================================================================================
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 period ended December 28, 1996
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number: 0-24360
SPECTRIAN CORPORATION
(Exact name of registrant as specified in its charter)
CALIFORNIA 77-0023003
(State or other (I.R.S. Employer
jurisdiction of Identification
incorporation or Number)
organization)
350 West Java Drive
Sunnyvale, California 94089
(Address of principal executive offices)
Telephone Number (408) 745-5400
(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
----- -----
As of December 28, 1996 there were 8,171,144 shares of the Registrant's Common
Stock outstanding.
================================================================================
<PAGE>
<TABLE>
SPECTRIAN CORPORATION
Form 10-Q
INDEX
<CAPTION>
Page No.
<S> <C>
Cover Page 1
Index 2
PART I - Financial Information
ITEM 1 - Condensed consolidated financial statements
Condensed consolidated balance sheets -
March 31, 1996 and December 28, 1996 3
Condensed consolidated statements of operations -
three months and nine months ended
December 30, 1995 and December 28, 1996 4
Condensed consolidated statements of cash flows nine months
ended December 30, 1995 and
December 28, 1996 5
Notes to condensed consolidated financial statements 6
ITEM 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II - Other Information
ITEM 6 - Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE>
<TABLE>
SPECTRIAN CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
<CAPTION>
March 31, December 28,
Assets 1996 1996
--------------- ----------------
(Unaudited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 1,163 $ 6,207
Short-term investments 3,002 ----
Accounts receivable, less allowance for doubtful
accounts of $339 and $361, respectively 11,980 11,403
Inventories 7,229 14,333
Prepaid expenses and other current assets 420 692
--------------- ----------------
Total current assets 23,794 32,635
Property and equipment, net 32,128 21,579
--------------- ----------------
$ 55,922 $ 54,214
=============== ================
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable $ 6,964 $ 8,630
Accrued liabilities 4,120 5,278
--------------- ----------------
Total current liabilities 11,084 13,908
--------------- ----------------
Shareholders' Equity:
Common Stock, no par value, 20,000,000 shares authorized;
8,014,525 and 8,171,144 shares issued and outstanding,
respectively 51,956 52,866
Deferred compensation expense (182) (110)
Unrealized gains on investments 2 ----
Accumulated deficit (6,938) (12,450)
--------------- ----------------
Total shareholders' equity 44,838 40,306
--------------- ----------------
$ 55,922 $ 54,214
=============== ================
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
SPECTRIAN CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three months ended Nine months ended
December 30, December 28, December 30, December 28,
---------------------------------- -------------- ---------------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 11,644 $ 23,839 $ 51,396 $ 55,404
Non-recurring engineering revenues 628 646 2,288 1,276
-------- -------- -------- --------
12,272 24,485 53,684 56,680
-------- -------- -------- --------
Costs and expenses:
Cost of product sales 8,203 17,211 33,895 42,341
Research and development 3,611 4,773 10,643 12,836
Selling, general and administrative 1,460 2,293 5,612 6,620
-------- -------- -------- --------
13,274 24,277 50,150 61,797
-------- -------- -------- --------
Operating income (loss) (1,002) 208 3,534 (5,117)
Interest income (expense), net 201 (70) 797 (395)
-------- -------- -------- --------
Income (loss) before income taxes (801) 138 4,331 (5,512)
Income tax expense (benefit) (65) -- 350 --
-------- -------- -------- --------
Net income (loss) $ (736) $ 138 $ 3,981 $ (5,512)
======== ======== ======== ========
Net income (loss) per share $ (0.09) $ 0.02 $ 0.49 $ (0.68)
======== ======== ======== ========
Shares used in computing per
share amounts 7,771 8,295 8,147 8,118
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
SPECTRIAN CORPORATION AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Nine months ended
December 30, December 28,
----------------------------------------
1995 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 3,981 $ (5,512)
Adjustments to reconcile net income (loss) to net
cash provided by (used for) operating activities:
Depreciation and amortization 3,103 4,486
Stock option compensation expense 153 72
Tax benefit associated with stock options 337 --
Changes in operating assets and liabilities
Accounts receivable 1,801 577
Inventories (2,214) (7,104)
Prepaid expenses and other assets (409) (272)
Accounts payable (1,040) 1,666
Accrued liabilities 73 1,158
-------- --------
Net cash provided by (used for) operating activities 5,785 (4,929)
-------- --------
Cash used for investing activities:
Purchase of short-term investments (16,123) --
Proceeds from sale of short-term investments 21,303 3,000
Purchase of property and equipment (20,090) (10,355)
Proceeds from sale of land, building and improvements -- 16,418
-------- --------
Net cash provided by (used for) investing activities (14,910) 9,063
-------- --------
Cash flows from financing activities:
Proceeds from sales of Common Stock, net 1,551 910
-------- --------
Net cash provided by financing activities 1,551 910
-------- --------
Net increase (decrease) in cash and cash equivalents (7,574) 5,044
Cash and cash equivalents, beginning of period 8,420 1,163
======== ========
Cash and cash equivalents, end of period $ 846 $ 6,207
======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated financial
statements
</FN>
</TABLE>
5
<PAGE>
SPECTRIAN CORPORATION AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 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 the management, the statements include all
adjustments (which are of a normal and recurring nature) necessary for the fair
presentation of the financial information set forth therein. These financial
statements should be read in conjunction with the Company's audited consolidated
financial statements as incorporated by reference in the Company's Form 10-K for
fiscal year ended March 31, 1996. The interim results presented herein are not
necessarily indicative of the results of operations that may be expected for the
full fiscal year ending March 31, 1997, or any other future period.
NOTE 2: Balance Sheet Components
Balance sheet components are as follows:
March 31, December 28,
1996 1996
------------- ---------------
(In thousands)
Inventories:
Raw materials $ 1,512 $ 7,972
Work in process 5,285 4,842
Finished goods 1,076 875
------- -------
$ 7,229 $14,333
======= =======
Property and equipment:
Machinery and equipment $26,053 $34,921
Land, building and improvements 15,682 --
Furniture and fixtures 1,342 1,447
Leasehold improvements 927 964
------- -------
44,004 37,332
Less accumulated depreciation and
amortization 11,876 15,753
------- -------
$32,128 $21,579
======= =======
Accrued liabilities:
Employee compensation and benefits $ 2,673 $ 2,804
Warranty 699 1,410
Other accrued liabilities 748 1,064
------- -------
$ 4,120 $ 5,278
======= =======
6
<PAGE>
NOTE 3: Revenue Recognition
The Company recognizes product sales upon shipment and concurrently accrues for
expected warranty expenses. Repair and service revenues are recognized when the
service is performed.
Non-recurring engineering revenues relate to customer funded development
projects and are deferred and recognized upon completion of project milestones.
The Company is under no obligation to repay funds once related milestones are
achieved. Costs associated with such customer funded research and development of
$1.1 million and $429,000 for the three months ended December 30, 1995 and
December 28, 1996, respectively, and $3.1 million and $1.6 million for the nine
months ended December 30, 1995 and December 28, 1996, respectively, are included
in research and development expense.
NOTE 4: Earnings Per Share Computation
Net income (loss) per share has been computed using the weighted average number
of outstanding shares of Common Stock and common equivalent shares from stock
options outstanding (when dilutive using the treasury stock method). Common
Stock options are assumed to be exercised and the proceeds used to buy back
Common Stock at the fair market value (the treasury stock method). Due to the
net losses incurred during the three month period ending December 30, 1995 and
the nine month period ending December 28, 1996, Common Stock options outstanding
would be antidilutive and are therefore not included in the earnings per share
calculation.
NOTE 5: Bank Borrowings and Debt
During the three month period ending December 29, 1996, the Company sold and
leased back its principle facilities located at 350 West Java Drive and 160
Gibraltar Court in Sunnyvale, California. Prior to the sale, the Company had a
term loan of $5.9 million outstanding, secured by this real estate, as well as
borrowings under a revolving line of credit of $6.0 million. Both of these
obligations were paid in full with the proceeds of the real estate sale
transaction.
In January 1997, the Company borrowed $6.0 million against a Term Loan, secured
by substantially all of the Company's capital equipment. Under the terms of the
agreement, which expires January 2002, the Company is required to make monthly
payments against the loan, plus interest at a rate equal to the Treasury Rate
plus 2.75%. Under the terms of the agreement, the Company is required to
maintain certain minimum net worth and other specific financial ratios. As of
January 27, 1997, the Company was in conformance with these covenants.
7
<PAGE>
SPECTRIAN CORPORATION AND SUBSIDIARY
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Overview
Spectrian provides highly linear power amplifiers to wireless
communications infrastructure original equipment manufacturers ("OEMs"). The
Company designs, manufactures, and markets single carrier and multicarrier
amplifiers that support a broad range of worldwide analog and digital
transmission standards, including AMPS, TDMA, CDMA, TACS, GSM and DCS-1800.
Spectrian's customers include many of the world's largest manufacturers of
wireless infrastructure equipment, including Northern Telecom, as well as other
equipment manufacturers in emerging wireless markets. The Company's revenues are
derived from a limited number of OEM customers and products. In recent periods,
sales to Northern Telecom and its affiliates as a percentage of total revenues
have fluctuated significantly. During the three months ended December 28, 1996,
Northern Telecom Limited, Qualcomm Incorporated and Matra Communication, in
which Northern Telecom has an equity investment, accounted for 61%, 13% and 12%
of the Company's total revenues, respectively. The concentration of sales among
a limited number of OEM customers, in particular Northern Telecom, has increased
the volatility of the Company's revenues and results of operations. The Company
expects that it will continue to experience volatility in customer orders, but
it is working to diversify its customer base to reduce this risk. As part of
this diversification strategy, the Company is seeking to enter the Korean
marketplace as well as to begin selling directly to cellular service providers
in addition to its current OEM business. There can be no assurance, however,
that the Company will be successful in selling its products into the Korean
market or directly to cellular service providers.
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 as
a result of changes in OEM requirements. Fluctuating demand from the Company's
largest customer, delays in the availability for sale of new products, and scrap
and inefficiencies associated with introducing these new products into
manufacturing have caused significant revenue and net income volatility during
the current fiscal year. Results during the nine months ended December 28, 1996
were also impacted by redundant costs associated with developing the Company's
new 4-inch wafer fabrication facility while still maintaining its 3-inch wafer
facility. The Company expects these redundant costs to continue into the fourth
quarter of fiscal 1997, when the full qualification of the 4-inch wafer
fabrication facility is anticipated. In addition, the Company incurred
significant manufacturing costs during the nine months ended December 28, 1996,
primarily due to inefficiencies associated with the transition of several new
products from development into production. These higher costs for new product
introductions are expected to continue for at least the next six months.
The marketplace for the Company's products is becoming increasingly
competitive. The Company currently faces competition from HP-Avantek for its
largest customer, Northern Telecom and its affiliates. Further, as the Company
seeks to diversify its customer base to reduce risk, it must enter new markets
where its competitors are already established. In particular, several companies
have been selling in the Korean marketplace and directly to cellular service
providers prior to Spectrian pursuing these opportunities. This competition has
resulted in, and will result in, reduced average sales prices for the Company's
products, which accordingly will negatively impact gross margins.
In an effort to improve the Company's liquidity, Spectrian sold and
leased back its main facilities located in Sunnyvale, California on November 19,
1996. Proceeds from the sale of the facility were approximately $16.4 million
net of fees, commissions and closing costs. The Company agreed to leaseback the
facility for a term of 15 years, with options to extend the lease for two
additional five year periods.
8
<PAGE>
Results of Operations
Three Month and Nine Month Periods Ended December 30, 1995 and December 28, 1996
Revenues. The Company generates product sales revenue from the sale of power
amplifiers, primarily to OEMs in cellular and other markets, as well as from
amplifier repair and service. A portion of the Company's revenues is also
generated through non-recurring engineering ("NRE") revenues which represent
funding from the Company's OEM customers for specific development projects. The
Company's revenues increased by 99% from $12.3 million in the three months ended
December 30, 1995 to $24.5 million in the three months ended December 28, 1996,
primarily driven by increased shipments of Personal Communications Services
("PCS") amplifiers for both CDMA and GSM protocols as well as increases in sales
of existing cellular amplifier products. The Company's revenues increased by 6%
from $53.7 million in the nine months ended December 30, 1995 to $56.7 million
in the nine months ended December 28, 1996, primarily attributable to increased
shipments of Personal Communications Services ("PCS") amplifiers for both CDMA
and GSM protocols.
The Company's revenues are derived primarily from a limited number of OEM
customers and products. During the three months ended December 28, 1996,
Northern Telecom Limited, Qualcomm Incorporated and Matra Communication, in
which Northern Telecom has an equity investment, accounted for 61%, 13% and 12%
of revenues, respectively. If the Company were to lose a major OEM customer, in
particular Northern Telecom, or if orders by a major OEM customer were to
otherwise decrease, the Company's business, financial condition and results of
operations would be materially adversely affected.
Cost of Product Sales. Cost of product sales consists primarily of raw
materials, RF transistor fabrication costs, amplifier assembly and test costs,
overhead and warranty costs, and does not include costs incurred in connection
with NRE revenues. The Company's cost of product sales increased by 110% from
$8.2 million in the three months ended December 30, 1995 to $17.2 million in the
three months ended December 28, 1996. The Company's cost of product sales
increased by 25% from $33.9 million in the nine months ended December 30, 1995
to $42.3 million in the nine months ended December 28, 1996.
Gross margin on product sales decreased from 30% in the three month period
ended December 30, 1995 to 28% in the three month period ended December 28,
1996, primarily due to inefficiencies, scrap and high material costs on new
products coming out of development into production, as well as warranty costs
associated with the Company's first generation multicarrier products. The cost
of scrapping wafers and transistors for the Company's newer products was
particularly high during the period and was exacerbated by the Company's
continued reliance on its older 3-inch wafer fabrication facility for
production. Gross margin on product sales decreased from 34% in the nine month
period ended December 30, 1995 to 24% in the nine month period ended December
28, 1996, primarily due to inefficiencies and high material costs on new
products coming out of development into production and warranty costs associated
with the Company's first generation multicarrier products.
Due to an unusually large number of new products introduced in fical 1997,
the Company has experienced high manufacturing costs, including high scrap and
material waste, significant material obsolescence, labor inefficiencies, high
overtime hours, inefficient material procurement, an inability to recognize
economies of scale, and high costs associated with the transition of these new
products from development into production. The Company's manufacturing costs
have historically been volatile and have had a material adverse effect on gross
margins. Although the Company has initiated actions to reduce its manufacturing
costs, any failure to achieve these reductions could have a material adverse
effect on the Company's business, financial condition and results of operations.
Research and Development. Research and development expenses include the cost of
designing, developing or cost reducing amplifiers and RF transistors, including
the cost associated with NRE revenues. NRE funding received from OEM customers
may be greater or less than the related development costs. Research and
development also includes the expenses associated with the design and
qualification expenses of the Company's new 4-inch wafer fabrication facility.
The Company's research and development expenses increased by 32% from $3.6
million in the three months ended December 30, 1995 to $4.8 million in the three
months ended December 28, 1996. The Company's research and development expenses
9
<PAGE>
increased by 21% from $10.6 million in the nine months ended December 30, 1995
to $12.8 million in the nine months ended December 28, 1996. The increase in
research and development spending in both periods is attributable to increased
spending on development of the Company's 4-inch wafer fabrication facility and
increased spending on semiconductor research and development.
Research and development expenses as a percentage of revenues decreased
from 29% in the three months ended December 30, 1995 to 19% for the three months
ended December 28, 1996, reflecting the Company's decision to continue the
investment in product development, despite lower revenues, during the three
month period ended December 30, 1995. Research and development expenses as a
percentage of revenues increased from 20% in the nine months ended December 30,
1995 to 23% for the nine months ended December 28, 1996. The increase in
research and development spending as a percentage of revenues reflects the
Company's increased spending for the development of the Company's 4-inch wafer
fabrication facility.
Selling, General and Administrative. Selling, general and administrative
expenses include compensation and benefits for sales, marketing, senior
management and administrative personnel, commissions paid to independent sales
representatives, professional fees and other expenses. The Company's selling,
general and administrative expenses increased by 57% from $1.5 million in the
three months ended December 30, 1995 to $2.3 million in the three months ended
December 28, 1996, primarily due to increases in sales and administrative
headcount and related compensation. The Company's selling, general and
administrative expenses increased by 18% from $5.6 million in the nine months
ended December 30, 1995 to $6.6 million in the nine months ended December 28,
1996, primarily due to increases in sales and administrative headcount and
related compensation and outside services for information systems support.
Selling, general and administrative expenses as a percentage of revenues
decreased from 12% in the three months ended December 30, 1995 to 9% for the
three months ended December 28, 1996 reflecting the Company's decision to
continue sales and administrative spending, despite the lower revenues during
the three month period ended December 30, 1995. Selling, general and
administrative expenses as a percentage of revenues increased from 10% in the
nine months ended December 30, 1995 to 12% for the nine months ended December
28, 1996 reflecting increases in sales and administrative headcount and related
compensation as well as the continued spending.
Interest Income (Expense), Net. Net interest income for the three months ended
December 30, 1995 was $201,000 compared to net interest expense of $70,000 for
the three months ended December 28, 1996. Net interest income for the nine
months ended December 30, 1995 was $797,000 compared to net interest expense of
$395,000 for the nine months ended December 28, 1996. The change from net
interest income to net interest expense from period to period was a result of
the Company's lower cash balances and the interest associated with incurring $12
million of debt during fiscal 1997 and subsequently repaying the obligation with
proceeds derived from a facility sale and leaseback.
Income Taxes. The Company recorded an income tax benefit of $65,000 for the
three month period ended December 30, 1995 reflecting the net loss during the
period. No tax provision was made during the three months ended December 28,
1996 due to the loss in the current nine month period ended December 28, 1996.
The December 30, 1995 effective tax rate of 8% reflects the use of net operating
loss carryforwards. At March 31, 1996, the Company had federal and state net
operating loss carryforwards for tax reporting purposes of approximately $25.0
million and $9.0 million, respectively. The Company's ability to use its net
operating loss carryforwards against taxable income may be subject to
restrictions and limitations under Section 382 of the Internal Revenue Code of
1986, as amended, in the event of a change in ownership of the Company as
defined therein.
Variability of Operating Results. The Company's quarterly operating results have
in the past, and will in the future, vary significantly due to a number of
factors, including the timing, cancellation, or rescheduling of customer
shipments; the timing and level of NRE revenues; variations in manufacturing
efficiencies and costs; low yields of wafers and transistors from the Company's
wafer and device fabrication facilities; changes in the mix of products having
differing gross margins; declining average sales prices; competitive factors;
the long sales cycles associated with the Company's customer-specific products;
development risks associated with the introduction of new products that comprise
much of the Company's future sales; the high manufacturing costs associated with
starting production of new products; and variations in product development or
other operating expenses. In the near term, operating results may be adversely
affected by continuing delays in the availability for sale of the Company's new
products or by any failure to meet acceptable wafer production levels during the
10
<PAGE>
Company's transition from its current 3-inch wafer fabrication facility to the
new 4-inch wafer fabrication facility currently nearing completion.
Liquidity and Capital Resources
Cash provided by operations was $5.8 million for the nine months ended
December 30, 1995 compared to cash used for operations of $4.9 million for the
nine months ended December 28, 1996. The decrease in cash provided by operations
in the nine months ended December 28, 1996 primarily related to the decrease in
profitability over the comparable period of the prior year, as well as increases
in inventory.
As of December 28, 1996, the Company had working capital of $18.7
million, including $6.2 million in cash and cash equivalents. The Company has a
revolving line of credit with a bank, secured primarily by the Company's
accounts receivable and inventory. Under the terms of the agreement, which
expires July 31, 1997, the Company is required to maintain certain minimum
working capital, net worth, profitability, and other specific financial ratios
and prohibits the payment of cash dividends without the prior written consent of
the lender. As of December 28, 1996, the Company was in conformance with these
convenants and $5.0 million was available under the line of credit.
During the three month period ending December 28, 1996, the Company sold
and leased back its principle facilities located at 350 West Java Drive and 160
Gibraltar Court in Sunnyvale, California. Proceeds from the sale of the facility
were approximately $16.4 million net of fees, commissions and closing costs. The
Company agreed to leaseback the facility for a term of 15 years, with options to
extend the lease for two additional five year periods. Prior to the sale, the
Company had a term loan of $5.9 million outstanding, secured by this real
estate, as well as borrowings under a revolving line of credit of $6.0 million.
Both of these obligations were paid in full with the proceeds of the real estate
sale transaction.
In January 1997, the Company borrowed $6.0 million against a Term
Loan, secured by substantially all of the Company's capital equipment. Under the
terms of the agreement, which expires January 2002, the Company is required to
make monthly payments against the loan, plus interest at a rate equal to the
Treasury Rate plus 2.75%. Under the terms of the agreement, the Company is
required to maintain certain minimum net worth and other specific financial
ratios. As of January 27, 1997, the Company was in conformance with these
covenants.
Additions to property and equipment in the nine months ended December 30,
1995 were $20.1 million, including $8.6 million for the purchase of the facility
in Sunnyvale, California and $5.4 million for improvements to the facility.
Additions to property and equipment were $10.4 million in the nine months ended
December 28, 1996, including $3.4 million for equipment and construction
associated the Company's new 4-inch wafer fabrication facility.
The Company expects capital additions for the remainder of fiscal 1997 to
be approximately $4 million, primarily for test equipment for manufacturing.
Based on the Company's current working capital, expected cash flows and the
Company's debt capacity, the Company believes that sufficient cash will be
available to meet the Company's needs through at least the next twelve months.
In connection with the operation of American Microwave Technology, Inc.
("AMT"), the Company's wholly-owned subsidiary located in Brea, California, the
Company occupies approximately 14,400 square feet of a facility pursuant to a
lease which expired in July 1996 and was subsequently renewed until September
30, 1997.
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations are forward-looking statements based on
current expectations, and entail various risks and uncertainties that could
cause actual results to differ materially from those expressed in such forward
looking statements. Such risks and uncertainties are set forth above in
"Overview" and "Variability of Operating Results" and include, without
limitation, statements relating to the cancellation or deferral of customer
orders; the timely development and market acceptance of new products,
particularly the second generation multicarrier product; continued growth in
wireless communications, including new PCS networks; the ability to manufacture
new or existing products in sufficient quantity or quality; the market
acceptance of the Company's new or existing products in Korea; the ability of
the Company to successfully sell its products directly to cellular service
providers; or other general economic conditions. Further information on factors
which could affect the Company's financial results are included in the Company's
1996 Annual Report on Form 10-K.
11
<PAGE>
ITEM 6: Exhibits and Reports on Form 8-K
(a)Exhibits
11.1 Statement regarding computation of net income (loss) per share
27.1 Financial Data Schedule
(b)Reports on Form 8-K
The Company filed a Current Report on Form 8-K on December 3, 1996
with respect to a sale/leaseback transaction for the Company's main facilities
in Sunnyvale, California. Proceeds from the sale of the facility were
approximately $16.4 million net of fees, commissions and closing costs. The
Company agreed to leaseback the facility for a term of 15 years, with options to
extend the lease for two additional five year periods.
12
<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.
Dated: January 28, 1996
SPECTRIAN CORPORATION
(Registrant)
/S/ EDWARD A. SUPPLEE, JR.
-----------------------------------
Edward A. Supplee, Jr.
Executive Vice President, Finance and Administration,
Chief Financial Officer and Secretary
(Principal Financial and Accounting Officer)
13
<PAGE>
INDEX TO EXHIBITS
EXHIBITS
11.1 Statement regarding computation of net income (loss) per share
27.1 Financial Data Schedule
14
Exhibit 11.1
<TABLE>
SPECTRIAN CORPORATION AND SUBSIDIARY
COMPUTATION OF NET INCOME (LOSS) PER SHARE
(In thousands except per share data)
<CAPTION>
Three months ended Nine months ended
December 30, December 28, December 30, December 28,
---------------- -------------- -------------- --------------
1995 1996 1995 1996
---------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net income (loss) $ (736) $ 138 $ 3,981 $ (5,512)
================ ============== ============== ==============
Weighted average number of shares outstanding used
in computation:
Common Stock 7,771 8,169 7,609 8,118
Common Stock equivalents
as a result of stock options
outstanding n/a * 126 538 n/a *
---------------- -------------- -------------- --------------
Shares used in computing per
share amounts ** 7,771 8,295 8,147 8,118
================ ============== ============== ==============
Net income (loss) per share $ (0.09) $ 0.02 $ 0.49 $ (0.68)
================ ============== ============== ==============
<FN>
* Due to the loss in this period, stock options outstanding would be
antidilutive and are therefore not included in the calculation.
** The dilutive impact of options determined using the fully diluted
calculation is not materially different from the dilutive impact
represented in this statement determined using the primary method.
</FN>
</TABLE>
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED
FROM CONDENSED CONSOLIDATED
BALANCE SHEETS, CONDENSED
CONSOLIDATED STATEMENTS OF
OPERATIONS AND NOTES TO
CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0000925054
<NAME> Spectrian Corporation
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-28-1996
<CASH> 6,207
<SECURITIES> 0
<RECEIVABLES> 11,764
<ALLOWANCES> 361
<INVENTORY> 14,333
<CURRENT-ASSETS> 32,635
<PP&E> 37,332
<DEPRECIATION> 15,753
<TOTAL-ASSETS> 54,214
<CURRENT-LIABILITIES> 13,908
<BONDS> 0
<COMMON> 52,866
0
0
<OTHER-SE> (12,560)
<TOTAL-LIABILITY-AND-EQUITY> 54,214
<SALES> 56,680
<TOTAL-REVENUES> 56,680
<CGS> 42,341
<TOTAL-COSTS> 19,454
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 395
<INCOME-PRETAX> (5,510)
<INCOME-TAX> 2
<INCOME-CONTINUING> (5,512)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,512)
<EPS-PRIMARY> (0.68)
<EPS-DILUTED> (0.68)
</TABLE>
