SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of l934
Date of Report (Date of earliest event reported) January 21, 1997
U.S. Robotics Corporation
(Exact name of registrant as specified in its charter)
Delaware 0-25630 36-3994412
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) No.)
8100 North McCormick Boulevard
Skokie, Illinois 60076
(Address of principal executive offices) (Zip Code)
(847) 982-5010
(Registrant's Telephone Number, Including Area Code)
<PAGE>
Item 5. Other Events
On January 21, 1997, the Registrant issued a press release
announcing its results of operations for its first quarter, which
ended December 29, 1996. The press release is attached as an
exhibit.
Item 7. Financial Statements, Pro Forma Financial Statements
and Exhibits
(c) Exhibits.
99 Press Release dated January 21, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
U.S. Robotics Corporation
Date: January 21, 1997 BY: /s/ Mark Remissong
Mark Remissong
Vice President and Chief Financial
Officer
<PAGE>
Contact: Karen J. Novak
(Media Only)
847-982-5244
C. David Hall
(Investor Relations)
847-982-5162
U.S. ROBOTICS REPORTS RECORD REVENUES AND EARNINGS FOR FIRST
QUARTER; REVENUES UP 77%, EARNINGS UP 66%
--First Quarter Revenues a Record $645.4 Million--
- -First Quarter Earnings, a Record $69.0 Million ($.72 per Share)- -
SKOKIE, Illinois -- January 21, 1997 -- U.S. Robotics
Corporation (NASDAQ:USRX) today reported record revenues of
$645.4 million and record net earnings of $69.0 million ($.72 per
share on 96.3 million weighted averages shares outstanding) for
its fiscal first quarter ended December 29, 1996.
Revenues for the first quarter of fiscal 1997 increased 77% over
the $364.8 million recorded for the corresponding quarter of the
previous year. Net earnings for the first quarter of fiscal 1997
increased 66% from the $41.6 million recorded for the first
quarter of fiscal 1996. Net earnings per share for the quarter
were $.72, based on 96.3 million weighted average shares
outstanding, compared to $.45 on 92.9 million weighted average
shares outstanding for the first quarter of the prior year.
The company attributed the growth in revenues to continuing
strong demand for its products in all of the markets it serves
worldwide, noting that increased unit sales of its PC-related
products were the primary reason for the higher revenues and
earnings. Unit sales of the company's PC-related products, which
include desktop modems, PC card modems and the Pilot connected
organizer, in the first quarter were up 80%, while average
selling prices for these products were unchanged compared to the
corresponding period in 1996.
Gross margins increased to 42.8 % in the current quarter compared
to 41.8% for the corresponding period in 1996. This increase was
due primarily to reductions in the manufactured cost of the
-more-
<PAGE>
2-2-2-2-2-2-2
U.S. ROBOTICS REPORTS RECORD REVENUES AND EARNINGS FOR FIRST
QUARTER; REVENUES UP 77%, EARNINGS UP 66%
company's products, partially offset by changes in the mix of
products sold in each of the periods. Operating expenses were
$165.0 million or 25.6% of sales in the quarter compared to $88.9
million or 24.3% of sales in the corresponding period of 1996.
The increase was related primarily to increased selling and
marketing costs.
The increased commitment of resources to sales activities relates
to the company's entire business but is particularly critical to
expanding international sales of its network systems products.
Substantial marketing expenditures also were made in connection
with the introduction of the company's new x2 technology
(56Kbps). x2 is a key breakthrough in modem technology that
enables Internet and other network downstream connections at
speeds nearly twice as fast as those currently available over
standard telephone lines.
Revenues for the first quarter of fiscal 1997 increased by $34.0
million, or 6% over the $611.4 million reported for the fourth
quarter of fiscal 1996. Net earnings for the first quarter
increased 411% to $69.0 million from the $13.5 million posted for
the preceding quarter. Net earnings per share increased $.58 over
the previous quarter's $.14 per share on 95.7 million weighted
averages shares outstanding. Included in the fourth quarter
results was an acquisition related non-recurring charge of $54.0
million. Excluding the non-recurring charge, net earnings for the
fourth quarter of fiscal 1996 were $67.5 million or $.71 per
share.
Revenues from sales of the company's desktop and PC card modem
products increased slightly as a percentage of total revenues
during the quarter. The change in the percentage of total
revenues attributable to the sale of systems products was
primarily due to lower shipments to a single large customer in
the December quarter compared to the September quarter. Total
international sales for the quarter were $193.5 million, or 30%
of total sales, up from 25% for the fourth quarter of fiscal
1996.
Sales of modem products to end users by the company's
distribution channel partners increased significantly during the
first quarter, continuing an established trend. Shipments of
Sportster products by
-more-
<PAGE>
3-3-3-3-3-3
U.S. ROBOTICS REPORTS RECORD REVENUES AND EARNINGS FOR FIRST
QUARTER; REVENUES UP 77%, EARNINGS UP 66%
the company to its distributors were extremely strong during the
last two weeks of December. This was due to the fulfillment of
replenishment orders received from these customers at the close
of the holiday selling season. At the end of the December
quarter, Sportster inventory levels held by North American
distribution channel customers, as measured in weeks of sales,
were essentially unchanged from those at the end of the September
quarter.
Gross margins increased 42.8% in the December quarter from 41.9%
in the September quarter. The increase was primarily due to
reduced costs to manufacture the company's products, partially
offset by changes in product mix.
Total operating expenses for the first quarter were $165.0
million or 25.6% of net sales. As a percentage of net sales,
these expenses increased slightly from 24.3% in the preceding
quarter. The primary reasons were increased employee-related
costs stemming from a 6% rise in the number of employees in
sales, marketing and research and development during the quarter
as well as increases in spending related to marketing and
advertising programs due to the company's x2 launch. The company
continued to make substantial investments in building its
worldwide sales force, expanding it approximately 5% over and
above the 20% increase in the September quarter.
Outlook
The following statements include forward-looking statements and
actual results may differ materially.
Commenting on the quarter, U.S. Robotics President and Chief
Operating Officer John McCartney said, "Demand continues to be
strong for our expanding portfolio of information access
products, including Total Control Enterprise Network Hubs,
Sportster modems, Megahertz PC cards and Pilot connected
organizers. In addition, the coming availability of our x2 56
Kbps technology is expected to have a widespread impact on
Internet users by enabling them to have a more satisfying online
experience."
Mr. McCartney added that the company expects demand for all of
its product lines to continue to grow substantially during the
remainder of the 1997
-more-
<PAGE>
4-4-4-4-4-4-4-4
U.S. ROBOTICS REPORTS RECORD REVENUES AND EARNINGS FOR FIRST
QUARTER; REVENUES UP 77%, EARNINGS UP 66%
fiscal year as world-wide requirements for highly integrated,
cost-effective, end-to-end information access solutions increase.
Mr. McCartney stated that revenue growth in the second quarter of
1997 will depend to a large extent on the timing of its Internet
and online service provider customers making available x2
(56Kbps) service and the resultant consumer and corporate demand
for x2 enabled products. While gross margin increased 0.9%
during the December quarter, he reiterated that the company
expects gross margins for 1997 to remain consistent with the
approximately 41%-42% achieved during recent quarters.
The company's ability to achieve its revenue and profitability
objectives in fiscal 1997 will depend on many factors beyond the
company's control. These include the timing and market acceptance
of x2 and other new products and features announced and
introduced by the company and its competitors, and the extent to
which the company is successful in implementing its ongoing
strategy of continuously improving the performance/cost
characteristics of its products through improved designs and
manufacturing efficiencies. Other factors include rapid changes
in technologies and standards relating to information access and
telecommunications.
The foregoing forward-looking statements involve a number of
risks and uncertainties. In addition to the factors discussed
above, among the other factors that could cause actual results to
differ materially are those listed in the company's most recent
report on Form 10-K and included from time to time in other
documents filed by the company with the Securities and Exchange
Commission.
U.S. Robotics is one of the world's leading suppliers of products
and systems that provide access to information. The company
designs, manufactures, markets and supports remote access
servers, enterprise communications systems, desktop/mobile client
products and modems and telephony products that connect computers
and other equipment over analog, digital and switched cellular
networks, enabling users to gain access to, manage and share
data, fax and voice information. Its customers include Internet
service providers, regional Bell operating companies, inter-
exchange carriers and a wide range of other large and small
businesses, institutions and individuals.
#############
Tables follow.
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U.S. Robotics Corporation and Subsidiaries
Consolidated Statement of Earnings
(Dollars in thousands, except earnings per share data)
(UNAUDITED)
Quarter Quarter
Ended Ended
12/29/96 % 12/31/95 %
--------------- -----------------
Net sales $645,412 100.0 $364,812 100.0
Cost of goods sold 369,414 57.2 212,196 58.2
-------- ----- -------- -----
Gross profit 275,998 42.8 152,616 41.8
Operating expenses
Selling & marketing 100,750 15.6 47,790 13.1
General & administrative 30,018 4.7 17,625 4.8
Research & development 34,230 5.3 23,453 6.4
-------- ----- -------- -----
Total operating expenses 164,998 25.6 88,868 24.3
Operating profit 111,000 17.2 63,748 17.5
Interest income 192 0.0 3,271 0.9
Interest expense 1,779 0.3 1,220 0.3
Other income (expense) 331 0.1 (218) (0.1)
-------- ----- -------- -----
Earnings before income taxes 109,744 17.0 65,581 18.0
Income tax expense 40,715 6.3 23,936 6.6
-------- ----- -------- -----
Net earnings $ 69,029 10.7 $ 41,645 11.4
======== ========
Net earnings per share $ .72 $ .45 (A)
======== ========
(A) Adjusted to reflect the two-for-one stock split in the form of a
100% stock dividend paid on May 10, 1996.
<PAGE>
U.S. Robotics Corporation and Subsidiaries
Condensed Consolidated Balance Sheet
(Dollars in thousands)
(UNAUDITED)
December 29, September 29,
1996 1996
------------ -------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 18,726 $ 16,814
Accounts receivable - net 631,185 490,040
Inventories 152,164 185,855
Deferred income taxes 43,077 45,493
Prepaid expenses and other current
assets 12,018 12,407
---------- ----------
Total current assets 857,170 750,609
PROPERTY, PLANT & EQUIPMENT- NET 311,674 276,591
OTHER ASSETS 47,505 40,083
---------- ----------
$1,216,349 $1,067,283
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term
obligations $ 12,303 $ 12,174
Short-term obligations 50,000 32,500
Accounts payable 149,170 130,959
Accrued liabilities 143,336 138,747
Income taxes payable 32,664 19,324
---------- ---------
Total current liabilities 387,473 333,704
LONG-TERM OBLIGATIONS 54,922 54,044
DEFERRED INCOME TAXES 8,641 7,665
STOCKHOLDERS' EQUITY
Common stock 889 882
Additional contributed capital 381,639 356,265
Retained earnings 381,521 312,492
---------- ----------
764,049 669,639
Cumulative translation adjustment
and other 1,264 2,231
---------- ----------
Total stockholders' equity 765,313 671,870
---------- ----------
$1,216,349 $1,067,283
========== ==========
