<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
of
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended June 29, 1996
Commission File Number 0-22660
TRIQUINT SEMICONDUCTOR, INC.
(Registrant)
Incorporated in the State of California
I.R.S. Employer Identification Number 95-3654013
3625A SW Murray Blvd., Beaverton, OR 97005
Telephone: (503) 644-3535
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
----- -----
On June 28, 1996, 8,058,862 shares of the registrant's common stock were
issued and outstanding.
<PAGE>
TRIQUINT SEMICONDUCTOR, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
- --------------------------------------------------------------------------------
Item 1. Financial Statements
Condensed Statements of Operations -- Three and
six months ended June 30, 1996 and 1995 3
Condensed Balance Sheets -- June 30, 1996
and December 31, 1995 4
Condensed Statements of Cash Flows -- Six months
ended June 30, 1996 and 1995 5
Notes to condensed financial statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
- --------------------------------------------------------------------------------
Item 1. Legal Proceedings 13
Item 4. Submission of matters to a vote of security holders 13
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
TRIQUINT SEMICONDUCTOR, INC.
CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------------------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Total revenues $ 15,095 $ 11,137 $ 28,211 $ 20,577
Operating costs and expenses:
Cost of goods sold 8,363 5,781 16,291 10,590
Research, development and engineering 2,660 2,131 5,149 4,549
Selling, general and administrative 2,809 2,226 5,205 4,279
------------- ------------- ------------- -------------
Total operating costs and expenses 13,832 10,138 26,645 19,418
------------- ------------- ------------- -------------
Income from operations 1,263 999 1,566 1,159
------------- ------------- ------------- -------------
Other income (expense):
Interest income 977 186 1,827 391
Interest expense (255) (110) (446) (233)
Other, net (2) (39) (6) (46)
------------- ------------- ------------- -------------
Total other income, net 720 37 1,375 112
------------- ------------- ------------- -------------
Income before income taxes 1,983 1,036 2,941 1,271
Income tax expense 119 31 167 39
------------- ------------- ------------- -------------
Net income $ 1,864 $ 1,005 $ 2,774 $ 1,232
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income per common and common
equivalent share $ 0.21 $ 0.15 $ 0.32 $ 0.19
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average common and common
equivalent shares outstanding 8,769 6,610 8,696 6,515
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See notes to Condensed Financial Statements.
3
<PAGE>
TRIQUINT SEMICONDUCTOR, INC.
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 1996 1995 (1)
------------ -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 19,949 $ 35,051
Investments 31,457 27,921
Accounts receivable, net 9,830 7,388
Inventories, net 9,472 8,709
Prepaid expenses and other assets 771 432
------------ -------------
Total current assets 71,479 79,501
------------ -------------
Property, plant and equipment, net 17,306 14,460
Restricted investments 11,661 -
Other non-current assets 74 63
------------ -------------
Total assets $ 100,520 $ 94,024
------------ -------------
------------ -------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of capital lease obligations $ 2,960 $ 2,329
Accounts payable and accrued expenses 12,427 11,443
Other current liabilities 79 216
------------ -------------
Total current liabilities 15,466 13,988
Capital lease obligations, less current installments 9,136 7,392
------------ -------------
Total liabilities 24,602 21,380
------------ -------------
Shareholders' equity:
Common stock 108,312 107,813
Accumulated deficit (32,394) (35,169)
------------ -------------
Total shareholders' equity 75,918 72,644
------------ -------------
Total liabilities and shareholders' equity $ 100,520 $ 94,024
------------ -------------
------------ -------------
</TABLE>
(1) The information in this column was derived from the Company's audited
financial statements as of December 31, 1995.
See notes to Condensed Financial Statements.
4
<PAGE>
TRIQUINT SEMICONDUCTOR, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------
June 30, June 30,
1996 1995
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $2,774 $1,232
Adjustments to reconcile net income to
net cash provided (used) by operating activities:
Depreciation and amortization 1,518 1,459
Gain on sale of assets (48) (19)
Change in assets and liabilities
(Increase) in:
Accounts receivable (2,442) (1,941)
Inventories (763) (2,020)
Prepaid expense and other assets (350) (8)
Increase (decrease) in:
Accounts payable and accrued expenses 984 758
Other current liabilities (137) 148
------------- -------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES 1,536 (391)
Cash flows from investing activities:
Purchase of investments (33,893) (2,020)
Purchase of restricted investments (11,661) -
Sale/Maturity of investments 30,358 4,002
Capital expenditures (647) (1,244)
Proceeds from sale of assets 48 19
------------- -------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (15,795) 757
Cash flows from financing activities:
Principal payments under capital lease obligations (1,342) (774)
Issuance of common stock, net 499 274
------------- -------------
NET CASH USED BY FINANCING ACTIVITIES (843) (500)
NET DECREASE IN CASH AND CASH EQUIVALENTS (15,102) (134)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 35,051 9,443
------------- -------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $19,949 $9,309
------------- -------------
------------- -------------
</TABLE>
See notes to Condensed Financial Statements.
5
<PAGE>
TRIQUINT SEMICONDUCTOR, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(In thousands except share amounts)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles. However, certain information or
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed, or omitted, pursuant to the rules and regulations of the
Securities and Exchange Commission. In the opinion of management, the
statements include all adjustments necessary (which are of a normal and
recurring nature) for the fair presentation of the results of the interim
periods presented. These financial statements should be read in
conjunction with the TriQuint Semiconductor, Inc. ("Company") audited
consolidated financial statements for the year ended December 31, 1995, as
included in the Company's 1995 Annual Report to Shareholders.
The Company's fiscal year ends on the Saturday nearest December 31. For
convenience, the Company has indicated in this quarterly report on Form
10-Q that its fiscal year ended on December 31. In addition, the Company's
quarters end on the Saturday nearest the end of the calendar quarter. For
convenience, the Company has indicated that its second quarter ended on
June 30.
2. NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
Net income (loss) per common and common equivalent share is computed using
the weighted average number of common and dilutive common equivalent shares
assumed to be outstanding during the period. Common equivalent shares
consist of options and warrants to purchase common stock.
3. RESEARCH AND DEVELOPMENT COSTS
The Company charges all research and development costs associated with the
development of new products to expense when incurred. Engineering and
design costs related to revenues on non-recurring engineering services
billed to customers are classified as research, development and engineering
expense. Additionally, certain related contract engineering costs are also
included in research, development and engineering expense.
4. INCOME TAXES
The provision for income taxes has been recorded based on the current
estimate of the Company's annual effective tax rate. For periods of
income, this rate differs from the federal statutory rate primarily because
of the utilization of net operating loss carryforwards.
6
<PAGE>
5. INVENTORIES
Inventories, net of reserves, stated at the lower of cost or market consist
of:
June 30, December 31,
1996 1995
------------- -------------
Raw material $2,568 $2,198
Work in progress 6,007 5,908
Finished goods 897 603
------ ------
Total inventories $9,472 $8,709
------ ------
6. SHAREHOLDERS' EQUITY
Shares authorized and outstanding are SHARES OUTSTANDING
as follows: June 30, December 31,
1996 1995
------------- -------------
Preferred stock, no par value,
5,000,000 shares authorized - -
Common stock, no par value,
25,000,000 shares authorized 8,058,862 7,929,881
7. SUPPLEMENTAL CASH FLOW INFORMATION
SIX MONTHS ENDED
June 30, June 30,
1996 1995
------------- -------------
Cash Transactions:
Cash paid for interest $446 $234
Cash paid for income taxes 7 4
Non-Cash Transactions:
Purchase of assets through capital leases $3,717 -
9. LITIGATION
See Part II, Item 1, of this Quarterly Report on Form 10-Q for a
description of legal proceedings.
7
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forwarding looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward looking statements as a result of
certain factors discussed herein.
INTRODUCTION
TriQuint Semiconductor, Inc. ("TriQuint" or the "Company") designs,
develops, manufactures and markets a broad range of high performance analog and
mixed signal integrated circuits for the wireless communications,
telecommunications and computing markets. The Company utilizes its proprietary
gallium arsenide ("GaAs") technology to enable its products to overcome the
performance barriers of silicon devices in a variety of applications. The
Company sells its products on a worldwide basis and the Company's end user
customers include Alcatel, Cirrus Logic, Digital Equipment, DSC Communications,
Ericsson, Giga A/S, Hughes, IBM, Intel, Lucent Technologies, Motorola, Northern
Telecom, Philips, Rockwell, Siemens, Storage Technology and Stratacom.
RESULTS OF OPERATIONS
The following table sets forth the statement of operations data of the
Company expressed as a percentage of total revenues for the periods indicated.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- -------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Total revenues 100.0 % 100.0 % 100.0 % 100.0 %
Operating costs and expenses:
Cost of goods sold 55.4 51.9 57.7 51.5
Research, development and engineering 17.6 19.1 18.3 22.1
Selling, general and administrative 18.6 20.0 18.5 20.8
---------- ---------- ---------- ----------
Total operating costs and expenses 91.6 91.0 94.4 94.4
---------- ---------- ---------- ----------
Income from operations 8.4 9.0 5.6 5.6
Other income, net 4.8 0.3 4.9 0.6
---------- ---------- ---------- ----------
Income before income taxes 13.1 9.3 10.4 6.2
Income tax expense 0.7 0.3 0.6 0.2
---------- ---------- ---------- ----------
Net income 12.3 % 9.0 % 9.8 % 6.0 %
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
TOTAL REVENUES
The Company derives revenues from the sale of standard and customer-
specific products and services. The Company's revenues also include non-
recurring engineering (NRE) revenues relating to customer-specific products.
Although revenues from standard products are separately identifiable by
reference to the Company's standard product catalogue, it is not practical to
differentiate between
8
<PAGE>
customer-specific product revenue and NRE revenue because (i) the Company's
contracts generally state a total contract price without differentiating between
engineering and production activity, (ii) it is difficult to determine when
engineering activity has transitioned to production activity and (iii) it is
difficult to determine whether certain manufacturing services should be
classified as engineering activity or customer-specific products.
Total revenues for the three and six months ended June 30, 1996 increased
35.5% and 37.1% to $15.1 million and $28.2 million, respectively, over the
comparable three and six month periods ended June 30, 1995. The increase in
revenues during the three and six months ended June 30, 1996 reflected an
overall increase in the volume of product sales to existing and new customers,
primarily from product sales in the wireless communications, telecommunications
and computing markets.
COST OF GOODS SOLD
Cost of goods sold includes all direct material, labor and overhead
expenses and certain production costs related to NRE revenues. In general, the
Company believes that gross profit generated from the sale of customer-specific
products and from NRE revenues is typically higher than gross profit generated
from the sale of standard products. The factors affecting product mix include
the relative demand in the markets served by customer-specific and standard
products, as well as the number of NRE projects which result in volume
requirements for customer-specific products.
Cost of goods sold as a percentage of the total revenues for the three
months ended June 30, 1996 increased to 55.4% from 51.9% for the comparable
three month period ended June 30, 1995. For the six months ended June 30, 1996
the cost of goods sold as a percentage of the total revenues increased to 57.7%
from 51.5% for the comparable six month period ended June 30, 1995. The
increase in cost of goods sold as a percentage of total revenues, from the three
and six months comparable periods ended June 30, 1995, was primarily
attributable to lower than expected production yields and a higher volume of
standard products which typically have a lower gross margin than
customer-specific products. The cost of goods sold as a percentage of the total
revenues in the second quarter was down from 60.4% in the first quarter to 55.4%
in the second quarter.
The Company has in the past experienced lower than expected production
yields which have delayed shipments of a given product and adversely affected
gross margins. There can be no assurance that the Company will be able to
maintain acceptable production yields in the future and, to the extent that it
does not achieve acceptable production yields, its operating results would be
materially adversely affected. In addition, the Company's operation of its own
wafer fabrication facility entails a high degree of fixed costs and requires an
adequate volume of production and sales to be profitable. During periods of
decreased demand, high fixed wafer fabrication costs would have a material
adverse effect on the Company's operating results.
RESEARCH, DEVELOPMENT AND ENGINEERING
Research, development and engineering expenses include the costs incurred
in the design of products associated with NRE revenues, as well as ongoing
product development and research and development expenses. The Company's
research, development and engineering expenses for the three and six months
ended June 30, 1996 increased 24.8% and 13.2% to $2.7 million and $5.2 million,
respectively, from the comparable three and six month periods ended June 30,
1995. Research, development and engineering expenses as a percentage of total
revenues for the three months ended June 30, 1995 decreased to 17.6% from 19.1%
for the comparable three month period ended June 30, 1995;
9
<PAGE>
for the six months ended June 30, 1995, research, development and engineering
expenses as a percentage of total revenues decreased to 18.3% from 22.1% for the
comparable six month period ended June 30, 1995. The increase in research,
development and engineering expenses in absolute dollar level was primarily due
to increased product development activities and NRE expenses. The decrease in
research, development and engineering expenses as a percentage of total revenues
resulted from revenue growth that outpaced the growth of research, development
and engineering expenses. The Company is committed to substantial investments in
research, development, and engineering and expects such expenses shall increase
in absolute dollar amount in the future.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses for the three and six months
ended June 30, 1996 increased 26.2% and 21.6% to approximately $2.8 million and
$5.2 million, respectively, from the comparable three and six month periods
ended June 30, 1995. Selling, general and administrative expenses as a
percentage of revenue for the three months ended June 30, 1996 decreased to
18.6% from 20.0% for the comparable three month period ended June 30, 1995; for
the six months ended June 30, 1996, selling, general and administrative expenses
as a percentage of revenue decreased to 18.5% from 20.8% for the comparable six
month period ended June 30, 1995. The increase in absolute dollar level of
selling, general and administrative expenses was primarily due to increased
sales commissions in connection with the increase in total revenues and
increased personnel expenses. The decrease in selling, general and
administrative expenses as a percentage of total revenues resulted from revenue
growth that outpaced the growth of selling, general and administrative expenses.
OTHER INCOME (EXPENSE), NET
Other income (expense), net for the three and six months ended June 30,
1996 increased to an approximate net other income of $720,000 and $1,375,000,
respectively, as compared to net other income of $37,000 and $112,000 for the
comparable three and six month periods ended June 30, 1995. This improvement
resulted from interest income earned on higher cash, cash equivalents and
investment balances due primarily to the net proceeds of the follow-on stock
offering in September, 1995.
INCOME TAX EXPENSE
The effective tax rate for the six months ended June 30, 1996 was 6.0%,
which is less than the federal and state statutory rate of approximately 40% due
to the use of net operating loss carryforwards. Income tax expense for the
three and six months ended June 30, 1996 increased to approximately $119,000 and
$167,000, respectively, compared to $31,000 and $39,000 for the comparable three
and six month periods ended June 30, 1995. This increase in income tax expenses
was attributable to higher profits partially offset by the use of net operating
losses.
VARIABILITY OF OPERATING RESULTS AND CYCLICALITY OF SEMICONDUCTOR INDUSTRY
The Company's quarterly and annual results may vary significantly in the
future due to a number of factors including timing, cancellation or delay of
customer orders; market acceptance of the Company's and its customers' products;
variations in manufacturing yields; timing of announcement and introduction of
new products by the Company and its competitors; changes in revenues and product
mix; competitive factors; changes in manufacturing capacity and variations in
the utilization of this capacity; variations in average selling prices;
variations in operating expenses; the long sales cycles associated with the
Company's customer-specific products; the timing and level of product and
process development costs;
10
<PAGE>
cyclicality of the semiconductor industry; the timing and level of NRE revenues
and expenses relating to customer-specific products; and changes in inventory
levels. Any unfavorable changes in these or other factors could have a material
adverse effect on the Company's operating results.
A significant portion of the Company's revenues in each fiscal period has
historically been concentrated among a limited number of customers. In recent
periods, sales to the Company's major customers as a percentage of total
revenues have fluctuated. For the three months ended June 30, 1996, Cirrus
Logic and Northern Telecom accounted for 24.2% and 12.5% respectively, of total
revenues. The Company's revenues to a certain extent depend upon its customer's
success introducing and marketing new products. Certain of these products are
consumer products and there is no guarantee purchases by consumers will meet
TriQuint customers' expectations. The Company does not have long-term purchase
agreements with any of its customers. Customers generally purchase the
Company's products pursuant to cancelable short-term purchase orders. The
Company's business, financial condition, and results of operations have been
materially adversely affected in the past by the failure of anticipated orders
to materialize and by deferrals or cancellations of orders.
The semiconductor industry has historically been characterized by wide
fluctuations in product supply and demand. From time to time, the industry has
also experienced significant downturns, often in connection with, or in
anticipation of, declines in general economic conditions. These downturns have
been characterized by diminished product demand, production overcapacity and
subsequent accelerated erosion of average selling prices, and, in some cases,
have lasted for extended periods of time. The Company's business has in the past
been and could in the future be materially adversely affected by such
industry-wide fluctuations.
LIQUIDITY AND CAPITAL RESOURCES
The Company completed a follow on public offering in September 1995 raising
approximately $48.1 million, net of offering expenses. In December 1993 and
January 1994, the Company completed its initial public offering raising
approximately $16.7 million, net of offering expenses. In addition, the Company
has funded its operations to date through sales of equity, bank borrowing,
capital equipment leases and cash flow from operations. As of June 30, 1996, the
Company had working capital of approximately $56.0 million, including $51.4
million in cash, cash equivalents, and investments. The Company has a $10.0
million unsecured revolving line of credit with a financial institution.
Restrictive covenants included in the line of credit require the Company to
maintain (i) a total liability to tangible net worth ratio of not more than 0.75
to 1.00, (ii) a current ratio of not less than 1.75 to 1.00, (iii) minimum
tangible net worth greater than $50.0 million and (iv) cash and investments
greater than $45.0 million. As of June 30, 1996 the Company was in compliance
with the covenants contained in this line of credit.
The Company's current wafer fabrication facility lease expires in January
1998. During the first six months of 1996, the Company began arranging
construction and exploring financing options to construct a new wafer
fabrication and office complex at Dawson Creek, in Hillsboro, Oregon with the
intent of consolidating all operations into one facility before the current
wafer fabrication facility lease expires. In May 1996 the Company obtained
financing in the form of a five year operating lease. The Company entered into
several agreements each dated May 17, 1996 in connection with the operating
lease. Pursuant to that certain Participation Agreement among the Company,
Wolverine Leasing Corp. ("Wolverine"), Matisse Holding Company ("Matisse") and
United States National Bank ("Bank"), Wolverine shall lease certain real
property owned by Wolverine to the Company under an operating lease with an
option by the Company to purchase such property. In addition the Participation
Agreement provides that Wolverine will make advances to the Company to cover the
costs of certain improvements to such real property and to pay certain related
financing costs, transaction costs, and other costs and expenses; Wolverine will
use the
11
<PAGE>
proceeds of loans from the Bank and Matisse, as well as certain equity funds
provided by Matisse, in order to provide the Company with such advances and such
other costs and expenses. The Bank loans are collateralized by pledged
investments from the Company, classified as restricted investments on the
Company's balance sheet ($11.7 million as of June 30, 1996). Restrictive
covenants included in the Participation Agreement between the Company and the
Bank require the Company to maintain (i) a total liability to tangible net worth
ratio of not more than 0.75 to 1.00, (ii) minimum tangible net worth greater
than $50.0 million and (iii) cash and liquid investments, including restricted
investments, greater than $45.0 million. As of June 30, 1996 the Company was in
compliance with the covenants contained in the Participation Agreement.
The following table presents a summary of the Company's cash flows (IN
THOUSANDS):
SIX MONTHS ENDED JUNE 30,
1996 1995
---- ----
Net cash and cash equivalents provided
(used) by operating activities $ 1,536 $ (391)
Net cash and cash equivalents provided
(used) by investing activities (15,795) 757
Net cash and cash equivalents
used by financing activities (843) (500)
-------- ------
Net increase (decrease) in cash and cash
equivalents $(15,102) $ (134)
-------- ------
-------- ------
The cash provided by operating activities for the six month period ended
June 30, 1996, $1.5 million, related to cash generated from profitable
operations partially offset by increased accounts receivable, inventories and
prepaid expenses.
The cash used by investing activities for the six month period ended June
30, 1996, $15.8 million, related to the purchase of restricted investments
pledged to collateralize the operating lease on the Dawson Creek facility, the
net purchase of investments and the cash purchase of approximately $0.6 million
of capital equipment.
The cash used by financing activities for the six month period ended June
30, 1996, $0.8 million, related primarily to the payment of principal under
capital leases partially offset by the issuance of common stock upon option
exercises.
Capital expenditures for the six months ended June 30, 1996 were
approximately $0.6 million. For the six months ended June 30, 1996, the Company
established approximately $3.7 million in new capital leases. Since 1991, the
Company has financed approximately $17.6 million of machinery and equipment
through capital lease obligations. The Company believes these capital
expenditures were relatively low compared to other companies in the
semiconductor industry because of the relatively high capital investments made
prior to 1991. The Company anticipates that its capital equipment needs,
including manufacturing and test equipment and computer hardware and software,
will require additional expenditures of approximately $9.0 million over the next
twelve months.
The Company believes that its current cash and investment balances,
together with cash anticipated to be generated from operations, additional
equipment leases and the operating lease with Wolverine, will satisfy the
Company's projected working capital and capital expenditure requirements through
the end of 1997. However, the Company may be required to finance any additional
requirements through additional equity, debt financings, or credit facilities.
There can be no assurance that such additional financings or credit facilities
will be available, or if available, that they will be on satisfactory terms.
12
<PAGE>
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS.
On June 9, 1994 the Company issued a press release indicating softness in
the Company's revenues which would adversely affect the Company's financial
results. The cause for the reduction in revenues was due somewhat to a general
softness in orders in the telecommunications market; however, it was primarily
the result of a decision by the Company's largest customer to delay shipment of
certain products. As a result of this announcement, the Company's stock price
dropped 48% on June 10, 1994. On July 12, 1994, a shareholder class action
lawsuit was filed against the Company in the United States District Court for
the Northern District of California. On June 21, 1996, the court granted the
Company's motion to transfer the litigation to the District of Oregon. The suit
alleges that the Company, its underwriters, and certain of its officers,
directors and investors, intentionally misled the investing public regarding the
financial prospects of the Company. Since the Company and its management have
striven to keep investors current on the Company's progress at all times, the
Company strongly denies any claims of wrongdoing and will defend this lawsuit
vigorously.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 29, 1996, the Company held its annual meeting of shareholders for
which it solicited votes by proxy. The following is a brief description of each
matter voted upon at the meeting and a statement of the number of votes cast
for, against or withheld and the number of abstentions with respect to each
matter. There were no broker non-votes with respect to any matter.
1. Election of Directors: VOTE RESULTS
FOR WITHHELD
Steven J. Sharp 7,117,638 54,105
Bruce R. Darnall 7,118,237 31,641
Charles Scott Gibson 7,117,137 31,641
E Floyd Kvamme 7,117,837 31,641
Dr. Walden C. Rhines 7,119,337 31,641
Edward F. Tuck 7,116,137 36,741
2. To ratify the appointment of KPMG Peat Marwick as independent public
accountants of the Company for the year ending December 31, 1996.
FOR AGAINST ABSTAIN
Vote results 7,168,817 31,138 12,282
3. To approve the adoption of the TriQuint Semiconductor, Inc. 1996 Stock
Incentive Program and the reservation of 400,000 shares of Common Stock for
issuance thereunder.
FOR AGAINST ABSTAIN
Vote results 3,780,868 545,217 31,667
4. To approve an amendment to the TriQuint Semiconductor, Inc. 1992 Employee
Stock Purchase Plan to increase the aggregate number of shares of Common Stock
that may be issued thereunder by 150,000 shares to a total of 200,000 shares.
FOR AGAINST ABSTAIN
Vote results 4,225,789 95,105 25,430
13
<PAGE>
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed a report on Form 8-K on June 14, 1996. This
Form 8-K was filed with respect to the five year operating
lease financing the Company had obtained in connection with the
construction of a new wafer fabrication manufacturing and office
complex in Hillsboro, Oregon.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TriQuint Semiconductor, Inc.
Dated: August 6, 1996 /s/Steven J. Sharp
--------------------------------------
STEVEN J. SHARP
President, Chief Executive Officer and
Chairman (Principal Executive Officer)
Dated: August 6, 1996 /s/Edward C.V. Winn
--------------------------------------
EDWARD C.V. WINN
Executive Vice President, Finance and
Administration and Chief Financial Officer
(Principal Financial and Accounting Officer)
15
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------------------------------------------
27.1 Financial Data Schedule
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED BALANCE SHEET AS OF JUNE 30, 1996 AND THE CONDENSED STATEMENT OF
OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 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-31-1996
<PERIOD-START> MAR-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 19,949
<SECURITIES> 31,457
<RECEIVABLES> 9,974
<ALLOWANCES> (144)
<INVENTORY> 9,472
<CURRENT-ASSETS> 71,479
<PP&E> 48,183
<DEPRECIATION> (30,877)
<TOTAL-ASSETS> 100,520
<CURRENT-LIABILITIES> 15,466
<BONDS> 9,136
0
0
<COMMON> 108,312
<OTHER-SE> (32,394)
<TOTAL-LIABILITY-AND-EQUITY> 100,520
<SALES> 28,211
<TOTAL-REVENUES> 28,211
<CGS> 16,291
<TOTAL-COSTS> 10,354
<OTHER-EXPENSES> 6
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 446
<INCOME-PRETAX> 2,941
<INCOME-TAX> 167
<INCOME-CONTINUING> 2,774
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,774
<EPS-PRIMARY> 0.32
<EPS-DILUTED> 0.32
</TABLE>