<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 June 30, 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: 0-25630
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 August 9, 1996 was 88,056,728.
1
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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 2. Change in Securities 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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 Nine Months Ended
------------------------------ ---------------------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
---------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Net sales $ 546,785 $ 237,347 $ 1,366,102 $ 595,951
Cost of goods sold 317,824 139,051 794,208 350,794
---------- --------- ----------- ----------
Gross profit 228,961 98,296 571,894 245,157
Operating expenses
Selling and marketing 73,128 35,996 178,879 95,829
General and administrative 25,283 10,396 66,949 28,770
Research and development 28,661 13,835 80,492 35,062
Non-recurring merger-related
costs - - - 29,449
---------- --------- ----------- ----------
127,072 60,227 326,320 189,110
---------- --------- ----------- ----------
Operating profit 101,889 38,069 245,574 56,047
Interest income 1,444 2,208 7,269 4,393
Interest expense (659) (1,481) (3,332) (4,353)
Other expense (745) (190) (719) (408)
---------- --------- ----------- ----------
Income before
income taxes 101,929 38,606 248,792 55,679
Income tax expense 38,631 13,744 92,244 23,946
---------- --------- ----------- ----------
Net income $ 63,298 $ 24,862 $ 156,548 $ 31,733
========== ========= =========== ==========
Net income per share $ 0.66 $ 0.30 $ 1.65 $ 0.39
========== ========= =========== ==========
Number of shares used in
per share calculation 96,613 83,580 94,997 80,652
========== ========= =========== ==========
</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>
June 30, October 1,
1996 1995
----------- --------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 46,009 $ 136,803
Marketable securities 68,148 96,000
Accounts receivable, net 325,513 168,365
Inventories 231,332 103,032
Deferred income taxes 50,413 22,373
Prepaid expenses and other current
assets 12,581 7,739
----------- --------------
Total current assets 733,996 534,312
PROPERTY, PLANT AND EQUIPMENT-NET 238,752 117,156
OTHER ASSETS 18,211 8,155
----------- --------------
$ 990,959 $ 659,623
=========== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term
obligations $ 12,147 $ 249
Accounts payable 108,973 78,386
Accrued liabilities 142,914 78,171
Income taxes payable 22,599 9,525
----------- --------------
Total current liabilities 286,633 166,331
LONG-TERM OBLIGATIONS 53,337 65,651
DEFERRED INCOME TAXES 3,977 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;
87,887,396 and 84,386,396 outstanding
at June 30, 1996 and October 1, 1995,
respectively 879 422
Additional contributed capital 345,979 273,939
Retained earnings 299,019 148,617
----------- --------------
645,877 422,978
Cumulative translation adjustment
and other 1,135 1,417
----------- --------------
Total stockholders' equity 647,012 424,395
----------- --------------
$ 990,959 $ 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>
Additional Cumulative Total
Common Contributed Retained Translation Stockholders'
Stock Capital Earnings Adjustment 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 15 18,459 - - 18,474
Tax benefits
relating to the
exercise of stock
options - 49,941 - - 49,941
Issuances of stock
in connection with
acquisition 3 3,809 (5,707) - (1,895)
Stock split 439 - (439) - -
Redemption of stock
rights - (220) - - (220)
Foreign currency
translation
adjustments and
other - 51 - (282) (231)
Net income for the
period - - 156,548 - 156,548
---- -------- -------- ------ --------
BALANCE AT JUNE 30,
1996 $879 $345,979 $299,019 $1,135 $647,012
==== ======== ======== ====== ========
</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>
Nine Months Ended
----------------------------
June 30, July 2,
1996 1995
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 156,548 $ 31,733
Changes in assets and liabilities (152,530) 17,405
Adjustments to reconcile net income to net
cash from operating activities 1,368 29,071
--------- ----------
Net cash provided by operating
activities 5,386 78,209
Cash flows from investing activities:
Purchases of marketable securities (175,835) 886
Sales and maturities of marketable
securities 204,559 43
Capital expenditures, net (140,147) (31,509)
Other, net 712 (323)
--------- ----------
Net cash used in investing activities (110,711) (30,903)
Cash flows from financing activities:
Net cash provided by financing activities 15,142 127,218
Effect of exchange rate changes (611) (643)
--------- ----------
Net increase (decrease) in cash and cash
equivalents (90,794) 173,881
Cash and cash equivalents at beginning of period 136,803 58,286
--------- ----------
Cash and cash equivalents at end of period $ 46,009 $ 232,167
========= ==========
</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 nine months ended June 30, 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 in the form of an 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. All references to share and per share data have been restated to reflect
the stock split.
NOTE B - BUSINESS ACQUISITION
On February 29, 1996, the Company issued approximately 694,000 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 results of 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>
June 30, October 1,
1996 1995
-------- ----------
(in thousands)
<S> <C> <C>
Finished products $ 124,972 $ 32,688
Work-in-process 22,860 21,373
Raw materials 83,500 48,971
--------- ----------
$ 231,332 $ 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 or results of operations.
NOTE E - STOCKHOLDER RIGHTS PLAN
Effective May 9, 1996, the Board of Directors of the Company approved the
replacement of its stockholder rights plan with a new stockholder rights plan.
Under the new plan, stockholders have certain rights to purchase Series B
Junior Participating Preferred Stock, par value $.01 per share ("Series B
Junior Preferred") under certain circumstances, including the event of
unsolicited attempts to acquire a controlling interest in the Company. Each
right, when exercisable, will entitle the holder to purchase from the Company
one one-hundredth of a share of Series B Junior Preferred at a price of $500.00
or, in certain circumstances, such right will entitle the holder, other than an
acquiring person, to receive, upon exercise at the then current exercise price
of the right, common stock of the Company (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the right. Of the 10,000,000 preferred shares the
Company is authorized to issue, 2,500,000 shares have been designated Series B
Junior Preferred. The Series B Junior Preferred has certain dividend, voting
and liquidation preferences. No preferred shares have been issued.
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 third quarter ended June 30, 1996 ("Third Quarter 1996") and the nine
month period ended June 30, 1996 ("First Nine Months 1996") compared to the
fiscal third quarter ended July 2, 1995 ("Third Quarter 1995") and the nine
month period ended July 2, 1995 ("First Nine 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>
Third Quarter
---------------------------------
1996 Change 1995
<S> <C> <C> <C>
- -------------------------------------------------------------
Net sales $546.8 130.4% $237.3
- -------------------------------------------------------------
<CAPTION>
First Nine Months
---------------------------------
1996 Change 1995
<S> <C> <C> <C>
- -------------------------------------------------------------
Net sales $1,366.1 129.2% $596.0
- -------------------------------------------------------------
</TABLE>
Net sales increased in the Third Quarter 1996 and First Nine 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. Net sales also
were favorably impacted during the 1996 periods due to higher average selling
prices, reflecting a shift in sales mix to higher speed, higher priced
products.
International Sales
<TABLE>
<CAPTION>
Third Quarter
-------------------------------
1996 Change 1995
<S> <C> <C> <C>
- -------------------------------------------------------------
International sales $ 139.7 132.4% $60.1
Percentage of net sales 25.5% 25.3%
- -------------------------------------------------------------
<CAPTION>
First Nine Months
-------------------------------
1996 Change 1995
<S> <C> <C> <C>
- -------------------------------------------------------------
International sales $365.9 140.1% $152.4
Percentage of net sales 26.8% 25.6%
- -------------------------------------------------------------
</TABLE>
International sales, concentrated in Canada and Europe, include both U.S.
exports and sales from foreign operations. Sales increased for the Third
Quarter 1996 and First Nine 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 Third Quarter 1996, the Company
had foreign currency forward contracts totaling approximately $6.0 million.
The Company has no other foreign currency contracts or derivative instruments.
9
<PAGE> 10
Gross Profit
<TABLE>
<CAPTION>
Third Quarter
---------------------------------
1996 Change 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------
Gross profit $229.0 133.0% $ 98.3
Percentage of net sales 41.9% 41.4%
- ------------------------------------------------------------------
<CAPTION>
First Nine Months
---------------------------------
1996 Change 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------
Gross profit $571.9 133.2% $245.2
Percentage of net sales 41.9% 41.1%
- ------------------------------------------------------------------
</TABLE>
The increases in gross profit dollar contribution in the Third Quarter
1996 and First Nine Months 1996 over the comparable prior year periods resulted
primarily from significantly higher unit sales volumes. Gross margin as a
percentage of sales improved for both periods primarily due 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 and
lower cost product components and architectures, and the timing of price
reductions necessitated by the competitive environment.
Operating Expenses
<TABLE>
<CAPTION>
Third Quarter
--------------------------------------------
1996 Change 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------------
Selling and marketing $ 73.1 103.1% $36.0
Percentage of net sales 13.4% 15.2%
- ------------------------------------------------------------------------
General and administrative $ 25.3 143.3% $10.4
Percentage of net sales 4.6% 4.4%
- ------------------------------------------------------------------------
Research and development $ 28.7 108.0% $13.8
Percentage of net sales 5.2% 5.8%
- ------------------------------------------------------------------------
<CAPTION>
First Nine Months
--------------------------------------------
1996 Change 1995
<S> <C> <C> <C>
- ------------------------------------------------------------------------
Selling and marketing $178.9 86.7% $95.8
Percentage of net sales 13.1% 16.1%
- ------------------------------------------------------------------------
General and administrative $ 66.9 132.3% $28.8
Percentage of net sales 4.9% 4.8%
- ------------------------------------------------------------------------
Research and development $ 80.5 129.3% $35.1
Percentage of net sales 5.9% 5.9%
- ------------------------------------------------------------------------
Non-recurring merger costs - $29.4
Percentage of net sales - 4.9%
- ------------------------------------------------------------------------
</TABLE>
Selling and marketing expenses for the Third Quarter 1996 and First Nine
Months 1996 increased as compared with the corresponding prior year periods due
to substantial expenditures for marketing and promotions as well as increased
personnel related 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 the Third Quarter 1996 and First
Nine Months 1996 increased as compared with the corresponding prior year
periods, both in total dollars and as a percentage of net sales, due to
10
<PAGE> 11
increased administrative staff and systems necessary to support the Company's
expanded business activities. The increase in the First Nine Months 1996 also
reflected professional fees and expenses related to the Company's acquisition
activities and contract negotiations.
Research and development expenses for the Third Quarter 1996 and First
Nine 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 sales growth and
continued technological competitiveness.
In the First Nine Months 1995, the Company incurred non-recurring
merger-related costs of $29.4 million in connection with the acquisition of
Megahertz Corporation ("Megahertz").
Income Tax Expense
<TABLE>
<CAPTION>
Third Quarter
---------------------------------
1996 Change 1995
- -----------------------------------------------------------------
<S> <C> <C> <C>
Income tax expense $38.6 181.8% $13.7
Effective tax rate 37.9% 35.6%
- -----------------------------------------------------------------
<CAPTION>
First Nine Months
---------------------------------
1996 Change 1995
- -----------------------------------------------------------------
<S> <C> <C> <C>
Income tax expense $92.2 285.8% $23.9
Effective tax rate 37.1% 43.0%
- -----------------------------------------------------------------
</TABLE>
The effective tax rate for the Third Quarter 1996 increased as compared to
the corresponding prior year period, primarily due to the expiration of the
federal research and development tax credit and certain non-deductible
expenses. The effective tax rate for the First Nine Months 1996 decreased as
compared to the corresponding prior year period. The net decrease was
attributable to the tax treatment of certain non-recurring merger-related costs
in the fiscal 1995 period, including transaction costs and the write-down of
non-deductible goodwill. Additionally, in the fiscal 1995 period, 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. The effective tax rate for the First
Nine Months 1996 was adversely affected as compared to the rate for the
comparable prior year period due to the expiration of the federal research and
development tax credit.
Net Income and Net Income Per Share
<TABLE>
<CAPTION>
Third Quarter
---------------------------------
1996 1995
- -----------------------------------------------------------------
<S> <C> <C>
Net income $63.3 $24.9
Percentage of net sales 11.6% 10.5%
Net income per share $0.66 $0.30
- -----------------------------------------------------------------
</TABLE>
11
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<TABLE>
<CAPTION>
First Nine Months
--------------------------
1996 1995
- ----------------------------------------------------------
<S> <C> <C>
Net income $156.5 $31.7
Percentage of net sales 11.5% 5.3%
Net income per share $ 1.65 $0.39
- ----------------------------------------------------------
</TABLE>
Net income and net income per share for the Third Quarter 1996 and First
Nine Months 1996 increased as compared with the corresponding prior year
periods primarily due to higher operating profit. Also, net income and net
income per share for the First Nine Months 1995 reflect a $23.2 million after
tax non-recurring charge associated with the Megahertz merger.
Liquidity and Capital Resources
<TABLE>
<CAPTION>
June 30, October 1,
1996 1995
- ---------------------------------------------------------
<S> <C> <C>
Cash, cash equivalents and
marketable securities $114.2 $232.8
Working capital $447.4 $368.0
- ---------------------------------------------------------
</TABLE>
Excluding changes in working capital, cash flow from operations increased
to $157.9 million for the First Nine Months 1996 from $60.8 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 $152.5 million during the First Nine Months 1996. Net cash flow from
operations was $5.4 million for the First Nine Months 1996 compared to $78.2
million for the First Nine Months 1995.
The cash portfolio (cash, cash equivalents and marketable securities)
totaled $114.2 million at June 30, 1996 compared to $232.8 million at October
1, 1995. Excluding the cash portfolio, working capital was $333.2 million at
June 30, 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. Inventory levels increased
in support of higher net sales levels and to ensure that sufficient inventory
was on hand to rapidly fill customers orders early in the Company's fiscal
fourth quarter ending September 29, 1996.
Cash used in investing activities was $110.7 million for the First Nine
Months 1996 compared to $30.9 million for the First Nine Months 1995. The
increase was related primarily to higher capital expenditures, partially
offset by net sales of marketable securities. The Company made net capital
investments of $140.1 million during the First Nine Months 1996 for facilities,
equipment and systems needed to support its sales growth. The Company expects
that it will continue to make significant capital investments during the
remainder of the fiscal year ending September 29, 1996. On an ongoing basis,
the Company expects to continue to invest in property, plant, and equipment,
and 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 in the future, including general economic
conditions, market competition and changes in working capital requirements.
12
<PAGE> 13
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. Although the Company expects
continued growth and strong demand for its products, revenues in the fiscal
fourth quarter ending September 29, 1996 may not increase at the same rate as
in recent quarters.
On July 2, 1996, the Company announced an agreement to acquire Tel-Aviv
based Scorpio Communications Ltd. Negotiations of final terms are ongoing, and
the transaction is expected to close in the Company's fiscal fourth quarter
ending September 29, 1996. The transaction will entail the payment of cash and
the issuance of common stock of the Company together having an aggregate value
of up to $80 million. The transaction will be accounted for as a purchase and
is expected to result in a significant one-time charge primarily related to
purchased research and development costs. The amount of this charge has not
yet been determined. Excluding the impact of the one-time charge, the Company
does not expect the transaction to have a significant impact on results for the
fourth quarter.
The foregoing statements regarding expected sales growth in the current
quarter and the potential impact of the pending acquisition of Scorpio
Communications, Ltd. on the Company's results of operations are forward-looking
statements and actual results may differ materially. Such statements involve a
number of risks and uncertainties. Among the factors that could cause actual
results to differ materially are the following: changes in business conditions
and growth trends affecting the Company's products and markets, the personal
computer and telecommunications industries and the economy generally; the
timing of development, announcement and introduction of new products and
product features by the Company and its competitors, and the market demand for
and acceptance of such new products and product features; continuing
availability of key components and technologies at competitive prices; a
variety of other competitive factors such as price reductions by the Company
and its competitors and resulting effects on market shares; changes in consumer
and business purchasing patterns; the Company's merger and acquisition
activities, including its success in integrating businesses it has acquired and
the amounts of any non-recurring charges related to such activities; and other
factors listed from time to time in documents filed by the Company with the
Securities and Exchange Commission.
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
results and 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
Item 2. Change in Securities
On April 12, 1996, the Company announced a two-for-one split of its common
stock in the form of an 100% stock dividend. Stockholders of record as of the
close of business April 25, 1996 received one additional share for each share
held. The additional shares were distributed to stockholders on May 10, 1996.
On May 9, 1996, the Board of Directors of U.S. Robotics Corporation
approved the replacement of its stockholder rights plan with a new rights plan,
as described in Note E of the Notes to the Condensed Consolidated Financial
Statements set forth above. The replacement of the plan was effected by a
redemption of the existing rights and a dividend of the new rights. The
redemption price of $.0025 (split adjusted) for the exiting rights was paid to
stockholders of record as of the close of business on May 31, 1996.
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 16
27 Financial Data Schedule (filed only elec-
tronically with the Securities and Exchange
Commission) 17
</TABLE>
(b) Since the end of its most recent fiscal quarter on March 31, 1996, U.S.
Robotics Corporation has filed the following reports on Form 8-K:
Date of Report Item Reported
- --------------------------------------------------------------------------------
April 12, 1996 The Registrant announced a two-for-one split of its common
stock to be effected in the form of an 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 16, 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.
May 9, 1996 U.S. Robotics Corporation announced the replacement of its
stockholder rights plan with a new rights plan.
July 24, 1996 U.S Robotics Corporation announced its results of
operations for its fiscal third quarter ended
June 30, 1996.
14
<PAGE> 15
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 T. Campbell
------------------------------------------
Steven T. Campbell,
Vice President and Controller and
Chief Accounting Officer
DATE: August 14, 1996
15
<PAGE> 1
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE
(In thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
------------------------ --------------------------
June 30, July 2, June 30, July 2,
1996 1995 1996 1995
-------- -------- -------- -------
<S> <C> <C> <C> <C>
PRIMARY NET INCOME PER SHARE (a)(b)
Weighted average common shares
outstanding 87,688 75,846 86,240 73,292
Common equivalent shares 8,925 7,734 8,757 7,360
------- ------- -------- -------
Shares used in per share
calculations 96,613 83,580 94,997 80,652
======= ======= ======== =======
Net income $63,298 $24,862 $156,548 $31,733
======= ======= ======== =======
Net income per share $ 0.66 $ 0.30 $ 1.65 $ 0.39
======= ======= ======== =======
FULLY DILUTED NET INCOME PER SHARE (a)(b)
Weighted average common shares
outstanding 87,688 75,846 86,240 73,292
Common equivalent shares 9,006 8,354 9,592 8,719
------- ------- -------- -------
Shares used in per share
calculations 96,694 84,200 95,832 82,011
======= ======= ======== =======
Net income $63,298 $24,862 $156,548 $31,733
======= ======= ======== =======
Net income per share $ 0.65 $ 0.30 $ 1.63 $ 0.39
======= ======= ======== =======
</TABLE>
- ---------------------
(a) For the quarter and nine months ended June 30, 1996, the treasury stock
method was used for the computations of primary and fully diluted net
income per share. For the corresponding prior year periods, the modified
treasury stock method was used.
(b) On April 12, 1996, the Company announced a two-for-one split of its
common stock in the form of an 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.
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT JUNE 30, 1996 (UNAUDITED) AND THE
CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE NINE MONTHS ENDED JUNE 30,
1996 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-29-1996
<PERIOD-START> OCT-02-1995
<PERIOD-END> JUN-30-1996
<CASH> 46,009
<SECURITIES> 68,148
<RECEIVABLES> 338,002
<ALLOWANCES> 12,489
<INVENTORY> 231,332
<CURRENT-ASSETS> 733,996
<PP&E> 287,146
<DEPRECIATION> 48,394
<TOTAL-ASSETS> 990,959
<CURRENT-LIABILITIES> 286,633
<BONDS> 0
0
0
<COMMON> 879
<OTHER-SE> 646,133
<TOTAL-LIABILITY-AND-EQUITY> 990,959
<SALES> 1,366,102
<TOTAL-REVENUES> 1,366,102
<CGS> 794,208
<TOTAL-COSTS> 794,208
<OTHER-EXPENSES> 326,320
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,332
<INCOME-PRETAX> 248,792
<INCOME-TAX> 92,244
<INCOME-CONTINUING> 156,548
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 156,548
<EPS-PRIMARY> 1.65
<EPS-DILUTED> 1.63
</TABLE>
