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 March 29, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission file number: 0-22632
ASANT<E'> TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0200286
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
821 Fox Lane
San Jose, CA 95131
(Address of principal executive offices, including zip code)
Registrant's Telephone No., including area code: (408) 435-8388
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
As of March 29, 1997 there were 9,026,103 shares of the Registrant's Common
Stock outstanding.
<PAGE>1
ASANT<E'> TECHNOLOGIES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1: Financial Statements:
Unaudited Condensed Balance Sheets -
March 29, 1997 and September 28, 1996 3
Unaudited Condensed Statements of Operations -
Three and six months ended March 29, 1997
and March 30, 1996 4
Unaudited Condensed Statements of Cash Flows -
Six months ended March 29, 1997, and
March 30, 1996 5
Notes to Unaudited Condensed Financial Statements 6-8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-11
PART II. OTHER INFORMATION
Item 1: Legal Proceedings 12
Item 4: Submission of Matters to a Vote of
Security Holders 12
Item 5: Other Information 12
Item 6: Exhibits and Reports on Form 8-K 13
Signature 14
<PAGE>3
PART I. Financial Information
Item 1. Financial Statements
Asant<e'> Technologies, Inc.
Unaudited Condensed Balance Sheets
(in thousands)
March 29, September 28,
1997 1996
--------- -------------
Assets
Current assets:
Cash and cash equivalents $14,069 $12,693
Accounts receivable, net 10,551 10,038
Receivable from stockholder 572 400
Inventory 7,103 9,851
Other current assets 4,588 5,176
------- -------
Total current assets 36,883 38,158
Property and equipment, net 1,585 1,524
Other assets 389 284
------- -------
Total assets $38,857 $39,966
======= =======
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 6,484 $ 8,882
Accrued expenses 4,214 4,175
------- -------
Total current liabilities 10,698 13,057
------- -------
Stockholders' equity:
Common stock 25,973 25,322
Retained earnings 2,186 1,587
------- -------
Total stockholders' equity 28,159 26,909
------- -------
Total liabilities and stockholders' equity $38,857 $39,966
======= =======
The accompanying notes are an integral part of these Unaudited Condensed
Financial Statements
<PAGE>4
Asant<e'> Technologies, Inc.
Unaudited Condensed Statements of Operations
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- -----------------------------
March 29, March 30, March 29, March 30,
1997 1996 1997 1996
-------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net sales $21,187 $14,808 $38,667 $31,312
Cost of sales 13,654 9,029 24,377 18,754
------- -------- ------- -------
Gross profit 7,533 5,779 14,290 12,558
------- -------- ------- -------
Operating expenses:
Sales and marketing 4,274 4,501 8,400 9,086
Research and development 1,877 1,416 3,634 2,682
General and administration 812 737 1,581 1,424
------- ------ ------- -------
Total operating expenses 6,963 6,654 13,615 13,192
Income (loss) from operation 570 (875) 675 (634)
Interest & other income, net 152 157 290 323
------- ------ ------- --------
Income (loss) before income 722 (718) 965 (311)
Provision (benefit) for income 274 (198) 366 (116)
------- ------ ------- --------
Net income (loss) $448 ($520) $599 ($195)
======= ======= ======= ========
Net income (loss) per share $0.05 ($0.06) $0.07 ($0.02)
======= ======= ======= ========
Weighted average common
shares and equivalents 9,132 8,697 9,134 9,075
======= ======== ======= ========
</TABLE>
The accompanying notes are an integral part of these Unaudited Condensed
Financial Statements
<PAGE>5
Asant<e'> Technologies, Inc.
Unaudited Condensed Statements of Cash Flows
(in thousands)
Six months ended
----------------
March 29, March 30,
1997 1996
--------- ---------
Cash flows from operating activities:
Net income $599 ($195)
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 470 554
Changes in operating assets and liabilities:
Accounts receivable (513) 453
Receivable from stockholder (172) 224
Inventory 2,748 (957)
Other current assets 588 1,630
Accounts payable (2,398) 781
Accrued expenses 39 (742)
-------- -------
Net cash provided by operating activities 1,361 1,748
-------- -------
Cash flows from investing activities:
Purchases of property and equipment (531) (484)
Purchases/maturities of marketable securities - 1,700
Other assets (105) (180)
-------- -------
Net cash provided (used) by investing activities (636) 1,036
-------- -------
Cash flows from financing activities:
Net proceeds from issuance of common stock 651 357
Net cash provided by financing activities 651 357
-------- -------
Net increase in cash and and cash equivalents 1,376 3,141
Cash and cash equivalents, beginning of period 12,693 10,371
-------- -------
Cash and cash equivalents, end of period $14,069 $13,512
======== ========
Supplemental disclosures of cash flow information:
Interest paid during the year $4 $6
-------- --------
Income taxes paid (refunded) during the year ($966) ($1,825)
======== ========
The accompanying notes are an integral part of these Unaudited Condensed
Financial Statements
<PAGE>6
ASANT<E'> TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)
1. INTERIM CONDENSED FINANCIAL STATEMENTS
The Unaudited Condensed Financial Statements have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, the financial statements reflect
all adjustments, consisting only of normal recurring adjustments, necessary for
the fair statement of the financial position, operating results and cash flows
for those periods presented. These unaudited condensed financial statements
should be read in conjunction with the financial statements and notes thereto
for the year ended September 28, 1996, included in the Company's 1996 Annual
Report on Form 10-K.
The results of operations for interim periods are not necessarily indicative of
the results that may be expected for the entire year.
2. NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed using the average number of common and
common equivalent shares outstanding during the period. Common equivalent
shares include common stock issuable upon the exercise of stock options, except
when antidilutive. Common equivalent shares have been computed using the
modified treasury stock method for the three and six month periods ended March
29, 1997, and the treasury stock method for the three and six months ended
March 30, 1996, respectively. No common equivalent shares have been included
in the computation for the three and six months ended March 30, 1996, because
their effect was antidilutive.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per share." This statement
is effective for the Company's fiscal year ending after December 15, 1997.
The Statement redefines earnings per share under generally accepted accounting
principles. Under the new standard, primary earnings per share is replaced by
basic earnings per share and fully diluted earnings per share is replaced by
diluted earnings per share. If the Company had adopted this Statement for the
fiscal year ended September 28, 1996 and for the three and six month periods
ended March 29, 1997 and March 30, 1996, the Company's earnings (loss) per
share using the treasury stock method would have been as follows:
<PAGE>7
Three Months Ended Six Months Ended
------------------ ----------------
March 29, March 30, March 29, March 30,
1997 1996 1997 1996
--------- --------- --------- ---------
Basic income (loss)
per share $0.05 ($0.06) $0.07 ($0.02)
Diluted income (loss)
per share $0.05 ($0.06) $0.07 ($0.02)
3. INVENTORY
Inventory is stated at the lower of standard cost, which approximates actual
cost (on a first-in, first-out basis) or market, and consisted of the following
at:
March 29, September 28,
1997 1996
(in thousands)
-------------------------------
Raw materials and component parts $3,041 $3,298
Work-in-process 1,121 1,630
Finished goods 2,941 4,923
------ ------
$7,103 $9,851
====== ======
4. BANK BORROWINGS
The Company has a bank line of credit that provides for maximum borrowings of
$5 million, limited to a certain percentage of eligible accounts receivable,
and bears interest at the bank's base rate. In January 1997, the Company
renewed its line of credit with its bank. This line of credit expires January
31, 1998. Covenants under the line require the Company to maintain certain
minimum levels of liquidity, net worth and financial ratios, restrict amounts
of capital spending, dividends and stock repurchases, and require the Company
to maintain certain levels of quarterly profitability. No borrowings have been
made under the line of credit agreement in fiscal years 1995 and 1996, or for
the first two quarters of fiscal 1997.
5. INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes", for all periods.
Under this method, deferred assets and liabilities are determined based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse. Based on the current estimate of
expected operating results and certain other factors the Company expects its
effective rate to be 38% through fiscal 1997.
<PAGE>8
6. LEGAL PROCEEDINGS
On September 13, 1996, a complaint was filed by Datapoint Corporation against
the Company and six other companies individually and as purported
representatives of a defendant class of all manufacturers, vendors and users of
Fast Ethernet-compliant, dual protocol local-area network products, for alleged
infringement of United States letters Patent Nos. 5,077,732 and 5,008,879.
The complaint seeks unspecified damages in excess of $75,000 and permanent
injunctive relief. The Company has filed a response to the complaint denying
liability. To date, no discovery has been taken. The Company intends to defend
the action vigorously.
<PAGE>9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This discussion, other than the historical financial information, may consist
of forward-looking statements that involve risks and uncertainties, including
quarterly fluctuations in results, the timely availability of new products, the
impact of competitive products and pricing, and the other risks set forth from
time to time in the Company's SEC reports, including this report on Form 10-Q
for the quarter ended March 29, 1997. Actual results may vary significantly.
RESULTS OF OPERATIONS
Net sales for the second quarter of fiscal 1997 were approximately $21.2
million, an increase of approximately $6.4 million, or 43%, from net sales of
approximately $14.8 million for the second quarter of fiscal 1996. Net sales
for the first six months of fiscal 1997 increased by approximately 23% to $38.7
million compared to $31.3 million in the first half of fiscal 1996. This sales
increase was due primarily to increased sales of approximately $2.0 million of
the Company's 10/100 and PCI adapter card products, and approximately $6.3
million in OEM sales. This increase was partially offset by an approximately
$1.7 million decline in sales of other 10Mbps client access products due in
part to the continuing incorporation of Ethernet connectivity into the
motherboard of high performance products, and by a decline in sales dollars
from the Company's 10Mbps managed systems products due to competitive pricing
pressures and softer than expected sales into the educational market. In the
second quarter of fiscal 1997, OEM sales accounted for approximately $6.7
million, or 31.6% of total sales. This compares to approximately $0.4 million,
or 2.7% of total sales, for the second quarter of fiscal 1997. Management
anticipates that sales of 10/100 "Fast Ethernet" products will increase as a
percentage of total sales, and OEM sales will remain fairly constant as a
percentage of total sales in the next quarter.
Sales outside the United States accounted for approximately 18% of net sales
for the second quarter of fiscal 1997 and was approximately 22% for the first
six months of fiscal 1997. This decrease was due in part to the increase in
worldwide OEM sales which are reported in North American sales. These
percentages compare with approximately 30% of net sales for both the second
quarter and first six months of fiscal 1996. No assurance can be given that the
Company will supply product to its current OEM customers at current levels. In
the event that such OEM customers reduce their level of purchases, the Company
would experience an adverse impact on its financial position and results of
operations.
The Company's gross profit as a percentage of net sales decreased to 36% for
the second quarter of fiscal 1997 from 39% in the second quarter of fiscal
1996. The second quarter margin was affected by the approximately $6.3 million
increase in OEM sales at lower margins. For the first six months of fiscal
1997, the gross profit percentage decreased to approximately 37% from 40% for
the first six months of fiscal 1996 due primarily to the increased sales of
products to OEM customers.
Sales and marketing expenses decreased by approximately $0.2 million, or 5%,
in the second quarter of fiscal 1997 compared to the second quarter of fiscal
1996, and decreased by approximately $0.7 million in the first six months of
1997 compared to the first six months of 1996. As a percentage of sales, these
expenses were 20% in the second quarter of fiscal 1997 and 22% in the first six
months of 1997, compared with 30% and 29% in the second quarter and first six
months of fiscal 1996, respectively. The decreases in sales and marketing
expenditures were due primarily to decreased outside representative
commissions, advertising, trade show, product collateral expenses, and other
related costs, partially offset by increases in direct sales related salary and
commission expenses. In early 1996, the Company allocated additional resources
to increase its direct sales force in order to focus its efforts on increasing
sales. Correspondingly, the Company reduced the number of outside
manufacturing representative agencies promoting the Company's products
resulting in lower overall costs to the Company. The Company believes that
sales and marketing expenses will increase slightly for the remainder of fiscal
1997 as the Company launches a series of new switching products into the
market.
Research and development expenses increased by approximately $0.5 million, or
33%, in the second quarter of fiscal 1997 compared to the second quarter of
fiscal 1996 and increased by approximately $1.0 million in the first six
months of fiscal 1997 compared with the first six months of fiscal 1996. The
quarter-to-quarter increase was due to increases in personnel, prototype
materials, and outside consulting services. The higher spending in these areas
resulted from increased product development activities for new 10 Mbps Ethernet
switches and hubs, Fast Ethernet (100 Mbps) hubs, switches and software related
development expenses. The Company expects that future spending on research and
development will increase in absolute dollars for the remainder of fiscal 1997.
General and administrative expenses increased by approximately $75,000, or 10%,
in the second quarter of fiscal 1997 compared to the second quarter of fiscal
1996 and increased by approximately $157,000 in the first six months of fiscal
1997 compared with the first six months of fiscal 1996. As a percentage of net
sales, these expenses were 4% for both the second quarter and first six months
of fiscal 1997, as compared with 5% for both the second quarter and first six
months of fiscal 1996. The increase in general and administrative expenses in
absolute dollars in fiscal 1997 is primarily related to higher legal and
outside consulting services. The Company expects that future spending will
increase in absolute dollars during the remainder of fiscal 1997.
Based on the current estimate of its expected operating results, and certain
other factors, the Company expects its effective tax rate to be 38% through
fiscal 1997.
FACTORS AFFECTING FUTURE OPERATING RESULTS
A significant portion of the Company's sales are related to sales of Apple's
Macintosh computers. In January 1997, Apple announced significant operating
losses due to reduced product sales and a management reorganization. A
continuing decline in sales of Macintosh computers, over which the Company has
no control, may adversely affect sales of the Company's products.
<PAGE>11
Beginning in fiscal 1996 and continuing in fiscal 1997, the Company increased
its focus on its Fast Ethernet network products and the IBM PC-compatible
market in order to gain market share. Competition in this market is intense and
includes several companies that have significantly greater resources and
broader brand name recognition than the Company. As such, there can be no
assurance the Company will be successful in penetrating the PC-compatible
market. Nevertheless, the Company has committed itself to focusing significant
efforts in dominating certain vertical markets, principally the pre-press and
graphics intensive markets, and the educational marketplace, areas where
Asant<e'> already has proven strengths, in an effort to capitalize on its
already positive product and brand recognition.
The Company continues to focus its research and development activities on
introducing additional products supporting the adoption of the 100 Mbps
standard in Ethernet networking (100BASE-T, or "Fast Ethernet"), which enables
users to conduct high speed LAN data transmission. The Company continues to
allocate significant resources on research and development of additional
switching products which the Company believes is a large growth market. To
complement its high-speed hardware products the Company continues to develop
cutting edge software products that enhance the performance of the network
systems products. In that regard, the Company's future operating results are
somewhat dependent on the market acceptance and rate of adoption of this
technology, and on the Company's ability to timely bring more switching
products to market.
LIQUIDITY AND CAPITAL RESOURCES
At March 29, 1997, the Company had approximately $14 million of cash and cash
equivalents on hand, and working capital of approximately $26 million. In
January 1997, the Company renewed its line of credit with its bank providing
for maximum borrowings of $5 million with a new expiration date of January 31,
1998. Covenants under the line require the Company to maintain certain minimum
levels of liquidity, net worth and financial ratios, restrict amounts of
capital spending, dividends and stock repurchases, and require the Company to
maintain certain levels of quarterly profitability. No borrowings have been
made under the line of credit agreement in fiscal years 1995 and 1996, or for
the six months of fiscal 1997. The Company is currently in compliance with all
such covenants.
The Company believes that current cash and cash equivalents along with the bank
line of credit are sufficient to fund its operations and meet anticipated
capital requirements for fiscal 1997.
<PAGE>12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On September 13, 1996, a complaint was filed in federal court (United States
District Court, Eastern District of New York) by Datapoint Corporation against
the Company and six other companies individually and as purported
representatives of a defendant class of all manufacturers, vendors and users of
Fast Ethernet-compliant, dual protocol local-area network products, for alleged
infringement of United States letters Patent Nos. 5,077,732 and 5,008,879.
The complaint seeks unspecified damages in excess of $75,000 and permanent
injunctive relief. The Company has filed a response to the complaint denying
liability. To date, no discovery has been taken. The Company intends to defend
the action vigorously.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders of the Company, held February 25, 1997 in
San Jose, California, the stockholders (i) elected five directors to serve on
the Company's Board of Directors, (ii) amended the Company's 1990 Stock Option
Plan and (iii) ratified the Company's appointment of Price Waterhouse LLP as
independent accountants.
The vote for nominated directors was as follows:
NOMINEE FOR AGAINST
------- --- -------
Jeff Yuan-Kai Lin 8,174,558 171,690
Wilson Wong 8,174,358 171,890
Michael D. Kaufman 8,173,649 172,599
Edmond Y. Tseng 8,174,349 171,899
Cyrus Y. Tsui 8,174,549 171,699
The vote for amending the Company's 1990 stock option plan was as follows:
FOR AGAINST ABSTAIN BROKER NON-VOTE
--- ------- ------- ---------------
5,220,409 635,805 15,760 2,484,274
The vote for ratifying the appointment of Price Waterhouse LLP was as follows:
FOR AGAINST ABSTAIN
--- ------- -------
8,336,998 7,350 1,900
ITEM 5. OTHER INFORMATION
Effective March 1, 1997, Dr. David K. Lam, Founder of Lam Research, accepted a
position on Company's Board of Directors. As such, Dr. Lam will fill the seat
left vacant by Soo Boon Koh's resignation on January 17, 1997.
<PAGE>13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a.) Exhibits:
10.9F Seventh Modification Agreement to the Loan and
Security Agreement dated July 20, 1993.
11.1 Statement re computation of per share earnings.
(b.) Reports on Form 8-K: None
<PAGE>14
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.
Date: May 10, 1997 ASANT<E'> TECHNOLOGIES, INC.
(Registrant)
By: ROBERT A. SHEFFIELD
Robert A. Sheffield
Vice President, Finance and
Chief Financial Officer
(Authorized Officer and Principal Financial Officer)
EXHIBIT 10.9
[COMERICA STATIONARY]
This seventh Modification to Loan & Security Agreement (this
"Modification") is entered into by and between ASANTE TECHNOLOGIES, INC.
("Borrower") and COMERICA BANK-CALIFORNIA ("Bank") as of this 22nd day of
January, 1997, at San Jose, California.
RECITALS
A. Bank and Borrower have previously entered into or are
concurrently herewith entering into a Loan & Security Agreement (Accounts &
Inventory) (the "Agreement") dated July 20, 1993.
B. Borrower has requested, and Bank has agreed, to modify the
Agreement as set forth below.
AGREEMENT
For good and valuable consideration, the parties agree as set forth
below:
INCORPORATION BY REFERENCE. The Agreement as modified hereby and the
Recitals are incorporated herein by this reference.
SECTION 2.2 Except as hereinbelow provided, the Credit all bear
interest, on the Daily Balance owing, at a rate of Zero
(0.00%) percentage points per annum above the Base Rate (the
"Rate"). The Credit shall bear interest, from and after the
occurrence of an Event of Default and without constituting a
waiver of any such Event of Default on the Daily Balance
owing, at a rate five (5) percentage points per annum above
the Rate. All interest chargeable under this Agreement that
is based upon a per annum calculation shall be computed on
the basis of a three hundred sixty (360) day year for actual
days elapsed.
The Base Rate as of the date of this Modification is Eight
and One Quarter (8.25%) per annum. In the event that the
Base Rate announced is, from time to time hereafter,
changed, adjustment in the Rate shall be made and based on
the Base Rate in effect on the date of such change. The
Rate, as adjusted, shall apply to the Credit until the Base
Rate is adjusted again. The minimum interest payable by the
Borrower under this Agreement shall in no event be less than
N/A per month. All interest payable by the Borrower under
the Credit shall be due and payable on the first day of each
calendar month during the term of this Agreement and Bank
may, at its option, elect to treat such interest and any and
all Bank Expenses as advances under the Credit, which
amounts shall thereupon constitute Obligations and shall
thereafter accrue interest at the rate applicable to the
Credit under the terms of the Agreement.
SECTION 3.1 This Agreement shall remain in full force and effect until
January 31, 1998, or until terminated by notice by Borrower.
Notice of such termination by Borrower shall be effectuated
by mailing of a registered or certified letter not less than
thirty (30) days prior to the effective date of such
termination, addressed to the Bank at the address set forth
herein and the termination shall be effective as of the date
so fixed in such notice. Notwithstanding the foregoing,
should Borrower be in default of one or more of the
provisions of this Agreement, Bank may terminate this
Agreement at any time without notice. Notwithstanding the
foregoing, should either Bank or Borrower become insolvent
or unable to meet its debts as they mature, or fail,
suspend, or go out of business, the other party shall have
the right to terminate this Agreement at any time without
notice. On the date of termination all Obligations shall
become immediately due and payable without notice or demand;
no notice of termination by Borrower shall be effective
until Borrower shall have paid all Obligations to Bank in
full. Notwithstanding termination, until all obligations
have been fully satisfied, Bank shall retain its security
interest in all existing Collateral and Collateral arising
thereafter, and Borrower shall continue to perform all of
its Obligations.
SECTION 6.17 Borrower shall maintain the following financial ratios and
covenants on a consolidated and non-consolidated basis:
(b) A Tangible Effective Net Worth in an amount not less
than $25,000,000.00 (the Tangible Effective Net Worth
floor is set at $25,000,000.00 beginning 09/28/96 and
will increase by 75% of NPAT (quarterly) and 100% of
any new equity raised.
(d) A quick ratio of cash plus securities plus Receivables
to Current Liabilities of 1.25:1.00.
(e) A ratio of Total Liabilities (less debt subordinated to
Bank) to Tangible Net Worth of less than 0.75:1.00.
(h) Borrower is to be profitable on an operating and after-
tax basis, measured quarterly and annually. Borrower
will be allowed two consecutive loss quarters per year
not to exceed $1,000,000.00 in aggregate.
(i) Company is allowed to consummate any merger or
acquisition that involves a $5,000,000.00 or less cash
investment or a $10,000,000.00 or less Asante stock
investment provided no covenant violations results.
LEGAL EFFECT. Except as specifically set forth in this Modification,
all of the terms and conditions of the Agreement remain in full force and
effect.
INTEGRATION. This is an integrated Modification and supersedes all
prior negotiations and agreements regarding the subject matter hereof. All
amendments hereto must be in writing and signed by the parties.
IN WITNESS WHEREOF, the parties have agreed as of the date first set
forth above.
ASANTE TECHNOLOGIES, INC. COMERICA BANK-CALIFORNIA
By: ROBERT SHEFFIELD By: MARY BETH SUHR
Robert Sheffield Mary Beth Suhr
Title: Vice President Vice President
EXHIBIT 11.1
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS(1)
(In thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
March 29, 1997 March 29, 1997
Net income for purposes of computing
net income per share $ 448 $ 599
========= ========
Weighted average common shares
outstanding 8,978 8,925
Weighted common equivalent shares from
options 154 209
-------- --------
Weighted average common shares and
equivalents 9,132 9,134
======== =======
Net income per share $ 0.05 $ 0.07
======== =======
(1) This Exhibit should be read in conjunction with "Summary of Significant
Accounting policies -- Net Income per share" in Note 1 to the
Consolidated Financial Statements, contained in the Company's 1996 annual
Report to Stockholders.
(2) Computed using the modified treasury stock method. The difference
between primary net income per share and fully diluted net income per
share is not significant.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEETS AND CONDENSED STATEMENTS OF OPERATIONS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-27-1996
<PERIOD-END> MAR-29-1997
<CASH> 14,069
<SECURITIES> 0
<RECEIVABLES> 14,926
<ALLOWANCES> 4,375
<INVENTORY> 7,103
<CURRENT-ASSETS> 36,883
<PP&E> 6,843
<DEPRECIATION> 5,258
<TOTAL-ASSETS> 38,857
<CURRENT-LIABILITIES> 10,698
<BONDS> 0
0
0
<COMMON> 25,973
<OTHER-SE> 2,186
<TOTAL-LIABILITY-AND-EQUITY> 38,857
<SALES> 21,187
<TOTAL-REVENUES> 21,187
<CGS> 13,654
<TOTAL-COSTS> 13,654
<OTHER-EXPENSES> 6,963
<LOSS-PROVISION> 39
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 722
<INCOME-TAX> 274
<INCOME-CONTINUING> 448
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 448
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0.05
</TABLE>
