<PAGE>
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 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 July 6, 1997
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 000-22221
FIELDWORKS, INCORPORATED
(Exact name of registrant as specified in its charter)
Minnesota 41-1731723
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
9961 Valley View Road
Eden Prairie, Minnesota 55344
(Address of principal executive offices)
(Zip Code)
(612) 947-0856
(Registrant's telephone number, including area code)
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 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 [ ]
The number of shares of the registrant's Common Stock, $.001 par value,
outstanding as of August 11, 1997 was 8,684,054.
- --------------------------------------------------------------------------------
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIELDWORKS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JULY 6, 1997 JANUARY 5, 1997
------------ ---------------
ASSETS (UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents......................................................... $ 5,805,975 $ 2,132,089
Accounts receivable, net of allowance for doubtful accounts of $280,000 and
$201,400........................................................................ 2,959,650 2,008,693
Inventories....................................................................... 5,105,900 4,417,322
Note receivable from related party................................................ -- 92,175
Prepaid expenses and other........................................................ 220,576 418,189
----------- -----------
Total current assets........................................................ 14,092,101 9,068,468
----------- -----------
PROPERTY AND EQUIPMENT:
Computers and equipment........................................................... 1,236,974 1,125,379
Furniture and fixtures............................................................ 128,723 125,374
Leasehold improvements............................................................ 121,136 98,585
Less: Accumulated depreciation.................................................... (757,235) (553,178)
----------- -----------
Property and equipment, net................................................. 729,598 796,160
DEPOSITS AND OTHER ASSETS, net....................................................... 26,817 41,491
----------- -----------
$14,848,516 $ 9,906,119
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable..................................................................... $ -- $ 4,675,838
Notes payable to related parties.................................................. -- 1,350,000
Accounts payable.................................................................. 1,259,025 1,111,526
Accrued compensation and benefits................................................. 321,441 264,035
Accrued warranty and other........................................................ 462,796 567,201
Current maturities of capitalized lease obligations............................... 58,660 57,411
----------- -----------
Total current liabilities................................................... 2,101,922 8,026,011
CAPITALIZED LEASE OBLIGATIONS, less current maturities............................... 44,591 66,722
----------- -----------
Total liabilities........................................................... 2,146,513 8,092,733
----------- -----------
SHAREHOLDERS' EQUITY:
Series A convertible preferred stock, $.001 par value, 300,000 shares authorized,
issued and outstanding at January 5, 1997....................................... -- 300
Common stock, $.001 par value, 30,000,000 and 14,700,000 shares
authorized; 8,684,054 and 5,880,736 issued and outstanding...................... 8,684 5,881
Common stock warrants............................................................. 150,640 231,985
Additional paid-in capital........................................................ 19,849,260 7,878,591
Accumulated deficit............................................................... (7,306,581) (6,303,371)
----------- -----------
Total shareholders' equity.................................................. 12,702,003 1,813,386
----------- -----------
$14,848,516 $ 9,906,119
=========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
2
<PAGE>
FIELDWORKS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------- ----------------------------
JULY 6, 1997 JUNE 30, 1996 JULY 6, 1997 JUNE 30, 1996
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
NET SALES................................................... $ 5,513,304 $ 3,066,067 $ 10,630,472 $ 5,896,382
COST OF SALES............................................... 3,570,529 1,840,011 6,805,052 3,575,288
----------- ------------ ------------ ------------
Gross profit....................................... 1,942,775 1,226,056 3,825,420 2,321,094
----------- ------------ ------------ ------------
OPERATING EXPENSES:
Sales and marketing.................................... 1,128,646 775,389 2,116,925 1,366,137
General and administrative............................. 709,057 506,296 1,483,317 971,322
Research and development............................... 435,469 419,867 833,150 850,579
----------- ------------ ------------ ------------
Total operating expenses........................... 2,273,172 1,701,552 4,433,392 3,188,038
----------- ------------ ------------ ------------
Operating loss..................................... (330,397) (475,496) (607,972) (866,944)
INTEREST INCOME (EXPENSE) AND OTHER, net.................... 25,113 (54,660) (395,238) (118,564)
----------- ------------ ------------ ------------
NET LOSS FROM CONTINUING OPERATIONS......................... (305,284) (530,156) (1,003,210) (985,508)
LOSS FROM DISCONTINUED OPERATION (NOTE 1)................... -- (137,346) -- (206,955)
----------- ------------ ------------ ------------
NET LOSS.................................................... $ (305,284) $ (667,502) $ (1,003,210) $ (1,192,463)
=========== ============ ============ ============
EARNINGS (LOSS) PER SHARE:
Net loss per common share from continuing operations..... $ (.04) $ (.08) $ (.13) $ (.15)
Loss per common share from discontinued operation........ -- (.02) -- (.03)
----------- ------------ ------------ ------------
Net loss per common share................................ $ (.04) $ (.10) $ (.13) $ (.18)
=========== ============ ============ ============
Weighted average common shares outstanding............... 8,684,054 6,591,570 7,862,242 6,586,370
=========== ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
3
<PAGE>
FIELDWORKS, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
------------------------------
JULY 6, 1997 JUNE 30, 1996
------------ -------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss.................................................. $ (1,003,210) $ (1,192,463)
Adjustments to reconcile net loss to net cash used for
operating activities-
Depreciation and amortization........................ 539,588 130,320
Change in operating items:
Accounts receivable............................. (950,957) (475,501)
Inventories..................................... (688,578) (1,732,574)
Prepaid expenses and other...................... 201,842 (82,771)
Net assets of discontinued operation............ -- (26,068)
Accounts payable................................ 147,499 1,378,604
Accrued expenses................................ (46,999) (18,809)
------------ ------------
Net cash used for operating activities.......... (1,800,815) (2,019,262)
------------ ------------
INVESTING ACTIVITIES:
Purchase of property and equipment........................ (131,265) (270,562)
Collection of loan to related party....................... 92,175
------------ ------------
--
Net cash used for investing activities............... (39,090) (270,562)
------------ ------------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock.................... 11,891,827 160,999
Net line of credit borrowings............................. -- 840,000
Proceeds from notes payable to related parties............ -- 1,540,000
Payment of notes payable to related parties............... (6,350,000) --
Payment of capitalized lease obligations.................. (28,036) (20,608)
------------ ------------
Net cash provided by financing activities............ 5,513,791 2,520,391
------------ ------------
INCREASE IN CASH AND CASH EQUIVALENTS.......................... 3,673,886 230,567
CASH AND CASH EQUIVALENTS, beginning of period................. 2,132,089 112,602
------------ --------------
CASH AND CASH EQUIVALENTS, end of period....................... $ 5,805,975 $ 343,169
============= ==============
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
FIELDWORKS, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION:
The accompanying unaudited consolidated financial statements of FieldWorks,
Incorporated (FieldWorks or the Company), should be read in conjunction with the
consolidated financial statements and notes thereto filed with the Securities
and Exchange Commission in the Company's Registration Statement on Form S-1,
File No. 333-18335, for the fiscal year ended January 5, 1997. In the opinion of
management, the accompanying consolidated financial statements reflect all
adjustments (consisting only of normal recurring adjustments) considered
necessary to present fairly the financial results for the interim periods
presented. The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the entire fiscal year.
Merger With Paragon Technology, Incorporated and Subsequent Distribution
In August 1995, FieldWorks completed a merger with Paragon Technology,
Incorporated (Paragon), a Pennsylvania company engaged in software research and
development. The merger was accounted for as a pooling of interests. On November
11, 1996, the Company's board of directors approved the distribution of all of
the issued and outstanding common stock of Paragon as a dividend to Company
shareholders of record as of November 15, 1996. All shares of Paragon stock were
distributed prior to January 5, 1997. Paragon's results of operations for the
three and six month periods ended March 31, 1996 and June 30, 1996 have been
presented as a discontinued operation in the accompanying statements of
operations.
2. INVENTORIES:
Inventories are stated at the lower of cost or market value, as determined
by the first-in, first-out cost method, and consisted of the following:
<TABLE>
<CAPTION>
JULY 6, 1997 JANUARY 5, 1997
------------ ---------------
<S> <C> <C>
Raw materials........................................................... $3,659,394 $2,772,219
Work in process......................................................... 768,263 1,066,189
Finished goods.......................................................... 678,243 578,914
---------- ----------
Total.............................................................. $5,105,900 $4,417,322
========== ==========
</TABLE>
3. INITIAL PUBLIC OFFERING:
In March 1997, the Company completed an initial public offering (IPO) of
2,125,000 shares of common stock with proceeds of approximately $11.9 million,
net of related offering costs. The Company used $6.4 million of the proceeds to
repay bridge financing arrangements and the remaining proceeds will be used to
fund capital expenditures and for working capital purposes. In connection with
the offering, the Company issued warrants to the underwriter to purchase 212,500
shares of common stock at an exercise price of $7.80 per share. At the
completion of the IPO, the Company's articles of incorporation were amended to
authorize 30 million shares of common stock, $.001 par value, and five million
shares of undesignated preferred stock, $.001 par value.
5
<PAGE>
4. SUPPLEMENTAL CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
----------------------------
JULY 6, 1997 JUNE 30, 1996
------------ -------------
<S> <C> <C>
Supplemental cash flow disclosure:
Cash paid for interest................................................ $ 260,114 $ 155,292
========== ==========
Noncash investing activities:
Property and equipment acquired under capital leases.................. $ 7,154 $ 24,000
========== ==========
</TABLE>
5. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENT:
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128).
This standard establishes new guidelines for computing and presenting earnings
(loss) per share (EPS). Management believes that the adoption of SFAS No. 128
will not have a material impact on the Company's calculation of EPS.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
CAUTIONARY STATEMENT
This Quarterly Report on Form 10-Q 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. When used in
this Form 10-Q and in future filings by the Company with the Securities and
Exchange Commission, in the Company's press releases and in oral statements made
with the approval of an authorized executive officer, the words or phrases
"believes," "anticipates," "expects," "intends," "will likely result,"
"estimates," "projects" or similar expressions are intended to identify such
forward-looking statements, but are not the exclusive means of identifying such
statements. These forward-looking statements involve risks and uncertainties
that may cause the Company's actual results to differ materially from the
results discussed in the forward-looking statements. In light of this, the
Company wishes to caution readers not to place undue reliance on any such
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to revise any forward-looking statements in order to
reflect events or circumstances after the date of such statements. Readers are
urged carefully to review and consider the various disclosures made by the
Company in this report and in the Company's other reports filed with the
Securities and Exchange Commission, all of which attempt to advise interested
parties of the risks and factors that may affect the Company's business. Factors
that might cause such differences include, but are not limited to, the
following: the level of market acceptance of the Company's products, the growth
of the rugged computing market, the impact of competition, the success of the
Company's on going research and development efforts, the future availability of
financing when and if needed and the impact of general economic and business
conditions on the Company's sales. The Company's forward-looking statements are
qualified in their entirety by the cautions and risk factors set forth under the
"Cautionary Statement" filed as Exhibit 99.1 to its Form 10-Q for the period
ended April 6, 1997.
6
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth certain financial data expressed as a
percentage of net sales for the periods indicated:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
-------------------------- ------------------------
JULY 6, 1997 JUNE 30, 1996 JULY 6, 1997 JUNE 30, 1996
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Net sales......................................... 100% 100% 100% 100%
Cost of sales..................................... 65 60 64 61
--- --- --- ---
Gross profit................................. 35 40 36 39
Operating expenses:
Sales and marketing.......................... 20 25 20 23
General and administrative................... 13 17 14 16
Research and development..................... 8 14 8 15
--- --- --- ---
Total operating expenses................ 41 56 42 54
Operating loss.................................... (6) (16) (6) (15)
Interest expense and other, net................... -- (2) (3) (2)
--- --- --- ---
Net loss from continuing operations............... (6) (18) (9) (17)
Loss from discontinued operation.................. -- (4) -- (3)
--- --- --- ---
Net loss.......................................... (6)% (22)% (9)% (20)%
=== === === ===
</TABLE>
Net Sales. The Company's net sales increased 80% from $3.1 million in the
second quarter of fiscal 1996 to $5.5 million for the comparable period in 1997
and from $5.9 million in the first six months of fiscal 1996 to $10.6 million
for the comparable period in 1997. Increases in the number of units sold
accounted for $3.0 million and $5.7 million of the increase in net sales for the
second quarter and six month periods, respectively. These increases were offset
by decreases of $0.6 million and $1.0 million during the second quarter and the
six month periods due to reductions in the average selling prices of the 7000
Series products and the introduction of the 5000 Series, which carries lower
pricing.
International sales remained relatively constant at 24% of net sales for
the first six months of 1996 and 23% for the first six months of 1997. The
Company believes that international sales as a percentage of total net sales
will continue at levels similar to those in 1996, with little impact on the
Company's results of operations or liquidity.
Gross Profit. Gross profit increased 58% from $1.2 million in the second
quarter of 1996 to $1.9 million in the comparable period in 1997. As a
percentage of net sales, gross profit decreased from 40% to 35%. Gross profit
increased 65% from $2.3 million in the first six months of 1996 to $3.8 million
in the comparable period in 1997 but decreased as a percentage of net sales from
39% to 36%. The introduction in the second half of 1996 of the 5000 Series,
which carries lower pricing and profit margins, and the introduction of a new
lower base price 7000 Series model in the fourth quarter of 1996, were the
significant causes for the reduced margins as a percent of net sales. The
Company expects the 5000 Series to represent a greater percentage of sales in
future quarters. With unit volume increases and improvements in manufacturing
efficiencies, the Company believes it can maintain gross margins in the mid 30%
range for the remainder of 1997.
Sales and Marketing. Sales and marketing expenses increased from $0.8
million or 25% of net sales for the second quarter of 1996 to $1.1 million or
20% of net sales for the comparable period in 1997. Sales and marketing expenses
increased from $1.4 million or 23% of net sales for the first six months of 1996
to $2.1 million or 20% of net sales for the comparable period in 1997. The
increases were due
7
<PAGE>
primarily to increased staffing as the Company continued to expand its inside
sales force and advertising and promotion expenses to build general product
recognition. The Company expects that its sales and marketing expenses will
continue to increase as it seeks additional expansion of its sales channels.
General and Administrative. General and administrative expenses increased
from $0.5 million or 17% of net sales for the second quarter of 1996 to $0.7
million or 13% of net sales for the second quarter of 1997 and increased from
$1.0 million or 16% of net sales for the first six months of 1996 to $1.5
million or 14% of net sales for the comparable period in 1997. The increase was
due primarily to increased staffing, allowances for bad debt expenses and
facilities expenses. Additional compensation related expenses were incurred as
the Company continued to add to its general and administrative infrastructure.
The Company also incurred greater facility costs for additional leased space as
compared to the second quarter of 1996. An increase in professional services in
order to support the Company's information systems was offset by a reduction of
legal fees due to the resolution of a dispute with a terminated distributor in
the fourth quarter of 1996. During the second quarter of 1997, the Company
signed a lease for a new, larger facility which it expects to move into in the
fourth quarter of 1997. The Company is currently seeking a sub-lessor for its
current facility. General and administrative expenses are expected to continue
to increase in the foreseeable future.
Research and Development. Research and development expenses are incurred in
the development and testing of new products and customized computing platforms
for special applications and are expensed as incurred. Research and development
expenses remained constant at $0.4 million during the second quarter of 1996 and
the second quarter of 1997, which represented a decrease from 14% to 8% of net
sales. Research and development expenses decreased from $0.9 million for the
first six months of 1996 to $0.8 million for the comparable period in 1997,
which represented a decrease from 15% to 8% of net sales. An increase in
salaries and related expenses in these periods was offset by a reduction in
product development material costs. During the first six months of 1996 a
significant investment in material costs was made relating to the introduction
of the 5000 Series. The Company expects research and development expenses to
increase for the foreseeable future as it continues to develop new products and
enhance its existing product lines.
Interest Income (Expense) and Other, Net. Interest expense was
approximately $55,000 for the second quarter of 1996 compared to interest income
of $25,000 for the comparable period in 1997. This was primarily due to the
repayment of debt in March and April of 1997 using initial public offering
proceeds and the subsequent investment of the remaining proceeds. Interest
expense increased from approximately $119,000 for the first six months of 1996
to $395,000 for the comparable period in 1997, primarily due to higher levels of
indebtedness (which were paid off in March and April of 1997, as noted above)
and the related amortization of certain financing costs. The Company expects to
continue reporting net interest income for the second half of 1997.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company has principally financed its operations and
capital expenditures through the private sale of equity and debt securities,
loans and bank lines of credit. As of January 5, 1997, the Company had
outstanding loans of $6.4 million, including $1.3 million with affiliated
parties. As of July 6, 1997, the Company had no outstanding loans. There were no
bank lines open as of January 5, 1997 or July 6, 1997. In the first quarter of
1997, the Company completed an initial public offering of common stock and
received net proceeds of $11.9 million from the sale of 2,125,000 shares. From
the proceeds, the Company repaid $1.4 million of loans during the first quarter
of 1997, including the entire amount of loans with affiliated parties. The
Company repaid the remaining $5.0 million of loans in the second quarter of
1997. Cash provided by financing activities, including those listed above,
totaled $5.5 million for the first six months of 1997 and $2.5 million for the
comparable period in 1996.
8
<PAGE>
Cash used for operating activities totaled $1.8 million for the first six
months of 1997 and $2.0 million for the comparable period in 1996. Inventories,
which include primarily raw materials, work in process and demonstration units,
increased from $4.4 million at January 5, 1997 to $5.1 million at July 6, 1997.
The increase was primarily due to a build up of raw materials necessary to fill
the Company's backlog of orders and maintain current increased production
levels. Accounts receivable increased 47% from $2.0 million at January 5, 1997
to $3.0 million at July 6, 1997, due to increased sales.
Cash used for investing activities totaled approximately $39,000 for the
first six months of 1997 and $271,000 for the comparable period in 1996. The
Company plans to expend larger amounts in the third and fourth quarter of 1997
to purchase property and equipment related to its new leased facility.
As of July 6, 1997 the Company had cash and cash equivalents of $5.8
million.
The Company believes that cash on hand, interest expected to be earned
thereon, and anticipated operating cash flows will be sufficient to fund its
operations at least through the next twelve months. Cash requirements for
periods during and beyond the next twelve months depend on the Company's
profitability, its ability to manage working capital requirements and its rate
of growth, among other factors.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On June 25, 1996, a shareholder of the Company commenced an action in
Minnesota state district court against the Company and certain directors of the
Company. The essence of the shareholder's allegations was that the Company
issued shares of Common Stock without the authorization of all shareholders in
violation of certain agreements and that certain of the Company's directors
treated the plaintiff unfairly. The shareholder requested unspecified equitable
relief. On October 8, 1996, the district court judge granted the Company's
motion for summary judgment dismissing the lawsuit, and on October 29, 1996,
judgment was entered in favor of the Company. By notice dated January 15, 1997,
the shareholder filed an appeal with the Minnesota Court of Appeals, Rejsa vs.
Beeman et al. Briefs were submitted in the matter and oral arguments were held
on June 17, 1997. No decision has been rendered, but the Company expects a
decision within 90 days of the date of oral arguments.
ITEM 2. CHANGES IN SECURITIES
RECENT SALES OF UNREGISTERED SECURITIES
On January 7, 1997, the Company issued 10,050 shares of common stock to
a former employee at a price of $3.00 per share on exercise of an incentive
stock option. The Company relied on the exemption from registration available
under section 3(b) of the Securities Act of 1933, as amended, and Rule 701
thereunder.
On March 21, 1997, the Company issued 5,000 shares of common stock to a
former employee at a price of $1.00 per share on exercise of an incentive stock
option and 5,000 shares of common stock to a former consultant at a price of
$1.00 per share on exercise of a non incentive stock option. The Company relied
on the exemption from registration available under section 3(b) of the
Securities Act of 1933, as amended, and Rule 701 thereunder. Additionally, on
March 21, 1997, the Company issued 81,345 shares of common stock to a former
lessor at a price of $1.00 per share on exercise of a warrant. The Company
9
<PAGE>
relied on the exemption from registration available under section 4(2) of the
Securities Act of 1933, as amended.
On March 25, 1997, the Company issued a warrant to purchase 212,500
shares of common stock to R.J. Steichen & Company. The warrants may be exercised
any time after March 19, 1998 at a price of $7.80 per share and expire on March
20, 2002. The transaction was negotiated as part of an underwriting agreement
dated March 19, 1997. The Company relied on the exemption from registration
available under section 4(2) of the Securities Act of 1933, as amended.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<C> <C> <S>
(a) Exhibits
Exhibit 3.1 Second Amended and Restated Articles of Incorporation of the Company (incorporated by reference to
Exhibit 3.2 to the Company's Registration Statement filed on Form S-1, File No. 333-18335)
Exhibit 3.2 Second Amended and Restated Bylaws of the Company (incorporated by reference to
Exhibit 3.4 to the Company's Registration Statement filed on Form S-1, File No. 333-18335)
Exhibit 11.1 Statement Re Computation of Per Share Earnings
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
</TABLE>
SIGNATURE
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.
FIELDWORKS, INCORPORATED
Date: August 19, 1997 /s/ Karen L. Engebretson
------------------------------------------
Karen L. Engebretson, Vice President of
Finance and CFO (as authorized officer and
principal financial officer)
10
<PAGE>
Exhibit 11.1
FIELDWORKS, INCORPORATED AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
---------------------------- ----------------------------
JULY 6, 1997 JUNE 30, 1996 JULY 6, 1997 JUNE 30, 1996
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
PRIMARY AND FULLY DILUTED
Net loss................................................... $ (305,284) $ (667,502) $(1,003,210) $(1,192,463)
========== ========== =========== ===========
Weighted average common shares outstanding................. 8,684,054 5,854,633 7,547,662 5,849,433
Effect of conversion of preferred shares (1)............... -- 576,923 234,573 576,923
Effect of cheap shares issued (2).......................... -- 160,014 80,007 160,014
---------- ---------- ----------- -----------
8,684,054 6,591,570 7,862,242 6,586,370
========== ========== =========== ===========
NET LOSS PER COMMON SHARE..................................... $ (.04 $ (.10) $ (.13) $ (.18)
========== ============= =========== ===========
</TABLE>
(1) Gives effect to preferred shares which converted to common shares concurrent
with the company's initial public offering.
(2) Warrants issued and options granted from March 1, 1996 to February 28, 1997
are included in the calculation for certain periods presented, using the
treasury stock method, in accordance with Staff Accounting Bulletin Topic 4(D).
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-04-1998
<PERIOD-START> JAN-06-1997
<PERIOD-END> JUL-06-1997
<CASH> 5,805,975
<SECURITIES> 0
<RECEIVABLES> 2,959,650
<ALLOWANCES> 0
<INVENTORY> 5,105,900
<CURRENT-ASSETS> 14,092,101
<PP&E> 1,486,833
<DEPRECIATION> 757,235
<TOTAL-ASSETS> 14,848,516
<CURRENT-LIABILITIES> 2,101,922
<BONDS> 0
0
0
<COMMON> 8,684
<OTHER-SE> 12,693,319
<TOTAL-LIABILITY-AND-EQUITY> 14,848,516
<SALES> 10,630,472
<TOTAL-REVENUES> 10,630,472
<CGS> 6,805,052
<TOTAL-COSTS> 6,805,052
<OTHER-EXPENSES> 833,150
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 395,238
<INCOME-PRETAX> (1,003,210)
<INCOME-TAX> 0
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<NET-INCOME> (1,003,210)
<EPS-PRIMARY> (.13)
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</TABLE>
