SYQUEST TECHNOLOGY INC
10-K/A, 1996-06-28
MAGNETIC & OPTICAL RECORDING MEDIA
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                                                              Page 1 of 22 Pages
                                                     Exhibit Index is on Page 21

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
    

                                -----------------

   
                                   FORM 10-K/A
[X]          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended September 30, 1995
                                       OR
[ ]        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934]
          For the transition period from ____________ to ______________
    

                         Commission file number 0-19674

                            SyQuest Technology, Inc.
             (Exact name of registrant as specified in its charter)

         Delaware                                          94-2793941
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)

47071 Bayside Parkway, Fremont, California                    94538
(Address of principal executive offices)                    (Zip Code)

                                 (510) 226-4000
              (Registrant's telephone number, including area code)

                                 --------------

        Securities registered pursuant to Section 12(b) of the Act: None


           Securities registered pursuant to Section 12(g) of the Act:
                     Common Stock, par value $.001 per share
                                (Title of Class)

       Indicate by checkmark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

                    Yes X                               No
                       ---                                ---

       Indicate by checkmark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

       The aggregate  market value of the voting stock held by  nonaffiliates of
the  registrant,  based upon the closing  price of Common  Stock on November 30,
1995 as reported by Nasdaq,  was  approximately  $124,565,364.  Shares of Common
Stock held by each  officer and  director and by each person who owns 5% or more
of the  outstanding  Common Stock have been excluded in that such persons may be
deemed  to  be  affiliates.  This  determination  of  affiliate  status  is  not
necessarily a conclusive determination for other purposes.

       The number of  outstanding  shares of the  registrant's  Common  Stock on
November 30, 1995 was 11,324,124.

                       DOCUMENTS INCORPORATED BY REFERENCE

       Parts of the Proxy  Statement  for  Registrant's  1996 Annual  Meeting of
Stockholders  (the "Proxy  Statement") are incorporated by reference in Part III
of this Annual Report on Form 10-K.

<PAGE>
   
    

    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

            For the years ended September 30, 1995, 1994, and 1993


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

   
    Report of Ernst & Young LLP, Independent Auditors....................... 2

    Consolidated Balance Sheets -- September 30, 1995 and 1994.............. 3

    Consolidated Statements of Operations -- Years Ended September 30,
        1995, 1994, and 1993................................................ 4

    Consolidated Statements of Stockholders' Equity -- Years Ended
        September 30, 1995, 1994, and 1993.................................. 5

    Consolidated Statements of Cash Flows -- Years Ended September 30,
        1995, 1994, and 1993................................................ 6

    Notes to Consolidated Financial Statements.............................. 7
    


                                      -1-
<PAGE>

                REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS


    The Board of Directors and Stockholders
    SyQuest Technology, Inc.


         We have audited the accompanying consolidated balance sheets of SyQuest
Technology,  Inc. and  subsidiaries  as of September 30, 1995 and 1994,  and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for each of the three years in the period ended  September  30, 1995.  Our
audits also included the  financial  statement  schedule  listed in the Index at
Item 14(a).  These financial  statements and schedule are the  responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

         We conducted our audits in accordance with generally  accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

   
         Since the date of completion of our audit of the accompanying financial
statements  and initial  issuance of our report  thereon  dated October 26, 1995
(except for Note 4, as to which the date is December 27,  1995) the Company,  as
discussed in Note 12, has  experienced  a reduction  in revenues  and  increased
costs that  adversely  affect the Company's  current  results of operations  and
liquidity. Note 12 describes management's plans to address these issues.
    

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
SyQuest  Technology,  Inc. and  subsidiaries at September 30, 1995 and 1994, and
the  consolidated  results of their  operations and their cash flows for each of
the three years in the period ended  September  30,  1995,  in  conformity  with
generally  accepted  accounting  principles.  Also, in our opinion,  the related
financial statement schedule, when considered in relation to the basic financial
statements  taken as a whole,  presents  fairly  in all  material  respects  the
information set forth therein.

         As discussed in Note 1 of Notes to Consolidated  Financial  Statements,
in 1994 the Company changed its method of accounting for income taxes.


                                                 Ernst & Young LLP

   
    San Jose, California
    October 26, 1995,
    except for Note 4
    as to which the date is December 27, 1995 and
    Note 12, as to which the date is June 26, 1996
    

                                      -2-
<PAGE>
<TABLE>

                                           SYQUEST TECHNOLOGY, INC.
                                          CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                                 SEPTEMBER 30,
                                                                           1995                 1994
                                                                        -----------         -----------
                                                                       (In Thousands, Except Share Data)
<S>                                                                     <C>                 <C>
ASSETS
Current assets:
    Cash and cash equivalents                                           $  29,248           $  45,982
    Short-term investments                                                    400               1,715
    Accounts receivable                                                    55,653              46,719
    Inventories                                                            34,213              12,148
    Prepaid expenses and deposits                                           2,066               1,707
    Deferred income taxes                                                  13,254               6,537
                                                                          -------             -------
    Total current assets                                                  134,834             114,808

Property, equipment and leasehold improvements:
    Equipment                                                              47,291              38,120
    Furniture and fixtures                                                  2,667               2,347
    Property and leasehold improvements                                     7,832               6,529
                                                                        ---------           ---------
                                                                           57,790              46,996

    Accumulated depreciation and amortization                              31,070              24,634
                                                                        ---------           ---------
                                                                           26,720              22,362

    Other assets                                                            3,130               2,331
                                                                        ---------           ---------
    Total assets                                                         $164,684            $139,501
                                                                        =========           =========

LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
    Accounts payable                                                    $  41,213           $  26,052
    Accrued compensation and benefits                                       5,206               3,529
    Provision for losses on purchase commitments                           10,510                  --
    Accrued expenses and other liabilities                                 15,210               9,755
    Income taxes payable                                                      355               2,820
                                                                        ---------           ---------
Total current liabilities                                                  72,494              42,156

Deferred rent                                                                 276                 264
Deferred income taxes                                                       8,726               6,236

Commitments and contingencies                                                  --                  --

Stockholders' equity:
    Preferred stock, $.001 par value:
       Authorized shares -- 4,000,000
       No shares issued and outstanding                                        --                  --
    Common stock, $.001 par value:
       Authorized shares -- 20,000,000
       Issued and outstanding shares -- 11,323,974 in 1995 and
         10,824,593 in 1994                                                    13                  12
    Additional paid-in capital                                             79,489              74,161
    Treasury common stock at cost -- 1,225,000  shares in 1995 and
       1,125,000 shares in 1994                                           (12,855)            (11,655)
    Retained earnings                                                      16,541              28,327
                                                                        ---------           ---------
Total stockholders' equity                                                 83,188              90,845
                                                                        ---------           ---------
Total liabilities and stockholders' equity                              $ 164,684           $ 139,501
                                                                        =========           =========
<FN>

                                              See accompanying notes.
</FN>
</TABLE>
                                      -3-
<PAGE>
<TABLE>


                                             SYQUEST TECHNOLOGY, INC.
                                       CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>

                                                                                     YEARS ENDED SEPTEMBER 30,
                                                                              1995              1994             1993
                                                                          ------------      ------------     ------------
                                                                               (In Thousands, Except Per Share Data)

<S>                                                                         <C>                <C>             <C>     
Net revenues                                                                $ 299,544          $221,001        $206,362
Cost of revenues                                                              237,987           160,342         131,081
Provision for losses on purchase commitments                                   10,510                --              --
                                                                            ---------        ----------      ----------
Gross profit                                                                   51,047            60,659          75,281
Operating expenses:
    Selling, general, and administrative (includes provision for
      losses on accounts receivable of $2,008 in 1995, $3,151 in
      1994, and $1,725 in 1993)                                                43,796            37,229          37,253
    Research and development                                                   23,892            17,967          19,069
                                                                            ---------        ----------      ----------
Total operating expenses                                                       67,688            55,196          56,322
                                                                            ---------        ----------      ----------
Income (loss) from operations                                                 (16,641)            5,463          18,959

Interest income                                                                 1,134             1,193           1,041
                                                                            ---------        ----------      ----------
Income (loss) before income taxes and cumulative effect of
  accounting change                                                           (15,507)            6,656          20,000
Provision (benefit) for income taxes                                           (3,721)            1,597           4,788
                                                                            ---------        ----------      ----------
Income (loss) before cumulative effect of accounting change                   (11,786)            5,059          15,212

Cumulative effect of change in method of accounting for income   
  taxes                                                                            --               346              --
                                                                            ---------        ----------      ----------

Net income (loss)                                                            $(11,786)         $  5,405        $ 15,212
                                                                            =========        ==========      ==========

Income (loss) per share:
    Primary:
       Income(loss) before cumulative effect of  accounting
         change                                                             $   (1.07)        $     .43        $   1.23
       Cumulative effect of accounting change                                      --               .03              --
                                                                            ---------        ----------      ----------

Net income (loss)                                                           $   (1.07)         $    .46        $   1.23
                                                                            =========        ==========      ==========

Common and common equivalent shares used in computing per share
amounts                                                                        11,063            11,647          12,340
                                                                            =========        ==========      ==========
<FN>

                                              See accompanying notes.
</FN>
</TABLE>

                                      -4-
<PAGE>
<TABLE>

                                             SYQUEST TECHNOLOGY, INC.
                                  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>

                                            Common Stock        Additional   Treasury
                                            ------------         Paid-In      Common     Retained
                                          Shares     Amount      Capital      Stock      Earnings     Total
                                        ----------  --------- -------------- ---------   ---------    -----
                                                              (In Thousands)

<S>                <C>                     <C>       <C>        <C>          <C>         <C>         <C>      
Balance at October 1, 1992                 11,432    $     11   $ 69,179     $   --      $  7,710    $ 76,900 
                                                                            
Stock options exercised                       295           1      1,006         --          --         1,007
Shares issued under the Employee Stock                                      
   Purchase Plan                               56        --          841         --          --           841
Purchase of treasury stock at cost           (500)       --         --         (5,611)                 (5,611)
Income tax benefit from stock options                                       
   exercised                                 --          --          878         --          --           878
Stock option compensation                    --          --          317         --          --           317
Net income                                   --          --         --           --        15,212      15,212
                                         --------    --------   --------     --------    --------    --------
Balance at September 30, 1993              11,283          12     72,221       (5,611)     22,922      89,544
                                                                            
Stock options exercised                        88        --          497         --          --           497
Shares issued under the Employee Stock                                      
   Purchase Plan                               79        --          736         --          --           736
Purchase of treasury stock at cost           (625)       --         --         (6,044)       --        (6,044)
Income tax benefit from stock options                                       
   exercised                                 --          --          642         --          --           642
Stock option compensation                    --          --           65         --          --            65
Net income                                   --          --         --           --         5,405       5,405
                                         --------    --------   --------     --------    --------    --------
Balance at September 30, 1994              10,825          12     74,161      (11,655)     28,327      90,845
                                                                            
Stock options exercised                       502           1      2,932         --          --         2,933
Shares issued under the Employee Stock                                      
   Purchase Plan                               97        --        1,061         --          --         1,061
Purchase of treasury stock at cost           (100)       --         --         (1,200)       --        (1,200)
Income tax benefit from stock options                                       
   exercised                                 --          --        1,321         --          --         1,321
Stock option compensation                    --          --           14         --          --            14
Net income (loss)                            --          --         --           --       (11,786)    (11,786)
                                         --------    --------   --------     --------    --------    --------
Balance at September 30, 1995              11,324    $     13   $ 79,489     $(12,855)   $ 16,541    $ 83,188
                                         ========    ========   ========     ========    ========    ========
<FN>
                                                                          
                                            See accompanying notes
</FN>
</TABLE>
                                      -5-
<PAGE>

<TABLE>

                                 SYQUEST TECHNOLOGY, INC.
                           CONSOLIDATED STATEMENTS OF CASH FLOWS

<CAPTION>

                                                            YEARS ENDED SEPTEMBER 30,
                                                         1995          1994        1993
                                                       ----------   ----------   ---------
                                                                   (In Thousands)
<S>                                                      <C>         <C>         <C>     
OPERATING ACTIVITIES
Net income (loss)                                        $(11,786)   $  5,405    $ 15,212
Adjustments to reconcile net income (loss) to net cash
        provided by (used in) operating activities:
     Depreciation and amortization                          8,052       7,129       6,597
     Deferred income taxes                                 (4,227)     (1,675)      2,543
     Provision for losses on accounts receivable            2,008       3,151       1,725
     Stock option compensation                                 14          65         317
     Deferred rent                                             12          34           8
     Loss on disposal of equipment and leasehold
         improvements                                          99          63          13
Changes in operating assets and liabilities:
     Accounts receivable                                  (10,942)    (17,720)    (13,169)
     Inventories                                          (22,065)     (1,487)       (674)
     Prepaid expenses and deposits                           (359)       (991)        221
     Accounts payable                                      15,161      11,036      (2,325)
     Accrued compensation and benefits                      1,677        (437)       (344)
     Provision for losses on purchase commitments          10,510        --          --
     Accrued expenses and other liabilities                 5,455       2,058       2,092
     Income taxes payable                                  (1,144)      3,462       2,444
                                                         --------    --------    --------
Net cash provided by (used in) operating activities        (7,535)     10,093      14,660

INVESTING ACTIVITIES
Purchase of property, equipment and leasehold
         improvements                                     (12,509)     (7,743)     (7,292)
Purchase of short-term investments                         (3,178)     (7,603)     (2,770)
Proceeds from sale of short-term investments                4,493       5,895       3,271
Investment in Silmag                                       (2,100)       --          --
Other                                                       1,301          44      (2,014)
                                                         --------    --------    --------
Net cash used in investing activities                     (11,993)     (9,407)     (8,805)

FINANCING ACTIVITIES
Purchase of treasury stock                                 (1,200)     (6,044)     (5,611)
Proceeds from sale of common stock and
exercise of stock options                                   3,994       1,233       1,848
                                                         --------    --------    --------
Net cash provided by (used in) financing activities         2,794      (4,811)     (3,763)
                                                         --------    --------    --------

Increase (decrease) in cash and cash equivalents          (16,734)     (4,125)      2,092
Cash and cash equivalents at beginning of year             45,982      50,107      48,015
                                                         --------    --------    --------
Cash and cash equivalents at end of year                 $ 29,248    $ 45,982    $ 50,107
                                                         ========    ========    ========
<FN>

                                  See accompanying notes.
</FN>
</TABLE>

                                      -6-

<PAGE>


                            SYQUEST TECHNOLOGY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 1995




1. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

The  consolidated   financial   statements   include  the  accounts  of  SyQuest
Technology, Inc. (the "Company" or "SyQuest") and its wholly owned subsidiaries.
All significant  intercompany  accounts and transactions have been eliminated in
consolidation.

CASH EQUIVALENTS

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when purchased to be cash equivalents.

SHORT-TERM INVESTMENTS

The Company  considers  investments with an original maturity of more than three
months but less than  twelve  months to be  short-term  investments.  Short-term
investments consist primarily of certificates of deposit,  bankers  acceptances,
commercial paper, and U.S. Government agency debt securities.

Effective  October  1,  1994,  the  Company  adopted   Statements  of  Financial
Accounting  Standards No. 115,  "Accounting for Certain  Investments in Debt and
Equity  Securities"  (SFAS 115). In accordance with the Statement,  prior period
financial  statements have not been restated to reflect the change in accounting
principle.  The cumulative  effect as of October 1, 1994 of the adoption of SFAS
115 did not have a  material  effect on the  Company's  financial  condition  or
results of operations.

The   Company   has    classified   its   entire    investment    portfolio   as
available-for-sale.  Available-for-sale securities are stated at fair value with
unrealized gains and losses included in shareholders' equity. The amortized cost
of debt  securities  is adjusted for  amortization  of premiums and accretion of
discounts  to  maturity.  Such  amortization  is included  in  interest  income.
Realized  gains and losses are included in other income  (expense).  The cost of
securities is based on the specific identification method.

INVENTORIES

Inventories  are  stated at the lower of cost  (first-in,  first-out  method) or
market.

EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Equipment and leasehold  improvements are stated on the basis of cost. Equipment
is  depreciated  over the  estimated  useful  lives (three to five years) of the
assets using the straight-line method.  Leasehold  improvements are amortized by
the  straight-line  method over the shorter of the life of the related  asset or
the term of the lease.

                                      -7-
<PAGE>

         In  1995,  the  Financial   Accounting  Standards  Board  released  the
Statement of Financial Accounting Standards No. 121 (SFAS 121),  "Accounting for
the  Impairment of Long-Lived  Assets and for  Long-Lived  Assets to be Disposed
of." SFAS 121 requires  recognition  of impairment  of long-lived  assets in the
event the net book value of such  assets  exceeds the future  undiscounted  cash
flows  attributable  to such  assets.  SFAS 121 is  effective  for fiscal  years
beginning after December 15, 1995.  Adoption of SFAS 121 is not expected to have
a material impact on the Company's financial position or results of operations.

FOREIGN CURRENCY TRANSLATION AND FOREIGN CURRENCY TRANSACTIONS

The  functional  currency  of the  Company's  foreign  subsidiaries  is the U.S.
dollar.  Subsidiary  financial  statements are remeasured into U.S.  dollars for
consolidation.  Foreign currency  transaction gains of $468,000,  $337,000,  and
$319,000 are included in income for 1995, 1994, and 1993, respectively.

REVENUE RECOGNITION

Revenue from sales of products is recognized upon shipment to customers.

INCOME TAXES

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 109,
"Accounting for Income Taxes" (SFAS 109) effective  October 1, 1993.  Under SFAS
109,  deferred tax assets and  liabilities  are determined  based on differences
between the financial  reporting and tax basis of assets and liabilities and are
measured by applying  enacted tax rates and laws to taxable  years in which such
differences  are  expected to reverse.  In prior  years,  income tax expense was
determined using Accounting  Principles Board Opinion No. 11 (APB 11). Under APB
11,  deferred  tax expense  was based on items of income and  expense  that were
reported in different years in the financial statements and tax returns and were
measured at the tax rate in effect in the year the difference originated.

The effect of adopting  SFAS 109 was to increase  1994 net income and income per
share by $346,000 and $.03, respectively.

WARRANTY

The Company  generally  warrants its products for one to five years. A provision
for estimated future warranty costs is recorded at the time of shipment.

INCOME (LOSS) PER SHARE

Income per share for the years ended September 30, 1994 and 1993 is based on the
weighted  average  number of shares of common  stock  outstanding  and  dilutive
common  equivalent  shares from stock options (using the treasury stock method).
Loss per share for the year ended  September  30, 1995 is based on the  weighted
average number of shares of common stock outstanding.

DERIVATIVE FINANCIAL INSTRUMENTS

During  fiscal 1995,  the Company  adopted  Statement  of  Financial  Accounting
Standards No. 119, "Disclosure about Derivative  Financial  Instruments and Fair
Value of Financial Instruments" (FAS 119).

                                      -8-
<PAGE>

The Company may enter into forward foreign currency  forward exchange  contracts
to manage exposure related to certain foreign  currency  commitments and certain
foreign currency denominated balance sheet positions. The Company does not enter
into derivative  financial  instruments for trading  purposes.  At September 30,
1995, the Company had forward exchange  contracts  totaling  $12,300,000 for the
purchase of Singapore dollars,  $2,313,000 of forward contracts for the purchase
of  Malaysian  Ringgits and  $830,000 of forward  contracts  for the purchase of
Japanese Yen. All forward  contracts entered into by the Company have maturities
of 60 days or less.

While the  contract  or  notional  amounts  of the  Company's  forward  exchange
contracts provide one measure of the volume of these  transactions,  they do not
represent  the amount of the  Company's  exposure  to credit  risk.  The amounts
potentially  subject to credit risk  (arising  from the  possible  inability  of
counterparties  to meet the terms of their  contracts) are generally  limited to
the  amounts,  if any,  by  which  the  counterparties  obligations  exceed  the
obligations  of the Company.  The Company  controls  credit risk through  credit
approvals,  limits  and  monitoring  procedures.   Credit  rating  criteria  for
off-balance sheet transactions are similar to those for investments.

EMPLOYEE STOCK PLANS

         The Company  accounts for its stock option plans and the Employee Stock
Purchase Plan in accordance with provisions of the Accounting Principles Board's
Opinion No. 25 (APB 25),  "Accounting  For Stock Issued to  Employees." In 1995,
the Financial  Accounting  Standards  Board  released the Statement of Financial
Accounting   Standard   No.  123  (SFAS   123),   Accounting   for  Stock  Based
Compensation."  SFAS 123 provides an  alternative to APB 25 and is effective for
fiscal years  beginning after December 15, 1995. The Company expects to continue
to account for its employee stock plans in accordance with the provisions of APB
25.  Accordingly,  SFAS 123 is not expected to have any  material  impact on the
Company's financial position or results of operations.

2. BUSINESS SEGMENT AND CONCENTRATION OF CREDIT RISK

The Company operates in one business  segment,  the development,  production and
marketing  of  removable   cartridge   Winchester  disk  drives  and  associated
cartridges.  The Company has  manufacturing  facilities in Singapore and Penang,
Malaysia, which produce the majority of the Company's drives and cartridges. The
Company sells  primarily to aftermarket  original  equipment  manufacturers  and
distributors  in the personal  computer  market.  The Company  performs  ongoing
credit evaluations of its customers'  financial condition and generally requires
no collateral.

One  customer  accounted  for more than 10% of revenues in 1995 and no customers
accounted for 10% or more of revenues in 1994, or 1993.

Export sales by domestic  operations  accounted for approximately 1%, 3%, and 5%
of net revenues in 1995, 1994, and 1993, respectively, and are made primarily to
Europe & Far East customers.

                                      -9-
<PAGE>
<TABLE>

The following tables summarize the Company's  operations in different geographic
areas:
<CAPTION>

                                                                                 ADJUSTMENTS
                                                  NORTH                              AND
                                                 AMERICA           FAR EAST      ELIMINATIONS     CONSOLIDATED
                                                ---------------------------------------------------------------
                                                                                (In Thousands)
<S>                                               <C>              <C>             <C>              <C>        
   
1995
Sales to unaffiliated customers                   $ 186,276        $  113,268      $        --      $   299,544
Transfers between geographic locations                8,590           256,106         (264,696)              --
                                                  -------------------------------------------------------------
Total net revenues                                $ 194,866        $  369,374      $  (264,696)     $   299,544
                                                  =============================================================
Income (Loss) from operations                       (20,505)       $    5,618      $    (1,754)     $   (16,641)
Other income                                            742               392               --            1,134
                                                  -------------------------------------------------------------
Income (Loss) before income taxes                 $ (19,763)       $    6,010      $    (1,754)     $   (15,507)
                                                  =============================================================
Identifiable assets                                  97,008        $   73,483      $    (5,807)     $   164,684
                                                  =============================================================

1994
Sales to unaffiliated customers                  $  144,123        $   76,878      $        --      $   221,001
Transfers between geographic locations               31,142           166,037         (197,179)              --
                                                 --------------------------------------------------------------
Total net revenues                               $  175,265        $  242,915      $  (197,179)     $   221,001
                                                 ==============================================================
Income from operations                           $    1,130        $    4,395      $       (62)     $     5,463
Other income                                            760               433               --            1,193
                                                 --------------------------------------------------------------
Income before income taxes and
  cumulative effect of accounting change         $    1,890        $    4,828      $       (62)     $     6,656
                                                 ==============================================================
Identifiable assets                              $  106,411        $   37,228      $    (4,138)     $   139,501
                                                 ==============================================================

1993
Sales to unaffiliated customers                  $  145,648        $   60,714      $        --      $   206,362
Transfers between geographic locations           $   34,722           149,380         (184,102)              --
                                                 --------------------------------------------------------------
Total net revenues                               $  180,370        $  210,094      $  (184,102)     $   206,362
                                                 ==============================================================
Income from operations                           $    2,415        $   15,332      $     1,212      $    18,959
Other income                                            596               445               --            1,041
                                                 --------------------------------------------------------------
Income before income taxes                       $    3,011        $   15,777      $     1,212      $    20,000
                                                 ==============================================================
Identifiable assets                                  85,926        $   38,654      $    (4,077)     $   120,503
                                                 ==============================================================
</TABLE>
    

Sales and transfers  between  geographic areas generally  provide a profit after
coverage of all  manufacturing  costs. Far East sales include all shipments from
the Company's Far East operations to unaffiliated  customers irrespective of the
ultimate  destination.  Income  from  operations  is  total  net  revenues  less
operating expenses.

The  identifiable  assets  by  geographic  area  are  those  assets  used in the
Company's operations in each area.

                                      -10-

<PAGE>

3. SUPPLEMENTARY BALANCE SHEET INFORMATION
                                                               September 30,
                                                            1995         1994
                                                          -------      -------
Accounts receivable:
     Accounts receivable                                  $58,488      $50,293
     Less allowance for doubtful accounts                  (2,835)      (3,574)
                                                          -------      -------
                                                          $55,653      $46,719
                                                          =======      =======
Inventories:
     Raw materials                                        $22,258      $ 5,266
     Work-in-process                                        8,564        3,362
     Finished goods                                         3,391        3,520
                                                          -------      -------
                                                          $34,213      $12,148
                                                          =======      =======
Accrued expenses and other liabilities:
     Accrued warranty                                      $5,676      $ 3,533
     Co-op advertising/Market development funds             5,314        3,002
     Other                                                  4,220        3,220
                                                          -------      -------
                                                          $15,210      $ 9,755
                                                          =======      =======

4. LINE OF CREDIT

The  Company  has a line of  credit  agreement  (the  "Agreement")  with a bank,
expiring in February 1997.  Borrowings  under the Agreement bear interest at the
bank's prime rate plus 3/4 percent (9-1/2% at September 30, 1995). The Agreement
also provides for the issuance of letters of credit not to exceed  $2,000,000 in
the aggregate.  The total of borrowings and letters of credit are limited to the
lesser of $10,000,000 or 75 percent of the eligible accounts  receivable and are
collateralized by all assets of the Company.  The Agreement requires the Company
to meet financial covenants and places limitations on additional  borrowings and
payment of dividends.  At September 30, 1995,  the Company was in default on the
financial  covenant  requirements  for  profitability,  quick  asset  ratio  and
tangible net worth.  Subsequent  to September  30, 1995 the covenant  violations
were waived by the bank and the line of credit Agreement was amended on December
27, 1995 to bring the Company into  compliance  with the terms and conditions of
the amended Agreement.  There were no borrowings outstanding under the Agreement
at September  30, 1995 and  $9,859,000  was available for borrowing at September
30, 1995.


5. TREASURY STOCK

In February 1993, the Board of Directors authorized the Company to repurchase up
to one million shares of the Company's common stock. In April 1994, the Board of
Directors  authorized  the Company to  repurchase  up to an  additional  500,000
shares of the Company's common stock. The Company acquired 100,000,  625,000 and
500,000 shares of its common stock for approximately $1,200,000, $6,000,000, and
$5,600,000 through open market  transactions during fiscal 1995, 1994, and 1993,
respectively. The Company has acquired a total of 1,225,000 shares of its common
stock as of  September  30,  1995.  These  shares are held as treasury  stock at
September 30, 1995.


6. STOCK OPTION PLANS AND COMMON STOCK RESERVED

In 1991, the Company adopted the SyQuest Technology, Inc. 1991 Stock Option Plan
(the "Plan")  covering  3,403,524  shares of common stock for issuance under the
Plan and assumed stock options

                                      -11-
<PAGE>

currently  outstanding  under  predecessor stock option plans. The Plan provides
for the issuance of incentive  stock options and non statutory  stock options to
officers, employees of the Company and its subsidiaries (including directors who
are also employees),  consultants, and independent contractors.  Options granted
under  the Plan are  granted  at fair  value  on the  date of grant  and  become
exercisable  within the times or upon the events  determined by the Stock Option
Committee as set forth in the grant and expire within ten years from the date of
the grant.  In 1995,  the Company  adopted an  amendment to Plan to increase the
authorized number of shares for the Plan from 3,403,524 to 4,428,524.

In 1992,  the Company  adopted the 1992  Nonemployee  Director Stock Option Plan
(the "Director  Plan") and reserved 150,000 shares of common stock for issuance.
The Director  Plan was amended in 1994 to increase the size of the annual option
grants.  The Board of Directors  administers  the Director  Plan.  In 1995,  the
Company  adopted an amendment to the  Director  Plan to increase the  authorized
number of shares for the plan from  150,000 to  250,000.  Options are granted at
fair value on the grant date and  options may only be granted to  Directors  who
are not employees of the Company or its subsidiaries  (Outside  Directors).  All
option grants are automatic and  nondiscretionary.  After each annual meeting of
stockholders  at which  directors  are  elected,  reelected,  or  continuing  as
directors,  each Outside  Director shall be  automatically  granted an option or
options.  These options are to purchase such number of shares of common stock as
necessary  so that during each of the four  immediately  following  twelve-month
periods  of July 1 through  June 30,  such  Outside  Directors  will have  stock
options  (including  Company  stock  options  granted under plans other than the
Director  Plan)  which  become  exercisable  with  respect to a minimum of 5,000
shares  during each such  period.  Prior to 1994 the  minimum  was 2,500  shares
during each such period.  As of September 30, 1995,  options to purchase  95,000
shares of common stock were outstanding under this plan.

<TABLE>

The following  table  summarizes  stock option  activity  under the Plan and the
Director Plan:

<CAPTION>

                                                                              OPTION PRICE
                                                       ------------------------------------------------------------
                                                           SHARES               PER SHARE               AGGREGATE
                                                       --------------- ---------------------------- ---------------
                                                                (In Thousands, Except Per Share Amounts)
<S>                                                           <C>          <C>              <C>          <C>    
Outstanding at October 1, 1992                                2,039        $  .30   -     $24.25       $14,173
    Granted                                                     591        $ 9.00   -     $28.25         7,896
    Exercised                                                  (295)       $  .30   -     $ 7.50        (1,007)
    Canceled                                                   (336)       $ 1.25   -     $27.25        (3,629)
                                                       --------------- ----------- ---- --------- ---------------
Outstanding at September 30, 1993                             1,999        $  .30   -     $28.25        17,433
    Granted                                                     750        $ 9.00   -     $11.63         7,189
    Exercised                                                   (88)       $  .30   -     $18.00          (497)
    Canceled                                                   (360)       $ 1.25   -     $28.25        (5,948)
                                                       --------------- ----------- ---- --------- ---------------
Outstanding at September 30, 1994                             2,301        $  .30   -     $27.25        18,177
    Granted                                                     833        $11.50   -     $16.75        11,865
    Exercised                                                  (502)       $  .30   -     $12.50        (2,933)
    Canceled                                                   (431)       $ 7.50   -     $27.25        (6,176)
                                                       --------------- ----------- ---- --------- ---------------
Outstanding at September 30, 1995                             2,201        $  .30   -     $24.25       $20,933
                                                       =============== =========== ==== ========= ===============
</TABLE>
                                      -12-
<PAGE>

At September 30, 1995, options to purchase 878,533 shares were exercisable,  and
934,076 shares were available for grant.

The  following  table  summarizes  shares of common  stock  reserved  for future
issuance by the Company under the Company's  stock option and purchase  plans as
of September 30, 1995:

     1991 stock option plan                               3,135,076
     Director stock option plan                             250,000
     Employee stock purchase plan                           267,017
                                                          ---------
                                                          3,652,093
                                                          =========

7. EMPLOYEE STOCK PURCHASE PLAN

In 1992,  the  Company  adopted  the 1992  Employee  Stock  Purchase  Plan  (the
"Purchase Plan"),  and 500,000 shares of common stock were reserved for issuance
under the Purchase  Plan. The Purchase Plan is intended to qualify under Section
423 of the Internal Revenue Code of 1986, as amended.

The Purchase Plan is implemented by a single offering for each six-month  period
commencing on  approximately  February 1 and August 1 of each year. The Purchase
Plan is administered  by the Board of Directors or a committee  appointed by the
Board of  Directors.  The Purchase Plan permits  eligible  employees to purchase
common  stock  through  payroll  deductions,  which  may  not  exceed  15% of an
employee's compensation, at a price equal to 85% of the lower of the fair market
value  of the  common  stock as of the  first  day or as of the last day of each
offering  period.  As of September 30, 1995,  232,983 shares of common stock had
been issued under the Purchase Plan.


8. BONUS, PROFIT SHARING AND 401(K) SAVINGS AND RETIREMENT PLANS

The  Company  has  bonus  and  profit  sharing  plans  that  provide  additional
compensation to substantially all employees.  The profit sharing compensation is
determined on an annual basis based  principally on a percentage of income after
taxes, before profit sharing, and the Company meeting certain objectives for the
year. Bonuses for officers and key management  personnel are determined annually
at the discretion of the Board of Directors.  Such  determination  considers the
extent to which  individuals  and the Company meet  objectives for the year. The
Company did not record bonus and profit  sharing  expenses in 1995.  The Company
recorded  bonus and profit  sharing  expenses of $455,000 and $2,471,000 in 1994
and 1993, respectively.

The Company adopted a 401(k) Savings and Retirement Plan (the "Savings Plan") to
provide  for  voluntary  salary  deferral  contributions  on a  pretax  basis in
accordance with Section 401(k) of the Internal Revenue Code of 1986, as amended.
The Company has the option of matching a certain  percent of each  participant's
contribution  to the  Savings  Plan.  The  Company's  maximum  contribution  per
participant  was limited to $1,000 in 1995,  $500 in 1994 and $250 in 1993.  The
Company made matching contributions of $242,000,  $135,000, and $59,000 in 1995,
1994, and 1993, respectively.

                                      -13-
<PAGE>

9.        INCOME TAXES
<TABLE>

The  income  tax  provisions  for  fiscal  1995,  1994 and 1993  consist  of the
following:
<CAPTION>

                                                                                                 DEFERRED
                                                                 LIABILITY METHOD                 METHOD
                                                               1995               1994             1993
                                                         ------------------------------------- ---------------
                                                                          (In Thousands)
<S>                                                              <C>               <C>            <C>
Federal:
       Current                                                   $   (421)         $1,455         $   955
       Deferred                                                    (2,578)             79           2,627
                                                         -------------------- ---------------- ---------------
                                                                   (2,999)          1,534           3,582
State:
       Current                                                        181             324           1,277
       Deferred                                                      (928)           (279)            (84)
                                                         -------------------- ---------------- ---------------
                                                                     (747)             45           1,193
Foreign:
       Current                                                         25              18              13
                                                         -------------------- ---------------- ---------------

Provision (benefit) for income taxes                              $(3,721)         $1,597          $4,788
                                                         ==================== ================ ===============
</TABLE>
<TABLE>

Deferred tax assets and liabilities are determined based on differences  between
the financial reporting and tax basis of assets and liabilities and are measured
by  applying  enacted  tax rates  and laws to the  taxable  years in which  such
differences are expected to reverse. The significant components of the Company's
deferred tax assets and liabilities were as follows:
<CAPTION>

                                                                        SEPTEMBER 30,         SEPTEMBER 30,
                                                                            1995                   1994
                                                                    ---------------------- ---------------------
                                                                                (In Thousands)
<S>                                                                          <C>                 <C>      
DEFERRED TAX ASSETS
Credit carryforwards                                                         $ 1,773             $ 1,497
Receivable reserves                                                              879               1,207
Warranty reserves                                                              1,152                 811
Inventory valuation reserve                                                    7,668               1,453
Accrued expenses                                                               1,561                 862
Other - net                                                                      949               1,007
                                                                    ---------------------- -------------------
     Total Deferred Tax Assets                                                13,982               6,837
Valuation allowance                                                             (728)               (300)
                                                                    ---------------------- -------------------
     Net Deferred Tax Assets                                                 $13,254             $ 6,537

DEFERRED TAX LIABILITIES
Unremitted income of foreign subsidiaries                                     (8,417)            $(5,703)
Depreciation of plant and equipment                                             (309)               (533)
                                                                    ---------------------- -------------------
     Total Deferred Tax Liabilities                                           (8,726)             (6,236)
                                                                    ---------------------- -------------------
Net Deferred Tax Assets                                                      $ 4,528             $   301
                                                                    ====================== ===================
</TABLE>

The valuation  allowance  has been  provided for deferred tax assets  related to
foreign net operating loss  carryforwards.  The valuation allowance increased by
$300,000 in fiscal 1994 and by $428,000 in fiscal 1995.

                                      -14-
<PAGE>

The  realization of  approximately  $3,000,000 of the Company's net deferred tax
assets,  which  relate  primarily  to  temporary  differences,  is  dependent on
generating  sufficient  taxable income during the periods in which the temporary
differences  are  expected  to reverse.  Although  realization  is not  assured,
management  believes it is more likely than not that the net deferred tax assets
will  be  realized.  The  amount  of the  net  deferred  tax  assets  considered
realizable,  however,  could be reduced in the near term if  estimates of future
taxable  income during the reversal  period are reduced.  Management  intends to
evaluate the  realizability of the net deferred tax asset each quarter to assess
the need for a valuation allowance.
<TABLE>

The reconciliation of income taxes provided at the federal statutory rate to the
income tax provision follows:
<CAPTION>

                                                                                                            
                                                                                   LIABILITY METHOD          DEFERRED 
                                                                            ------------------------------    METHOD  
                                                                                 1995            1994          1993
                                                                            ------------------------------ --------------
                                                                                         (In Thousands)
<S>                                                                             <C>             <C>             <C>   
Income taxes (benefit) computed at the federal statutory rate                   $(5,272)        $2,263          $6,795
State income taxes (benefit) net of federal income tax effect                      (511)            30             787
Foreign income taxes                                                                 25             18              13
Foreign loss for which no current tax benefit is recognizable                       427            300              --
Taxes provided on earnings of foreign subsidiaries  previously  considered
    to be permanently invested in non-U.S. operations                             1,768             --              --
Benefit from net earnings of foreign subsidiaries considered to be                   
  permanently invested in non-U.S. operations                                        --           (652)         (1,583)
Utilization of tax credits                                                         (566)          (227)         (1,000)
Other                                                                               408           (135)           (224)
                                                                            ---------------- ------------- --------------
                                                                                $(3,721)        $1,597          $4,788
                                                                            ================ ============= ==============
</TABLE>

Income taxes paid  (refunded) were  $1,600,000,  ($670,000),  and ($40,000),  in
fiscal 1995, 1994, and 1993, respectively.

The Company's manufacturing operation in Singapore operates under a tax holiday,
which originally expired in fiscal year 1994. The Company has now met all of the
conditions  necessary to extend the tax holiday to the end of fiscal  1996.  The
net impact of this tax  holiday  was to  increase  net  income by  approximately
$518,130 ($0.04 per share) in fiscal 1994, and  approximately  $1,254,764 ($0.10
per  share) in fiscal  1993.  The tax  holiday  had no impact on the net loss in
fiscal 1995.

The  Company  has  approximately  $  2,141,000  in foreign  net  operating  loss
carryforwards. These carryforwards will expire in fiscal 1999 and fiscal 2000.


10. COMMITMENTS, CONTINGENCY AND LITIGATION

The Company leases its United States  facilities under  noncancelable  operating
lease  agreements.  These leases terminate  during 1997, 1999 and 2000,  include
five-year  renewal  options,  and contain  provisions  for  adjustments to lease
payments  based on the fair  market  value of similar  properties.  The  Company
leases its Singapore facilities under noncancelable lease agreements expiring in
1996 through 1998. The Company  leases its facilities in Amsterdam,  Netherlands
under a noncancelable lease agreement expiring in 2000.

                                      -15-
<PAGE>

Total rent expense amounted to $3,250,000,  $3,001,000, and $2,956,000 for 1995,
1994, and 1993, respectively.

Future minimum rental  commitments under  noncancelable  operating leases are as
follows (in thousands):

            1996                                              $2,820
            1997                                               2,620
            1998                                               2,037
            1999                                               1,195
            2000                                                 250
                                                              ------
            Total minimum lease payments                      $8,922
                                                              ======

A third party has notified the Company that it believes SyQuest infringes on six
U.S. patents.  It is the Company's belief that the alleged  infringement  claims
are without  merit or that the  infringement  claims  relate to component  parts
purchased  from  vendors.  The Company also believes that in the event the third
party prevails on its claims,  the Company will be indemnified by its vendor for
any liability  arising from the alleged  infringements and that this matter will
not  have  a  material  effect  upon  its  financial  condition  or  results  of
operations.

The Company has filed suit against Nomai,  S.A. (Nomai) and Maxell in France for
copyright  and patent  infringement  and is seeking a  temporary  injunction  to
prohibit the sale and distribution of Nomai's 200 megabyte cartridges.

                                      -16-

<PAGE>

11. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                         THREE MONTHS ENDED
                                                           --------------------------------------------
                                                              (In thousands, except per share data)

                                                             DEC. 31,  MARCH 31    JUNE 30    SEPT. 30
                                                              1994       1995        1995       1995
                                                            --------   --------    --------   --------
<S>                                                         <C>        <C>         <C>        <C>     
Net revenues                                                $ 65,892   $ 76,490    $ 68,787   $ 88,375
Gross profit (loss)(A)                                        15,927     21,460      18,427     (4,767)
Income (loss) from operations                                  2,165      4,539       1,988    (25,333)
Net income (loss)                                              1,923      3,686       1,711    (19,106)

Net income (loss) per share                                 $   0.16   $   0.31    $    .15   $  (1.70)



                                                             DEC. 31,  MARCH 31     JUNE 30   SEPT. 30
                                                              1993       1994        1994       1994
                                                            --------   --------    --------   --------
Net revenues                                                $ 47,332   $ 46,344    $ 57,285   $ 70,040
Gross profit                                                  15,724     12,237      15,290     17,408
Income (loss) before cumulative effect of accounting
   change                                                      2,436     (1,654)      1,682      2,595
Cumulative effect of accounting change                           346       --          --         --

Net income (loss)                                              2,782     (1,654)      1,682      2,595

Income (loss) per share:
Income (loss) before cumulative effect of accounting
   change                                                   $   0.20   $  (0.15)   $   0.15   $   0.23
Cumulative effect of accounting change                          0.03       --          --         --
                                                            --------   --------    --------   --------


Net income (loss) per share                                 $   0.23   $  (0.15)   $   0.15   $   0.23
<FN>

        (A)   During the fourth  quarter of fiscal 1995,  the Company wrote down
              inventories  by $2.0 million and provided a $10.5 million  reserve
              for non-cancelable open purchase commitments.
</FN>
</TABLE>


12. SUBSEQUENT EVENT

   
The Company has incurred  losses in its most recent fiscal year ended  September
30, 1995 and its fiscal quarters ended December 31, 1995 and March 31, 1996. The
Company  announced in its Form 10-Q for the quarter ended March 31, 1996 that it
did not expect to be profitable for the quarter ended June 30, 1996.

The Company is presently in need of additional  cash to meet its working capital
needs.  On June 14, 1996,  the Company  closed the sale of 20,000  shares of its
Preferred Stock for $20 million in gross  proceeds.  The Company is currently in
discussion with a number of additional potential investors who have expressed an
interest in making an investment  in the Company.  The Company also is
    

                                      -17-
<PAGE>

   
presently  working  with  its  suppliers  to  negotiate  satisfactory  repayment
arrangements  but  there can be no  assurance  that  such  negotiations  will be
successful.

Although the Company expects the current  sources of financing  available to the
Company will be sufficient to fund the Company's  operations  through the end of
its fiscal  year,  the Company will  require  additional  funds during its first
quarter in the next fiscal year or  thereafter  to finance its  operations.  The
precise amount and timing of the Company's funding needs cannot be determined at
this time, and will depend upon a number of factors, including the market demand
for the Company's  products,  the progress of the Company's product  development
efforts,  the  availability  of critical  components,  the  Company's  strategic
alliances  for the  manufacture  of its products,  and the  Company's  inventory
management.  There can be no assurance that funds required by the Company in the
future will be available on terms satisfactory to the Company.  The inability to
obtain needed funding on satisfactory terms would have a material adverse effect
on the Company's business and financial results.
    

                                      -18-
<PAGE>
   
    

                                     PART IV

ITEM 14.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON     
             FORM 8-K

    (a)      The following documents are filed as a part of this Report:

   
                (1) Financial  Statements. The  following Consolidated Financial
                    Statements of  SyQuest  Technology,  Inc.  and  subsidiaries
                    are included in Item 8 of this Annual Report on Form 10-K/A:
    

                     Report  of  Ernst  &  Young  LLP,   Independent  Auditors

                     Consolidated Balance Sheets - September 30, 1995 and 1994

                     Consolidated  Statements  of  Operations  -  Years  Ended
                     September 30, 1995, 1994, and 1993

                     Consolidated  Statements of Stockholders' Equity -- Years
                     Ended September 30, 1995, 1994, and 1993

                     Consolidated  Statements  of Cash  Flows --  Years  Ended
                     September 30, 1995, 1994, and 1993

                     Notes to Consolidated Financial Statements

                (2) Financial  Statement  Schedules.  The following consolidated
                    financial   statement   schedule   of   the   Company    and
                    subsidiaries  are filed as part of this  Report  and  should
                    be read  in  conjunction  with  the  Consolidated  Financial
                    Statements of SyQuest Technology, Inc. and subsidiaries.

                  Schedule  for the Years Ended  September  30,  1995,  1994 and
                  1993:

Schedule                                                               Page
                                                                       ----

II             -   Valuation and Qualifying Accounts                    42


        Schedules  not  listed  above  have been  omitted  because  they are not
applicable  or are not  required  or the  information  required  to be set forth
therein is included in the Consolidated Financial Statements or Notes thereto.


        (3)                Exhibits                             Notes:
- ---------------- --------------------------------------------- --------
   
    

     23.1        Consent of Independent Auditors

   
    

                                      -19-

<PAGE>

                                   SIGNATURES

   
         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Registrant  has duly caused this  Amendment  to its
Annual  Report  on Form 10-K to be  signed  on its  behalf  by the  undersigned,
thereunto, duly authorized.
    

                                SYQUEST TECHNOLOGY, INC.


   
                                By: /S/ Edwin L. Harper
                                    ------------------------------
                                    Edwin L. Harper
                                    President and Chief Executive


Dated:  June 28, 1996
    

   
    

                                      -20-
<PAGE>
   
    

                                INDEX TO EXHIBITS


   
Exhibit No.                   Sequentially Numbered Page Number
- -----------                   ---------------------------------

    
   


    23.1                                    22




                                      -21-

    





                                  Exhibit 23.1

                            SYQUEST TECHNOLOGY, INC.

                         CONSENT OF INDEPENDENT AUDITORS


   
We consent to the  incorporation  by  reference in the  Registration  Statements
(Form S-8 Nos. 33-46460,  33-48273,  33-99224,  33-99372) pertaining to the 1991
Stock Option Plan, the 1992 Non-Employee Director Stock Option Plan and the 1992
Employee  Stock  Purchase Plan of SyQuest  Technology,  Inc. of our report dated
October 26, 1995  (except  note 4 as to which the date is December  27, 1995 and
Note 12, as to which the date is June 26, 1996) with respect to the consolidated
financial  statements and schedule of SyQuest  Technology,  Inc. included in the
Annual Report (Form 10-KA) for the year ended September 30, 1995.



San Jose, California
June 26, 1996
    



                                      -22-


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