<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-50464
NETRIX CORPORATION
------------------
(Exact name of registrant as specified in charter)
Delaware 54-1345159
- --------------------------- -----------------------------
(State of Incorporation) (IRS Employer Identification No.)
13595 Dulles Technology Drive, Herndon, Virginia 22071
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(703) 742-6000
--------------
(Registrant's telephone number, including area code)
Indicate by check number 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
------ ------
At July 31, 1996 there were 9,491,940 shares of the registrant's
Common Stock, $.05 par value per share, outstanding.
<PAGE>
NETRIX CORPORATION
------------------
FORM 10-Q
---------
JUNE 30, 1996
-------------
INDEX
-----
<TABLE>
<CAPTION>
Page No.
----------
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Condensed Consolidated Statements of Operations
for the six months and three months ended
June 30, 1996 and June 30, 1995 3
Condensed Consolidated Balance Sheets 4
Condensed Consolidated Statements of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 10
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS 13
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE 14
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
NETRIX CORPORATION
------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
--------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Product.................................... $16,362 $23,069 $ 7,729 $11,539
Service.................................... 5,372 4,901 2,809 2,458
------- ------- ------- -------
Total revenues.......................... 21,734 27,970 10,538 13,997
Cost of revenues:
Product.................................... 6,892 9,257 3,018 4,712
Service.................................... 3,457 3,449 1,742 1,711
------- ------- ------- -------
Total cost of revenues.................. 10,349 12,706 4,760 6,423
------- ------- ------- -------
Gross profit........................ 11,385 15,264 5,778 7,574
Operating expenses:
Sales and marketing........................ 6,044 7,307 2,850 3,698
Research and development................... 5,588 5,397 2,694 2,733
General and administrative................ 2,160 2,507 1,064 1,181
Restructuring reserve...................... 900 -- -- --
------- ------- ------- -------
Income (loss) from operations........ (3,307) 53 (830) (38)
Interest income, net............................ 263 344 86 198
Foreign exchange gain (loss).................... (45) 189 (34) 48
------- ------- ------- -------
Income (loss) before income taxes.... (3,089) 586 (778) 208
Provision for income taxes...................... 36 55 18 17
------- ------- ------- -------
Net income (loss)............................... $(3,125) $ 531 $ (796) $ 191
======= ======= ======= =======
Earnings per share.............................. $ (0.33) $ 0. 06 $ (0.08) $ 0. 02
======= ======= ======= =======
Weighted average number of shares outstanding... 9,441 9,499 9,447 9,470
======= ======= ======= =======
</TABLE>
See notes to unaudited condensed consolidated financial statements.
3
<PAGE>
NETRIX CORPORATION
------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents........................... $ 1,070 $ 4,370
Short-term investments.............................. 5,499 7,357
Accounts receivable, net of allowance for doubtful
accounts of $1,435 at June 30, 1996 and
$1,530 at December 31, 1995........................ 11,711 11,052
Inventories......................................... 8,660 9,016
Other current assets................................ 867 962
-------- --------
Total current assets.............................. 27,807 32,757
Property and equipment, net of accumulated
depreciation of $13,933 at June 30, 1996
and $12,131 at December 31, 1995................... 6,211 7,130
Goodwill, net........................................ 1,610 1,816
Deposits and other assets............................ 261 282
-------- --------
$ 35,889 $ 41,985
======== ========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
4
<PAGE>
NETRIX CORPORATION
------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
Current liabilities:
Lines of credit............................... $ 1,315 $ 1,311
Accounts payable.............................. 1,961 4,944
Accrued liabilities........................... 4,617 4,712
------- -------
Total current liabilities............ 7,983 10,967
Deferred rent, net of current portion............... 503 622
------- -------
8,396 11,589
------- -------
Stockholders' equity:
Preferred stock, $0.05 par value; 1,000,000 shares
authorized; none issued and outstanding..... -- --
Common stock, $0.05 par value; 15,000,000
shares authorized; 9,486,652 and 9,435,268
shares issued and outstanding at June 30,
1996 and December 31, 1995, respectively... 474 472
Additional paid-in capital.................... 55,432 55,105
Unrealized holding (loss) gain................ (38) 42
Cumulative translation adjustment............. (39) (11)
Accumulated deficit........................... (28,336) (25,212)
------- -------
Total stockholders' equity.................... 27,493 30,396
------- -------
$ 35,889 $ 41,985
========= =========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
5
<PAGE>
NETRIX CORPORATION
------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
---------------------------
1996 1995
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income............................... $(3,125) $ 531
Adjustments to reconcile net (loss) income to
net cash (used in) provided by operating
activities:
Depreciation and amortization................ 2,008 1,875
Non-cash compensation expense................ 86 --
Decrease in deferred rent.................... (104) (90)
Changes in assets and liabilities -
Accounts receivable........................ (659) 977
Inventories................................ (37) (163)
Other current assets....................... 95 331
Deposits and other assets.................. 22 74
Accounts payable........................... (2,982) (293)
Accrued liabilities........................ (111) (1,009)
------- -------
Net cash (used in) provided by operating
activities................................ (4,807) 2,233
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of short-term investments.......... (3,080) (7,793)
Sales of short-term investments.............. 4,858 6,111
Purchases of property and equipment.......... (490) (773)
Cash acquired from IDS acquisition........... -- 35
------- -------
Net cash provided by (used in) investing
activities................................ 1,288 (2,420)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options...... 169 200
Proceeds from employee stock purchase plan... 75 137
Proceeds from line of credit................. 4 --
Payments under capital lease obligations..... -- (13)
------- -------
Net cash provided by financing activities.. 248 324
------- -------
Effect of foreign currency exchange rate changes
on cash and cash equivalents..................... (28) (19)
------- -------
Net (decrease) increase in cash and cash
equivalents...................................... (3,299) 118
Cash and cash equivalents, beginning of period.... 4,370 6,000
------- -------
Cash and cash equivalents, end of period.......... $ 1,071 $ 6,118
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for interest..... 76 37
Cash paid during the period for income taxes. -- --
Capitalization of inventories into
manufacturing and test equipment............ 393 223
</TABLE>
See notes to unaudited condensed financial statements.
6
<PAGE>
NETRIX CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996
1. Basis of Presentation:
----------------------
Netrix Corporation (the "Company") was formed in 1985 to develop,
manufacture, market and support products for public network access and Internet
service provisioning, and integrated network switching and network management
products for use in enterprise-wide communications networks. During 1989, the
Company formed a wholly-owned subsidiary, Netrix International Corporation (a
Delaware corporation). On January 1, 1995, the Company's wholly-owned
subsidiary, Netrix Telcom Systems Corporation, was merged with and into the
Company. Also on January 1, 1995, the Company acquired the equipment,
inventory, and contract rights of InterData Systems GmbH ("IDS"), relating to
its corporate network business. All significant intercompany transactions have
been eliminated.
The unaudited condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission and include, in the opinion of
management, all adjustments, consisting of normal, recurring adjustments,
necessary for a fair presentation of interim period results. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The Company
believes, however, that its disclosures are adequate to make the information
presented not misleading. The results for such interim periods are not
necessarily indicative of results to be expected for the full year.
Certain reclassifications have been made to the prior year financial statements
to conform with current year presentation.
2. Acquisitions:
-------------
IDS
On January 1, 1995, the Company acquired the equipment, inventory, and
contract rights of IDS, relating to its corporate network business. Prior to
this acquisition, IDS was a distributor of the Company and provided sales and
service of the Company's products in Germany. The purchase price for the assets
acquired in this transaction was $545,000. All of the assets acquired were
transferred to Netrix GmbH, a wholly-owned subsidiary of the Company, which was
established coincidentally with the acquisition of the assets of IDS.
3. Cash Equivalents:
-----------------
Cash equivalents are primarily bank deposits, commercial paper, and US
government agency securities, with original maturities of three months or less.
These investments are carried at cost, which approximates market value.
4. Short-Term Investments:
-----------------------
Short-term investments consist primarily of commercial paper with
maturities of more than three months and less than twelve months and longer-term
investments which are primarily US government obligations with maturities
between twelve and eighteen months. Longer-term investments are bought and held
principally for the purpose of selling them in the near term. Short-term
investments are reported at fair value.
7
<PAGE>
Under SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," debt securities that are classified as available-for-sale are
reported at fair value, with unrealized gains and losses reported as a separate
component of stockholders' equity. At June 30, 1996 and December 31, 1995, the
unrealized holding gain/loss on short-term investments was a loss of
approximately $38,000 and gain of approximately $42,000, respectively, and is
reported as a separate component of stockholders' equity.
5. Inventories:
------------
<TABLE>
<CAPTION>
Inventories consisted of the following (in thousands):
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
Raw materials...... $ 475 $ 335
Work in process.... 1,469 798
Finished goods..... 6,716 7,883
---------- ----------
Total inventories.. $ 8,660 $ 9,016
========== ==========
</TABLE>
6. Line of Credit and Equipment Loan:
---------------------------------
In January 1996, the Company renegotiated its existing working capital
line of credit with a lending institution. The agreement provides for a $2.0
million line of credit for working capital and includes covenants that require
the Company to maintain certain levels of liquidity and tangible net worth. In
addition, the Company has utilized approximately $561,000 of available draws
under an equipment line of credit with the same lending institution. Both lines
provide for interest at a rate per annum equal to the lender's prime rate plus
3/4% (9.0% at June 30, 1996). The working capital line of credit matures with
unpaid principal amounts due and payable on January 3, 1997. The equipment line
of credit matures with unpaid principal amounts due and payable on June 5, 1998.
At June 30, 1996 and December 31, 1995, the Company had approximately $754,000
and $750,000, respectively, outstanding under the working capital line of
credit, and approximately $561,000 outstanding under the equipment line of
credit.
7. Product Revenues:
----------------
The Company's product revenues for the six months and three months
ended June 30, 1996 and 1995 were generated in the following geographic regions:
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------------ ------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Domestic.......................... $ 6,041 $12,539 $ 3,177 $ 6,624
Europe............................ 5,724 5,229 2,397 2,377
Pacific Rim and
other............................ 4,597 5,301 2,155 2,538
------- ------- ------- -------
Total............................. $16,362 $23,069 $ 7,729 $11,539
======= ======= ======= =======
</TABLE>
All of the Company's products are manufactured and shipped out of its
facilities in Herndon, Virginia and Boulder, Colorado. Sales are primarily
denominated in US dollars.
8
<PAGE>
8. Restructuring Charge:
---------------------
In March 1996, the Company recorded a restructuring charge of $900,000
before income taxes. The charge includes anticipated costs associated with the
consolidation and relocation of facilities and the reduction of personnel levels
as part of management's restructuring plan for the Company. Of this amount,
approximately $497,000 remained unused at June 30, 1996, and included
approximately $343,000 in lease obligations and fixed asset reserves.
9. Foreign Exchange Gain:
----------------------
Generally, assets and liabilities denominated in foreign currencies are
translated into US dollars at current exchange rates. Operating results are
translated into US dollars using the average rates of exchange prevailing during
the period. Gains or losses resulting from translation of assets and
liabilities are included in the cumulative translation adjustment account in
stockholders' equity, except for the translation effect of intercompany balances
that are anticipated to be settled in the foreseeable future. Included in
foreign exchange income for the three and six months ended June 30, 1996, is
approximately $34,000 and $45,000 in translation losses, respectively, and for
the three and six months ended June 30, 1995, is approximately $48,000 and
$189,000 in translation gains, respectively.
10. Earnings (Loss) Per Share:
--------------------------
Earnings (loss) per share have been computed using the weighted average
number of common shares and common equivalent shares having a dilutive effect
during the periods. The Company had a loss per share for the three months and
six months ended June 30, 1996, of $0.08 and $0.33, respectively, compared to
fully diluted earnings per share of $0.02 and $0.06, respectively, for the three
and six months ended June 30, 1995.
9
<PAGE>
NETRIX CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
- ---------------------
Background. The results for the three and six months ended June 30, 1996,
reflect a decrease in revenues and expenses over the comparable periods in 1995.
The decline in revenue is primarily a result of decreased domestic sales,
particularly in voice networking products, offset in part by an increase in
sales to European markets. The decrease in expenses is the result of the
Company's planned restructuring of operations, which included the reduction and
realignment of its US sales force and the relocation of certain manufacturing
operations to North Carolina.
In January 1995, the Company acquired the equipment, inventory, and
contract rights of IDS, relating to its corporate network business. Prior to
this acquisition, IDS was a distributor of the Company and provided sales and
service of the Company's products in Germany. The purchase price for the assets
acquired in this transaction was $545,000. See Notes 1 and 2 to the Unaudited
Condensed Consolidated Financial Statements for further discussion.
Revenues. Total revenues decreased by approximately $6.2 million or 22.3%,
in the six months ended June 30, 1996 compared to the six months ended June 30,
1995. Total revenues also decreased approximately $3.5 million, or 24.7%, in the
second quarter of 1996 compared to the second quarter of 1995. The decrease in
revenues was primarily due to decreased product volume, mainly in domestic
markets as discussed above. Product revenues decreased approximately $6.7
million, or 29.1% for the first six months of 1996 compared to 1995. Product
revenue from domestic customers decreased by 51.8%, while sales to Europe
increased by 9.5% during this time period. Service revenues increased by
approximately $0.5 million, or 9.6%, for the six months ended June 30, 1996
compared to six months ended June 30, 1995. For the second quarter of 1996,
there was an increase in service revenue of 14.3% from second quarter of 1995.
The increase in service revenue is reflective of additions to the installed base
during 1995 and early 1996.
Gross Profit. Gross profit decreased by approximately $3.9 million, or
25.4%, for the first six months of 1996 compared to the first six months of
1995, and decreased as a percentage of total revenues from 54.6% to 52.4%. For
the second quarter of 1996 compared to the second quarter of 1995, gross profit
decreased approximately $1.8 million or 23.7%, but increased as a percent of
total revenues from 54.1% to 54.8%. Product gross margin decreased from 59.9% in
the first six months of 1995 to 57.9% in the first six months of 1996. This
decrease in product gross margin primarily resulted from a combination of a
higher proportion of products sold through channels with higher discounts and,
to a lesser extent, a lower margin mix of products shipped. As the product mix
and channel mix change from quarter to quarter, product gross margins can vary
within a wide range. Due to this variable mix, margins earned in the six months
ended June 30, 1996 are not necessarily indicative of margins that will be
earned in the future. The gross margin for service revenue increased from 29.6%
in the first six months of 1995 to 35.6% in the first six months of 1996. This
is due to the fact that while revenues from maintenance agreements increased,
service costs remained relatively flat.
Sales and Marketing. Sales and marketing expenses decreased by
approximately $1.3 million or 17.3% from the first six months of 1995 to the
first six months of 1996. For the second quarter of 1996 as compared to the
second quarter of 1995, the decrease was approximately $0.8 million, or 22.9%.
The decrease in expenses was principally due to the Company's planned
restructuring discussed above, which resulted in a decrease in personnel and
travel costs, and marketing programs, including trade shows and public
relations.
10
<PAGE>
Research and Development. Research and development expenses increased by
approximately $0.2 million or 3.5% from the first six months of 1995 to the
comparable period of 1996. This increase was due principally to increased
expenses related to parts and outside services. Second quarter expenses
decreased 1.4% during this time period. Currently, all of the Company's research
and development costs are charged to operations as incurred.
General and Administrative. General and administrative expenses decreased
by approximately $0.3 million or 13.8%, for the first six months of 1996 as
compared to the same period in 1995. For the second quarter of 1996 compared to
the second quarter of 1995 there was a decrease of approximately $0.1 million,
or 9.9%. The decrease in these expenses was due principally to a reduction in
personnel and travel costs, and a lower level of capital expenditures, which
resulted in lower depreciation for this function.
Restructuring Charge. In March 1996, the Company recorded a restructuring
charge of $900,000 before income taxes. The charge includes anticipated costs
associated with the consolidation and relocation of facilities and the reduction
of personnel levels as part of management's restructuring plan for the Company.
Of this amount, approximately $497,000 remained unused at June 30, 1996. Except
for lease obligations of approximately $200,000, the remaining reserves will be
used through the fourth quarter of 1996.
Interest and Other Income, Net. For the first six months of 1996, the
Company net interest and other income of approximately $263,000 compared to
$344,000 in the comparable period of 1995. Net interest and other income for the
second quarter of 1996 was approximately $86,000 compared to $198,000 in the
second quarter of 1995. The decrease in net interest and other income is due
primarily to lower investment levels maintained in short-term investments,
combined with increased interest expense on the Company's borrowings under an
equipment line of credit.
Foreign Exchange Gain (Loss). Included in foreign exchange income for the
three and six months ended June 30, 1996, is approximately $34,000 and $45,000
in translation losses, respectively, and for the three and six months ended June
30, 1995, is approximately $48,000 and $189,000 in translation gains,
respectively.
Net Income (Loss). For the first six months of 1996, the Company generated
a net loss of approximately $3.1 million compared to net income of $0.5 million
in the comparable period of 1995. The net loss for the second quarter of 1996
was approximately $0.8 million compared to net income of $0.2 million in the
second quarter of 1995. The decline in earnings for both the year to date and
second quarter results were due to the factors discussed above.
Liquidity and Capital Resources
- -------------------------------
At June 30, 1996, the Company had approximately $1.1 million of cash and
cash equivalents on hand, short-term investments of $5.5 million, and net
working capital of $19.9 million, a decrease of $3.3 million, $1.9 million, and
$1.9 million, respectively, from December 31, 1995.
For the six months ended June 30, 1996, the Company used approximately $4.8
million in cash from operating activities. The cash used in operating activities
was primarily due to the negative cash flow from operating results and the use
of cash to reduce accounts payable during the six months. For the same period in
1995, the cash provided by operating activities totaled $2.2 million and was
attributable to improved operating results and accounts receivable collections
during the period.
11
<PAGE>
For the six months ended June 30,1996, the Company generated approximately
$1.3 million in investing activities. This was the result of net sales of short-
term investments totaling $1.8 million offset in part by purchases of capital
expenditures during the period of $0.5 million. For the same period in 1995, the
Company used approximately $2.4 million in investing activities, which consisted
primarily of net purchases of short-term investments totaling $1.7 million and
capital expenditures of $0.8 million. Capital expenditures in both periods were
financed with cash on hand and funds generated from operations, and were
primarily for additional research and development and test equipment required to
support the expanded product base at the Company.
Cash provided by financing activities in the first six months of 1996 was
approximately $0.2 million and consisted primarily of proceeds from the employee
stock option and employee stock purchase plans. For the same period in 1995,
cash provided by financing activities of approximately $0.3 million also
consisted primarily of proceeds from the employee stock plans.
In January 1996, the Company renegotiated its existing working capital line
of credit with a lending institution. The agreement provides for a $2.0 million
line of credit for working capital and includes covenants that require the
Company to maintain certain levels of liquidity and tangible net worth. In
addition, the Company has utilized approximately $561,000 of available draws
under an equipment line of credit with the same lending institution. Both lines
provide for interest at a rate per annum equal to the lender's prime rate plus
3/4% (9.0% at June 30, 1996). The working capital line of credit matures with
unpaid principal amounts due and payable on January 3, 1997. The equipment line
of credit matures with unpaid principal amounts due and payable on June 5, 1998.
At June 30, 1996 and December 31, 1995, the Company had approximately $754,000
and $750,000, respectively, outstanding under the working capital line of
credit, and approximately $561,000 outstanding under the equipment line of
credit.
The Company believes that existing cash resources, together with internally
generated funds, will be sufficient to meet its cash requirements through 1996.
12
<PAGE>
PART II -- OTHER INFORMATION
----------------------------
Item 1. Legal Proceedings
-----------------
Items 1 through 3 are not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the Company's Annual Meeting of Stockholders held on May 21, 1996, the
following proposals were adopted by the votes specified:
Proposal I (Election of two Class I Directors: William T. Rooker, Jr. and
Charles W. Stein)
<TABLE>
<CAPTION>
For Withheld From All Nominees Instructed
- --- -------------------------- ----------
<S> <C> <C>
7,797,189 669,671
Proposal II (Approval of the Company's 1996 Stock Option Plan)
<CAPTION>
Broker
For Against Abstain Non Vote
- --- ------- ------- --------
<S> <C> <C> <C>
2,915,400 970,890 210,066 4,370,504
</TABLE>
Proposal III (Amendment to increase shares authorized for issuance under the
1996 Stock Option Plan, 1992 Employee Stock Purchase Plan, 1992 Director Stock
Option Plan and 1986 Incentive Stock Option Plan from 2,175,000 to 2,925,000)
<TABLE>
<CAPTION>
Broker
For Against Abstain Non Vote
- --- ------- ------- --------
<S> <C> <C> <C>
3,006,816 1,033,204 220,156 4,206,684
</TABLE>
Proposal IV (Amendment to 1992 Employee Stock Purchase Plan extending such Plan
for four additional six-month offering periods)
<TABLE>
<CAPTION>
Broker
For Against Abstain Non Vote
- --- ------- ------- --------
<S> <C> <C> <C>
7,264,278 711,219 213,564 277,799
</TABLE>
Proposal V (Ratify Arthur Andersen LLP as the Company's Auditors)
<TABLE>
<CAPTION>
Broker
For Against Abstain Non Vote
- --- ------- ------- --------
<S> <C> <C> <C>
8,430,764 15,471 20,625 0
</TABLE>
Item 5 is not applicable.
Item 6. Exhibits and Reports of Form 8-K
--------------------------------
(a) Exhibits
Exhibit No. Description
----------- -----------
11 Computation of Earnings Per Share.
(b) Reports on Form 8-K
No report on Form 8-K was filed by the Registrant during the quarter
ended June 30, 1996.
13
<PAGE>
SIGNATURE:
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NETRIX CORPORATION
Date: August 12, 1996 By:
--------------- ----------------------------------------
Robert W. Carroll
Vice President, Finance
(Principal Financial Officer)
14
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Page
- ------- ----------- ----
11 Computation of Earnings Per Share 16
15
<PAGE>
Exhibit 11
Computation of Earnings Per Share
18
<PAGE>
<TABLE>
<CAPTION>
Netrix Corporation Exhibit 11
EPS Calculation
Six Months Ended Three Months Ended
-------------------------- ----------------------------
6/30/96 6/30/95 6/30/96 6/30/95
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
Earnings per share and common stock
equivalents - Primary:
Net income/(loss) (3,124,618) 531,000 (796,360) 191,000
Weighted average common stock outstanding 9,441,202 9,330,106 9,446,937 9,351,287
Weighted average common stock equivalents: - 168,975 - 118,706
Other stock options - - - -
------------ ------------ ------------ ------------
Total weighted average common stock and
common stock equivalents 9,441,202 9,499,081 9,446,937 9,469,993
Earnings per share (0.33) 0.06 (0.08) 0.02
============ ============ ============ ============
Earnings per share and common stock
equivalents - Fully Diluted:
Net income (3,124,618) 531,000 (796,360) 191,000
Weighted average common stock outstanding 9,441,202 9,330,106 9,446,937 9,351,287
Weighted average common stock equivalents: - 170,444 - 153,407
Other stock options - - - -
------------ ------------ ------------ ------------
Total weighted average common stock and
common stock equivalents 9,441,202 9,500,550 9,446,937 9,504,694
Earnings per share (0.33) 0.06 (0.08) 0.02
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
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