<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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 29, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 0-22068
LEVEL ONE COMMUNICATIONS, INCORPORATED
State: California I.R.S. Employer ID No.: 33-0128224
Address: 9750 Goethe Road, Sacramento, CA 95827
Telephone: (916) 855-5000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _______
-----
The number of Common Shares of the registrant outstanding on August 1, 1996, was
12,980,860.
<PAGE>
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
June 29, 1996, and December 30, 1995 3
Consolidated Statements of Operations
for the Three and Six Months Ended
June 29, 1996, and July 1, 1995 4
Consolidated Statements of Cash Flows
for the Six Months Ended June 29, 1996,
and July 1, 1995 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8
PART II. OTHER INFORMATION
Item 1. Litigation 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures S-1
</TABLE>
2
<PAGE>
LEVEL ONE COMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
June 29, 1996 December 30, 1995
------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 29,765 $ 21,628
Short-term investments 2,762 8,223
Accounts receivable, net of
allowance for doubtful
accounts of $505 and
$90 for 1996 and 1995,
respectively 13,576 15,390
Inventories 13,738 15,772
Deferred income tax benefit 3,852 4,289
Prepaid expenses 2,539 2,905
-------- --------
Total current assets 66,232 68,207
Property and equipment, net 19,322 20,438
Long-term investments 3,620 4,695
Related party note receivable 2,250 1,225
Other assets 11,810 6,236
-------- --------
Total assets $103,234 $100,801
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of capital lease
obligations $ 1,087 $ 1,059
Accounts payable 4,107 9,541
Accrued payroll costs 2,057 1,762
Income taxes payable 172 --
Deferred revenue -- 133
Other accrued liabilities 4,671 4,878
-------- --------
Total current liabilities 12,094 17,373
Capital lease obligations, less
current portion 3,254 3,814
Deferred lease expense 632 649
-------- --------
Total liabilities 15,980 21,836
-------- --------
Shareholders' equity:
Common Stock 79,621 77,839
Retained earnings 7,633 1,126
-------- --------
Total shareholders' equity 87,254 78,965
-------- --------
Total liabilities and
shareholders' equity $103,234 $100,801
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
LEVEL ONE COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
------------------------------- -------------------------------
JUNE 29, 1996 JULY 1, 1995 JUNE 29, 1996 JULY 1, 1995
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenues $27,479 $16,605 $55,021 $29,824
Cost of sales 11,521 6,882 23,109 12,483
------- ------- ------- -------
Gross margin 15,958 9,723 31,912 17,341
Research & development 5,739 3,991 11,414 6,887
One time charge for SFT
acquisition -- 750 -- 750
Sales & marketing 3,989 2,492 7,990 4,739
General & administrative 1,765 1,337 3,531 2,421
------- ------- ------- -------
Total operating expenses 11,493 8,570 22,935 14,797
------- ------- ------- -------
Operating income 4,465 1,153 8,977 2,544
Other income, net 349 557 741 1,069
------- ------- ------- -------
Income before provision for income
taxes 4,814 1,710 9,718 3,613
Provision for income taxes 1,590 477 3,208 858
------- ------- ------- -------
Net income $ 3,224 $ 1,233 $ 6,510 $ 2,755
======= ======= ======= =======
Net income per share (Note 2) $ 0.24 $ 0.09 $ 0.48 $ 0.21
======= ======= ======= =======
Weighted average common shares
and equivalents 13,681 13,420 13,683 13,322
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
LEVEL ONE COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------------
JUNE 29, 1996 JULY 1, 1995
------------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,510 $ 2,755
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 3,277 2,907
Purchased Research & Development
expenses -- 750
(Increase) decrease in accounts
receivable 1,814 (2,209)
Increase in inventories 2,035 (1,655)
(Increase) decrease in prepaid
expenses 365 (3,498)
Increase (decrease) in accounts
payable and accrued liabilities (5,060) 6,558
Increase (decrease) in deferred
liabilities (134) (22)
Increase (decrease) in deferred lease
expense (85) --
Increase (decrease) in deferred taxes 390 --
------- -------
Total adjustments 2,602 2,831
Net cash provided by operating activities 9,112 5,586
------- -------
Cash flows from investing activities:
Purchase of short-term investments (1,400) (4,693)
Proceeds from sales and maturities of
short-term investments 7,915 --
Purchase of long-term investments (20) 200
Proceeds from sales and maturities of
long-term investments -- --
Capital expenditures (1,955) (8,149)
Payments for related party notes receivable (1,025) --
Payments for other assets (5,782) (390)
------- -------
Net cash used in investing activities (2,267) (13,032)
------- -------
Cash flows from financing activities:
Principal payments under capital lease
obligations (532) (229)
Proceeds from issuance of preferred and
common stock, net 1,825 212
------- -------
Net cash provided by financing activities 1,293 (17)
------- -------
Net increase (decrease) in cash and cash
equivalents 8,138 (7,463)
Cash and cash equivalents, beginning of period 21,627 9,260
------- -------
Cash and cash equivalents, end of period $29,765 $ 1,797
======= =======
SUPPLEMENTARY DISCLOSURE OF CASH AND NONCASH
TRANSACTIONS
Cash payments for:
Interest $ 179 $ 29
======= =======
Income taxes $ 2,052 $ 732
======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
LEVEL ONE COMMUNICATIONS, INCORPORATED
___________
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three- and six-month periods ended June 29, 1996, are
not necessarily indicative of the results that may be expected for the year
ending December 28, 1996. The information reported in this Form 10-Q should be
read in conjunction with the financial statements and footnotes contained in the
Company's Form 10-K filed with the Securities and Exchange Commission for the
year ended December 30, 1995.
NOTE 2 - NET INCOME PER SHARE
Net income per share is computed using the weighted average number of shares of
common stock outstanding, and the dilutive common equivalent shares outstanding
from stock options and warrants (using the treasury stock method).
6
<PAGE>
LEVEL ONE COMMUNICATIONS, INCORPORATED
__________
NOTE 3 - INVENTORIES
Inventories, stated at the lower of cost (first in, first out) or market,
consist of:
<TABLE>
<CAPTION>
(in thousands) June 29, 1996 December 30, 1995
------------- -----------------
<S> <C> <C>
Raw materials $ 44 $ 26
Work-in-process 12,091 14,281
Finished goods 1,603 1,465
-------- --------
$ 13,738 $ 15,772
======== ========
</TABLE>
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment, net is comprised of the following:
<TABLE>
<CAPTION>
(in thousands) June 29, 1996 December 30, 1995
-------------- -----------------
<S> <C> <C>
Machinery & equipment $ 22,006 $ 22,557
Furniture & fixtures 10,749 8,244
--------- --------
$ 32,755 $ 30,801
Accumulated depreciation (13,433) (10,363)
--------- --------
$ 19,322 $ 20,438
========= ========
</TABLE>
7
<PAGE>
LEVEL ONE COMMUNICATIONS, INCORPORATED
_____
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following information should be read in conjunction with the unaudited
interim financial statements and the notes thereto included in Item 1 of this
Quarterly Report on Form 10-Q and the Management's Discussion and Analysis of
Financial Condition and Results of Operations contained in the Company's Form
10-K filed with the Securities and Exchange Commission on March 29, 1996.
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Actual results could differ materially from
those projected in the forward-looking statements as a result of the factors set
forth in "Factors that May Affect Future Results" and elsewhere in this Report.
REVENUES
Revenues increased 65% to $27.5 million in the second quarter of 1996 compared
to revenues of $16.6 million for the same quarter of 1995. For the first six
months of 1996, revenues increased 84% to $55.0 million from $29.8 million for
the same period of 1995.
Networking product revenues were $11.9 million and $9.1 million for the second
quarter of 1996 and 1995, respectively, an increase of 30%. Transmission product
revenues were $15.6 million and $7.5 million for the second quarter of 1996 and
1995, respectively, an increase of 108%. For the first six months of 1996,
networking product revenues were $24.2 million and transmission product revenues
were $30.8 million, an increase of 73% and 95%, respectively, over the first six
months of 1995. The increases during the second quarter and first half of 1996
reflect the substantial unit sales growth due to the continued market acceptance
of the Company's products in both the networking and transmission markets, and
the broadening of the Company's customer base.
International sales were $11.1 million or 41% and $5.7 million or 34% of sales
for the second quarter of 1996 and 1995, respectively. For the first half of
1996 and 1995, international sales were $21.3 million or 39% and $9.5 million or
32% of sales, respectively. The increase in international sales in the second
quarter and first half of 1996 over the same periods of 1995 is attributable to
the Company's increased international marketing efforts, which included the
addition of sales and application engineering personnel. All sales are
denominated in U.S. dollars, thereby eliminating the impact of foreign currency
exchange rate fluctuations on revenues. The Company's profit margin on
international sales is not materially different from that realized on its sales
in the United States.
8
<PAGE>
GROSS MARGIN
The Company's cost of sales includes the cost of wafer fabrication, packaging
and assembly performed by third party vendors, and costs associated with the
procurement, scheduling, product engineering, testing and quality assurance
functions performed by the Company. Gross margin as a percentage of revenues in
the second quarter of 1996 was 58.1% versus 58.6% in the second quarter of
1995. During any period, the Company's gross margin is affected by several
factors, including the mix of products, test equipment utilization, foundry and
assembly manufacturing yields, declining selling prices, and the cost benefits
achieved through die size reductions. The Company conducts ongoing product
enhancement and cost reduction programs.
RESEARCH AND DEVELOPMENT
Research and development expenses were $5.7 million or 20.9% of revenues in the
second quarter of 1996 versus $4.7 million, or 28.6% of revenues in the second
quarter of 1995. In the first half of 1996, research and development expenses
were $11.4 million or 20.7% of revenues versus $7.6 million, or 25.6% of
revenues in the same period of 1995. Research and development expenses in 1995
were uncharacteristically high as a percentage of revenues as a result of a one-
time charge of $750,000 in the second quarter of 1995 related to the acquisition
of San Francisco Telecom, Inc. The research and development expense increase on
a year-to-year basis is due primarily to additions to the Company's design
engineering staff and related new product design expenses.
The markets for the Company's products are characterized by continuing
technological change, evolving industry standards, and frequent new product
introductions. The Company believes that the continued introduction of new
products is essential to its success and is committed to continued substantial
investment in new product research and development. The Company anticipates
increased investment in research and development in absolute dollars in future
years, although research and development costs as a percentage of revenues may
decline over time.
SALES AND MARKETING
Sales and marketing expenses were $4.0 million or 14.5% of revenues in the
second quarter of 1996 versus $2.5 million or 15% of revenues in the second
quarter of 1995. In the first half of 1996, sales and marketing expenses were
$8.0 million or 14.5% of revenues compared to $4.7 million or 15.9% of revenues
in the first half of 1995. The increases in expenditures are primarily
attributable to the continued expansion of the Company's international sales
efforts, higher sales commissions associated with increased revenues, and the
expansion of the Company's sales and marketing staffs.
The Company anticipates that sales and marketing expenses will continue to
increase as revenues grow and it opens sales support offices in Europe and in
the Far East during 1996. The Company also plans to add additional application
engineering personnel.
GENERAL AND ADMINISTRATIVE
In the second quarter of 1996, general and administrative expenses were $1.8
million or 6.4% of revenues versus $1.3 million or 8.1% of revenues in the same
period of 1995. General and
9
<PAGE>
administrative expenses were $3.6 million or 6.5% of revenues in the first half
of 1996 versus $2.4 million or 8.1% of revenues in the first half of 1995. The
increased expenses are primarily attributable to additional headcount associated
with the Company's growth.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity as of June 29, 1996, consisted of
$32.5 million of cash, cash equivalents and short-term investments, and $10
million available under the Company's revolving line of credit. At June 29,
1996, the Company had no outstanding balance under this line of credit. Working
capital as of June 29, 1996, was $54.1 million.
During the first six months of 1996, the Company generated $9.1 million of cash
from operating activities, as compared to $5.6 million in the same period in
1995. Net cash generated from operations in the second quarter of both 1996 and
1995 was primarily due to increased profitability.
During the first six months of 1996, financing activities provided net cash of
$1.3 million versus net cash used of $17,000 for the same period a year ago.
The primary source of cash in both periods was the issuance of common stock upon
exercise of employee stock options.
During the first six months of 1996, the Company used net cash of $2.3 million
for investing activities. The Company generated net cash of $6.5 million from
the maturity of short-term investments and used $8.8 million for the purchase of
capital equipment and other assets, including a deposit with a third party
semiconductor foundry. During the first six months of 1995, the Company used
net cash of $13.0 million for investing activities, primarily for the purchase
of short-term investments of $4.7 million and the purchase of capital equipment
for $8.1 million.
During 1995, the Company entered into five-year arrangements with three of its
suppliers for committed foundry capacity in consideration for equipment
financing or a cash deposit. Under one of these agreements, the Company is
subject to a penalty if it fails to purchase specified minimum quantities of
wafers. Through 1998, these arrangements provide for additional expenditures
aggregating $18 million, which the Company expects to pay using cash generated
from operations.
The Company expects to fund its 1996 capital equipment requirements using a
combination of cash and equipment leasing. The Company believes that its
existing cash resources combined with cash generated from operations, equipment
lease arrangements and its line of credit will be sufficient to meet the
Company's cash requirements through the end of 1996. However, the Company may
from time to time seek additional equity or debt financing as a result of the
capital intensive nature of the semiconductor industry.
FACTORS THAT MAY AFFECT FUTURE RESULTS
The following risk factors may be associated with the outlook for the Company's
business:
DEPENDENCE UPON INDEPENDENT MANUFACTURERS
10
<PAGE>
The Company does not manufacture the wafers used for its products. To date, the
Company's wafers have been manufactured by foundries located in the United
States, Europe, and the Far East. The Company depends upon these suppliers to
produce wafers at acceptable yields and to deliver them to the Company in a
timely manner at competitive prices. The Company may sustain an adverse impact
on operating results from problems with the cost, timeliness, yield and quality
of wafer deliveries from suppliers. From time to time, the available industry-
wide foundry capacity fluctuates significantly. During periods of constrained
supply, the Company may experience difficulty in securing an adequate supply of
wafers, and/or its suppliers may increase wafer prices which must be paid by the
Company. In periods in which wafer supply is plentiful, the Company may
experience less predictability in customer ordering patterns, as the shorter
lead times cause customers to place orders nearer to their planned delivery
dates. The Company's operating results depend in substantial part on its ability
to maintain or increase the capacity available to it from its existing or new
foundries.
The Company is also dependent upon third-party assembly companies that package
the semiconductor die. The Company depends upon these suppliers to produce
products in a timely manner and at competitive prices. The Company has in the
past and may in the future sustain a financial impact from problems with the
cost, timeliness, yield and quality of product deliveries from these suppliers.
FACTORS AFFECTING QUARTERLY OPERATING RESULTS
The semiconductor industry is characterized by rapid technological change,
intense competitive pressure and cyclical market patterns. The Company's
results of operations are affected by a wide variety of factors, including
general economic conditions, conditions specific to the semiconductor industry,
decreases in average selling price, the timing of new product introductions
(both by the Company and its competitors), use of new manufacturing
technologies, the ability to safeguard patents and intellectual property, and
rapid escalation or decline of demand for products. The level of net revenues in
any specific quarter can also be affected by the level of orders placed during
that quarter. The Company attempts to respond to changes in market conditions as
soon as possible; however, the suddenness of their onset can make the prediction
of and reaction to such events difficult. Due to the foregoing and other
factors, past results, such as those described in this report, may not be
predictive of future performance.
DEPENDENCE ON NEW PRODUCTS
The Company's future success depends on its ability to develop and introduce new
products on a timely basis. These new products need to compete effectively on
the basis of price, performance and customer requirements. During the second
quarter of 1996, the Company introduced two new products. Because of the
complexity of its products, the Company may experience delays from time to time
in completing development and introduction of new products, and, as a result,
may not achieve the market share anticipated for such products. The Company
conducts its own analysis of market trends and relies as well on forecasts and
information provided by industry analysts. Market conditions may change rapidly
as technology, economic, or user-preference conditions cause different
communications technologies to experience different growth prospects from those
forecast by the Company or by others. There can be no assurance that the Company
will successfully identify new product opportunities and bring new products to
market in a timely manner, that products or technologies developed by others
will not render the Company's products or technologies obsolete or
noncompetitive, or that the Company's products will be
11
<PAGE>
selected for design into the products of its targeted customers. In addition,
the average selling price for any particular product may decrease rapidly over
the product's life. To offset such decreases, the Company relies primarily on
obtaining yield improvements and corresponding cost reductions in the
manufacture of existing products and on introducing new products which
incorporate advanced features and other price/performance factors such that
higher average selling prices and higher margins are achievable relative to
existing product lines. To the extent that such cost reductions and new product
introductions with higher margins do not occur in a timely manner, or the
Company's products do not achieve market acceptance, the Company's operating
results could be adversely affected.
INTELLECTUAL PROPERTY
The Company relies upon patent, trademark, trade secret and copyright law to
protect its intellectual property. There can be no assurance that such
intellectual property rights can be successfully asserted in the future or will
not be invalidated, circumvented or challenged. Litigation, regardless of its
outcome, could result in substantial cost and diversion of resources of the
Company. Any infringement claim or other litigation against or by the Company
could have a material adverse effect on the Company's financial condition and
results of operations. In November 1995 the Company commenced infringement
litigation against a competitor. See Part II, Item 1, "Litigation".
SEMICONDUCTOR INDUSTRY
The semiconductor industry has historically been cyclical and subject to
significant economic downturns at various times, characterized by diminished
product demand, accelerated erosion of average selling prices and overcapacity.
The Company may experience substantial period-to-period fluctuations in future
operating results due to general semiconductor industry conditions, overall
economic conditions or other factors.
In addition, the securities of many high technology companies have historically
been subject to extreme price and volume fluctuations, a factor which may
adversely affect the market price of the Company's Common Stock.
Due to the number of weeks in the Company's accounting months within a quarter,
the Company generally receives bookings for and ships more product in the third
month of each quarter than in either of the first two months of the quarter.
This concentration of shipments in the last month of the quarter may cause the
Company's quarterly results of operations to be more difficult to predict.
Moreover, if a disruption in the Company's production or shipping occurs near
the end of a quarter, the Company's revenues for that quarter could be adversely
affected.
The Company must often order wafers and build inventory well in advance of
product shipments. There is risk that the Company may forecast incorrectly and
produce excess or insufficient inventories of particular products because the
Company's markets are volatile and subject to rapid technology and price
changes, which could affect shipments.
This inventory risk is heightened because certain of the Company's customers
place orders with lead times that make such orders subject to cancellation or
rescheduling by that customer. To the extent the Company produces excess or
insufficient inventories of particular products, the Company's revenues and
earnings could be adversely affected.
12
<PAGE>
Sales in the second quarter of 1996 to customers who placed orders within the
quarter generating these sales represented a larger portion of the Company's
revenues than the Company has previously experienced. To the extent the Company
continues to be subject to such shorter ordering cycles, it may increase the
Company's risk that it will over- or under-produce inventory while making it
more difficult for the Company to forecast its quarterly operating results.
Increases in the general demand for semiconductor products may result in a
reduction in the availability of wafers from foundries. Such capacity
limitations may adversely affect the Company's ability to deliver products to
its customers on a timely basis, and may also adversely impact the Company's
margins. Additionally, the Company believes that during periods of strong
demand and/or restricted semiconductor capacity, customers will over order to
attempt to assure an adequate supply. Accordingly, certain of the Company's
customers may cancel or postpone orders without notice if parts become
available. These characteristics may result in volatility of the Company's
backlog.
Even if the Company has products available for sale to its customers, many of
the Company's products could be affected in the event the Company's customers
encounter shortages in other parts necessary to build and ship their products.
Shortages of components from other suppliers could cause the Company's customers
to cancel or delay programs incorporating the Company's parts, resulting in the
cancellation or delay of orders of the Company's products.
The Company's business is intensely competitive and is characterized by new
product cycles, price erosion, and rapid technological change. Competition
typically occurs at the design stage, where the customer evaluates alternative
design approaches that require integrated circuits. Because product life and
design-in cycles can be short, the Company's competitors have opportunities to
achieve design wins in next generation systems. In the event that competitors
succeed in supplanting the Company's products, the Company's market share may
not be sustainable and revenues, gross margin, and earnings would be adversely
affected
Because of the foregoing factors that may affect future results, investors
should not use historical trends to anticipate results or trends for future
periods. In addition, the Company participates in a highly dynamic industry
that may result in significant volatility of the Company's common stock price.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On November 28, 1995, the Company initiated a patent infringement suit
against Seeq Technologies, Inc. in United States District Court for the Northern
District of California. The suit relates to two Level One patents, No.
5,267,269 and No. 5,249,183, and to certain Seeq products used in Ethernet
system products. The suit seeks damages and injunctive relief. Seeq has denied
the allegations. Although the Company does not believe such litigation will
have a material impact on the Company, litigation, regardless of its outcome,
could result in substantial cost and diversion of resources of the Company. See
"Factors Affecting Quarterly Operating Results".
There are no other material pending legal proceedings, other than routine
litigation incidental to the Company's business, to which the Company is a party
or of which any of its property is the subject.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - 27.1--Financial Data Schedule, June 29, 1996
(b) Reports on Form 8-K - None
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEVEL ONE COMMUNICATIONS, INCORPORATED
Date: August 12, 1996 By: /s/ Robert S. Pepper
----------------------------------------
Robert S. Pepper, Ph.D.
Chairman of the Board of Directors,
President and Chief Executive Officer
(Principal Executive Officer)
Date: August 12, 1996 By: /s/ John Kehoe
----------------------------------------
John Kehoe
Vice President and Chief Financial
Officer
(Principal Financial Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED JUNE 29, 1996, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-END> JUN-29-1996
<CASH> 29,765
<SECURITIES> 2,762
<RECEIVABLES> 14,081
<ALLOWANCES> 505
<INVENTORY> 13,738
<CURRENT-ASSETS> 66,232
<PP&E> 32,738
<DEPRECIATION> 13,433
<TOTAL-ASSETS> 103,234
<CURRENT-LIABILITIES> 12,094
<BONDS> 0
0
0
<COMMON> 79,621
<OTHER-SE> 7,633
<TOTAL-LIABILITY-AND-EQUITY> 103,234
<SALES> 55,021
<TOTAL-REVENUES> 55,021
<CGS> 23,109
<TOTAL-COSTS> 23,109
<OTHER-EXPENSES> 22,935
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 179
<INCOME-PRETAX> 9,718
<INCOME-TAX> 3,208
<INCOME-CONTINUING> 6,510
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,510
<EPS-PRIMARY> 0
<EPS-DILUTED> .48
</TABLE>
