===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-26634
LeCROY CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 13-2507777
(State or other jurisdiction (I.R.S. Employer
of Incorporation or organization) Identification No.)
700 CHESTNUT RIDGE ROAD, CHESTNUT RIDGE, NEW YORK 10977
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (914) 425-2000
Indicate by check mark ("X") whether the Registrant: (1) has filed all reports
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve 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 _______
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JANUARY 20, 2000
------- -------------------------------
Common stock, par value $.01 share 7,751,481
===============================================================================
<PAGE>
LeCROY CORPORATION
INDEX
Page
----
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
PART I OTHER INFORMATION 12
PART II OTHER INFORMATION 12
Signatures 12
2
<PAGE>
LeCROY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
December 31, June 30,
In thousands 1999 1999
- ----------------------------------------------------------------------------------------------------------------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 6,191 $ 1,791
Accounts receivable 27,586 31,549
Inventories:
Raw materials 11,118 10,346
Work in process 9,217 5,854
Finished goods 12,243 12,920
------------- ---------------
Total inventories 32,578 29,120
Other current assets 3,027 3,200
------------- ---------------
Total current assets 69,382 65,660
Property and equipment, at cost:
Land and building 10,270 9,294
Furniture, machinery and equipment 30,058 28,463
------------- ---------------
Total property and equipment 40,328 37,757
Less: Accumulated depreciation and amortization (25,099) (23,200)
------------- ---------------
Property and equipment, net 15,229 14,557
Marketable securities 2,442 7,383
Other assets 14,709 14,614
------------- ---------------
TOTAL ASSETS $ 101,762 $ 102,214
============= ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $ - $ 1,600
Accounts payable 11,366 11,858
Accrued expenses:
Warranty 2,019 1,822
Deferred revenue 3,021 3,910
Compensation and benefits 5,297 6,903
Restructuring 2,762 3,420
Income taxes 2,878 3,194
Other 3,188 2,573
------------- ---------------
Total current liabilities 30,531 35,280
Long term debt 10,200 6,600
Deferred compensation 334 327
Redeemable convertible preferred stock 8,321 8,152
Stockholders' equity:
Common stock 78 77
Additional paid-in capital 43,124 42,869
Accumulated other comprehensive loss (4,225) (3,970)
Retained earnings 13,399 12,879
------------- ---------------
Total stockholders' equity 52,376 51,855
------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 101,762 $ 102,214
============= ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
LeCROY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Three months ended Six months ended
December 31, December 31,
In thousands, except per share data 1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Digital oscilloscopes and related products $ 28,293 $ 25,047 $ 53,353 $ 50,671
Service and other 1,642 1,752 3,488 3,235
License fees - 2,500 - 2,500
------------ ----------- ----------- -------------
Test and measurement revenues 29,935 29,299 56,841 56,406
LAN/WAN test instruments 1,570 3,033 3,096 5,221
Sale of network technology 2,000 - 2,000 -
------------ ----------- ----------- -------------
Network revenues 3,570 3,033 5,096 5,221
------------ ----------- ----------- -------------
Total revenues 33,505 32,332 61,937 61,627
Cost of sales 16,429 15,119 30,742 29,006
------------ ----------- ----------- -------------
Gross profit 17,076 17,213 31,195 32,621
Operating expenses:
Selling, general and administrative 12,112 10,070 23,251 21,053
Research and development 4,707 4,201 9,899 8,602
------------ ----------- ----------- -------------
Total operating expenses 16,819 14,271 33,150 29,655
------------ ----------- ----------- -------------
Operating income 257 2,942 (1,955) 2,966
Gain from sales of marketable securities 2,460 - 2,460 -
Other (income) expenses, net (448) (151) (238) 186
------------ ----------- ----------- -------------
Income before incomes taxes 3,165 3,093 743 2,780
Provision for incomes taxes 950 927 223 833
------------ ----------- ----------- -------------
Net income 2,215 2,166 520 1,947
Charges related to convertible preferred stock (85) - (169) -
------------ ----------- ----------- -------------
Net income available to common stockholders $ 2,130 $ 2,166 $ 351 $ 1,947
============ =========== =========== =============
Income per common share applicable to common stockholders
Basic $ 0.28 $ 0.28 $ 0.05 $ 0.26
============ =========== =========== =============
Diluted $ 0.26 $ 0.28 $ 0.04 $ 0.25
============ =========== =========== =============
Weighted average number of common shares:
Basic 7,738 7,605 7,723 7,588
============ =========== =========== =============
Diluted 8,412 7,861 7,985 7,874
============ =========== =========== =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
LeCROY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Six Months Ended
December 31
In thousands 1999 1998
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 520 $ 1,947
Adjustments for noncash items included in operating activities:
Depreciation and amortization 2,667 2,246
Gain on sale of marketable securities (2,460) -
Other - 11
Change in operating asset and liability components:
Accounts receivable 4,274 4,965
Inventories (3,471) 40
Prepaid expenses and other assets 503 234
Accounts payable, accrued liabilities and deferred revenue (1,618) (3,970)
Accrued employee compensation and benefits (1,650) (2,589)
Income taxes (341) (444)
-------------- ---------------
Net cash (used) provided by operating activities (1,576) 2,440
-------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,147) (3,357)
Investment in computer software (381) (755)
Proceeds from the sale of marketable securities 7,587 -
-------------- ---------------
Net cash provided (used) in investing activities 4,059 (4,112)
-------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in short-term debt (1,630) 601
Borrowings under line of credit 3,600 4,000
Proceeds from exercise of stock options and stock purchases 485 586
Costs related to the issuance of preferred stock (61) -
-------------- ---------------
Net cash provided by financing activities 2,394 5,187
-------------- ---------------
Effect of exchange rates on cash (477) 437
-------------- ---------------
Increase in cash and cash equivalents 4,400 3,952
Cash and cash equivalents at beginning of the period 1,791 1,895
-------------- ---------------
Cash and cash equivalents at end of the period $ 6,191 $ 5,847
============== ===============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
LeCROY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Basis of Presentation
In the opinion of management, the accompanying unaudited interim condensed
consolidated financial statements reflect all adjustments, of a normal and
recurring nature, necessary to present fairly the results for the interim
periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The year-end balance sheet data was derived from
audited financial statements, but does not include all disclosures required by
generally accepted accounting principles. It is suggested that these condensed
statements be read in conjunction with the Company's most recent Form 10-K and
Annual Report as of June 30, 1999.
This Form 10-Q contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
the Company's actual results or activities to differ materially from these
forward-looking statements include but are not limited to: the effect of
economic conditions, including the effect on purchases by the Company's
customers; competitive factors, including pricing pressures, technological
developments and products offered by competitors; changes in product sales and
mix; the Company's ability to deliver a timely flow of competitive new products
and market acceptance of these products; inventory risks due to changes in
market demand or the Company's business strategies; currency fluctuations; risks
due to an interruption in supply or an increase in price for the Company's
parts, components and subassemblies; and other risk factors listed from time to
time in the Company's reports filed with the Securities and Exchange Commission
and press releases.
Results for the interim period are not necessarily indicative of the results
that may be expected for the entire year.
Comprehensive Income (Loss)
For the three months ended December 31, 1999 and 1998 the Company's
comprehensive income totaled $(1.4) million and $3.3 million, respectively. For
the six months ended December 31, 1999 and 1998 the Company's comprehensive
income totaled $2.0 million and $3.9 million, respectively. During the second
quarter of 1999, a $1.7 million (net of tax) realized gain relating to the sale
of marketable equity securities was recorded in the Statement of Income.
Comprehensive income for the three months ended December 31, 1999 included
foreign currency translation losses of $1.2 million and unrealized losses on
marketable equity securites classified as available for sale of $2.4 million.
Comprehensive income for the six months ended December 31, 1999 included foreign
currency translation losses of $0.2 million and unrealized gains on marketable
equity securites classified as available for sale of $1.6 million. Comprehensive
income for the three and six months ended December 31, 1998 included foreign
currency translation gains of $0.3 million and $3.0 million, respectively, as
well as unrealized gains (losses) on marketable equity securities of $0.8
million and $(1.0) million, respectively. The cumulative foreign currency
translation losses were $4.8 million at December 31, 1999 and $4.6 million at
June 30, 1999. The cumulative unrealized gains on marketable equity securities
classified as available for sale were $0.6 million at December 31, 1999 and $0.7
million at June 30, 1999.
Restructuring Costs
In the third quarter of fiscal 1999 the Company adopted a restructuring plan
(the "Plan"). The objectives of the Plan were to consolidate oscilloscope
operations in order to enhance operating efficiencies and to dedicate additional
resources to capitalize on several current breakthrough technologies.
6
<PAGE>
LeCROY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
At December 31, 1999 the Company had remaining reserves and liabilities of
approximately $5.4 million relating to the Plan. During the quarter and six
months ended December 31, 1999 the Company charged approximately $1.0 million
and $1.7 million, respectively, against the restructuring reserves. These
charges primarily related to severance and employee benefits costs and lease
payments. The overall expected cost of the Plan has not changed since the Plan
was approved. The Plan is expected to be completed by the end of fiscal 2000.
Sale of Marketable Equity Securities
In a series of transactions in October 1999, the Company sold 2.691 million
shares of marketable securities representing an investment in a strategic
partner for net proceeds of approximately $7.6 million. As a result of this
sale, the Company recorded a pretax gain of approximately $2.5 million ($0.20
per diluted share, net of taxes) in its second fiscal quarter.
Segment and Geographic Information
The Company develops, manufactures, sells and licenses signal analyzers,
principally high-performance digital oscilloscopes ("Test and Measurement") and
Local Area Network analyzers ("LAN Network Analysis") including remote protocol
analysis. The Company also manufacturers, sells and licenses certain other
Protocol analyzers ("Protocol Analysis") through its wholly owned subsidiary,
Digitech Industries, Inc. Revenue, operating income (loss) and assets by
segment, which are regularly reviewed by management, which makes decisions on
such a basis, are as follows:
<TABLE>
<CAPTION>
LAN Elimination of
Test & Network Protocol Corporate/ Intersegment
Measurement Analysis Analysis Other Revenue Consolidated
----------- ---------- ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
For the Six Months Ended December 31, 1999
Revenue:
Revenue from external customers $ 56,841 $ 2,221 $ 2,875 $ - $ - $ 61,937
Intersegment revenues 1,434 - - - - 1,434
Elimination of intersegment revenues - - - - (1,434) (1,434)
----------- ---------- ---------- ----------- ---------- ----------
Total revenues $ 58,275 $ 2,221 $ 2,875 $ - $ (1,434) $ 61,937
=========== ========== ========== =========== ========== ==========
Operating profit (loss) $ 2,236 $ (5,067) $ 1,591 $ - $ (715) $ (1,955)
For the Three Months Ended December 31,1999
Revenue:
Revenue from external customers $ 29,935 $ 1,085 $ 2,485 $ - $ - $ 33,505
Intersegment revenues 729 - - - - 729
Elimination of intersegment revenues - - - - (729) (729)
----------- ---------- ---------- ----------- ---------- ----------
Total revenues $ 30,664 $ 1,085 $ 2,485 $ - $ (729) $ 33,505
=========== ========== ========== =========== ========== ==========
Operating profit (loss) $ 1,764 $ (2,988) $ 1,846 $ - $ (365) $ 257
Total Assets at December 31, 1999 $ 92,603 $ 6,091 $ 2,212 $ 856 $ - $ 101,762
For the Six Months Ended December 31, 1998
Revenue:
Revenue from external customers $ 56,406 $ 1,435 $ 3,786 $ - $ - $ 61,627
Intersegment revenues 364 - - - - 364
Elimination of intersegment revenues - - - - (364) (364)
----------- ---------- ---------- ----------- ---------- ----------
Total revenues $ 56,770 $ 1,435 $ 3,786 $ - $ (364) $ 61,627
=========== ========== ========== =========== ========== ==========
Operating profit (loss) $ 5,719 $ (3,760) $ 1,191 $ - $ (184) $ 2,966
</TABLE>
7
<PAGE>
LeCROY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Elimination of
Test & Network Protocol Corporate/ Intersegment
Measurement Analysis Analysis Other Revenue Consolidated
----------- ---------- ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
For the Three Months Ended December 31,1998
Revenue:
Revenue from external customers $ 29,299 $ 870 $ 2,163 $ - $ - $ 32,332
Intersegment revenues 269 - - - - 269
Elimination of intersegment revenues - - - - (269) (269)
----------- ---------- ---------- ----------- ---------- ----------
Total revenues $ 29,568 $ 870 $ 2,163 $ - $ (269) $ 32,332
=========== ========== ========== =========== ========== ==========
Operating profit (loss) $ 4,533 $ (1,931) $ 476 $ - $ (136) $ 2,942
</TABLE>
As a result of the Company's philosophy of maximizing operating efficiencies
through the centralization of certain functions, certain corporate expenses and
selected fixed assets are not directly attributable to individual operating
segments and have been included in corporate/other.
Revenues, by geographic area, are as follows:
<TABLE>
<CAPTION>
For the Six Months For the Three Months
Ended December 31, Ended December 31,
--------------------------- ---------------------------
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
North America $ 29,665 $ 30,065 $ 16,219 $ 15,002
Europe 16,243 18,115 9,268 10,837
Other Foreign 16,029 13,447 8,018 6,493
----------- ----------- ----------- -----------
Total $ 61,937 $ 61,627 $ 33,505 $ 32,332
=========== =========== =========== ===========
</TABLE>
Other foreign revenues consist principally of sales from Japan and Asia.
Total assets, by geographic segment, are as follows:
<TABLE>
<CAPTION>
December 31, 1999 June 30, 1999
--------------------------- -------------------------
<S> <C> <C>
North America $ 70,038 $ 69,644
Europe 20,577 25,502
Other Foreign 11,147 7,068
----------- -----------
Total $ 101,762 $ 102,214
=========== ===========
</TABLE>
8
<PAGE>
LeCROY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Consolidated revenues were $33.5 million and $61.9 million, respectively,
for the three and six months ended December 31, 1999, an increase of
approximately $1.2 million and $0.3 million, or 4% and 0.5%, respectively, from
the comparable prior year periods.
Digital oscilloscopes and related product revenues, excluding license fees,
increased $3.2 million or 13% in the second quarter and $2.9 million or 5% in
the six months ended December 31, 1999 compared to the comparable prior year
periods. The increase in revenue for both the three and six month periods was
caused by higher unit volumes due to the continued success of the Waverunner(TM)
family of oscilloscopes, which serves the low to mid market segment, and a $1.6
million shipment to Kelly Air Force Base during the second quarter of fiscal
2000. The increase in revenue caused by higher unit volumes was partially offset
by a decline in average selling prices for the quarter and six months ended
December 31, 1999.
Network revenues, including the one-time technology sale of source code,
increased $0.5 million or 18% in the second quarter and decreased $0.1 million
or 2% in the six months ended December 31, 1999 compared to the same periods in
the prior year. The increase for the quarter was caused by a $2.0 million sale
of network technology and an increase in sales of Vigilant Networks products,
offset partially by lower unit volume at the Company's subsidiary, Digitech
Industries, Inc. The decrease for the six months ended December 31, 1999 was
caused by lower unit volume at Digitech, offset partially by an increase in
sales of the Company's NEWSLine(TM) network analyzer product.
Gross profit in the three months ended December 31, 1999 was 51% of
revenues compared to 53.2% of revenues for the three months ended December 31,
1998. Gross profit in the six months ended December 31, 1999 was 50.4% of
revenues compared to 52.9% of revenues for the comparable period in the prior
year. The decline in gross profit for both the three and six months ended
December 31, 1999 was caused by a shift in sales mix towards the lower margin
Waverunner family of oscilloscopes. The Company expects this shift in sales mix
to continue until the Company introduces its next generation of high performance
digital oscilloscopes in the first quarter of fiscal 2001. Low and mid-market
oscilloscopes, including the Waverunner family of oscilloscopes which commenced
shipping in the third quarter of fiscal 1999, represented 24% and 29% of total
revenue for the three and six months ended December 31, 1999, respectively. Low
and mid-market oscilloscopes represented 16% and 18% of total revenue for the
three and six months ended December 31, 1998, respectively.
Selling, general and administrative expenses for the quarter and six months
ended December 31, 1999 increased $2.0 million and $2.2 million, or 20% and 10%,
respectively, from the comparable prior year periods. This increase was due in
part to the 13% increase in sales of digital oscilloscopes and related products
and to the expansion of the Company's network division. As a percentage of total
revenues, selling, general and administrative expenses were 36.1% for the three
months ended December 31, 1999 and 31.1% for the three months ended December 31,
1998. Selling, general and administrative expenses as a percentage of total
revenues was 37.5% for the six months ended December 31, 1999 compared to 34.2%
for the six months ended December 31, 1998.
Research and development expenses increased $0.5 million, or 12% in the
quarter ended December 31, 1999 and $1.3 million, or 15% in the six months ended
December 31, 1999. This increase reflects the development costs for the future
generations of oscilloscope products. As a percentage of total revenues,
research and development expenses were 14% and 16% for the three and six months
ended December 31, 1999 compared to 13% and 14% for the three and six months
ended December 31, 1998.
Operating income decreased $2.7 million for the current quarter and $4.9
million for the six months ended December 31, 1999 compared to the same periods
in the prior year. This decline in operating income was due to lower margins and
higher selling, general and administrative costs for the networking business in
the current year, as well as the other factors discussed above. Operating income
(loss) as a percentage of total revenues was 1% and (3%) for the
9
<PAGE>
LeCROY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Cont.)
quarter and six months ended December 31, 1999 compared to 9%, and 5%,
respectively, for the quarter and six months ended December 31, 1998.
In a series of transactions in October 1999 the Company sold 2.691
million shares of marketable securities in a strategic partner. This sale
generated net proceeds of approximately $7.6 million. As a result of this sale,
the Company recorded a pretax gain of approximately $2.5 million ($0.20 per
diluted share, net of taxes) in its second fiscal quarter.
Net interest expense and financing charges, included in other (income)
expenses, was $0.2 million and $0.4 million in the three and six month periods
ended December 31, 1999 compared to $0.1 million and $0.2 million in the same
prior year periods. The increase in the current year is due primarily to an
increase in the Company's long term debt. Operating results for the three months
ended December 31, 1999 included foreign currency exchange gains of $0.6 million
compared to $0.3 million in the comparable prior year period. Operating results
for the six months ended December 31, 1999 included foreign exchange gains of
$0.7 million compared to foreign exchange losses of $23,000 for the six months
ended December 31, 1998.
The Company's income tax rate for the three and six month periods ending
December 31, 1999 and 1998 was 30%.
Restructuring Costs
In the third quarter of fiscal 1999 the Company adopted a restructuring
plan (the "Plan"). The objectives of the Plan were to consolidate oscilloscope
operations in order to enhance operating efficiencies and to dedicate additional
resources to capitalize on several current breakthrough technologies.
At December 31, 1999 the Company had remaining reserves and liabilities of
approximately $5.4 million relating to the Plan. During the quarter and six
months ending December 31, 1999 the Company charged approximately $1.0 million
and $1.7 million, respectively, against the restructuring reserves. These
charges primarily related to severance and employee benefit costs and lease
payments. The overall expected cost of the Plan has not changed since the Plan
was approved. The Plan is expected to be completed by the end of fiscal 2000.
Year 2000
The year 2000 problem concerns the inability of information systems to
recognize properly and process date-sensitive information beyond December 31,
1999. At the time of this filing the Company had not experienced any year 2000
problems with any of its financial or operating systems or with any of its
suppliers or customers. The Company will continue to monitor these systems, but
it does not anticipate any problems or significant expenditures in the future.
This represents a forward-looking statement under the Private Securities
Litigation Reform Act of 1997. Undiscovered issues related to the year 2000
issue could have an adverse impact on the Company's results of operations.
Liquidity and Capital Resources
Working capital, including $6.2 million in cash and cash equivalents, was
$38.9 million at December 31, 1999 compared to $30.4 million, at June 30, 1999.
The current ratio is 2.27 to 1.
The Company has borrowed $10.2 million under its secured multicurrency
credit agreement. At December 31, 1999, the Company had met its financial
covenants relating to the multicurrency credit agreement, which was amended in
September 1999. Upon completion of the sale of marketable securities in October
1999, which generated $7.6 million in proceeds, the Company reduced its maximum
borrowings under the agreement to $15 million.
Cash flows generated from operating activities for the first six months of
fiscal 2000 decreased in comparison with the first six months of the prior year
due primarily to lower operating earnings and an increase in inventories.
10
<PAGE>
LeCROY CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Cont.)
The Company's cash together with amounts available under its multicurrency
revolving credit agreement and internally generated cash flow will be sufficient
to fund working capital and capital expenditure requirements for at least the
next twelve months.
Risk Management
The Company's equity investment in Iwatsu Electric Co., Ltd is subject to
the impact of foreign exchange rates and the Japanese stock market fluctuation.
In October 1999 the Company sold 2.691 million shares of such stock reducing its
exposure to exchange risk and fluctuations in the Japanese stock market. As of
December 31, 1999 Japanese stock market fluctuations resulted in a $0.6 million
increase to the investment's original cost. The change in the value of this
investment, which is deemed to be temporary, is included as part of accumulated
comprehensive income (loss) in stockholders' equity and is not included in the
Condensed Consolidated Statements of Income.
New Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This statement establishes accounting and
reporting standards for derivative instruments and requires recognition of all
derivatives as assets or liabilities in the statement of financial position and
measurement of those instruments at fair value. The statement is effective for
fiscal years beginning after June 15, 2000. Management believes that adopting
this statement will not have a material impact on the financial position,
results of operations or cash flows of the Company.
11
<PAGE>
LeCROY CORPORATION
PART I. OTHER INFORMATION
Item 6.(a) Exhibits
Exhibit 27 Financial Data Schedule.
PART II. OTHER INFORMATION
Item 4. Submission of matters to a Vote of Security Holders
The Company's annual meeting of stockholders was held on
October 28, 1999. The following actions were taken at the
meeting:
Election of Directors
Votes For Votes Against
--------- -------------
Lutz P. Henckels . 6,608,629 27,956
Charles A. Dickinson 6,608,629 27,956
Item 6.(b) Reports on Form 8-K
No current reports on Form 8-K were filed during the quarter
ended December 31, 1999.
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.
LECROY CORPORATION
Date: February 14, 2000 By: /S/ Lutz P. Henckels
Lutz P. Henckels
President and Chief Executive Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-Q for the six months months ended December 31, 1999
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 6191
<SECURITIES> 2442
<RECEIVABLES> 28306
<ALLOWANCES> 720
<INVENTORY> 32578
<CURRENT-ASSETS> 69382
<PP&E> 40328
<DEPRECIATION> 25099
<TOTAL-ASSETS> 101762
<CURRENT-LIABILITIES> 30531
<BONDS> 0
0
8321
<COMMON> 78
<OTHER-SE> 52268
<TOTAL-LIABILITY-AND-EQUITY> 101762
<SALES> 58449
<TOTAL-REVENUES> 61937
<CGS> 30742
<TOTAL-COSTS> 30742
<OTHER-EXPENSES> 33150
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 443
<INCOME-PRETAX> 743
<INCOME-TAX> 223
<INCOME-CONTINUING> 520
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 520
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.04
</TABLE>
