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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 September 30, 1997.
OR
[ ] Transition report pursuant to Section 13(d) or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
__________ to __________.
Commission file number: 0-23296
CIDCO INCORPORATED
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-3500734
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
220 Cochrane Circle
Morgan Hill, CA 95037
(Address of principal executive offices and zip code)
(408) 779-1162
(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 outstanding of the Registrant's Common Stock on October 31,
1997 was 13,955,302.
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<PAGE>
CIDCO INCORPORATED
Form 10-Q
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements:
Balance sheet at September 30, 1997
and December 31, 1996 ..................................3
Income statement for the three and nine months
ended September 30, 1997 and 1996 ......................4
Statement of cash flows for the nine months
ended September 30, 1997 and 1996 ......................5
Notes to financial statements ..............................6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations...........7
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..........................................12
Item 2. Changes in Securities......................................12
Item 3. Defaults upon Senior Securities............................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 ..........................12
SIGNATURES ..................................................................13
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CIDCO INCORPORATED
BALANCE SHEET
(in thousands, except per share data)
<CAPTION>
September 30, December 31,
1997 1996
----------- ------------
unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................. $ 32,498 $ 26,509
Short-term investments ................................ 57,090 38,560
Accounts receivable, net of allowances
for doubtful accounts of $3,003 and $2,966........... 32,618 48,242
Inventories ........................................... 10,793 14,555
Deferred tax asset .................................... 5,086 5,086
Other current assets .................................. 4,943 1,284
----------- ------------
Total current assets ................................ 143,028 134,236
Property and equipment, net .............................. 12,419 14,118
Other assets ............................................. 2,567 4,259
----------- ------------
$ 158,014 $ 152,613
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................................... $ 22,130 $ 16,880
Accrued liabilities ................................... 9,614 6,211
Accrued taxes payable ................................. 74 676
----------- ------------
Total current liabilities ........................... 31,818 23,767
----------- ------------
Stockholders' equity:
Common stock, $.01 par value; 35,000 shares authorized,
13,953 and 14,399 shares issued and outstanding .... 139 144
Additional paid-in capital ............................ 88,806 87,725
Treasury stock, at cost (1,000,000 shares)............. (12,942) --
Retained earnings ..................................... 50,193 40,977
----------- ------------
Total stockholder's equity .......................... 126,196 128,846
----------- ------------
$ 158,014 $ 152,613
=========== ============
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CIDCO INCORPORATED
INCOME STATEMENT
(in thousands, except per share data; unaudited)
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
--------------------- ----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales .......................... $ 51,079 $ 45,959 $ 186,397 $ 158,091
Cost of sales .................. 28,417 23,067 102,439 86,050
--------- --------- --------- ---------
Gross margin ................... 22,662 22,892 83,958 72,041
--------- --------- --------- ---------
Operating expenses:
Research and development ... 4,093 3,193 12,617 9,688
Selling and marketing ...... 14,030 10,275 50,478 28,509
General and administrative . 2,534 1,824 7,780 5,643
--------- --------- --------- ---------
20,657 15,292 70,875 43,840
--------- ------------ --------- ---------
Income from operations ......... 2,005 7,600 13,083 28,201
Other income, net .............. 914 1,300 2,064 2,257
--------- --------- --------- ---------
Income before income taxes...... 2,919 8,900 15,147 30,458
Provision for income taxes ..... 1,173 3,560 5,964 12,183
--------- --------- --------- ---------
Net income ..................... $ 1,746 $ 5,340 $ 9,183 $ 18,275
========= ========= ========= =========
Earnings per share ............. $ 0.12 $ 0.33 $ .64 $ 1.18
========= ========= ========= =========
Weighted average shares......... 14,230 18,707 14,302 16,306
========= ========= ========= =========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
CIDCO INCORPORATED
STATEMENT OF CASH FLOWS
(in thousands, unaudited)
<CAPTION>
Nine months ended
September 30,
1997 1996
--------- --------
<S> <C> <C>
Cash flows provided by operating activities:
Net income .............................................. $ 9,183 $ 18,275
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation........................................... 4,639 3,954
Equity in losses of affiliate ......................... 1,777 --
Changes in assets and liabilities:
Accounts receivable.................................. 15,624 1,763
Inventories.......................................... 3,762 2,780
Other current assets................................. (3,659) (1,407)
Other assets......................................... (85) (4,832)
Accounts payable..................................... 5,250 2,691
Accrued liabilities.................................. 3,403 (3,229)
Accrued taxes payable................................ (602) 1,776
--------- --------
Net cash provided by operating activities.......... 39,292 21,771
--------- --------
Cash flows used in investing activities:
Acquisition of property and equipment ................... (2,940) (4,436)
Purchase of short-term investments, net ................. (18,497) (112,826)
--------- --------
Net cash used in investing activities ............. (21,437) (117,262)
--------- --------
Cash flows provided by (used in) financing activities:
Issuance of common stock ................................ 1,076 2,350
Treasury stock purchases................................. (12,942) --
Proceeds from issuance of long-term debt ................ -- 150,000
--------- --------
Net cash provided by (used in) financing activities (11,866) 152,350
--------- --------
Net increase in cash and cash equivalents .................. 5,989 56,859
Cash and cash equivalents at beginning of period ........... 26,509 19,290
--------- --------
Cash and cash equivalents at end of period ................. $ 32,498 $ 76,149
========= ========
Supplemental disclosure of cash flow information:
Cash paid for income taxes .............................. $ 7,777 $ 9,835
========= ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
CIDCO INCORPORATED
NOTES TO FINANCIAL STATEMENTS
NOTE 1-- BASIS OF PRESENTATION
The accompanying financial information is unaudited, but, in the opinion of
management, reflects all adjustments (which include only normally recurring
adjustments) necessary for a fair presentation of the Company's financial
position, operating results and cash flows for those periods presented. 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 the rules and regulations of the Securities and
Exchange Commission. The financial information should be read in conjunction
with the audited financial statements and notes thereto for the year ended
December 31, 1996 included in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission. Results for the interim periods are
not necessarily indicative of results for the entire year.
NOTE 2--RECENT ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS 128"). This
statement is effective for the Company's quarter ending December 31, 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.
The unaudited pro forma basic and diluted earnings per share computed in
accordance with FAS 128 for the three and nine month periods ended September 30,
1997 and 1996 are as follows:
Three months ended Nine months ended
September 30, September 30,
------------------ -------------------
1997 1996 1997 1996
------- ------ ------- --------
Basic earnings per share.......... $ .13 $ .37 $ .65 $ 1.28
Diluted earnings per share........ $ .12 $ .33 $ .64 $ 1.18
In June 1997, the FASB issued Statement No. 130, "Reporting Comprehensive
Income" ("FAS 130"). FAS 130 establishes standards for reporting comprehensive
income and its components in a financial statement that is displayed with the
same prominence as other financial statements. Comprehensive income as defined
includes all changes in equity (net assets) during a period from non-owner
sources. Examples of items to be included in comprehensive income, which are
excluded from net income, include foreign currency translation adjustments and
unrealized gain/loss on available-for-sale securities. The disclosure prescribed
by FAS 130 must be made beginning with the first quarter of calendar 1998.
In June 1997, the FASB issued Statement No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("FAS 131"). This statement establishes
standards for the way companies report information about operating segments in
annual financial statements. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The disclosures prescribed by FAS 131 are effective for 1998.
<PAGE>
NOTE 3--COMMON STOCK
On January 27, 1997, the Company announced its plans to purchase up to 1 million
shares of its outstanding Common Stock. The Company subsequently repurchased 1
million shares at an aggregate price of $12.9 million. The Company has no plans
to repurchase additional shares at this time.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following information should be read in conjunction with the interim
financial statements and the notes thereto in Part I, Item 1 of this Quarterly
Report.
Background
The Company's primary sales and distribution channels include direct marketing
fulfillment programs ("Agency Fulfillment"), standard fulfillment of telephone
company orders ("Standard Fulfillment"), and wholesale shipments directly to
telephone companies, and, to a lesser extent, international accounts, retail
stores ("Retail") and OEM customers. Agency Fulfillment programs are sales
campaigns run by the Company involving the use of television and radio
advertising, consumer mailings and telemarketing to sell intelligent network
services for the Regional Bell Operating Companies (each an "RBOC") and
independent telephone operating companies (each an "Independent Telco") which
utilize the Company's products. Standard Fulfillment sales occur when the
Company receives an order either electronically or through an on-line transfer
of the customer by the RBOC or Independent Telco, and the Company ships the
requested product directly to the customer. In the case of Standard Fulfillment
sales, the RBOC or Independent Telco generates the order by performing the
marketing activities themselves. Standard Fulfillment sales accounted for 43%,
68% and 50% of sales in 1996, 1995 and 1994, respectively. Agency Fulfillment
sales totaled 25%, 2% and 0% of sales in 1996, 1995 and 1994, respectively. In
the third quarter of 1997, Standard Fulfillment sales accounted for 28% of sales
and Agency Fulfillment sales totaled 47% of sales. In the first nine months of
1997, Standard Fulfillment sales accounted for 34% of sales and Agency
Fulfillment sales totaled 48% of sales.
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements which reflect the Company's
current views with respect to future events which may impact the Company's
results of operations and financial condition. In this report, the words
"anticipates," "believes," "expects," "intends," "future" and similar
expressions identify forward-looking statements. These forward-looking
statements are subject to risks and uncertainties and other factors, including
those set forth below under the caption "Factors Which May Affect Future
Results," which could cause the actual future results to differ materially from
historical results or those described in the forward-looking statements. The
forward-looking statements contained in this Management's Discussion and
Analysis of Financial Condition and Results of Operations and made elsewhere by
the Company should be considered in light of these factors. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof.
<PAGE>
Results of Operations
The following table sets forth for the periods indicated the percentage of sales
represented by certain line items in the Company's income statement:
Three months ended Nine months ended
September 30, September 30,
-------------------- ------------------
1997 1996 1997 1996
------- ------- ------- -------
Sales ......................... 100.0% 100.0% 100.0% 100.0%
Cost of sales ................. 55.6 50.2 55.0 54.4
------- ------- ------- -------
Gross margin .................. 44.4 49.8 45.0 45.6
------- ------- ------- -------
Operating expenses:
Research and development ... 8.0 6.9 6.8 6.1
Selling and marketing ...... 27.5 22.4 27.1 18.0
General and administrative . 5.0 4.0 4.2 3.6
------- ------- ------- -------
40.5 33.3 38.1 27.7
------- ------- ------- -------
Income from operations ........ 3.9 16.5 6.9 17.9
Other income, net.............. 1.8 2.8 1.1 1.4
------- ------- ------- -------
Income before income taxes .... 5.7 19.3 8.0 19.3
Provision for income taxes .... 2.3 7.7 3.2 7.7
------- ------- ------- -------
Net income .................... 3.4% 11.6% 4.8% 11.6%
======= ======= ======= =======
Sales
Sales are recognized upon shipment of the product to the customer less reserves
for anticipated returns or retention of certain services provided by the Telcos
and customer credit worthiness. Sales increased 11% to $51.1 million in the
third quarter of 1997 from $46 million in the third quarter of 1996. This
increase was primarily due to the product introduction of large format screen
phones sold through the Company's direct marketing programs to Southwestern Bell
customers. Additionally there were increased unit sales of adjunct products
through the Company's Agency Fulfillment programs for Caller ID services on
behalf of GTE and Standard Fulfillment sales to NYNEX customers. These increases
were partially offset by decreases in unit sales of phones sold to Ameritech. In
the first nine months of 1997, sales were $186.4 million, an 18% increase over
sales of $158.1 million for the same period in 1996. This increase was primarily
due to increased unit sales of adjunct products through the Company's Agency
Fulfillment programs for Caller ID services on behalf of GTE, and growth in
Standard Fulfillment sales to US West and NYNEX customers, as well as the
introduction of large format screen phones in the third quarter sold through the
Company's direct marketing programs to Southwestern Bell customers. Ameritech,
the Company's second largest customer in 1996, discontinued selling the
Company's products in the second quarter of 1997. The Company believes that
Ameritech will not make any significant purchases for the remainder of 1997.
Higher volumes of large screen phones and adjuncts during the third quarter of
1997 were partially offset by lower sales volumes and sales prices of corded
telephones and lower sales prices of adjuncts as compared with the third quarter
of 1996.
<PAGE>
Gross margin
Cost of sales includes primarily the cost of finished goods purchased from the
Company's offshore contract manufacturers, costs associated with procuring and
warehousing the Company's inventory and royalties payable on licensed technology
used in the Company's products. Gross margin as a percentage of sales decreased
to 44.4% in the third quarter of 1997 from 49.8% in the same quarter of 1996.
Gross margin as a percentage of sales decreased to 45% in the first nine months
of 1997 from 45.6% for the same period in 1996. These decreases resulted from
declines in average selling prices of adjunct products and the liquidation of
several older model telephones to prepare for new product introductions in the
fourth quarter. The Company expects gross margins to vary in the future due to
changes in sales mix by distribution channel and product mix. In addition, the
Company anticipates that gross margins may continue to decline over time as a
result of competitive pricing pressures.
Research and development expenses
Research and development expenses represent primarily salaries for personnel,
associated benefits, and tooling and supplies for research and development
activities. The Company's policy is to expense all research and development
expenditures as incurred except for certain investments for tooling. Research
and development expenses increased to $4.1 million in the quarter ended
September 30,1997 from $3.1 million in the same quarter of 1996. Research and
development expenses in the nine month periods ended September 30, 1997 and 1996
were $12.6 million and $9.7 million, respectively. These increases primarily
resulted from increased spending on development projects, such as ADSI phones,
cordless telephones and advanced screen phones which provide access to the
Internet. Specifically, the Company recognized $1.8 million of expense in the
first nine months of 1997 related to the Company's equity in losses of InfoGear,
which is developing the software for the Company's initial Internet product. The
Company expects equity in losses of Infogear to continue at this level for the
remainder of 1997. Research and development expenses as a percentage of sales
increased to 8 % in the quarter ended September 30, 1997 from 6.9% in the like
period of 1996 and to 6.8% in the nine months ended September 30, 1997 from 6.1%
in the like period of 1996. The Company expects that research and development
spending will increase slightly during the remainder of 1997.
Selling and marketing expenses
Selling and marketing expenses represent primarily personnel costs, telephone
and electronic data exchange expenses, promotional costs and travel expenses.
Selling and marketing expenses increased to $14 million in the quarter ended
September 30, 1997 from $10.3 million in the comparable period of 1996. As a
percentage of sales, selling and marketing expenses increased to 27.5% in the
quarter ended September 30, 1997 from 22.4% in the like period of 1996. In the
nine months ended September 30, 1997, selling and marketing expenses were $50.5
million or 27.1% of sales versus $28.5 million or 18.0% of sales in the same
period of 1996. These increases were due principally to the Company's increased
promotion of intelligent network services and large format screen phones through
several direct mail, direct response television and telemarketing campaigns,
resulting in increased advertising and telemarketing agency costs. The Company
expects that selling and marketing expenses as a percentage of sales will remain
at these higher levels due to the anticipated continued reliance on direct
marketing activities during the remainder of 1997.
General and administrative expenses
General and administrative expenses represent primarily salaries, benefits and
other expenses associated with the finance and administrative functions of the
Company. General and administrative expenses increased to $2.5 million in the
quarter ended September 30, 1997 from $1.8 million in the comparable period of
1996. As a percentage of sales, general and administrative expenses increased to
5% in the quarter ended September 30, 1997 from 4.0% in the comparable period of
1996. These increases reflect increased legal, human resources, recruiting,
relocation and information systems costs. In the nine months ended September 30,
1997, general and administrative expenses were $7.8 million or 4.2% of sales
versus $5.6 million or 4% of sales in the same period of 1996. In addition to
the quarter over quarter increases, the third quarter of 1997 year-to-date
numbers reflect a one-time charge on contractually obligated expenses incurred
as part of the relinquishment of day-to-day duties of certain executives which
occurred in the first quarter of 1997. The Company believes that general and
administrative expenditures will remain at approximately the same dollar level
during the fourth quarter of 1997 as during the third quarter of 1997.
<PAGE>
Provisions for income taxes
The provisions for income taxes in the quarters ended September 30, 1997 and
1996 reflect a rate of 40%. The provisions for income taxes in the nine months
ended September 30, 1997 and 1996 reflect rates of 39% and 40%, respectively.
Liquidity and capital resources
The Company's cash, cash equivalents and short-term investments increased $24.5
million during the nine months ended September 30, 1997 primarily due to cash
generated by operating activities of $39.3 million, offset by the Company's
repurchase of one million shares of its Common Stock for an aggregate purchase
price of $12.9 million and acquisitions of property and equipment of $2.9
million. Cash generated by operations of $39.3 million resulted primarily from
net income of $9.2 million, decreases in accounts receivable of $15.6 million
and inventories of $3.8 million and increases in accounts payable of $5.3
million and accrued liabilities of $3.4 million. The Company had working capital
of $111.2 million as of September 30, 1997 as compared to $110.5 million at
December 31, 1996. The Company's current ratio was 4.5 to 1 both at September
30, 1997 and 5.6 to 1 at December 31, 1996. The Company believes that cash, cash
equivalents and short term investments will remain at approximately the same
levels for the remainder of 1997.
As of September 30, 1997, the Company had a secured credit line of $25 million.
The interest rate on borrowings under the line is the bank's prime rate less
0.25%. The Company had not borrowed any funds under the line as of September 30,
1997.
Capital expenditures in 1997 (which are budgeted to be approximately $3 million
during the remaining three months of 1997) are expected to be funded from
working capital currently available. The Company believes its current cash, cash
equivalents, short-term investments and borrowing capacity will satisfy the
Company's working capital and capital expenditure requirements for the next
twelve months.
Factors That May Affect Future Results
A substantial majority of the Company's sales are currently derived from its
Agency Fulfillment and Standard Fulfillment programs for Caller ID and Caller ID
on Call Waiting products through RBOCs and Independent Telcos, both domestic and
international (collectively, "Telcos"). As a result, the Company's sales and
operating results are substantially dependent on the extent of, and the timing
of, the Telcos' determinations to implement and promote Caller ID and Caller ID
on Call Waiting services on a system wide or regional basis. The extent to which
the Telcos determine to implement and/or from time-to-time promote these Caller
ID services may be affected by a wide variety of factors, including regulatory
approvals, technical requirements, budgetary constraints at the Telcos,
consolidation among Telcos, market saturation for Caller ID services, the
profitability of Caller ID services to the Telcos, market acceptance for Caller
ID services and other factors. The Company typically has little control over any
of these factors. There can be no assurances that the Telcos will continue to
implement and/or promote Caller ID services, nor that the Company's product and
program offerings will be selected by the Telcos. Moreover, there can be no
assurances that these services will gain widespread market acceptance nor that,
in areas where the services are accepted, the markets will not become saturated,
with the result that the Telcos cease to promote the services in that area.
<PAGE>
The Company operates with little or no backlog and its quarterly results are
substantially dependent on Telcos' implementation and/or promotion of Caller ID,
Caller ID on Call Waiting, ADSI and other services (collectively, "Services') on
a system wide or regional basis during each quarter. The Company's operating
expenses are based on anticipated sales levels, and a high percentage of such
expenses are relatively fixed. As a result, to the extent that the Telcos delay
the implementation and/or promotion of these Services which were anticipated for
a particular quarter, the Company's sales and operating results may be
materially and adversely affected.
The telecommunications industry is subject to rapid technological change,
changing customer requirements, frequent new product introductions and changing
industry standards which may render existing products and services obsolete. The
Company's future success will depend in large part on its ability to timely
develop and introduce new products and services which keep pace with, and
correctly anticipate, these changes and which meet new, evolving market
standards and changing customer requirements. There can be no assurance that the
Company's existing markets will not be eroded or that the Company will be able
to correctly anticipate and/or timely develop and introduce products and
services which meet the requirements of the changing marketplace or which
achieve market acceptance. If the Company is unable to develop and introduce
products and services which timely meet the changing requirements of the
marketplace, the Company's operating results may be materially and adversely
affected.
The Company has experienced in the past, and may experience in the future,
significant fluctuations in sales and operating results from quarter to quarter
as a result of a variety of factors, including the foregoing factors and the
following additional factors: the timing of significant orders for the Company's
products; the success of the Company's own direct marketing programs, in
particular, deriving adequate sales volumes and control of related costs; the
addition or loss of distribution channels or outlets; changes in service charges
for Services; new product introductions by the Company or its competitors;
increases in the cost of acquiring end-user customers for Services and the
resulting effects on margins; technical difficulties with Telco networks;
changes in the Company's product mix or sales mix by distribution channel that
may affect sales prices, margins or both; future expansion of the Company's
marketing and services operations; technological difficulties and resource
constraints encountered in developing, testing and introducing new products;
uncertainties involved in the Company's entry into markets for new Services;
disruption in sources of supply, manufacturing and product delivery; changes in
material costs; regulatory changes; general economic conditions, competitive
pressures, including reductions in average selling prices and resulting erosions
of margins; and other factors.
Because of these factors, the Company believes that period-to-period comparisons
of its results of operations are not necessarily meaningful and that such
comparisons should not be relied upon as indications of future performance. Due
to all of the foregoing factors, it is likely that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors. In such event, the price of the Company's Common Stock
would likely be materially adversely affected.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Index to Exhibits at page 14 below.
(b) Reports on Form 8-K.
The Company filed no reports on Form 8-K during the three
months ended September 30, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CIDCO INCORPORATED
November 12, 1997 By: /s/Daniel L. Eilers
- ----------------- ----------------------------
Date Daniel L. Eilers
President and Chief Executive Officer
November 12, 1997 /s/Richard D. Kent
- ----------------- ---------------------------
Date Richard D. Kent
Vice President, Finance
and Chief Financial Officer
<PAGE>
<TABLE>
CIDCO INCORPORATED
INDEX TO EXHIBITS
<CAPTION>
Exhibits Page
-------- ----
<S> <C> <C>
3.1 Amended and Restated Certificate of Incorporation. (1) --
3.2 Amended and Restated By-Laws. (7) --
4.1 Second Amendment to Revolving Credit Loan Agreement dated
October 13, 1995 between Registrant and Comerica Bank.(4) --
10.4 Patent License Agreement dated as of May 1, 1989 between the
Registrant and American Telephone and Telegraph Company.(1) --
10.5 Form of Indemnification Agreement. (1) --
10.13 Agreement effective as of December 21, 1992 between the
Registrant and SBC Communications. (1), (2) --
10.14 Lease dated August 15, 1993 between Thoits Bros., Inc.
and theRegistrant for 220 Cochrane Circle. (1) --
10.16 Lease dated May 31, 1994, between Thoits Bros., Inc. and the
Registrant for 225 Cochrane Circle, Units A, B, C, D,
and E. (4) --
10.17 Sublease dated November 18, 1994, between Thoits Bros.
and the Registrant for 180 Cochrane Circle.(3) --
10.18 Lease dated November 1, 1994, between Thoits Bros., Inc.
and the Registrant for 105 Cochrane Circle, Units A, B, C, D,
and E.(3) --
10.19 Registrant's Amended and Restated 1993 Stock Option Plan. (1) --
10.20 Registrant's 1994 Directors' Stock Option Plan, as amended. (7) --
10.21 Registrant's 1994 Employee Stock Purchase Plan. (1) --
10.22 Agreement dated January 1, 1995 between the Registrant and
Ameritech Services, Inc. (5) --
10.23 Standard Form of Office Lease between Registrant and 400
Columbus Avenue, LCC dated May 19, 1995. (5) --
10.24 Employment Agreement dated June 28, 1996 between Registrant
and Ian Laing. (6) --
10.25 Employment Agreement dated July 29, 1996 between Registrant
and Marv Tseu. (6) --
10.26 Employment Agreement dated December 16, 1996 between Registrant
and Richard D. Kent. (6) --
10.27 Employment Agreement dated March 17, 1997 between Registrant
and Daniel L. Eilers. (6) --
10.28 Option Agreement dated March 12, 1997 between Registrant and
Daniel L. Eilers. (6) --
10.29 1997 Annual Executive Incentive Plan. (7) --
11.1 Computation of Earnings Per Share. 16
</TABLE>
(1) Incorporated herein by reference to the Company's registration statement on
Form S-1, Registration File No. 33-74114.
(2) Confidential treatment has been granted with respect to certain portions of
this document.
(3) Incorporated herein by reference to the Company's Form 10-K for the year
ended December 31, 1994.
(4) Incorporated herein by reference to the Company's Form 10-Q for the quarter
ended September 30, 1995.
(5) Incorporated herein by reference to the Company's Form 10-Q for the quarter
ended June 30, 1996.
(6) Incorporated herein by reference to the Company's Form 10-Q for the quarter
ended March 31, 1997.
(7) Incorporated herein by reference to the Company's Form 10-Q for the quarter
ended June 30, 1997.
<PAGE>
EXHIBIT 11.1
<TABLE>
CIDCO INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
<CAPTION>
Three months ended Sept. 30, Nine months ended Sept. 30,
---------------------------- ---------------------------
1997 1996 1997 1996
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net income.......................................... $ 1,746 $ 5,340 $ 9,183 $ 18,275
=========== ========== =========== =========
Adjustment to net income to exclude interest
expense on convertible notes, net of income tax..... -- 913 -- 943
----------- ---------- ----------- ---------
Adjusted net income................................. $ 1,746 $ 6,253 $ 9,183 $ 19,218
=========== ========== =========== =========
Weighted average shares outstanding:
Common stock..................................... 13,948 14,336 13,910 14,256
Common stock issuable upon exercise of stock
options.......................................... 312 712 392 790
----------- ---------- ----------- ---------
Common stock issuable on conversion of
convertible notes................................ -- 3,659 -- 1,260
----------- ---------- ----------- ---------
Weighted average shares and equivalents
outstanding......................................... 14,230 18,707 14,302 16,306
=========== ========== =========== =========
Earnings per share.................................. $ .12 $ 0.33 $ .64 $ 1.18
=========== ========== =========== =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(In thousands, except per share data)
</LEGEND>
<CIK> 0000917639
<NAME> CIDCO Incorporated
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Sep-30-1997
<CASH> 32,498
<SECURITIES> 57,090
<RECEIVABLES> 35,621
<ALLOWANCES> 3,003
<INVENTORY> 10,793
<CURRENT-ASSETS> 143,028
<PP&E> 27,596
<DEPRECIATION> 15,177
<TOTAL-ASSETS> 158,014
<CURRENT-LIABILITIES> 31,818
<BONDS> 0
0
0
<COMMON> 139
<OTHER-SE> 126,057
<TOTAL-LIABILITY-AND-EQUITY> 158,014
<SALES> 51,079
<TOTAL-REVENUES> 51,079
<CGS> 28,417
<TOTAL-COSTS> 20,657
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,919
<INCOME-TAX> 1,173
<INCOME-CONTINUING> 1,746
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,746
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
