<PAGE>
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the quarterly period ended May 3, 1997
Commission File Number 0-19558
CENTIGRAM COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-2418021
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
91 East Tasman Drive
San Jose, California 95134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (408) 944-0250
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 outstanding shares of the Registrant's Common Stock as of May
30, 1997 was 7,074,000.
- -------------------------------------------------------------------------
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<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Centigram Communications Corporation
Consolidated Balance Sheets
<TABLE>
<CAPTION>
May 3, November 2,
(In thousands, except share and per share data) 1997 1996
- ----------------------------------------------- ----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,327 $ 12,668
Short-term investments 30,183 29,408
Trade receivables, net 25,283 27,741
Inventories 11,067 11,467
Deferred tax assets 1,424 1,424
Other current assets 1,823 3,108
Total current assets 80,107 85,816
Property and equipment, net 14,894 15,249
Intangible assets, net 2,529 2,004
Deposits and other assets 1,023 940
--------- ---------
$ 98,553 $ 104,009
--------- ---------
--------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,177 $ 9,739
Accrued compensation 3,026 4,202
Accrued expenses and other liabilities 8,541 6,424
Current portion of capital lease obligations 151 154
--------- ---------
Total current liabilities 19,895 20,519
Capital lease obligations 5 78
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value, 1,000,000
authorized; none outstanding
Common stock, $.001 par value, 25,000,000
authorized; 6,996,000 and 6,908,000
outstanding 7 7
Additional paid-in capital 89,772 88,767
Accumulated deficit (10,616) (4,992)
Unrealized loss on investments (123) (36)
Cumulative translation adjustments (87) (34)
Note receivable from officer (300) (300)
--------- ---------
Total stockholders' equity 78,653 83,412
--------- ---------
$ 98,553 $ 104,009
--------- ---------
--------- ---------
</TABLE>
See accompanying notes.
2
<PAGE>
Centigram Communications Corporation
Consolidated Statements of Operations
(In thousands, except per share amounts - unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
May 3, April 27, May 3, April 27,
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net revenue $ 24,899 $ 24,533 $ 52,812 $ 48,546
Cost and expenses:
Costs of goods sold 10,839 10,950 22,182 20,461
Research and development 5,451 4,961 11,144 9,535
Selling, general and administrative 11,917 10,483 22,535 20,369
Other expenses 3,563 - 3,563 -
--------- --------- --------- ---------
31,770 26,394 59,424 50,365
--------- --------- --------- ---------
Operating loss (6,871) (1,861) (6,612) (1,819)
Other income and expense, net 567 550 1,064 1,071
--------- --------- --------- ---------
Loss before income taxes (6,304) (1,311) (5,548) (748)
Provision for income taxes - - 76 56
--------- --------- --------- ---------
Net loss $ (6,304) $ (1,311) $ (5,624) $ (804)
--------- --------- --------- ---------
--------- --------- --------- ---------
Net loss per share $ (.90) $ (.19) $ (.81) $ (.12)
--------- --------- --------- ---------
--------- --------- --------- ---------
Common and common equivalent shares
used in computing per share amounts 6,994 6,806 6,977 6,767
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
See accompanying notes.
3
<PAGE>
Centigram Communications Corporation
Consolidated Statements of Cash Flows
(In thousands - unaudited)
<TABLE>
<CAPTION>
Six Months Ended
May 3, April 27,
1997 1996
--------- ----------
<S> <C> <C>
Cash and equivalents, beginning of period $ 12,668 $ 10,633
--------- ----------
Cash flows from operations:
Net loss (5,624) (804)
Depreciation and amortization 4,635 3,464
Trade receivables 2,358 (5,801)
Inventories 400 (2,831)
Other assets 1,302 (741)
Accounts payable (1,562) 2,466
Accrued expenses and other liabilities 941 (864)
--------- ----------
2,450 (5,111)
--------- ----------
Cash flows from investing:
Purchase of short-term investments (44,040) (54,529)
Proceeds from sales and maturities of
short-term investments 43,178 73,625
Purchase of property and equipment (4,145) (4,846)
Purchase of other assets (713) -
--------- ----------
(5,720) 14,250
Cash flows from financing:
Proceeds from sale of common stock 1,005 1,353
Note receivable from officer - (300)
Principal payments on capital leases (76) (104)
--------- ----------
929 949
--------- ----------
Net change in cash and equivalents (2,341) 10,088
--------- ----------
Cash and equivalents, end of period $ 10,327 $ 20,721
--------- ----------
--------- ----------
</TABLE>
See accompanying notes.
4
<PAGE>
Centigram Communications Corporation
Notes to Consolidated Financial Statements
(unaudited)
BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared by the
Company without audit and reflect all adjustments (consisting of normal
recurring adjustments) which are, in the opinion of management, necessary to
reflect a fair statement of the results for the interim periods. For further
information, refer to the audited Consolidated Financial Statements and
footnotes thereto incorporated by reference in the Company's Annual Report on
Form 10-K for the fiscal year ended November 2, 1996.
The results of operations for the quarter and six months ended May 3, 1997 may
not necessarily be indicative of the results for the fiscal year ending
November 1, 1997 or any future period.
INVENTORIES
Inventories consisted of (in thousands):
May 3, November 2,
1997 1996
-------- -----------
Raw materials $ 4,972 $ 4,603
Work-in-process 3,330 2,898
Finished goods 2,765 3,966
-------- -----------
$ 11,067 $ 11,467
-------- -----------
-------- -----------
OTHER EXPENSES
During the second quarter ended May 3, 1997 the Company recorded other
operating expenses of approximately $3,563,000, consisting of $2,352,000 in
restructuring charges and $1,211,000 in direct expenses associated with the
proposed acquisition of Voice-Tel Enterprises and Voice-Tel Network ("Voice-
Tel"). The restructuring charges noted above represent termination benefits for
approximately 40 employees from all functions of the Company and costs
associated with the resignation of the Company's president.
FASB STATEMENT NO. 128, EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effect of
stock options will be excluded. Statement No. 128 is not expected to change the
Company's calculation of loss per share for the second quarter and six months
ended May 3, 1997 and April 27, 1996, respectively.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Centigram Communications Corporation
The following discussion contains forward-looking statements regarding
future events or the future financial performance of Centigram Communications
Corporation ("Centigram" or the "Company") that involve risks and
uncertainties. These statements include but are not limited to statements
related to changes in Centigram's research and development and selling, general
and administrative expenses, Centigram's effective tax rate, Centigram's
expenditures for capital equipment and sufficiency of Centigram's cash
reserves. Actual results could differ materially from those anticipated in
these forward-looking statements as a result of certain factors, including but
not limited to those set forth in this Management's Discussion and Analysis of
Financial Condition and Results of Operations under "Certain Trends and
Uncertainties".
RESULTS OF OPERATIONS
Net revenue for the second quarter of fiscal 1997 ended May 3, 1997 was 1%
higher than net revenue for the corresponding quarter of fiscal 1996 and 11%
lower than the first quarter of fiscal 1997. The increase in net revenue from
the second quarter of 1996 reflects higher sales of system upgrade and
expansion products and greater sales of the Company's MobileManager product,
offset by a slight decrease in the Company's small system products. The
decrease in the net revenue from the first quarter of 1997 reflects lower sales
of the company's large systems and lower sales of system upgrade and expansion
products, offset in part by increased sales of the Company's MobileManager
product and smaller systems products. Sales to international customers were
55% of revenues for the second quarter as compared to 23% in the similar period
of 1996. Increased large system orders from Latin America and Australia
contributed to this increase in international business. Customer Premise
Equipment (CPE) sales decreased 16% in the second quarter as compared to the
prior year second quarter due to delays in orders from several North American
customers. Sales to Service Provider customers increased in the second quarter
over the similar prior year period because of strong international sales as
noted above.
Net revenue for the first six months of 1997 was 9% higher than net
revenue for the comparable 1996 period. This increase is attributable to
greater sales of large system products and general sales increases in all
product categories. Sales to international customers were 50% of revenue in
the first six months of 1997 as compared to 30% in the same period of 1996
because of increased sales to Latin America and Australia and lower sales to
North America. During the first six months of fiscal 1997 and 1996 the
distribution of sales to Customer Premise Equipment (CPE) and Service Provider
(SP) customers was approximately the same.
There can be no assurance that the market for voice processing products
will grow in future periods at its historical percentage rate or that certain
market segments will not decline. Further, there can be no assurance that the
Company will be able to increase or maintain its domestic or international
market share in the future or to achieve historical growth rates. See "Certain
Trends and Uncertainties".
6
<PAGE>
Gross margin was 56.5%, 55.4% and 59.4% of net revenue in the second
quarter of fiscal 1997, the second quarter of 1996, and the first quarter of
1997, respectively. Gross margins increased in the second quarter over the
prior year's second quarter because of lower retrofit costs, reduced inventory
obsolescence provisions as the Company completed its transition to the Series 6
product operating system, and increased margins on system expansions, offset by
increased service expenses. The lower gross margin in the second quarter as
compared to the first quarter of fiscal 1997 reflects lower sales of large
systems and system expansions products which typically carry higher than
average margins. This reduction in margins was partially offset by lower
inventory provisions and freight expenses.
Gross margin for the first six months of fiscal 1997 was 58.0% of net
revenue as compared to 57.9% for the first six months of fiscal 1996. This
comparison reflects offsetting effects of reduced margins on system expansion
sales and services offset by a favorable margin impact of lower retrofit
expenses and freight costs. See "Certain Trends and Uncertainties."
Research and development (R&D) expenses increased 10% in the second
quarter of fiscal 1997 as compared to the corresponding quarter of 1996 and
were 4% below the R&D expenses for the first quarter of fiscal 1997. The
increase in R&D expenses reflects general expansion of the Company's
engineering and product development programs including increased staffing and
depreciation expenses. The reduction in the second quarter spending levels as
compared to the first quarter reflects primarily expense control actions taken
during the second quarter to reduce travel and outside services. R&D expenses
represented 22%, 20%, and 20% of net revenue in the second quarter of 1997, the
second quarter of 1996, and the first quarter of 1997, respectively.
Research and development expenses increased 17% in the first six months of
fiscal 1997 as compared to the first six months of fiscal 1996 and represented
21% and 20% of net revenues for each respective period. This increase in R&D
expense resulted from higher employee costs including salaries and benefits
resulting from increased headcount, increased costs of outside consultants and
services, and increased facilities expenses. The Company believes that ongoing
development of new products and features is required to maintain and enhance
its competitive position. The Company expects to continue to invest in R&D and
therefore these expenses are expected to be maintained at the current levels or
to increase moderately, notwithstanding the level of sales realized in future
quarters. Accordingly, while the Company expects to control expenses where
possible in forthcoming quarters, its R&D expenses may continue to increase.
Selling, general and administrative (SG&A) and other expenses increased
48% in the second quarter of fiscal 1997 as compared to the corresponding
quarter of 1996 and were 46% above the first quarter of fiscal 1997. These
increases in expenses resulted primarily from charges taken in the second
quarter of approximately $3.6 million which represented $2.4 million in
restructuring charges and $1.2 million in expenses associated with the proposed
acquisition of Voice-Tel Enterprises and Voice-Tel Network ("Voice-Tel") which
was terminated in the second quarter of fiscal 1997. In addition, SG&A
expenses increased approximately $1.4 million in the second quarter of fiscal
1997 over the same quarter of fiscal 1996 and were 12% over those incurred in
the first fiscal quarter of 1997. These increases consisted primarily of
increased compensation,
7
<PAGE>
travel, and outside services in sales and marketing. SG&A and other expenses
represented 62%, 43%, and 38% of net revenue in the second quarter of 1997,
the second quarter of 1996, and the first quarter of fiscal 1997,
respectively.
Selling, general and administrative (SG&A) and other expenses for the
first six months of fiscal 1997 were up 28% over the prior year six month
period and represented 49% and 42% of net revenues for the respective periods.
This increase in expenses reflects the same reasons as noted in the previous
paragraph, namely, the impact of the other operating expense charges taken in
the second quarter and the increases in the sales and marketing expenses. The
Company believes continued investments in sales and customer support,
particularly in export markets, are essential to maintaining its competitive
position. The Company expects to continue to invest in SG&A. Therefore, SG&A
expenses are expected to be maintained at the current levels or to increase
moderately, after deducting the unusual second quarter other operating expense
charges.
The Company did not record an income tax benefit at the domestic
statutory tax rate for the second quarter and first six months of fiscal 1997
and 1996. Realization of the deferred tax benefits of the tax net operating
loss carryforwards resulting from the loss incurred are dependent upon future
taxable income, the amount and timing of which are uncertain. Accordingly, a
valuation allowance has been established to fully offset the deferred tax
assets resulting from the loss incurred. The tax provision recorded for the
first six months of fiscal 1997 and 1996 relates to anticipated current foreign
taxes payable.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents and short-term investments at May 3, 1997 were
$40.5 million, decreasing $0.8 million from the February 1, 1997 balance of
$41.3 million and decreasing $1.6 million from the year end balance of $42.1
million.
For the first six months ended May 3, 1997 the net cash generated from
operating activities was $2.5 million. Trade receivables at the end of the
second fiscal quarter decreased $2.4 million from the year end balances
primarily due to reduced revenues in the second quarter as compared to the last
quarter in fiscal 1996. Days sales outstanding (computed using quarterly
revenues) were 91 days in the second quarter as compared to 86 days at end of
fiscal 1996. This increase in days sales outstanding was primarily due to a
larger percentage of quarterly shipments occurring in the last month of the
second quarter as compared to the last month in the prior fiscal year.
Inventory levels at May 3, 1997 were $0.4 million lower than the year end
balance. The Company expects investments in receivables and inventories will
continue to represent a significant portion of working capital.
During the first six months ended May 3, 1997, the Company made
approximately $4.9 million in capital expenditures. These expenditures
consisted primarily of purchases of computer equipment, software, and
engineering lab equipment. The Company currently expects to spend approximately
$9.0 million for capital equipment during fiscal 1997. On April 15, 1997 the
Company's Board of Directors authorized a stock repurchase program whereby up
to 1 million shares of its Common Stock may be repurchased in the open market
from time-to-time. The
8
<PAGE>
Company presently believes, notwithstanding its accumulated deficit, that its
existing cash and short-term investments and amounts available under its line
of credit and lease credit arrangements, will be sufficient to support the
Company's working capital, capital equipment purchase requirements, and stock
repurchase program at least through fiscal 1997.
The Company's principal sources of liquidity as of May 3, 1997 consisted
of $40.5 million of cash and cash equivalents and short-term investments and
$20.0 million available under the Company's bank line of credit which expires
April 29, 1998. This bank line requires the Company to maintain certain
financial ratios, minimum working capital, minimum tangible net worth, and
financial performance, and requires the bank's consent for the payment of cash
dividends. The Company is in compliance with this agreement and there were no
borrowings outstanding under the bank line as of May 3, 1997.
CERTAIN TRENDS AND UNCERTAINTIES
The Company has in the past experienced and will likely in the future
experience substantial fluctuations in quarterly operating results. The Company
generally has no long-term order commitments from its customers, and a
significant portion of bookings and shipments in any quarter have historically
occurred near the end of the quarter. Accordingly, the Company has historically
operated with very little backlog, and net revenue has been difficult to
predict. In addition, the portion of backlog shippable in the next quarter
varies over time. As a result, revenue in future quarters will depend largely
on the level of orders received during such quarters.
If new order bookings do not meet expected levels, or if the Company
experiences delays in shipments at the end of a quarter, operating results will
be adversely affected, and these developments may not become apparent to the
Company until near or at the end of a quarter. Net revenue can also be
affected by product sales mix, distribution mix, the size and timing of
customer orders and shipments, customer returns and reserves provided therefor,
competitive pricing pressures, the effectiveness of key distributors in selling
the Company's products, changes in distributor inventory levels, the timing of
new product introductions by the Company and its competitors, regulatory
approvals, and the availability of components for the Company's products, each
of which is difficult to predict accurately. Each of such factors has in the
past affected the Company's revenue.
A significant portion of the Company's net revenue is attributable to a
limited number of customers. The Company's top five customers, representing a
combination of major distributors and service providers, accounted for
approximately 40%, 39% and 35% of the Company's net revenue in the second
quarter of fiscal 1997, the second quarter of fiscal 1996, and fiscal 1997 to
date, respectively, although the Company's five largest customers were not the
same in these three periods. The Company has no long-term order commitments
from any of its customers. Any material reduction in orders from one or more of
such customers or the cancellation or deferral of any significant portion of
backlog could have an adverse effect on net revenue and operating results. Such
concentration of sales typically results in a corresponding concentration of
accounts receivable. Although the Company has established reserves for
uncollectible accounts, the inability
9
<PAGE>
of any large customer to pay the Company could have a material adverse impact
on the Company's financial position, results of operations and cash flows.
Approximately 55% of the Company's sales in the second fiscal quarter
ended May 3, 1997 consisted of sales outside of the United States. The
Company's international sales are subject to a number of additional risks
generally associated with international sales, including the effect on demand
for the Company's products in international markets as the results of any
strengthening or weakening of the U.S. dollar, the effect of currency
fluctuations on consolidated multinational financial results, state imposed
restrictions on the repatriation of funds, import and export duties and
restrictions, the need to modify products for local markets, and the logical
difficulties of managing multinational operations.
The Company's gross margin can be affected by a number of factors,
including changes in product, distribution channel and customer mix, cost and
availability of parts and components, royalty obligations to suppliers of
licensed software, provisions for warranty, retrofits, and excess and obsolete
inventory, customer returns, and competitive pressures on pricing. The Company
has experienced increasing competitive pricing pressure in its international
service provider markets and expects this pricing pressure to continue.
Further, distributors purchase products at discounts, and the Company's margins
can therefore vary depending upon the mix of distributor and direct end user
sales in any particular fiscal period. The Company anticipates that its sales
mix will continue to fluctuate in future periods.
The Company's future success will depend in part upon the ability of the
Company to continue to introduce new features and products as the Company's
markets evolve, new technologies become available, and customers demand
additional functionality. The Company's competitors continue to add
functionality to their products, and any failure by the Company to introduce in
a timely manner new products and features that meet customer requirements would
adversely affect the Company's operating results and cash flows. The Company's
ability to develop such new products and features depends in large measure on
its ability to hire and retain qualified technical talent and outside
contractors in highly competitive markets for such services. There can be no
assurance that the Company's product development efforts will be successful, or
that it will be able to introduce new products in a timely manner. Any material
additional delays in the introduction and market acceptance of such products
would be adverse to the Company's business. Moreover, customers' expectations
of the introduction of new products by the Company or its competitors can
adversely affect sales of current products. In addition, upon the introduction
of new products, the Company could be subject to higher customer returns with
respect to prior generations of products, which could adversely affect the
Company's financial position, operating results and cash flows.
The Company presently uses third parties to perform printed circuit board
and subsystem assembly. In addition, although the Company has not experienced
significant problems with third-party manufacturers in the past, there can be
no assurance that such problems will not develop in the future. Although the
Company generally uses standard parts and components for its products, certain
microprocessors, line cards, application cards and other semiconductor devices
and other components are available from sole sources. Other components,
including power supplies, disk
10
<PAGE>
drives, certain other semiconductor devices and subcontracted line card
assemblies, are presently available or acquired from a single source or from
limited sources. The Company has been notified by suppliers that certain
components will no longer be manufactured. To date, the Company has been able
to obtain adequate supplies of these components in a timely manner from
existing sources or, when necessary, from alternative sources of supply
although such alternatives have resulted in increased costs to the Company.
However, the inability to develop such alternative sources if and as required
in the future, to obtain sufficient sole or limited source components as
required, or to locate alternatives to discontinued parts would have a
material adverse affect on the Company's operating results and cash flows. In
addition, the Company's products are dependent on the QNX software operating
system, a multitasking, real-time operating system for Intel
microprocessor-based computers. In future periods, the Company's products may
become increasingly dependent on software licensed from third party
suppliers. There can be no assurance such licenses will continue to be
available to the Company as needed or at commercially reasonable prices.
In recent years, stock markets have experienced extreme price and volume
trading volatility. This volatility has had a substantial effect on the market
prices of securities of many high technology companies for reasons frequently
unrelated to the operating performance of the specific companies. These broad
markets fluctuations may adversely affect the market price of the Company's
common stock. In addition, the trading price of the Company's common stock
could be subject to wide fluctuations in response to quarter-to-quarter
variations in operating results, announcements of new products or technological
innovations by the Company or its competitors, and general conditions in the
computer and communications industries.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders of the Company was held on
March 24, 1997 (the "Annual Meeting"), at which there were
6,978,000 shares of common stock issued and outstanding and
entitled to vote. The vote of holders of record of shares of
the Company's common stock outstanding at the close of
business on January 24, 1997 was solicited by proxy pursuant
to Regulation 14A under the Securities Exchange Act of 1934.
11
<PAGE>
(b) The following persons were elected Class II directors at the
Annual Meeting to serve three-year terms expiring in 2000:
VOTE
--------------------------------------
For Against Abstain
--------- --------- -----------
Dean O. Morton 6,246,159 0 354,405
David S. Lee 6,248,721 0 351,843
The other directors of the Company whose terms continue are James H. Boyle,
George H. Sollman, James F. Gibbons, and J. Michael Jarvis.
(c) At the Annual Meeting, stockholders approved the following
matters by the vote indicated:
VOTE
--------------------------------------
For Against Abstain
--------- --------- -----------
Approval of the adoption of the
Centigram 1997 Stock Plan 1,952,008 1,319,590 47,143
Approval of an amendment of the
Centigram 1991 Employee Stock
Purchase Plan to increase the
number of shares of Common
Stock reserved for issuance
thereunder from 575,000 shares
to 675,000 shares. 2,385,690 1,155,361 25,840
Ratification of appointment of
Ernst & Young LLP independent
auditors for Fiscal 1997 6,522,566 51,053 26,945
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
11.1 Statement of Computation of Net Loss Per Share.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
There were no reports filed on Form 8-K during the quarter ended
May 3, 1997.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTIGRAM COMMUNICATIONS CORPORATION
(Registrant)
Date: June 16, 1997 By: /s/ Dennis P. Wolf
--------------------------------------
Dennis P. Wolf
Sr. Vice President and
Chief Financial Officer
13
<PAGE>
EXHIBIT 11.1
Centigram Communications Corporation
Statement of Computation of Net Loss Per Share
(In thousands, except per share data - unaudited)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
May 3, April 27, May 3, April 27,
1997 1996 1997 1996
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Net loss $ (6,304) $ (1,311) $ (5,624) $ (804)
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
Computation of common and common equivalent
shares outstanding:
Common stock 6,994 6,806 6,977 6,767
Stock options - - - -
---------- ---------- ---------- ---------
Common and common equivalent shares used in
computing per share amounts 6,994 6,806 6,977 6,767
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
Net loss per share $ (.90) $ (.19) $ (.81) $ (.12)
---------- ---------- ---------- ---------
---------- ---------- ---------- ---------
</TABLE>
- -------------------
Fully diluted computation not presented since such amount differs by less than
3% of the net per share amounts shown above.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S SECOND FISCAL QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-01-1997
<PERIOD-START> NOV-03-1996
<PERIOD-END> MAY-03-1997
<CASH> 10,327
<SECURITIES> 30,183
<RECEIVABLES> 26,072
<ALLOWANCES> 789
<INVENTORY> 11,067
<CURRENT-ASSETS> 80,107
<PP&E> 40,976
<DEPRECIATION> 26,082
<TOTAL-ASSETS> 98,553
<CURRENT-LIABILITIES> 19,895
<BONDS> 0
0
0
<COMMON> 7
<OTHER-SE> 78,646
<TOTAL-LIABILITY-AND-EQUITY> 98,553
<SALES> 52,812
<TOTAL-REVENUES> 52,812
<CGS> 22,182
<TOTAL-COSTS> 22,182
<OTHER-EXPENSES> 37,242
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5,548)
<INCOME-TAX> 76
<INCOME-CONTINUING> (5,624)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,624)
<EPS-PRIMARY> (0.81)
<EPS-DILUTED> (0.81)
</TABLE>
