<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
----------------------------
OLICOM A/S
(Translation of registrant's name into English)
Nybrovej 114
DK-2800 Lyngby
Denmark
(Address of principal executive offices)
-----------------------------
[Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F
Form 20-F [X] Form 40-F [ ]
[Indicate by check mark whether the registrant by finishing the
information contained in this Form is also thereby furnishing
the information to the Commission pursuant to Rule 13g3-2(b)
under the Securities Exchange Act of 1934.
Yes [ ] No [X]
[If "Yes" is marked, indicate below the file number assigned to
the registrant in connection with Rule 13g3-2(b): Not Applicable
This Form 6-K shall be incorporated by reference to
the registrant's registration statement on Form F-4
under the Securities Act of 1933, as amended,
registration no. 333-24655.
<PAGE> 2
OLICOM A/S
FORM 6-K
TABLE OF CONTENTS
Page
----
ITEM 1. FINANCIAL INFORMATION
Consolidated Balance Sheets as of
December 31, 1996 and June 30, 1997 3
Consolidated Statements of Income
for the three months ended June 30, 1996
and June 30, 1997 4
Consolidated Statements of Cash Flows for the six months
ended June 30, 1996
and June 30, 1997 5
Notes to Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 8
ITEM 3. PRESS RELEASE 14
<PAGE> 3
OLICOM A/S
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
ASSETS (IN THOUSANDS)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 41,663 $ 12,834
Short term investments 9,887 35,788
Accounts receivable, less allowance of
$1,055 in 1996 and $1,944 in 1997 37,712 46,933
Other receivables 1,913 271
Inventories 22,252 25,273
Deferred tax 945 4,289
Prepaid expenses 1,769 4,227
--------- ---------
Total current assets 116,141 129,615
Property and equipment 11,032 13,605
Purchased intangibles 751 10,239
--------- ---------
Total assets $ 127,924 $ 153,459
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable 21,083 12,706
Accrued payroll and related expenses 3,424 3,707
Accrued product warranty expense 823 2,177
Other accrued expenses 1,834 18,875
Income taxes payable 2,570 1,499
--------- ---------
Total current liabilities 29,734 38,964
Minority interests 681 840
Shareholders' equity:
Common shares, DKK 0.25 nominal value
authorized and issued -
15,938 in 1996, 18,475 in 1997 614 711
Additional paid - in capital 52,348 98,679
Retained earnings 56,849 25,917
Treasury stock - 1,255 in 1996 and 1,192 in 1997 (11,831) (11,671)
Unrealized gains/losses on securities (471) 19
--------- ---------
Total shareholders' equity 97,509 113,655
--------- ---------
Total liabilities and shareholders' equity $ 127,924 $ 153,459
========= =========
</TABLE>
See accompanying notes
<PAGE> 4
OLICOM A/S
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -----------------------
1996 1997 1996 1997
--------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<S> <C> <C> <C> <C>
Net Sales $ 72,465 $ 101,707 $ 40,318 $ 53,303
Cost of Sales 42,205 53,840 21,875 27,691
--------- --------- --------- ---------
Gross profit 30,260 47,867 18,443 25,612
--------- --------- --------- ---------
Operating expenses:
Sales and marketing 20,710 22,469 10,868 11,983
Research and development 6,388 6,419 3,257 3,523
General and administrative 3,333 4,823 1,793 2,730
Acquisition related expenses 3,787 40,917 0 40,917
Special charge re. management change 1,402 0 0 0
--------- --------- --------- ---------
Total operating expenses 35,620 74,628 15,918 59,153
--------- --------- --------- ---------
Income from operations (5,360) (26,761) 2,525 (33,541)
Sale of minority interest in related party 2,878 0 0 0
Interest income (expense) and other, net 1,467 851 607 431
--------- --------- --------- ---------
Income before income taxes (1,015) (25,910) 3,132 (33,110)
Income taxes (249) 4,864 1,033 2,344
--------- --------- --------- ---------
Income before minority interests (766) (30,774) 2,099 (35,454)
Minority interests 433 159 60 77
--------- --------- --------- ---------
Net income $ (1,199) $ (30,933) $ 2,039 $ (35,531)
========= ========= ========= =========
Net income (loss) per share $ (0.08) $ (2.07) $ 0.14 $ (2.34)
========= ========= ========= =========
Weighted average shares outstanding 14,869 14,944 14,892 15,192
========= ========= ========= =========
</TABLE>
See accompanying notes
<PAGE> 5
OLICOM A/S
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1996 1997
-------- --------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Operating activities:
Net income $ (1,199) $(30,934)
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,699 2,122
Gain on sale of affiliate (2,878) 0
Minority interest in earnings 433 193
Exchange rate adjustment re. minority interest (16) (34)
Adjustment minority interest re. acquisition of affiliate (482) 0
Deferred income taxes (490) (1,194)
Purchased research and development 2,431 40,917
Change in operating assets and liabilities:
Accounts receivable 4,362 (4,914)
Other receivables (340) 1,642
Inventories (395) 736
Inventories - corr. Lasat exchange rate 94 0
Prepaid expenses (658) (4,006)
Accounts payable (7,121) (10,866)
Accrued payroll and related expenses (3,315) (144)
Accrued product warranty expense (109) 173
Other accrued liabilities 2,330 14,428
Income taxes payable (1,294) 1,067)
-------- --------
Net cash provided by (used in)
operating activities (6,948) 7,052
Investing activities:
Capital expenditures (4,310) (2,487)
Proceeds from sale of property and affiliated company 7,193 0
Proceeds from sale of short-term investments 0 6,553
Acquisition of CrossComm net of cash acquired 0 (39,634)
Acquisition of Lasat net of cash acquired (3,509) 0
-------- --------
Net cash provided by (used in)
investing activities (626) (35,658)
Financing activities:
Borrowings (repayments) (5,000) (0)
Proceeds from warrants/options exercised 639 441
Sale (purchase) of treasury stock 0 160
-------- --------
Net cash used in financing activities (4,361) 601
Effect of exchange rate changes on cash (777) (915)
-------- --------
Net increase (decrease) in cash and cash equivalents (12,712) (28,830)
Cash and cash equivalents at beginning of period 34,029 41,664
-------- --------
Cash and cash equivalents at end of period $ 21,317 $ 12,834
======== ========
Interest paid during the period $ 174 $ 8
======== ========
Tax paid during the period $ 1,544 $ 6,142
======== ========
</TABLE>
See accompanying notes
<PAGE> 6
OLICOM A/S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements as of June 30, 1996 and 1997, are
unaudited. In the opinion of the management of Olicom A/S (the "Company"), such
unaudited financial statements include only such normally recurring adjustments
necessary for a fair presentation of the results of operations for the interim
periods presented and of the financial position of the Company at the date of
the interim balance sheet. The results for such interim periods are not
necessarily indicative of the results for the entire year.
It is recommended that this financial data be read in conjunction with the
audited consolidated financial statements and notes thereto included in the 1996
Annual Report.
1. NET INCOME PER SHARE
Net income per share is computed based on the weighted average number of
common shares and common stock equivalents outstanding during each period.
Common stock equivalents are determined under the assumption that
outstanding warrants and options are exercised. Outstanding warrants and
options have been included in earnings per share computations based on the
treasury stock method.
2. INVESTMENTS IN FINANCIAL INSTRUMENTS
The Company invests cash resources not required for current operations in
various financial instruments. The Company considers highly liquid
investments with maturities of three months or less from the acquisition
date of the instrument to be cash equivalents. Short-term investments
consist primarily of shares in a U.S. mutual fund. The fund's investment
policy is that a major part of its assets is invested in U.S. Government
bonds and other securities rated AAA by Standard & Poor's. The expected
average maturity is approximately three to five years.
3. INVENTORIES
Inventories are stated as the lower of cost or market with cost determined
on the basis of the first-in, first-out method. Raw materials inventories
are sold at the Company's cost to subcontractors who assemble products to
the Company's specifications. Finished goods inventories include completed
products purchased from subcontractors. Inventories consist of:
<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
(In thousands)
<S> <C> <C>
Finished goods $13,967 $13,461
Raw materials 8,285 11,812
------- -------
Total inventories $22,252 $25,273
======= =======
</TABLE>
4. LEASEHOLD IMPROVEMENTS AND EQUIPMENT
Leasehold improvements and equipment are carried at cost. Depreciation is
charged on a straight-line basis to cost and expensed over the expected
useful lives of the assets. Equipment is depreciated over four years, and
leasehold improvements are amortized over the shorter of their estimated
lives or non-cancelable term of the lease. Leasehold improvements and
equipment consist of:
<PAGE> 7
OLICOM A/S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
(In thousands)
<S> <C> <C>
Leasehold improvements $ 2,280 $ 2,341
Equipment 17,740 26,896
------- -------
20,020 29,237
Accumulated depreciation 8,988 15,632
------- -------
Total property and equipment $11,032 $13,605
======= =======
</TABLE>
5. REPORTING CURRENCY
Although the Company and its Danish subsidiaries maintain their books and
records in Danish kroner, as required by Danish law, the Consolidated
Financial Statements have been prepared in U.S. dollars because the U.S.
dollar is the currency of the primary economic environment in which the
Company and its subsidiaries conduct their operations.
The majority of the Company's sales are billed and collected in U.S.
dollars, and the majority of the Company's purchases of raw materials and
finished goods inventories are invoiced and paid in U.S.
dollars.
6. RESEARCH AND DEVELOPMENT COSTS
Research and development costs, including costs of developing software
products, are expensed as incurred. Application of Statement of Financial
Accounting Standards No. 86, "Accounting for the Costs of Computer Software
to Be Sold, Leased, or Otherwise Marketed," has not had any material effect
on the Company's consolidated financial position or results of operations.
As of June 30, 1997, research and development costs are net of a $880,000
subsidy received from a Danish Government agency in support of ATM and LAN
switching activities. The subsidy will be repaid in the form of a royalty if
and when revenue from such switching products is realized.
<PAGE> 8
OLICOM A/S
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1997.
The following discussion should be read in conjunction with the information
contained in the Company's Annual Report on Form 20-F for the fiscal year ended
December 31, 1996, and the consolidated financial statements and related notes
included elsewhere herein.
RESULTS OF OPERATIONS
Net sales increased $13.0 million, or 32.2%, from the three months ended June
30, 1996, to the comparable period of 1997. The Company believes that the
increase in net sales during such period was due to several factors, including
increased sales in the U.S. Continued strength in the Company's traditional
lines of business (especially, growth in sales of Token-Ring PCI adapters) also
contributed to the increase in revenue. The inclusion since June 12, 1997, of
the net sales of the former CrossComm Corporation (CrossComm), which was
acquired by the Company on this date, contributed $2.6 million of revenue during
the period.
Gross profit increased $7.2 million, or 38.9%, from the three months ended June
30, 1996, to the comparable period of 1997, and increased as a percentage of net
sales from 45.7% to 48.0%. The increase in gross margin was primarily due to a
more favorable product mix and due to the inclusion from June 12, 1997 of
revenues from CrossComm's operations, which typically operates at a higher
average gross margin than the Company has historically experienced.
Sales and marketing expenses increased $1.1 million, or 10.3%, from the three
months ended June 30, 1996, to the comparable period of 1997, but decreased as a
percentage of net sales from 27.0% to 22.5%. The increase in the amount of such
expenses during such period was primarily due to increased marketing activities
both in the United States and Europe, including higher costs associated with
personnel expenses and promotional expenditures, and the inclusion of expenses
associated with CrossComm's operations. The Company expects that increased
levels of sales activity will continue to require the commitment of additional
resources to the sales and marketing of the Company's products. Accordingly,
marketing expenses are expected to continue to be a significant percentage of
net sales as a result of the planned continued investment in the Company's sales
and support organization.
Research and development expenses increased $266,000, or 8.2%, from the three
months ended June 30, 1996, to the comparable period of 1997, but decreased as a
percentage of net sales from 8.1% to 6.6%. The increases were caused by the
hiring of additional personnel required to support enhancements of current
products, and expenditures for new product development, such as products based
on ATM-technology and switching-technology, and the inclusion of expenses
associated with CrossComm's operations. All of the Company's research and
development costs have been expensed as incurred.
General and administrative expenses increased $937,000, or 52.2%, from the three
months ended June 30, 1996, to the comparable period of 1997, and increased as a
percentage of net sales from 4.4% to 5.1%. The increase in the amount of such
expenses during such period primarily reflected additional personnel and costs
associated with the generally higher level of business activity and the
inclusion of expenses associated with CrossComm's operations.
As a result of the CrossComm acquisition the Company incurred a non-recurring
charge during the quarter in the amount of $40.9 million reflecting a write-off
of in-process research and development and other charges related to the
acquisition.
The Company experienced an operating loss for the second quarter of 1997 was a
loss of $33.5 million, compared to an operating profit of $2.5 million for the
second quarter of 1996.
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company has two unsecured line of credit facilities for an aggregate amount
of DKK 15.0 million ($2.3 million) and, in addition, a USD-denominated line of
credit facility for $8.5 million, of which $10.8 million was unused at June 30,
1997. Under prevailing banking practice in Denmark, these lines of credit are
terminable by the lender on 14 days prior notice (even if the Company is not in
breach of the general conditions for such facilities) and are terminable without
notice in the event of a breach thereof by the Company (subject to any
applicable cure period).
At June 30, 1997, the Company's inventory levels increased 13.6% from that
recorded at December 31, 1996. The increase of inventory was due to the
acquisition of CrossComm resulting in an increase in inventories of $3.9
million, which was partly offset by decreases in inventory during such period
that reflected improvements in production and material planning and control.
Trade accounts receivable at June 30, 1997, increased 24.5% to $46.9 million,
from that recorded at December 31, 1996. The increase during such period was
primarily attributable to trade accounts receivable recorded in connection with
the acquisition of CrossComm which resulted in an increase of accounts
receivable of $7.5 million.
Additional paid in capital at June 30, 1997, increased as a result of the common
shares issued in connection with the acquisition of CrossComm.
Other than disclosed below (See "-- Subsequent Events) the Company had no
material commitments for capital expenditures at June 30, 1997.
SUBSEQUENT EVENTS
On July 1, 1997 the Company exercised its option to convert its subordinated
convertible loan to the Danish ISDN hardware and software development company,
Digianswer A/S, in the original amount of DKK 8.1 million (approximately $1.4
million), to a 35% interest in such company.
BUSINESS ENVIRONMENT AND RISK FACTORS
Certain statements included in this Report are forward-looking,. Such
forward-looking statements, in addition to other information included in this
Report, are based on current expectations and are subject to a number of risks
and uncertainties that could cause actual results in the future to differ
significantly from results expressed or implied in any forward-looking
statements by, or on behalf of the Company. Further, the Company's future
operating results may be affected by various trends and factors which the
Company must successfully manage in order to achieve favorable operating
results. In addition, there are trends and factors that are beyond the Company's
control that may affect its business, financial condition or results of
operations.
Such trends and factors include, without limitation, the following: overall
demand for communications and networking products, economic and other
considerations specific to the computer and networking industries, and general
economic conditions; rapid technological change, frequent new product
introductions, changes in customer requirements, continued emergence of industry
standards, and evolving methods of building and operating networks, which
require that the Company identify, develop, manufacture and market, on a
cost-effective and timely basis, new products and enhancements to existing
products that meet changing customer requirements and emerging industry
standards, and take advantage of technological advances; difficulties or delays
in the development, production and marketing of products, including, without
limitation, any failure to ship new products and technologies when anticipated,
the failure of manufacturing economies to develop when planned, customer delays
in purchasing products in anticipation of new product introductions or for other
reasons, and the activities of parties with whom the Company has joint
development projects; continued compatibility and interoperability of the
Company's products with products and architectures offered by various vendors;
fluctuations in the Company's revenues and operating results from quarter to
quarter, due to a variety of factors, including, without limitation, increased
competition, capital spending patterns of end-
<PAGE> 10
users, the timing and amount of significant orders from distributors,
value-added resellers ("VARs") and original equipment manufacturer customers
("OEMs") (including decisions by such customers as to the quantity of products
to be maintained in inventories), the mix of distribution channels and products,
and pricing, purchasing, operational and promotional decisions by distributors,
VARs and OEMs (which could affect their supply of, or end-user demand for, the
Company's products); the absence of long-term obligations on the part of
distributors, VARs and OEMs to purchase products from the Company (and the
implicit risk of any unanticipated declines in sales to any of the Company's
material customers for competitive reasons or because of the internalization of
production of products purchased from the Company on an OEM basis); declining
average selling prices and short product life cycles, both of which could
adversely impact the sales and operating margins of the Company; the Company's
shipment of products shortly after receipt of a purchase order, with the result
that a substantial portion of the Company's revenues for any quarter results
from orders received during such quarter, and minor shifts in the timing of
purchase orders can have a significant effect on net sales for any quarter; the
Company's failure to accurately anticipate the demand for its products, due to,
among other things, the fact that the Company's expectations of future net sales
as well as its expenditures are based largely on its own estimate of future
demand and not on firm customer orders; unanticipated declines in the demand for
network interface cards, which accounted for approximately 74.4% of the
Company's net sales during 1996; the effect that consolidation in the LAN
industry may have on the competitive position of the Company and its revenues
and operating results; the acquisition of assets and businesses, including,
without limitation, the making or incurring of any expenditures and expenses in
connection therewith (including, without limitation, any research and
development expenses relating thereto) and expense attendant to the integration
of personnel, operations and products associated therewith; the Company's
ability to continue to improve its operational, management and financial systems
and controls, and to integrate new employees; any interruption in the supply of
any sole or limited source components, or the inability of the Company to
procure these components from alternate sources at acceptable prices and within
a reasonable time; product supply disruption and increased costs as a result of
the subcontracting of product assembly and aspects of component procurement, or
in the event of political unrest, unstable economic conditions or developments
that are adverse to trade in the countries in which certain of the Company's
subcontractors conduct operations; the activities of any parties with whom the
Company has an agreement or understanding, including, without limitation, issues
affecting joint development projects in which the Company is a participant; the
continued efficacy of steps taken by the Company to protect its proprietary
rights, or the independent development by competitors of technologies that are
substantially equivalent or superior to the Company's technologies; the loss of
software or other intellectual property licensed from third parties; claims from
third parties asserting that trademarks used by the Company, or technology used
in the Company's products, infringe or may infringe the rights of third parties;
risks associated with international operations, including, without limitation,
longer payment cycles, unexpected changes in regulatory requirements and
tariffs, export licenses, political instability, difficulties in staffing and
managing foreign operations, greater difficulty in accounts receivable
collection, potentially adverse tax consequences, and seasonal fluctuations
resulting from lower sales that typically occur during the summer months in
Europe and other parts of the world; the ability or inability of the Company to
hedge against foreign currency, foreign exchange rates and fluctuations in such
rates; and a change in the value of the U.S. dollar (the Company's functional
currency) relative to other currencies.
In addition, there are certain factors and risks relating to the acquisition of
CrossComm by the Company, including, without limitation, whether the integration
of the two companies' businesses is accomplished in an efficient manner, without
diversion of resources from new product development, confusion or
dissatisfaction among existing customers of the combined company, or temporary
distraction of management attention from the day-to-day business of the combined
company; the ability of the combined company to realize anticipated synergies;
the continuation by distributors, VARs and OEMs of their current buying patterns
without regard to the acquisition; the Company's success in implementing its
distribution model in connection with the sale of CrossComm products; the
incurrence of additional unanticipated expenses relating to the integration of
CrossComm into the Company's operations; the completion by the Company of
in-process technologies acquired in connection with the CrossComm transaction;
and the ability of the Company to exploit the new technologies as they are
developed. Further, unfavorable changes in the current political and economic
environment in Poland (where CrossComm has conducted and the Company presently
conducts significant research and development activities) or the imposition of
restrictions on travel or technology transfers between Poland and the United
States could have a material adverse effect on the business, financial condition
or results of operations of the combined company
<PAGE> 11
In light of the foregoing factors, as well as other factors affecting the
Company's operating results, past trends should not be used by investors or
others to anticipate future trends, and prior operating performance may not be
an accurate indicator of future performance.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
With the exception of historical information, certain of the matters discussed
in this report and the press release included herewith are forward-looking
statements that involve risks and uncertainties, including, without limitation,
the risks and uncertainties described above under the caption "Business
Environment and Risk Factors", together with such risks and uncertainties as are
described in registration statements, reports and other documents filed by the
Company from time to time with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended. Such risks and uncertainties could cause the Company's actual
consolidated results for 1997 and beyond to differ materially from those
expressed in any forward-looking statements made by, or on behalf of, the
Company.
<PAGE> 12
SIGNATURES
The registrant certifies that it meets all of the requirements for filing and
has duly caused this form to be signed on its behalf by the undersigned,
thereunto duly authorized.
Olicom A/S
Date: February 19, 1998 By: /s/ Boje Rinhart
------------------------
Boje Rinhart
Chief Financial Officer
<PAGE> 13
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
99 Press Release
<PAGE> 1
EXHIBIT 99
[OLICOM LOGO]
NEWS RELEASE
OLICOM REPORTS RECORD REVENUE FOR SECOND QUARTER 1997
Copenhagen, Denmark and Dallas, Texas, July 16, 1997 - Olicom A/S (Nasdaq:
OLCMF), a leading global supplier of high-performance networking solutions,
today reported financial results for the second quarter ended June 30, 1997.
Actual reported financial results include acquisition costs of $40.9 million,
during the second quarter of 1997, for CrossComm Corp., primarily as a write-off
of in-process R&D.
Net sales for the second quarter were $53.3 million, up 32 percent from $40.3
million in net sales reported in the second quarter of 1996.
Pro forma net income for the second quarter of 1997, which excludes the one-time
charge, was $5.1 million, or $0.33 per share on 15.5 million shares outstanding.
Such pro forma net income and earnings represent records for Olicom. In the
second quarter of 1996 the company reported net income of $2.0 million, or $0.14
per share on 14.9 million shares outstanding. The actual net loss for the second
quarter of 1997, which includes the one-time charge, was $35.5 million or $2.34
per share on 15.2 million shares outstanding.
"We are extremely pleased to report yet another all-time record for both revenue
and, excluding acquisition-related charges, earnings. This would also be our
fourth consecutive record in earnings," said Lars Stig Nielsen, Olicom's chief
executive officer. "We continue to be strongest in our core business, Token-Ring
solutions, but we have grown across a wide range of product categories as well."
Olicom exhibited strongest relative growth in its mobile computing product line,
growing 35 percent quarter-to-quarter and 95 percent year-to-year. Another
strong performer was the company's market-leading Token-Ring PCI adapter, sales
of which increased 20 percent quarter-to-quarter and 111 percent year-to-year.
Further, with no change to its price structure, Olicom maintained its
price-performance leadership position despite pricing pressures from competing
providers of Token-Ring adapters. Olicom also delivered improvements in gross
margins this quarter, climbing from 46 percent in the first quarter 1997 to 48
percent in the second quarter.
<PAGE> 2
The integration process with CrossComm is proceeding as expected. "Olicom and
former CrossComm customers are realizing the benefit of our broader, integrated
product line as well as an enhanced service organization which results from this
acquisition," said Nielsen. "We have successfully begun the transition to a new
organization, and I am pleased with the progress we have made in a short period
of time."
Olicom designs, develops and manufactures high-performance, high-availability
networking solutions for the corporate enterprise, specializing in providing
end-to-end connectivity solutions and a migration path to high-speed LANs. The
products of Olicom and its subsidiary, LASAT, are distributed worldwide by a
network of strategic partners and resellers. More information on Olicom is
available from the company's SEC filings or by contacting the company directly.
Olicom news and product/service information are available at the company's World
Wide Web site at http://www.olicom.com.
###
This news release contains forward-looking statements that involve risks and
uncertainties that could cause actual results to differ from predicted results.
Further information on factors that could affect the company's results are
detailed from time to time in Olicom's periodic filings with the Securities and
Exchange Commission, specifically the most recent Annual Report on Form 20-F.
Statements of income and balance sheets follow.
CONTACT INFORMATION:
- --------------------
OLICOM GROUP
Boje Rinhart, CFO Michael Camp, CEO
Olicom A/S Olicom, Inc.
+45 45 27 00 77 972-423-7560
EDITORIAL CONTACTS: INVESTOR RELATIONS CONTACT:
- ------------------- ---------------------------
OLICOM, INC. STAPLETON COMMUNICATIONS
Diane Weldin Tersh Barber
972-516-4698 415-988-9207
[email protected] [email protected]
