<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 8-K/A
AMENDMENT 3
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): August 12, 1997
(MARCH 10, 1997)
UNIPHASE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-22874 94-2579683
(STATE OF OTHER JURISDICTION (COMMISSION FILE NO.) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
163 BAYPOINTE PARKWAY, SAN JOSE, CALIFORNIA 95134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(408) 434-1800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
PAGE 1 OF 19 PAGES
EXHIBIT INDEX LOCATED ON PAGE 19
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<PAGE> 2
This amendment to Item 7. (b) of the 8K-A, filed on June 10, 1997, is to clarify
certain statements made on the Nine Months Ended March 31, 1997, Pro Forma
Condensed Combined Consolidated Statement of Operation.
<PAGE> 3
This form 8-K/A amends Item 7 of that certain Form 8-K filed with the
Securities and Exchange Commission on March 25, 1997 (the "Original Form 8-K")
by including the financial statements and pro forma financial information
referred to below.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired
(1) Report of Independent Auditors.
(2) Laser Enterprise, a division of International
Business Machines, balance sheets as of December 31,
1996 and 1995 and the related statements of income
and cash flows for each of the three years in the
period ended December 31, 1996.
(3) Notes to Financial Statements of Laser Enterprise,
a division of International Business Machines.
<PAGE> 4
REPORT OF INDEPENDENT AUDITORS
with
Financial Statements
Years ended December 31, 1996, 1995 and 1994
of
LASER ENTERPRISE, RUESCHLIKON ZH, SWITZERLAND
a Division of International Business Machines Corporation, New York (IBM)
<PAGE> 5
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors of Uniphase Corporation, USA
We have audited the accompanying balance sheets of Laser Enterprise, a Division
of International Business Machines, New York, as of December 31, 1996 and
December 31, 1995, and the related statements of income and cash flows for each
of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Division's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Laser Enterprise, a Division of
International Business Machines as at December 31, 1996 and 1995 and the results
of operations and its cash flows for each of the three years in the period ended
December 31, 1996 in conformity with accounting principles generally accepted in
the United States of America.
Zurich, Switzerland ATAG Ernst & Young AG
May 7, 1997
/s/ Robert G. Wightman /s/ Yves Vontobe
Robert G. Wightman Yves Vontobe
Chartered Accountant Certified Accountant
<PAGE> 6
LASER ENTERPRISE, A DIVISION OF INTERNATIONAL BUSINESS MACHINES
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31
--------------------------
1996 1995
----------- ----------
<S> <C> <C>
Assets
Current assets:
Accounts Receivable $ 5,328,755 $3,860,480
Inventories 3,336,370 776,315
----------- ----------
Total current assets 8,665,125 4,636,795
Property, plant and equipment, net 3,407,841 1,952,191
----------- ----------
Total assets $12,072,966 $6,588,986
=========== ==========
Liabilities and Division Equity
Current Liabilities:
Accounts payable $ 124,971 $ 42,514
Accrued liabilities 98,377 102,207
Accrued pa1yroll costs 610,269 312,264
Provision for warranty costs 1,008,858 831,683
----------- ----------
Total current liabilities 1,842,475 1,288,668
----------- ----------
Provision for hospitalization contribution plan 420,000 375,000
Provision for employee pension costs 2,420,000 2,230,000
Division equity
Head Office current account 7,390,491 2,695,318
----------- ----------
Total liabiilities and division equity 12,072,966 6,588,986
=========== ==========
</TABLE>
The accompanying notes form an integral part of these financial statements
<PAGE> 7
LASER ENTERPRISE, A DIVISION OF INTERNATIONAL BUSINESS MACHINES
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Years ended December 31
------------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Gross sales $ 21,895,655 $ 19,679,554 $ 13,844,335
Cost of sales (7,572,417) (9,587,004) (7,622,562)
------------ ------------ ------------
Gross profit 14,323,238 10,092,550 6,221,773
------------ ------------ ------------
Operating expenses:
Research and development expenses 1,841,401 1,627,510 1,246,621
Selling, general and administrative expenses 2,608,628 2,211,617 1,591,217
------------ ------------ ------------
Total operating expenses 4,450,029 3,839,127 2,837,838
------------ ------------ ------------
Income before income taxes 9,873,209 6,253,423 3,383,935
Notional income tax expense 2,665,766 1,688,424 913,662
------------ ------------ ------------
Net income $ 7,207,443 $ 4,564,999 $ 2,470,273
============ ============ ============
</TABLE>
The accompanying notes form an integral part of these financial statements
<PAGE> 8
LASER ENTERPRISE, A DIVISION OF INTERNATIONAL BUSINESS MACHINES
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Years ended December 31
-----------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Operating activities
Net income $ 7,207,443 $ 4,564,999 $ 2,470,273
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 732,812 895,958 920,859
Changes in operating assets and liabilities:
Accounts receivable (1,468,275) 1,246,450 (2,176,630)
Inventories (2,560,055) 400,212 (1,076,527)
Accounts payable and other current liabilities 553,807 599,205 239,463
Change in long-term liabilities 235,000 220,000 200,000
----------- ----------- -----------
Net cash provided by operating activities 4,700,732 7,926,824 577,438
----------- ----------- -----------
Investing activities
Investments in property, plant and equipment (2,188,462) (576,071) (802,244)
----------- ----------- -----------
Financing activities
Net cash provided by (to) International Business Machines (2,512,270) (7,350,753) 224,806
----------- ----------- -----------
Cash at beginning and end of period $ 0 $ 0 $ 0
=========== =========== ===========
</TABLE>
The accompanying notes form an integral part of these financial statements
<PAGE> 9
LASER ENTERPRISE DIVISION OF IBM CORPORATION
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Laser Enterprise has operated as a business operation of International Business
Machines Corporation, New York (IBM). The accompanying financial statements
include the assets and liabilities and the related net sales and expenses that
are directly related to Laser Enterprise's operations on a historical basis.
The Laser Enterprise business consists of research in the opto-electronic field
and the development and manufacture of gallium arsenide laser chips in
Rueschlikon, Zurich, Switzerland and their sale to unrelated parties located
principally in North America, Italy and Korea. Laser Enterprise performs ongoing
credit evaluations and does not require collateral.
Laser Enterprise had no separate legal status as it was an integral part of the
Zurich Research Laboratory, a component of the Research Division of IBM. As a
result, separate accounting records have not been maintained for the Laser
Enterprise operations acquired by Uniphase Corporation under the Purchase
Agreement of March 10, 1997 (the "Purchase Agreement") (see Note 9). The
accompanying financial statements have been prepared from the historical
accounting records of IBM.
Since all financing, cash receipts and disbursements were undertaken by IBM for
Laser Enterprise, these financial statements do not show liquid asset balances.
All financing, cash receipts and disbursements since January 1, 1994 are
recorded in the Head Office current account. At the end of each year, the net
income is credited to the Head Office current account.
The US Dollar is considered to be the functional currency of Laser Enterprise.
Accounts denominated in other currencies are translated into US Dollars at the
approximate rates of exchange in effect at the dates of the underlying
transactions. Exchange differences are considered to be immaterial and are
charged to income under operating expenses.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
<PAGE> 10
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES
Inventory is stated at the lower of cost or market value. Cost is computed on
the basis of estimated costs allocated to Laser Enterprise and on estimated
average yields of salable product resulting from the production process.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. Depreciation is computed for
financial reporting purposes by the use of the straight line method over the
estimated useful lives (production and research machinery and equipment 7 years,
office machines and equipment 5 years).
INCOME TAXES
Since Laser Enterprise has operated as a part of a non-trading division of IBM,
its results have not been subject to taxation on a basis comparable to that
applicable to an unaffiliated independent company. For financial reporting
purposes, a notional income tax charge is shown; this is computed on the
reported profit before income tax at the approximate average income tax rate
(maximum tax bracket: 27%) applicable to a company operating in Rueschlikon,
Zurich.
REVENUE RECOGNITION
Sales, cost of sales, and a provision for estimated sales returns, warranty
costs and allowances are recorded at the time sales transactions are considered
complete, which is generally the date products are shipped to customers.
NOTE 3 - INVENTORIES
Inventories comprise the following:
<TABLE>
<CAPTION>
December 31, 1996 1995 1994
<S> <C> <C> <C>
Finished goods $ 704,281 $ 110,986 $ 677,330
Work in process (cells in lot validation) 2,632,089 665,329 499,197
---------- ---------- ----------
Total $3,336,370 $ 776,315 $1,176,527
---------- ---------- ----------
</TABLE>
Management considers the value of the raw material inventories to be
insignificant.
<PAGE> 11
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment comprises the following:
<TABLE>
<CAPTION>
December 31, 1996 1995 1994
<S> <C> <C> <C>
Production and research machinery
and equipment $ 9,150,997 $ 7,298,902 $ 6,778,196
Office machines and equipment 1,225,397 889,030 831,665
----------- ----------- -----------
Total cost 10,376,394 8,187,932 7,609,861
Accumulated depreciation 6,968,553 6,235,741 5,339,783
----------- ----------- -----------
Net book value $ 3,407,841 $ 1,952,191 $ 2,270,078
----------- ----------- -----------
</TABLE>
NOTE 5 - PROVISION FOR HOSPITALIZATION COST PLAN
Laser Enterprise makes contributions of up to CHF 25,000 each to the
hospitalization costs of the employees, their spouses and non-adult children.
After a disbursement has been made, the remaining credit balance of the person
concerned is topped-up to CHF 25,000 by annual installments of CHF 2,500 during
the period of employment. After retirement, the persons concerned remain
entitled to contributions up to the amount of their credit balance; this balance
is no longer topped-up after retirement. Entitlement to contributions ceases on
the termination of employment other than through retirement.
For financial reporting purposes, provision is made for the cost of these
hospitalization contributions at the rate of USD 1,000 per employee per year
(the approximate average historical cost per employee for the IBM Zurich
Research Laboratory) up to an amount of USD 20,000 per employee. This amount of
USD 20,000 then represents a provision for the post-retirement cost of the
hospitalization contribution plan. The actual disbursements of hospitalization
contributions for Laser Enterprise personnel were minimal in the years 1996,
1995 and 1994.
NOTE 6 - PROVISION FOR EMPLOYEE PENSION COSTS
The personnel of Laser Enterprise were members of the defined benefit and
defined contribution pension plans of IBM. For the financial reporting purposes
of Laser Enterprise, these plans have the characteristics of multiemployer
plans. The pension plans are funded by defined contributions from the employees
plus defined (defined contribution plan) or non-defined contributions (defined
benefit plan) from the employers. The defined contribution plan and the vested
benefits under the defined benefit plan are considered to be fully funded
through current contributions.
Provisions for the unfunded obligations of the defined benefit plan have been
made in these financial statements based on the supplementary funding amounts in
respect of projected benefit obligations under the defined benefit plan which
were included in the Purchase Agreement.
<PAGE> 12
Pension plan expense was one of the components of the total employee benefits
costs allocated to Laser Enterprise primarily on the basis of headcount. The
total pension plan expense charged to the income statements amounted to
approximately $ 1,204,000 in 1996, $ 513,000 in 1995 and $ 413,000 in 1994.
NOTE 7 - GROSS SALES
Gross sales per the accompanying financial statements represent shipments by
Laser Enterprise for the products acquired by Uniphase Corporation.
Two significant third-party customers in the North America accounted for 46%
respectively 43% of gross sales in 1996, 55% respectively 34% in 1995 and 79%
respectively 7% in 1994.
NOTE 8 - TRANSACTIONS WITH HEAD OFFICE
The Head Office current account balance included in the balance sheet represents
a net balance as a result of the various transactions between Laser Enterprise
and its Head Office. There are no terms of settlement or interest charges
associated with the account balance. The balance is primarily the result of
Laser Enterprise,s participation in the Head Office,s central cash management
program, wherein all Laser Enterprise,s cash receipts are remitted to the Head
Office and all cash disbursements are funded by the Head Office.
An analysis of transactions in the Head Office current account for each of the
three years in the period ended December 31, 1996 follows:
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Balance at beginning of year $ 2,695,318 $ 5,481,072 $ 2,985,993
Customer payments directly to Head Office (18,039,038) (17,883,604) (7,784,405)
Investment in property, plant and equipment 2,188,463 578,071 802,244
Miscellaneous expenses, net of items not
requiring disbursement of cash 10,672,539 8,266,356 6,093,305
Notional income tax expense 2,665,766 1,688,424 913,662
Net income 7,207,443 4,564,999 2,470,273
------------ ------------ ------------
Balance at end of year $ 7,390,491 $ 2,695,318 $ 5,481,072
------------ ------------ ------------
Average balance during year $ 5,042,904 $ 4,088,195 $ 4,233,532
------------ ------------ ------------
</TABLE>
The Zurich Research Laboratory of IBM provides various services to Laser
Enterprise for which charges are made based on allocations of the total costs of
the Zurich Research Laboratory. Such allocations of the costs of corporate
services, production, clean room and other facilities, information services,
etc. to Laser Enterprise were made based on the estimated usage, determined
primarily on the basis of actual headcount. In the opinion of management this
method of allocation is reasonable. No charges have been made for the use of
existing IBM patents and know-how.
<PAGE> 13
NOTE 9 - SUBSEQUENT EVENT
On March 10, 1997, Laser Enterprise was acquired by Uniphase Corporation and its
name was changed to Uniphase Laser Enterprise AG.
---------------------
<PAGE> 14
PRO FORMA FINANCIAL INFORMATION
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS (CONTINUED)
(b) Pro Forma Financial Information
On March 10, 1997, Uniphase Corporation (the "Company")
acquired the certain assets, including accounts receivable,
fixed assets, inventory, non-exclusive technology and a
patent license agreement and assumed certain accrued
liabilities of Laser Enterprise, a division of International
Business Machines ("IBM"), located at IBM's Zurich Research
Laboratory in Switzerland for the purchase price of $45.9
million consisted of $45 million cash and acquisition
expenses of approximately $900,000. The Unaudited Pro Forma
Condensed Combined Statement of Operations for the nine
months ended March 31, 1997 and the fiscal year ended June 30
1996, should be read in conjunction with the consolidated
financial statements of the Company, as previously filed and
the Financial Statements of Laser Enterprise, a division of
IBM ("Laser Enterprise") included herein. Those financial
statements are based on the historical financial statements
of the Company and Laser Enterprise after giving effect to
the acquisition under the purchase method of accounting and
the assumptions and adjustments described in the accompanying
Notes to the Unaudited Pro Forma Condensed Combined
Statements of Operation. The pro forma information does not
purport to be indicative of the results which would have been
reported if the above transaction had been in effect for the
periods presented or which may result in the future.
The Unaudited Pro Forma Condensed Combined Statements of
Operations are presented as if the operations of the Company
and Laser Enterprise had been combined as of July 1, 1995.
The Unaudited Pro Forma Condensed Combined Statement of
Operations for the year ended June 30, 1996 combines the year
ended June 30, 1996 for the Company and the twelve month
period ended June 30, 1996 for Laser Enterprise. The
Unaudited Pro Forma Condensed Combined Statement of
Operations for the nine months ended March 31, 1997 combines
the nine months ended March 31, 1996 for the Company and for
Laser Enterprise.
<PAGE> 15
PRO FORMA CONDENSED COMBINED CONSOLIDATED
STATEMENT OF OPERATIONS (UNAUDITED)
MARCH 31, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Nine Months Ended March 31, 1997
------------------------------------------
Pro Forma
Laser Pro Forma Uniphase
Uniphase Enterprise Adjustments Combined
-------- -------- ------------ -------
<S> <C> <C> <C> <C>
Net sales $ 73,073 $ 16,847 $ -- $ 89,920
Cost of sales 39,167 8,205 87 (B) 47,459
-------- -------- ------- -------
Gross profit 33,906 8,642 (87) 42,461
Operating expenses:
Research and development 6,307 1,519 52 (B) 7,878
Royalty and license 1,209 -- -- 1,209
Selling, general and administrative 17,635 1,907 1,422 (A) 21,194
230 (B)
Acquired in-process research and development 33,314 -- (33,314)(A) --
-------- -------- ------- -------
Total operating expenses 58,465 3,426 (31,610) 30,281
-------- -------- ------- -------
Income (loss) from operations (24,559) 5,216 31,523 12,180
Interest and other income, net 2,805 -- -- 2,805
-------- -------- ------- -------
Income (loss) before income taxes (21,754) 5,216 31,523 14,985
Income tax expense (benefit) 6,056 1,366 (716)(C) 6,706
-------- -------- ------- -------
Net income (loss) $(27,810) $ 3,850 $32,239 $ 8,279
======== ======== ======= =======
Net income (loss) per share $ (1.69) $ 0.50
======== =======
Number of weighted average shares used in per
share amounts 16,489 16,489
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements
<PAGE> 16
PRO FORMA CONDENSED COMBINED CONSOLIDATED
STATEMENT OF OPERATIONS (UNAUDITED)
JUNE 30, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Twelve Month Period Ended June 30, 1996
--------------------------------------------------
Pro Forma
Laser Pro Forms Uniphase
Uniphase Enterprise Adjustments Combined
-------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Net sales $69,073 $19,191 $88,264
Cost of sales 36,300 7,890 116(B) 44,306
------- ------- ------- -------
Gross profit 32,773 11,301 116 43,958
Operating expenses
Research and development 5,828 1,528 70(B) 7,426
Royalty and license 1,337 -- 1,337
Selling, general, and administrative 12,699 2,349 2,521(A) 17,569
307(B)
Acquired in-process research and development 4,480 -- -- 4,480
Compensation expense 3,000 -- -- 3,000
------- ------- ------- -------
Total operating expenses 27,344 3,877 2,898 33,812
------- ------- ------- -------
Income (loss) from operations 5,429 7,424 (2,782) 10,146
Interest and other income, net 1,399 -- -- 1,399
------- ------- ------- -------
Income (loss) before income taxes 6,828 7,424 (2,782) 11,545
Income tax expense (benefit) 4,036 2,004 (1,113)(C) 4,927
-------- ------- ------- -------
Net income (loss) $ 2,792 $ 5,420 $(1,669) $ 6,618
======= ======= ======= =======
Net income (loss) per share $ 0.21 $ 0.49
======= =======
Number of weighted avg. shares used in per share
amounts 13,577 13,577
======= =======
</TABLE>
See accompanying notes to unaudited pro forma condensed combined financial
statements
<PAGE> 17
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(A) In March 1997, the Company acquired ULE. The total purchase price of $45.9
million included consideration of $45 million in cash and estimated direct
costs of $900,000.
Of the total purchase price, $33.3 million has been allocated to in-process
research and development and charged to expenses. Since such amount is a
non-recurring charge, it has been included as a pro forma adjustment to
exclude the effects from the Unaudited Pro Forma Condensed Combined
Statement of Income for the nine-month period ended March 31, 1997.
The remaining $12.6 million of the total purchase price has been allocated
to specifically identifiable assets acquired which includes $1.5 million
allocated to a prepaid lease and service agreement that is being amortized
over the terms of two years. The intangible assets acquired of $6.9 million
will be amortized over an average estimated useful life of five years. The
related amortization is reflected as a pro forma adjustment to the Unaudited
Pro Forma Condensed Combined Statements of Income.
The purchase price allocation is preliminary subject to change based on the
Company's final analysis.
(B) Upon the closing, the Company granted stock options to certain employees at
a grant price of less than market value. The Company will incur compensation
expenses totaling $2.0 million which will be amortized over the vesting
period of four years and the related proportional amounts have been included
as a pro forma adjustment to the Unaudited Pro Forma Condensed Combined
Statements of Income.
(C) The pro forma combined provisions for income taxes do not represent the
amounts that would have resulted had Uniphase and Laser Enterprise filed
consolidated income tax returns during the periods presented. The pro forma
adjustments have been tax effected at the Company's incremental tax rate of
approximately 40%.
<PAGE> 18
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS (CONTINUED)
(c) Exhibits
The Exhibit Index appearing on page 19 is incorporated by
reference.
<PAGE> 19
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 hereunto duly authorized.
UNIPHASE CORPORATION
/s/ Dan E. Pettit
-------------------------------
Dan E. Pettit
Vice President of Finance and CFO
Date: August 12, 1997
<PAGE> 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT DESCRIPTION NUMBERED PAGE
- ------- ----------- -------------
<S> <C> <C>
2.1 Purchase Agreement among Uniphase Corporation,
International Business Machines Corporation, and
Uniphase Laser Enterprise AG (incorporated by
reference to exhibits of Registrant's Form 8-K
filed on March 25, 1997).
2.3 Patent License Agreement (incorporated by reference to
exhibits of Registrant's Form 8-K filed on March 25,
1997).
2.4 The Agreement for Exchange of Confidential Information
(incorporated by reference to exhibits of Registrant's
Form 8-K filed on March 25, 1997).
10.1 Technology License Agreement (incorporated by
reference to exhibits of Registrant's Form 8-K filed on
March 25, 1997).
23.1 Consent of ATAG Ernst & Young AG, independent auditors.
</TABLE>
