<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1996
or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission file number: 0-19550
U.S. ROBOTICS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3994412
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 North McCormick Boulevard, Skokie, Illinois 60076-2999
(Address of principal executive offices) (Zip Code)
(847) 982-5010
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report.)
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 periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
The number of shares of the registrant's common stock, $.01 par value per
share, outstanding as of May 8, 1996 was 43,812,305.
1
<PAGE> 2
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Page
------
Item 1. Financial Statements(Unaudited)
Condensed Consolidated Statement of Income 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Statement of Stockholders' Equity 5
Condensed Consolidated Statement of Cash Flows 6
Notes to Condensed Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
U.S. ROBOTICS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
------------------------------- -----------------------------------
March 31, April 2, March 31, April 2,
1996 1995 1996 1995
--------- ------- --------- --------
<S> <C> <C> <C> <C>
Net sales $454,505 $196,149 $819,317 $358,603
Cost of goods sold 264,188 116,376 476,384 211,742
-------- -------- -------- --------
Gross profit 190,317 79,773 342,933 146,861
Operating expenses
Selling and marketing 57,961 33,215 105,751 59,834
General and administrative 24,041 9,071 41,666 18,374
Research and development 28,378 11,282 51,831 21,227
Non-recurring merger costs - 27,338 - 29,449
-------- -------- -------- --------
110,380 80,906 199,248 128,884
-------- -------- -------- --------
Operating profit(loss) 79,937 (1,133) 143,685 17,977
Interest income 2,554 1,275 5,825 2,186
Interest expense (1,453) (1,417) (2,673) (2,872)
Other income (expense) 244 210 26 (218)
-------- -------- -------- --------
Income(loss)before
income taxes 81,282 (1,065) 146,863 17,073
Income tax expense 29,677 3,922 53,613 10,202
-------- -------- -------- --------
Net income(loss) $ 51,605 $ (4,987) $ 93,250 $ 6,871
======== ======== ======== ========
Net income(loss) per
share $ 0.55 $ (0.06) $ 1.00 $ 0.09
======== ======== ======== ========
Number of shares used in
per share calculation 94,168 79,387 93,568 78,776
======== ======== ======== ========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
3
<PAGE> 4
U.S. ROBOTICS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, October 1,
1996 1995
--------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 88,446 $ 136,803
Marketable securities 74,585 96,000
Accounts receivable, net 267,096 168,365
Inventories 192,771 103,032
Deferred income taxes 43,089 22,373
Prepaid expenses and other current assets 14,130 7,739
--------- ----------
Total current assets 680,117 534,312
PROPERTY, PLANT AND EQUIPMENT-NET 193,308 117,156
OTHER ASSETS 12,409 8,155
--------- ----------
$ 885,834 $ 659,623
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and current maturities of
long-term obligations $ 137,152 $ 78,635
Accrued liabilities 111,791 78,171
Income taxes payable 7,904 9,525
--------- ---------
Total current liabilities 256,847 166,331
LONG-TERM OBLIGATIONS 65,390 65,651
DEFERRED INCOME TAXES 3,387 3,246
STOCKHOLDERS' EQUITY
Preferred stock - $.01 par value; 10,000,000
shares authorized; issuable in series, none
issued - -
Common stock - $.01 par value;
250,000,000 shares authorized; 43,676,860 and
42,193,198 outstanding at March 31, 1996
and October 1, 1995, respectively 437 422
Additional contributed capital 322,924 273,939
Retained earnings 236,160 148,617
--------- ---------
559,521 422,978
Cumulative translation adjustment and other 689 1,417
--------- ---------
Total stockholders' equity 560,210 424,395
--------- ---------
$ 885,834 $ 659,623
========= =========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
4
<PAGE> 5
U.S. ROBOTICS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands)
(UNAUDITED)
<TABLE>
<CAPTION> Cumulative
Additional Translation Total
Common Contributed Retained Adjustment Stockholders'
Stock Capital Earnings and Other Equity
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT OCTOBER 1,
1995 $ 422 $ 273,939 $ 148,617 $ 1,417 $ 424,395
Issuances under stock
option and purchase
plans 12 13,707 - - 13,719
Tax benefits relating
to the exercise of
stock options - 31,411 - - 31,411
Issuances of stock in
connection with
acquisition 3 3,809 (5,707) - (1,895)
Foreign currency
translation
adjustments and other - 58 - (728) (670)
Net income for the
period - - 93,250 - 93,250
----- --------- --------- -------- ---------
BALANCE AT MARCH 31,
1996 $ 437 $ 322,924 $ 236,160 $ 689 $ 560,210
===== ========= ========= ======== =========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
5
<PAGE> 6
U.S. ROBOTICS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
----------------------------
March 31, April 2,
1996 1995
----------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 93,250 $ 6,871
Changes in assets and liabilities (86,677) 11,072
Adjustments to reconcile net income to net
cash from operating activities (1,662) 26,549
--------- ---------
Net cash provided by operating
activities 4,911 44,492
Cash flows from investing activities:
Purchases of marketable securities (161,809) (8,997)
Sales and maturities of marketable
securities 184,463 1,981
Capital expenditures, net (86,857) (8,265)
Other, net 708 (258)
-------- ---------
Net cash used in investing activities (63,495) (15,539)
Cash flows from financing activities:
Net cash provided by(used in)
financing activities 10,683 (2,401)
Effect of exchange rate changes (456) 222
--------- ---------
Net increase(decrease)in cash and cash
equivalents (48,357) 26,774
Cash and cash equivalents at beginning of period 136,803 58,286
---------- ---------
Cash and cash equivalents at end of period $ 88,446 $ 85,060
========== =========
</TABLE>
See accompanying notes to
condensed consolidated financial statements.
6
<PAGE> 7
U.S. ROBOTICS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
include the accounts of U.S. Robotics Corporation and its subsidiaries (the
"Company"). Such statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and pursuant
to the regulations of the Securities and Exchange Commission; accordingly, they
do not include all of the information and notes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair presentation have been included. The results
of operations for the quarter and six months ended March 31, 1996 are not
necessarily indicative of the results for the fiscal year ending September 29,
1996. The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's Annual Report on Form 10-K for the
fiscal year ended October 1, 1995.
The Company acquired Amber Wave Systems, Inc. ("Amber Wave") on February
29, 1996 (See NOTE B).
On April 12, 1996, the Company announced a two-for-one split of its common
stock (See NOTE E).
NOTE B - BUSINESS ACQUISITION
On February 29, 1996, the Company issued approximately 347,000 shares of
its common stock in exchange for all of the outstanding capital stock of Amber
Wave. Amber Wave develops technology related to LAN switching products. The
transaction was accounted for as a pooling of interests. The historical
operations of Amber Wave prior to the date of combination were not material to
the Company's consolidated operations and financial position; therefore, prior
period financial statements have not been restated.
NOTE C - INVENTORIES
Inventories are stated at the lower of cost or market value, after
reductions for potentially unsaleable or unusable items. Cost
7
<PAGE> 8
is determined by the first-in, first-out method. The components of
inventories were as follows:
<TABLE>
<CAPTION>
March 31, October 1,
1996 1995
--------- ---------
(in thousands)
<S> <C> <C>
Finished products $ 91,662 $ 32,688
Work-in-process 18,951 21,373
Raw materials 82,158 48,971
--------- ---------
$192,771 $103,032
========= =========
</TABLE>
NOTE D - LITIGATION
The Company is a party to lawsuits in the normal conduct of its business.
The Company and its counsel believe that the Company has meritorious defenses
in lawsuits in which the Company is a defendant. The Company does not believe
the outcome of these cases will have a material effect on its financial
position and results of operations.
NOTE E - SUBSEQUENT EVENT
On April 12, 1996, the Company announced a two-for-one split of its common
stock to be effected in the form of 100% stock dividend. Stockholders of
record as of the close of business on April 25, 1996 received one additional
share for each share held. The additional shares were distributed to
stockholders on May 10, 1996. As required by generally accepted accounting
principles, the computations and presentation of net income per share are based
upon the new number of shares outstanding.
8
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
(In millions, except share and per share data)
The following discussion and analysis sets forth information for the
fiscal second quarter ended March 31, 1996 ("Second Quarter 1996") and the six
month period ended March 31, 1996 ("First Six Months 1996") compared to the
fiscal second quarter ended April 2, 1995 ("Second Quarter 1995") and the six
month period ended April 2, 1995 ("First Six Months 1995"). This information
should be read in conjunction with the Management's Discussion and Analysis of
Financial Condition and Results of Operations and the consolidated financial
statements and notes thereto contained in the Company's Annual Report on Form
10-K for the fiscal year ended October 1, 1995.
Results of Operations
Net Sales
<TABLE>
<CAPTION>
Second Quarter
---------------------------------
1996 Change 1995
- - --------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 454.5 131.7% $ 196.1
- - --------------------------------------------------------------------
<CAPTION>
First Six Months
---------------------------------
1996 Change 1995
- - --------------------------------------------------------------------
Net sales $ 819.3 128.5% $ 358.6
- - --------------------------------------------------------------------
</TABLE>
Net sales increased in Second Quarter 1996 and First Six Months 1996 as
compared with the corresponding prior year periods primarily as a result of
higher unit sales of both systems and PC-related products, reflecting continued
growth in overall market demand for information access devices. Average selling
prices also increased as the sales mix continued to shift towards higher speed,
higher priced products.
International Sales
<TABLE>
<CAPTION>
Second Quarter
-------------------------------------
1996 Change 1995
- - ---------------------------------------------------------------
<S> <C> <C> <C>
International sales $ 127.1 134.3% $ 54.2
Percentage of net sales 27.9% 27.7%
- - ---------------------------------------------------------------
<CAPTION>
First Six Months
-------------------------------------
1996 Change 1995
- - ---------------------------------------------------------------
<S> <C> <C> <C>
International sales $ 226.3 145.1% $ 92.3
Percentage of net sales 27.6% 25.7%
- - ---------------------------------------------------------------
</TABLE>
International sales, concentrated in Canada and Europe, include both U.S.
exports and sales from foreign operations. Sales increased for the Second
Quarter 1996 and First Six Months 1996 over the corresponding prior year
periods as a result of higher unit shipments of both systems and PC-related
products. Sales through foreign subsidiaries are denominated in both U.S.
dollars and foreign currencies. At the end of Second Quarter 1996, the Company
had foreign
9
<PAGE> 10
currency forward contracts totaling approximately $13.5 million. The Company
has no other foreign currency contracts or derivative instruments.
Gross Profit
<TABLE>
<CAPTION>
Second Quarter
-----------------------------------------
1996 Change 1995
- - ----------------------------------------------------------------------
<S> <C> <C> <C>
Gross profit $190.3 138.6% $79.8
Percentage of net sales 41.9% 40.7%
- - ----------------------------------------------------------------------
<CAPTION>
First Six Months
-----------------------------------------
1996 Change 1995
- - ----------------------------------------------------------------------
<S> <C> <C> <C>
Gross profit $342.9 133.5% $146.9
Percentage of net sales 41.9% 41.0%
- - ----------------------------------------------------------------------
</TABLE>
The increase in gross profit dollar contribution in Second Quarter 1996
and First Six Months 1996 resulted primarily from significantly higher unit
sales volumes. Gross margin as a percentage of sales improved from 40.7% in
Second Quarter 1995 to 41.9% in Second Quarter 1996 primarily due to
proportionately higher sales of systems products, which generate higher gross
margins, and to the shift in sales mix to higher margin, V.34 compliant modem
products. The Company's gross profit margins are subject to fluctuation from
quarter to quarter depending upon changes in the mix of products sold,
introductions of new products, lower cost product components and architectures,
and the timing of price reductions necessitated by the competitive environment.
Operating Expenses
<TABLE>
<CAPTION>
Second Quarter
-----------------------------------------
1996 Change 1995
- - ----------------------------------------------------------------------
<S> <C> <C> <C>
Selling and marketing $58.0 74.5% $33.2
Percentage of net sales 12.8% 16.9%
- - ----------------------------------------------------------------------
General and administrative $24.0 165.0% $ 9.1
Percentage of net sales 5.3% 4.6%
- - ----------------------------------------------------------------------
Research and development $28.4 151.5% $11.3
Percentage of net sales 6.2% 5.8%
- - ----------------------------------------------------------------------
Non-recurring merger costs - N/A $27.3
Percentage of net sales - 13.9%
- - ----------------------------------------------------------------------
<CAPTION>
First Six Months
-----------------------------------------
1996 Change 1995
- - ----------------------------------------------------------------------
<S> <C> <C> <C>
Selling and marketing $105.8 76.7% $59.8
Percentage of net sales 12.9% 16.7%
- - ----------------------------------------------------------------------
General and administrative $ 41.7 126.8% $18.4
Percentage of net sales 5.1% 5.1%
- - ----------------------------------------------------------------------
Research and development $ 51.8 144.2% $21.2
Percentage of net sales 6.3% 5.9%
- - ----------------------------------------------------------------------
Non-recurring merger costs - N/A $29.4
Percentage of net sales - 8.2%
- - ----------------------------------------------------------------------
</TABLE>
10
<PAGE> 11
Selling and marketing expenses for Second Quarter 1996 and First Six
Months 1996 increased as compared with the corresponding prior year periods due
to higher sales levels and the associated higher personnel related and
promotional costs. Total selling and marketing expenses decreased as a
percentage of net sales reflecting the leverage created at higher sales levels
by the fixed and semi-variable components of selling and marketing expenses.
General and administrative expenses for Second Quarter 1996 and First Six
Months 1996 increased as compared with the corresponding prior year periods,
both in total dollars and as a percentage of net sales, due to increased
administrative staff and systems necessary to support the Company's expanded
business activities. In addition, the increase in Second Quarter 1996
reflected professional fees related to the Company's bid to acquire Hayes
Microcomputer Products, Inc., its recent acquisition of Amber Wave Systems,
Inc. and other contract negotiations.
Research and development expenses for Second Quarter 1996 and First Six
Months 1996 increased over the corresponding prior year periods due to
increases in the size of the Company's engineering staff and related costs to
support its emphasis on product development. The Company believes that
investment in research and development is critical to future net sales growth
and continued technological competitiveness.
In the Second Quarter 1995 and First Six Months 1995, the Company incurred
non-recurring merger costs of $27.3 million and $29.4 million, respectively, in
connection with the acquisition of Megahertz Corporation ("Megahertz").
Income Tax Expense
<TABLE>
<CAPTION>
Second Quarter
-------------------------------------------
1996 Change 1995
- - ----------------------------------------------------------------
<S> <C> <C> <C>
Income tax expense $29.7 656.7% $3.9
Effective tax rate 36.5% (368.3)%
- - ----------------------------------------------------------------
<CAPTION>
First Six Months
-------------------------------------------
1996 Change 1995
- - ----------------------------------------------------------------
<S> <C> <C> <C>
Income tax expense $53.6 425.5% $10.2
Effective tax rate 36.5% 59.8%
- - ----------------------------------------------------------------
</TABLE>
The effective tax rate for Second Quarter 1996 and First Six Months 1996
decreased as compared to the corresponding prior year periods. The decrease in
the effective tax rate was attributable to the tax treatment of certain
non-recurring merger-related costs in the fiscal 1995 periods, including
transaction costs and the write-down of non-deductible goodwill. Additionally,
in the fiscal 1995 periods, the Company recorded a deferred tax valuation
allowance related to the uncertainty of realization of future tax benefits
associated with certain merger-related costs recorded by international
subsidiaries.
11
<PAGE> 12
Net Income and Net Income Per Share
<TABLE>
<CAPTION>
Second Quarter
----------------------------------------
1996 1995
- - ------------------------------------------------------------------
<S> <C> <C>
Net income $ 51.6 $ (5.0)
Percentage of net sales 11.4% (2.5)%
Net income per share $ .55 $ (0.06)
- - ------------------------------------------------------------------
<CAPTION>
First Six Months
----------------------------------------
1996 1995
- - ------------------------------------------------------------------
<S> <C> <C>
Net income $ 93.3 $ 6.9
Percentage of net sales 11.4% 1.9%
Net income per share $ 1.00 $ 0.09
- - ------------------------------------------------------------------
</TABLE>
Net income and net income per share for Second Quarter 1996 and First Six
Months 1996 increased as compared with the corresponding prior year periods due
to higher operating profit and, in part, to the absence of a $21.8 million
after tax non-recurring charge associated with the Megahertz merger in Second
Quarter 1995. Net income per share also reflected a two-for-one common stock
split in the form of a 100% stock dividend to stockholders of record as of the
close of business on April 25, 1996.
Liquidity and Capital Resources
<TABLE>
<CAPTION>
March 31, October 1,
1996 1995
- - --------------------------------------------------------------------------
<S> <C> <C>
Cash, cash equivalents and marketable
securities $ 163.0 $ 232.8
Working capital $ 423.3 $ 368.0
- - --------------------------------------------------------------------------
</TABLE>
Excluding changes in working capital, cash flow from operations increased
to $91.6 million for First Six Months 1996 from $33.4 million for the
comparable prior year period, primarily due to substantially higher net sales
and the resultant higher net income. Investments in working capital associated
with the Company's expanded level of current and anticipated business activity
totaled $86.7 million during First Six Months 1996. Net cash flow from
operations was $4.9 million for First Six Months 1996 compared to $44.5
million for First Six Months 1995.
The cash portfolio (cash, cash equivalents and marketable securities)
totaled $163.0 million at March 31, 1996 compared to $232.8 million at October
1, 1995. Excluding the cash portfolio, working capital was $260.3 million at
March 31, 1996 compared to $135.2 million at October 1, 1995. Accounts
receivable increased due to expanded sales levels, while days sales outstanding
remained consistent with the October 1, 1995 level. Raw material inventory
increased due to improved availability of certain components late in the fiscal
second quarter, and finished goods inventory grew in anticipation of higher
market demand for the fiscal third quarter.
Cash used in investing activities was $63.5 million for First Six Months
1996 compared to $15.5 million for First Six Months 1995, primarily reflecting
higher capital expenditures. The Company made net
12
<PAGE> 13
capital investments of $86.9 million during First Six Months 1996 for
facilities, equipment and systems needed to support its sales growth. The
Company expects to continue to invest significant additional amounts during the
remainder of the fiscal year ending September 29, 1996. On an ongoing basis,
the Company expects to continue to investigate other business opportunities
such as acquisitions and strategic alliances that may require capital
resources.
There are several factors that could affect the Company's ability to
generate cash from operations during the remainder of fiscal 1996, including
general economic conditions, market competition and changes in working capital
requirements. The Company believes that its cash portfolio, anticipated cash
flow from operations and access to debt and equity markets will permit the
financing of its business requirements in an orderly manner for the foreseeable
future.
Future Operating Results
Future trends for revenues and profitability are difficult to predict due
to a variety of risks and uncertainties, including (i) business conditions and
growth in the Company's markets and the general economy, (ii) development and
market acceptance of new products, (iii) availability of key components, (iv)
successful integration of future acquisitions, and (v) numerous competitive
factors.
Because of the risks and uncertainties affecting the Company's future
operating results, past performance should not be considered to be a reliable
indicator of future performance, and investors should not use historical trends
to anticipate results or trends in future periods. In addition, the Company's
participation in a highly dynamic industry often results in significant
volatility in the price of the Company's common stock.
13
<PAGE> 14
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
At the annual meeting of the Stockholders of U.S. Robotics Corporation on
March 7, 1996, the following matters were submitted to a vote of stockholders:
1. To elect 3 directors to the Board of Directors of the Company,
each to serve for a term of 3 years.
2. To consider and vote upon the proposed amendment to the
Company's Certificate of Incorporation to increase the number of
authorized shares of the Company's common stock to 250,000,000
shares and preferred stock to 10,000,000 shares.
3. To consider and vote upon the Company's amended and restated
Key Employee Stock Option Plan which includes a proposed increase of
2,000,000 in the number of shares subject to the Plan.
4. To consider and vote upon the Company's amended and restated
Executive Officers and Directors Stock Option Plan which includes a
proposed formula for the granting of options to all non-employee
directors.
5. To consider and vote upon the Company's proposed Senior Executive
Performance Bonus Plan which has been designed to permit bonuses paid
thereunder to be fully deductible in compliance with Internal Revenue
Code Section 162(m).
The results of the voting are shown below:
<TABLE>
<CAPTION>
BROKER
PROPOSAL FOR AGAINST WITHHELD NON-VOTES
- - -------------------------------- ---------- --------- -------- ---------
<S> <C> <C> <C> <C>
Election of Messrs. Cowell,
Graunke and Yovovich as
directors 38,527,735 0 357,912 0
Approval and adoption of
Amendment to U.S. Robotics
Corporation Certificate of
Incorporation 25,812,752 7,720,605 99,625 5,378,471
Proposed Amendment and
Restatement of U.S. Robotics
Corporation Key Employee Stock
Option Plan 28,054,033 9,520,316 134,971 1,302,133
Proposed Amendment and
Restatement of U.S. Robotics
Corporation Executive Officers
and Directors Stock Option Plan 30,802,858 6,155,297 137,957 1,915,341
Approval and adoption of Senior
Executive Performance Bonus Plan 36,483,733 513,563 98,816 1,915,341
</TABLE>
14
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K.
<TABLE>
<CAPTION>
Sequentially
(a) Exhibit Description Numbered Page
------- ----------- -------------
<S> <C> <C>
11 Computation of Net Income Per Share 17
</TABLE>
(b) Since the end of its most recent fiscal quarter on December 31, 1996,
U.S. Robotics Corporation has filed the following reports on Form 8-K:
<TABLE>
<CAPTION>
Date of Report Item Reported
- - --------------------------------------------------------------------------------------------------
<S> <C>
January 22, 1996 U.S. Robotics Corporation announced its results of
operations for its fiscal first quarter ended December 31, 1995.
February 2, 1996 U.S. Robotics Corporation announced that it was withdrawing
its bid to acquire Hayes Microcomputer Products, Inc.
March 4, 1996 U.S. Robotics Corporation announced it had acquired Amber
Wave Systems, Inc.(Amber Wave). All outstanding shares of Amber Wave were
converted into U.S. Robotics Corporation common shares pursuant to a merger of
a subsidiary of the Registrant with and into Amber Wave, which thereby
became a wholly owned subsidiary of the Registrant. The transaction was
accounted for as a pooling-of-interests .
March 22, 1996 On March 7, 1996, the stockholders approved an amendment to
the Registrant's Certificate of Incorporation to increase the number of
authorized shares of common stock to 250,000,000 shares and preferred stock
to 10,000,000 shares.
April 12, 1996 The Registrant announced a two-for-one split of its common
stock to be effected in the form of a 100% stock dividend. Stockholders of
record as of the close of business on April 25, 1996 received one additional
common share for each share held. The additional shares were
distributed to stockholders on May 10, 1996 and the stock began trading at the
split value on May 13, 1996.
April 19, 1996 U.S. Robotics Corporation announced the promotion of
Gene Feretti, Vice President, Finance to Vice
President and General Manager of its Mobile Communications unit.
April 22, 1996 U.S. Robotics Corporation announced its results of
operations for its fiscal second quarter ended March 31, 1996.
</TABLE>
15
<PAGE> 16
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.
U.S. ROBOTICS CORPORATION
(Registrant)
/s/ Mark Remissong
------------------------------------------
Mark Remissong,
Vice President and Chief Financial Officer
(Signing on behalf of the Registrant)
/s/ Steven Campbell
------------------------------------------
Steven T. Campbell,
Vice President and Controller and
Chief Accounting Officer
DATE: May 14, 1996
16
<PAGE> 1
EXHIBIT 11
COMPUTATION OF NET INCOME(LOSS) PER SHARE
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
----------------------------- ---------------------------
March 31, April 2, March 31, April 2,
1996 1995 1996 1995
--------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
PRIMARY NET INCOME(LOSS)PER SHARE (a)(b)
Weighted average common shares
outstanding 86,390 72,247 85,508 71,984
Common equivalent shares 7,778 7,140 8,060 6,792
--------------- ------------ -------------- ------------
Shares used in per share calculations 94,168 79,387 93,568 78,776
=============== ============ ============== ============
Net income $ 51,605 $ (4,987) $ 93,250 $ 6,871
=============== ============ ============== ============
Net income per share $ 0.55 $ (0.06) $ 1.00 $ 0.09
=============== ============ ============== ============
FULLY DILUTED NET INCOME(LOSS) PER SHARE (a)(b)
Weighted average common shares
outstanding 86,390 72,248 85,508 71,984
Common equivalent shares 8,496 7,630 8,898 7,506
--------------- ------------ -------------- ------------
Shares used in per share calculations 94,886 79,878 94,406 79,490
=============== ============ ============== ============
Net income $ 51,605 $ (4,987) $ 93,250 $ 6,871
=============== ============ ============== ============
Net income per share $ 0.55 $ (0.06) $ 0.99 $ 0.09
=============== ============ ============== ============
</TABLE>
- - -----------------------
(a) The modified treasury stock method is used for the computation of primary
and fully diluted net income per share because there are options and
warrants outstanding to acquire more than 20% of the shares outstanding at
the end of the periods presented.
(b) On April 12, 1996, the Company announced a two-for-one split of its
common stock to be effected in the form of 100% stock dividend.
Stockholders of record as of the close of business on April 25, 1996
received one additional share for each share held. The additional shares
were distributed to stockholders on May 10, 1996. As required by generally
accepted accounting principles, the computations and presentation of net
income per share are based upon the new number of shares outstanding.
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the condensed
consolidated balance sheet and the condensed consolidated statement of income
filed as part of the quarterly report on Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-29-1996
<PERIOD-START> OCT-02-1995
<PERIOD-END> MAR-31-1996
<CASH> 88,446
<SECURITIES> 74,585
<RECEIVABLES> 278,223
<ALLOWANCES> 11,127
<INVENTORY> 192,771
<CURRENT-ASSETS> 680,117
<PP&E> 233,886
<DEPRECIATION> 40,578
<TOTAL-ASSETS> 885,834
<CURRENT-LIABILITIES> 256,847
<BONDS> 65,390
0
0
<COMMON> 437
<OTHER-SE> 559,084
<TOTAL-LIABILITY-AND-EQUITY> 885,834
<SALES> 819,317
<TOTAL-REVENUES> 819,317
<CGS> 476,384
<TOTAL-COSTS> 476,384
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,471
<INTEREST-EXPENSE> 2,673
<INCOME-PRETAX> 146,863
<INCOME-TAX> 53,613
<INCOME-CONTINUING> 93,250
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 93,250
<EPS-PRIMARY> 1.00
<EPS-DILUTED> .99
</TABLE>
