period or as the services are
provided.
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4. NET INCOME PER SHARE
Net income per share is computed using the weighted average number of
shares of common stock, and dilutive common stock equivalent shares from stock
options using the treasury stock method. Fully diluted net income per share is
substantially the same as primary net income per share.
5. INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out) or
market, and include material, labor and manufacturing overhead costs. Finished
goods inventories include systems shipped to customers and awaiting
installation and acceptance. Inventories consist of the following:
<TABLE>
<CAPTION>
(In thousands) December 31, June 30,
1996 1996
----------- -----------
<S> <C> <C>
Purchased materials $4,604 $4,366
Systems in process 9,312 7,082
Finished goods 4,334 4,682
----------- -----------
Total inventories $18,250 $16,130
=========== ===========
</TABLE>
Page 5
<PAGE> 8
AUSPEX SYSTEMS, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenues for the second quarter of fiscal 1997 were $49.1
million, an increase of 29% compared to total revenues of $38.0 million for the
second quarter of fiscal 1996. Total revenues for the six months ended December
31, 1996 were $92.1 million, an increase of 29% compared to total revenues of
$71.5 million for the six months ended December 31, 1995.
Product revenues for the second quarter of fiscal 1997 were $44.5
million or 91% of total revenues. Revenues from systems sales accounted for 48%
of product revenues during the second quarter of fiscal 1997 and 46% for the
second quarter of fiscal 1996, while revenues from upgrades and add-on options
comprised 52% of product revenues during the second quarter of fiscal 1997 and
54% for the second quarter of fiscal 1996. Service revenues for the second
quarter of fiscal 1997 were $4.6 million or 9% of total revenues, compared to
10% of total revenues during the second quarter of fiscal 1996. Geographically,
North America accounted for 75% and 68% of total revenues in the second quarters
of fiscal 1997 and 1996, respectively; the Pacific Rim accounted for 12% and 22%
in the second quarters of fiscal 1997 and 1996, respectively; and Europe
accounted for 13% and 10% in the second quarters of fiscal 1997 and 1996,
respectively. The increased revenues in North America primarily relate to a
significant order from an existing customer. The lower revenues from the
Pacific Rim during the second quarter of fiscal 1997 was a result of a
reorganization within a major Japanese OEM partner delaying the introduction of
Auspex's model NS7000/700 NetServer.
Gross margin was 54% of total revenues in the second quarter of fiscal
1997 compared to 56% in the second quarter of fiscal 1996. For the six months
ended December 31, 1996 and 1995, gross margin was 55% for each period. The
reduction in gross margin in the second quarter of fiscal 1997 was primarily
related to a lower margin from the Company's service business.
Selling, general and administrative expenses during the second quarter
of fiscal 1997 totaled $13.5 million, an increase of 32% from $10.2 million for
the second quarter of fiscal 1996. As a percent of total revenues, selling,
general and administrative expenses remained flat at 27% during the second
quarter of fiscal 1997 and 1996. For the six months ended December 31, 1996,
selling, general and administrative expenses totaled $26.1 million, an increase
of 31% from $19.9 million for the six months ended December 31, 1995, and
represented 28% of total revenues in each period. The increase in absolute
dollars relates to increased staffing of the Company's U.S. and European direct
sales operations.
Research and development expenses incurred during the second quarter of
fiscal 1997 were $6.4 million, an increase of 47% from $4.3 million for the
second quarter of fiscal 1996, and were 13% and 11% of total revenues for the
second quarters of fiscal 1997 and 1996, respectively. For the six months ended
December 31, 1996, research and development expenses were $11.5 million, an
increase of 40% from $8.2 million for the six months ended December 31, 1995,
and were 13% and 11% of total revenues for the first six months of fiscal 1997
and 1996, respectively. The increase in research and development expenses was
attributable primarily to increased hiring of employees and to support the
Company's new product development efforts.
Page 6
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Income from operations for the second quarter of fiscal 1997 was $6.8
million, an increase of 3% from $6.6 million in the second quarter of fiscal
1996. Income from operations was 14% and 17% of total revenues for the quarters
ended December 31, 1996 and 1995, respectively. Income from operations for the
six months ended December 31, 1996 totaled $12.9 million, an increase of 14%
from $11.4 million for the six months ended December 31, 1995.
The Company's tax rate for the second quarter and first six months of
fiscal 1997 was 35.5% compared to 33% in the second quarter and the first six
months of fiscal 1996. The higher tax rate in fiscal 1997 primarily relates to
increased earnings, which reduces the impact of research and development and
other tax credits on the effective tax rate.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash, cash equivalents and short-term investments
increased by $5.5 million to $56.0 million at December 31, 1996, as compared to
June 30, 1996. The Company's working capital increased by $11.5 million to
$102.4 million at December 31, 1996, as compared to June 30, 1996.
Based on its current operating plans, the Company believes that its
existing cash, cash equivalents and short-term investments and expected cash
flows from operations will be sufficient to meet its working capital and capital
expenditure requirements at least through the next 12 months.
FACTORS THAT MAY AFFECT FUTURE OPERATING PERFORMANCE
The last paragraph under the section entitled "Liquidity and Capital
Resources" contains a forward-looking statement. The Company may also make oral
forward-looking statements from time to time. Actual results may differ
materially from those projected in any such forward-looking statements due to a
number of factors, including those set forth below. The Company undertakes no
obligation to update such information.
POTENTIAL SIGNIFICANT FLUCTUATIONS IN QUARTERLY RESULTS
The Company's operating results may fluctuate significantly from
quarter to quarter due to a variety of factors. These factors include the
timing of orders, the timing of new product introductions by the Company or its
competitors and the mix of distribution channels through which the Company's
products are sold in a particular quarter. The Company generally realizes
higher gross margins on sales of systems to end users than on systems sold
through distributors and OEMs. In addition, given the Company's focus on highly
configured enterprise class systems, the loss or delay in a given quarter of a
relatively limited number of systems sales could adversely affect the Company's
revenues. Because the Company recognizes revenue from sales to end users upon
customer installation and acceptance, timing of the installation of the
Company's products may also increase potential fluctuations in the Company's
quarterly results of operations. Historically, the Company has often recognized
a substantial portion of its revenues in the last month of the quarter. Because
the Company's operating expenses are based on anticipated revenue levels and
because a high percentage of the Company's expenses are relatively fixed, a
small variation in the timing of the recognition of revenues could cause
significant variations in operating results from quarter to quarter.
Page 7
<PAGE> 10
INTENSELY COMPETITIVE MARKET
The market for the Company's products is intenselycompetitive. The
Company experiences substantial competition, principally from Sun Microsystems,
Hewlett-Packard Company, IBM, Silicon Graphics, Inc. and Digital Equipment
Corporation. Also, EMC Corporation has recently introduced products to
provide network attached storage. In addition, smaller companies such
as Network Appliance, Inc. have introduced products at the low end of the
Company's target markets. Most of the Company's competitors are better known
and have substantially greater financial, technological, production and
marketing resources than the Company. While the Company believes that the
price/performance characteristics of its current products are competitive,
price competition in the markets for the Company's products is intense. Any
material reduction in the price of the Company's products without corresponding
decreases in manufacturing costs or increases in unit volume would negatively
affect gross margins, which could in turn have a materially adverse effect on
the Company's business, financial condition and results of operations. The
Company also derives a significant portion of its revenues from sales of
product upgrades to its installed base, including disk and tape drives and
additional processors. Increased competition for the Company's products that
results in lower product sales could also adversely impact the Company's
upgrades sales. In addition, decisions by customers not to increase the
capacity of their current systems could adversely impact the Company's revenues
and results of operations. The Company's ability to maintain its competitive
position will depend upon, among other factors, its success in anticipating
industry trends, its investments in product research and development, its
development of new products with improved price/performance characteristics and
its effective management of the introduction of new products into targeted
markets.
DEPENDENCE ON KEY PERSONNEL
Competition for employees with highly technical, managerial and other
skills is intense in the high-technology industry and is particularly
intense in the San Francisco Bay Area. The Company's failure to retain the
services of key personnel or to attract additional qualified employees could
have a materially adverse effect on the Company's business, financial condition
and results of operations.
SOFTWARE PRODUCT RISKS
With the release of its ServerGuard(TM) and DataGuard(TM) software
products, the Company now ships software products in addition to its
line of network file servers. The Company also expects to release enhancements
and new features for these products. Although the Company performs extensive
testing prior to releasing software products, such products may contain
undetected errors or bugs when first released. These may not be discovered
until the product has been used by customers in different application
environments. Failure to discover product deficiencies or bugs could delay
product introductions, require design modifications to previously shipped
products, cause unfavorable publicity or negatively impact system shipments,
any of which could result in a materially adverse effect on the Company's
business, financial condition and results of operations.
NEW PRODUCTS
New product introductions by the Company or its competitors carry the
risk that customers will delay or cancel orders for existing products pending
shipment of the new products. The Company's strategy is to continue to
introduce new products and upgrades to existing products on an ongoing basis.
There can be no
Page 8
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assurance that the Company will not experience difficulties that delay or
prevent the successful development, introduction or marketing of these products
and enhancements or that these new products and enhancements will adequately
address market requirements and achieve market acceptance. Any delays in the
launch or availability of new products could have a materially adverse effect
on the Company's business, financial condition and results of operations.
DEPENDENCE ON ESTABLISHED STANDARDS
The rapid emergence of new or alternate standards such as NT which
replace or diminish the market acceptance of UNIX operating systems or the
Network File System, on which the Company's products are currently based, could
materially adversely effect the Company's results of operations unless the
Company is able to incorporate such standards into the Company's products in a
timely manner.
DEPENDENCE ON CERTAIN CUSTOMERS/DISTRIBUTORS
For the six months ended December 31, 1996 and 1995, direct sales of
products and services to Intel Corporation ("Intel") represented approximately
8% and 13%, respectively, of the Company's revenues, and direct sales to
America Online ("AOL") represented approximately 14% and 6%, respectively, of
the Company's revenues. For the six months ended December 31, 1996 and 1995,
sales to Fuji Xerox Company, Ltd. ("Fuji Xerox"), the Company's exclusive
private label OEM in Japan, represented approximately 8% and 15%, respectively,
of the Company's revenues. Also for the six months ended December 31, 1996 and
1995, sales to Nissho Electronics ("Nissho"), the Company's distributor in
Japan, represented approximately 8% and 9%, respectively, of the Company's
revenues. In the second quarter of fiscal 1997, Fuji Xerox implemented a
reorganization of its operations, and the Company believes that this activity
significantly diminished its purchases of the Company's products during this
period. Fuji Xerox and Nissho are not obligated to purchase any minimum
quantities of products from the Company. A significant reduction in product
sales to Intel, AOL, Fuji Xerox or Nissho will materially and adversely affect
the Company's business, financial condition and results of operations.
RISKS OF INTERNATIONAL SALES; EUROPEAN MARKET RISKS
During the six months ended December 31, 1996 and 1995, approximately
31% and 34%, respectively, of the Company's total revenues were derived from
markets outside of North America, primarily in Japan, where the Company is
dependent on Fuji Xerox and Nissho (see "Dependence on Certain
Customers/Distributors" above). The Company has also increased its sales,
support and marketing efforts in Europe. There can be no assurance that the
Company's European operations will be successful. The Company's international
business may be affected by changes in demand resulting from localized economic
and market conditions. In addition, the Company's international business may
be affected by fluctuations in currency exchange rates and currency
restrictions as well as by risks such as trade restrictions, increases in
tariff and freight rates and difficulties in obtaining necessary export
licenses and meeting appropriate local regulatory standards. For example, the
Company has had to modify its products in minor respects in Japan to comply
with local electromagnetic emissions standards, and must also comply with
corresponding European Economic Community standards. In marketing its products
to the European Economic Community, the Company also must face the challenges
created by a fragmented market complicated by local distribution channels and
local cultural considerations. For international sales, the Company has
largely relied on distributors and OEM's, most of whom are entitled to carry
products of the Company's competitors.
Page 9
<PAGE> 12
INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
The Company currently relies on a combination of patent, copyright,
trademark and trade secret laws and contractual provisions to protect its
proprietary rights in its hardware and software products. The Company
currently holds six U.S. patents and has filed applications for additional
patents. The Company has also filed applications for counterpart patents in
foreign countries, including Japan. There can be no assurance that the
Company's present or future competitors will not independently develop
technologies that are substantially equivalent or superior to the Company's
technology. Further, there can be no assurance that the Company's patent
applications will result in issued patents, or that the Company's issued
patents will be upheld if challenged. Additionally, there can be no assurance
that third parties will not assert intellectual property infringement claims
against the Company in the future with respect to current or future projects or
that any such assertions may not require the Company to refrain from the sale
of its products, enter into royalty arrangements or undertake costly
litigation.
The Company's adherence to industry standards with respect to its
products limits the Company's opportunities to provide proprietary features
which may be protected. In addition, the laws of various countries in which
the Company's products may be sold may not protect the Company's products and
intellectual property rights to the same extent as the laws of the United
States.
Page 10
<PAGE> 13
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1996 Annual Meeting of the Stockholders of Auspex
Systems, Inc. was held at the Santa Clara Convention Center, 5001 Great America
Parkway, Santa Clara, California 95054 on December 6, 1996 at 9:00 a.m. (the
"Annual Meeting").
(b) At the Annual Meeting, the following three
individuals were elected to the Company's Board of Directors as Class II
directors elected to each serve for a two-year term:
<TABLE>
<CAPTION>
NUMBER OF VOTES
---------------
NOMINEE CAST FOR WITHHELD BROKER
- ------- -------- -------- ------
CLASS II DIRECTORS OR AGAINST NON-VOTES
- ------------------ ---------- ---------
<S> <C> <C> <C>
W. Frank King 21,220,691 235,745 0
Bruce N. Moore 21,216,118 240,318 0
David F. Marquardt 21,222,325 234,111 0
</TABLE>
(c) The following additional proposal was considered at the
Annual Meeting and was approved according to the respective vote of the
stockholders.
(1) Ratification and approval of the appointment of
Arthur Andersen LLP as the Company's independent public accountants for the
fiscal year ending June 30, 1997.
<TABLE>
<CAPTION>
Number of Votes
---------------
Abstentions Broker
----------- ------
Cast For or Against Non-Votes
-------- ---------- ---------
<S> <C> <C>
21,429,512 26,924 0
</TABLE>
PAGE 11
<PAGE> 14
ITEM 5. OTHER INFORMATION
Effective January 31, 1997, Laurence B. Boucher, Auspex's founder,
resigned from the Company's Board of Directors.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits
11.1 Statement of Computation of Common and Common
Equivalent Shares
27 Financial Data Schedule.
b. Report on Form 8-K
No report on Form 8-K was filed during the current period.
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.
AUSPEX SYSTEMS, INC.
Date February 13, 1997 /s/ Kent L. Robertson
------------------------- ----------------------------------------------
Kent L. Robertson
Vice President of Finance and Chief Financial
Financial Officer (Principal Financial Officer)
PAGE 12
<PAGE> 15
AUSPEX SYSTEMS, INC.
EXHIBITS TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 1996
Sequentially
Exhibit # Description Numbered Page
- --------- ----------- -------------
11.1 Statement of Computation of Common and Common 14
Equivalent Shares
27 Financial Data Schedule 15
Page 13
<PAGE> 1
Exhibit 11.1
AUSPEX SYSTEMS, INC. & SUBSIDIARIES
STATEMENT OF COMPUTATION OF COMMON
AND COMMON EQUIVALENT SHARES
(in thousands except per share amounts)
<TABLE>
<CAPTION>
For Three Months Ended For Six Months Ended
-------------------------- ---------------------------
December 31, December 31, December 31, December 31,
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Income............................................... $4,904 $4,687 9,174 8,222
Weighted average common shares outstanding............... 24,539 23,442 24,480 23,395
Weighted average common equivalent shares
Weighted average preferred stock outstanding........ -- -- -- --
Common stock options................................ 1,002 2,017 1,134 2,048
----------- ----------- ----------- -----------
Total weighted average common shares and equivalents..... 25,541 25,459 25,614 25,443
=========== =========== =========== ===========
Net income per share..................................... $0.19 $0.18 $0.36 $0.32
=========== =========== =========== ===========
</TABLE>
Page 14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 21,222
<SECURITIES> 34,750
<RECEIVABLES> 44,480
<ALLOWANCES> 1,216
<INVENTORY> 18,250
<CURRENT-ASSETS> 128,739
<PP&E> 52,903
<DEPRECIATION> 37,037
<TOTAL-ASSETS> 147,633
<CURRENT-LIABILITIES> 26,294
<BONDS> 59
0
0
<COMMON> 25
<OTHER-SE> 121,255
<TOTAL-LIABILITY-AND-EQUITY> 147,633
<SALES> 44,485
<TOTAL-REVENUES> 49,082
<CGS> 19,089
<TOTAL-COSTS> 22,437
<OTHER-EXPENSES> 19,808
<LOSS-PROVISION> 20
<INTEREST-EXPENSE> 10
<INCOME-PRETAX> 7,603
<INCOME-TAX> 2,699
<INCOME-CONTINUING> 4,904
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,904
<EPS-PRIMARY> .19
<EPS-DILUTED> 0
</TABLE>
