SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1998
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______TO _______
Commission File No. 0-26690
ELANTEC SEMICONDUCTOR, INC.
(Exact Name of registrant as specified in its charter)
Delaware 77-0408929
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
675 Trade Zone Boulevard, Milpitas, California 95035
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 945-1323
- --------------------------------------------------------------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of May 3, 1998, 9,168,982 shares of the Registrant's Common Stock, $0.01 par
value, were issued and outstanding.
<PAGE>
TABLE OF CONTENTS
Page
----
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.....................3
Notes to Condensed Consolidated Financial Statements............6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................9
Item 3. Quantitative and Qualitative Disclosures about Market Risk.....13
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>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
<TABLE>
ELANTEC SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues $ 11,660 $ 8,494 $ 22,894 $ 16,495
Cost of revenues 5,999 4,703 11,857 9,514
-------- -------- -------- --------
Gross profit 5,661 3,791 11,037 6,981
Operating expenses:
Research and development 1,770 1,653 3,412 2,935
Marketing, sales, general and administrative 2,548 2,177 5,135 4,284
-------- -------- -------- --------
Total operating expenses 4,318 3,830 8,547 7,219
-------- -------- -------- --------
Income (loss) from operations 1,343 (39) 2,490 (238)
Interest and other, net 122 116 238 203
-------- -------- -------- --------
Income (loss) before taxes 1,465 77 2,728 (35)
Provision (benefit) for taxes on income 92 10 218 (4)
-------- -------- -------- --------
Net income (loss) $ 1,373 $ 67 $ 2,510 $ (31)
======== ======== ======== ========
Net income per share:
Basic $ 0.15 $ 0.01 $ 0.28 $ 0.00
Diluted $ 0.14 $ 0.01 $ 0.26 $ 0.00
======== ======== ======== ========
Shares used in computing per share amounts:
Basic 9,124 8,804 9,093 8,782
Diluted 9,805 9,281 9,714 8,782
======== ======== ======== ========
<FN>
See accompanying notes to the condensed consolidated financial statements.
</FN>
3
</TABLE>
<PAGE>
ELANTEC SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31 September 30
1998 1997 (1)
------- -------
(Unaudited)
Current assets:
Cash and cash equivalents $ 6,410 $ 9,839
Short-term investments 7,240 6,089
Accounts receivable, net 6,352 3,315
Inventories 7,440 7,369
Prepaid expenses and other current assets 722 627
------- -------
Total current assets 28,164 27,239
Property and equipment, net 15,439 9,230
Other assets, net 701 622
------- -------
Total assets $44,304 $37,091
======= =======
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable and accrued liabilities $ 9,240 $ 5,367
Deferred revenue 3,111 2,094
Current portion of long-term debt and capital
lease obligations 1,362 1,491
------- -------
Total current liabilities 13,713 8,952
Long-term debt and capital lease obligations 3,118 3,336
Stockholders' equity 27,473 24,803
------- -------
Total liabilities and stockholders' equity $44,304 $37,091
======= =======
(1) The information in this column was derived from the Company's audited
consolidated financial statements at September 30, 1997.
See accompanying notes to the condensed consolidated financial statements.
4
<PAGE>
<TABLE>
ELANTEC SEMICONDUCTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<CAPTION>
Six Months Ended
March 31,
-------------------------------
1998 1997
-------- --------
<S> <C> <C>
Operating activities:
Net income (loss) $ 2,510 $ (31)
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,248 953
Changes in operating assets and liabilities:
Accounts receivable (3,037) (363)
Inventories (71) (458)
Prepaid expenses and other current assets (95) (112)
Accounts payable and accrued liabilities 3,873 96
Deferred revenue 1,017 (145)
-------- --------
Net cash provided by (used in) operating activities 5,445 (60)
Investing activities:
Sale/maturity (purchase) of available-for-sale securities (1,151) 3,185
Purchase of property and equipment (7,023) (688)
Decrease (increase) in other assets (79) 16
-------- --------
Net cash provided by (used in) investing activities (8,253) 2,513
Financing activities:
Payments on capital lease and other debt (781) (631)
Issuance of common stock 160 40
-------- --------
Net cash used in financing activities (621) (591)
Increase (decrease) in cash and cash equivalents (3,429) 1,862
Cash and cash equivalents at beginning of period 9,839 9,377
-------- --------
Cash and cash equivalents at end of period $ 6,410 $ 11,239
======== ========
Supplemental disclosures of cash flow information:
Lease and installment financing for capital equipment $ 433 $ 1,476
Interest paid $ 90 $ 123
Taxes paid $ 20 $ 25
<FN>
See accompanying notes to the condensed consolidated financial statements.
</FN>
5
</TABLE>
<PAGE>
ELANTEC SEMICONDUCTOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1. BASIS OF PRESENTATION
The Company has prepared the Unaudited condensed consolidated financial
statements included herein pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. In the opinion of management, all adjustments (consisting
of normal recurring items) considered necessary for a fair presentation have
been included. The results of operations for the six months ended March 31, 1998
are not necessarily indicative of the results to be expected for the entire
year. These consolidated financial statements should be read in conjunction with
the consolidated financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended September 30, 1997.
The Company's fiscal year end is the Sunday closest to September 30. The
Company's fiscal quarter's end on the Sunday closest to the end of the calendar
quarter. For convenience, the Company has indicated that its quarters end on
December 31, March 31, June 30 and September 30.
NOTE 2. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NOTE 3. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original maturity
(at the date of purchase) of three months or less to be the equivalent of cash
for purposes of balance sheet and statement of cash flows presentation. Cash and
cash equivalents are carried at cost, which approximates market value.
NOTE 4. SHORT-TERM INVESTMENTS
The Company's policy is to invest in various short-term instruments with
investment grade credit ratings. Generally such investments have contractual
maturity of less than one year. All of the Company's marketable investments are
classified as "available-for-sale" and the Company classifies its
available-for-sale portfolio as available for use in its current operations. At
March 31, 1998, there was no significant difference between the fair market
value and the underlying cost of such securities.
6
<PAGE>
NOTE 5. INVENTORIES
Inventories are stated at the lower of standard cost (first-in, first-out
method) or market and consist of the following balances in thousands:
March 31, September 30,
1998 1997
----------------- ------------------
Raw materials $ 365 $ 431
Work-in-process 5,567 5,039
Finished goods 1,508 1,899
----------------- ------------------
$ 7,440 $ 7,369
================= ==================
NOTE 6. EARNINGS (LOSS) PER SHARE
Beginning in the first quarter (Q198) ending December 31, 1997, Financial
Accounting Standards No. 128 "Earnings Per Share" (FAS 128) required the Company
to change the method used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating basic earnings per share,
the dilutive effect of stock options is excluded. However, diluted earnings per
share is analogous to the methodology the Company used in past earnings per
share reporting and is calculated based on the weighted average number of common
and dilutive common share equivalents outstanding using the treasury stock
method. Thus, diluted income per share is the same number the Company previously
reported as net income per share.
<TABLE>
The following table sets forth the computation of basic and diluted earnings per
share:
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
----------------------- -----------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Numerator for basic and diluted income per share:
Net income $ 1,373 $ 67 $ 2,510 $ (31)
======= ======= ======= =======
Denominator:
Denominator for basic income per share 9,124 8,804 9,093 8,782
Effect of dilutive securities:
Common stock options 681 477 621 --
------- ------- ------- -------
Denominator for diluted earnings per share 9,805 9,281 9,714 8,782
======= ======= ======= =======
Basic income per share $ 0.15 $ 0.01 $ 0.28 $ 0.00
======= ======= ======= =======
Diluted income per share $ 0.14 $ 0.01 $ 0.26 $ 0.00
======= ======= ======= =======
7
</TABLE>
<PAGE>
NOTE 7. RECENT ACCOUNTING PRONOUNCEMENTS
Capital Structure. In February 1997, the FASB released Statement of Financial
Accounting Standards No. 129, "Disclosure of Information about Capital
Structure" (FAS 129). FAS 129 consolidates the existing guidance regarding
disclosure relating to a company's capital structure and is effective for fiscal
years beginning after December 15, 1997. Adoption of FAS 129 will not have a
material impact on the Company's consolidated financial statements.
Comprehensive Income. In June 1997, the FASB released Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (FAS 130). FAS
130 establishes standards for the reporting and display of comprehensive income
and its components in a full set of general purpose financial statements and is
effective for fiscal years beginning after December 15, 1997. The Company
believes that adoption of FAS 130 will not have a material impact on the
Company's consolidated financial statements.
Segment Information. In June 1997, the FASB released Statement of Financial
Accounting Standards No. 131, " Disclosures about Segments of an Enterprise and
Related Information" (FAS 131). FAS 131 will change the way companies report
selected segment information in annual financial statements and also requires
those companies to report selected segment information in interim financial
reports to stockholders. FAS 131 is effective for fiscal years beginning after
December 15, 1997. The Company has not completed the determination of the impact
of the new rule on the Company's consolidated financial statements.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Except for the historical information contained herein, certain matters
discussed in this Form 10-Q, including discussions related to the discontinuance
of the Company's military and commercial hybrid products, manufacturing capacity
expansion and the development and use of SOI technology, may contain
forward-looking statements that involve risks and uncertainties. The Company's
actual future results could differ materially from those discussed here. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed in this section, as well as in the section entitled
"Business" in the Company's 1997 Form 10-K filed with the Securities and
Exchange Commission.
<TABLE>
The table below states the income statement items for the three months ended
March 31, 1998 and 1997 as a percentage of net revenues and provides the
percentage change in absolute dollars from the previous year:
<CAPTION>
Three Three Dollar % Six Six Dollar %
Months Ended Months Ended Change Months Ended Months Ended Change
---------------------------------------- ---------------------------------------
March 31, 1998 March 31, 1997 March 31, 1998 March 31, 1997
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net revenues 100.0% 100.0% 37% 100.0% 100.0% 39%
Cost of revenues 51.4% 55.4% 28% 51.8% 57.7% 25%
Gross profit 48.6% 44.6% 49% 48.2% 42.3% 58%
Operating expenses:
Research and development 15.2% 19.5% 7% 14.9% 17.8% 16%
Marketing, sales, general
and administrative 21.9% 25.6% 17% 22.4% 26.0% 20%
</TABLE>
Results of Operations - During the second fiscal quarter of 1998, the Company
generated net revenues of $11.7 million, an increase of 37% from the $8.5
million reported in the same quarter of the previous year. For the first six
months of fiscal 1998 net revenue was $22.9 million, an increase of 39% from the
$16.5 million reported in the corresponding period of fiscal 1997. These
increases were attributed to overall increases in unit sales volumes in a
majority of the Company's product lines.
Cost of goods sold decreased to 51% of net sales for the second quarter of
fiscal 1998 compared to 55% for the second quarter of fiscal 1997. During the
first six-months of fiscal 1998, cost of goods sold decreased to 52% from 58%
reported from the corresponding period of fiscal 1997. These decreases in cost
and corresponding increase in gross were primarily due to improved manufacturing
variances, offset in part by provisions to increase inventory reserves.
Research and development expenses increased $0.1 million or 7% in the second
quarter of 1998 when compared to the comparable quarter of 1997. This increase
is primarily due to costs associated with increased engineering headcount.
Research and development expenses increased $0.5 million or 16% during the first
six months of 1998 when compared to the first six months of 1997. As a
percentage of revenues, research and development expenses decreased from 20% to
15% for the second quarter of 1998 and decreased from 18% to 15% of net revenues
for the first six months of fiscal 1998. These decreases as a percentage of net
revenues reflect higher net revenues in the second quarter and first half of
fiscal 1998. Management expects research and development expenses, in absolute
dollars, to increase as the
9
<PAGE>
company develops silicon on insulator (SOI) technology (see discussion below).
However, there can be no assurance that net revenues will increase at the same
rate as anticipated research and development expenses.
Marketing, selling and general and administrative expenses increased $0.4
million or 17% in the second quarter of 1998 when compared to the comparable
quarter of 1997, and increased $0.8 million or 20% for the first six months of
fiscal 1998 when compared to the first six months of fiscal 1997. These
increases were due to increased expenses related to commissions to outside sales
representatives, travel, advertising, legal and accounting services, and
recruiting. As a percentage of net revenues, marketing, selling and general and
administrative expenses decreased from 26% for the second quarter and first six
months of fiscal 1997, to approximately 22% of net revenues in the second
quarter and first six months of fiscal 1998, respectively. These decreases as a
percentage of net revenues reflect higher net revenues in the second quarter and
first half of fiscal 1998.
The Company's provision for income taxes for the first six months of fiscal 1998
are lower than the statutory rate, principally due to the benefit of net
operating loss and tax credit carry forwards offset by state taxes and foreign
withholding taxes.
In July 1997, the Company announced that it would discontinue its military and
commercial hybrid product. This product line accounted for 7.9% and 7.5% of
product revenues during the second quarters of 1998 and 1997, respectively.
Orders for these discontinued products will be accepted through the middle of
1998 with last shipments from the factory extending through the first quarter of
fiscal 1999. The Company expects higher revenues and gross margins from last-buy
orders during fiscal 1998. However, the Company does not expect the
discontinuance of this product line to have a material impact on the Company's
annual 1999 results from operations.
Factors Affecting Future Results - Elantec's operating results have been, and in
the future may be, subject to fluctuations due to a wide variety of factors
including the timing of or delays in new product and process technology
announcements and product introductions by the Company or its competitors,
competitive pricing pressures, fluctuations in manufacturing yields, changes in
the mix of product sold, availability and costs of raw materials, reliance on
subcontractors, the cyclical nature of the semiconductor industry, industry-wide
wafer processing capacity, political and economic conditions in various
geographic areas, and costs associated with other events, such as
under-utilization or expansion of production capacity, intellectual property
disputes, litigation, or environmental regulation.
From time to time, the Company has experienced production difficulties that have
caused delivery delays and quality problems. There can be no assurance that the
Company will not experience manufacturing problems and product delivery delays
in the future as a result of, among other things, changes to its process
technologies, ramping production, installing new equipment at its facilities and
constructing new facilities in Milpitas, California.
The Company utilizes various external foundries for the production of CMOS,
bipolar, and certain process steps of dielectric isolation wafers. The Company
currently uses a single source for certain process steps in the manufacture of
dielectric isolation wafers and the number of foundries that have the capability
to process dielectrically isolated semiconductor wafers is limited.
As a part of its wafer manufacturing expansion program the Company has been
developing internal capability for a number of these dielectric isolation
process steps and an alternate vendor for one key process step. The Company has
been informed that its current dielectric isolation foundry will discontinue
supplying this technology in the fourth fiscal quarter of 1998. The Company
plans to convert its production to its in-house capability in conjunction with
the new vendor during the fourth fiscal quarter of 1998.
To mitigate potential problems during the transition of suppliers, the Company
plans to increase its inventory of processed dielectric isolated wafers prior to
the transition. However there can be no assurance that this manufacturing change
can be successfully made in a timely manner or that the increased levels of
dielectrically isolated wafers will be sufficient to meet the Company's
requirements. Products based on dielectrically isolated wafers represent a
majority of the Company's revenues. Significant delays in the transition to the
new supply of dielectric isolated wafers or manufacturing problems encountered
with either the internal process or the new supplier would have a material
adverse effect on the Company's business and results of operations.
The semiconductor industry is highly cyclical and has been subject to
significant economic fluctuations at various times that have been characterized
by rapidly fluctuating product demand, periods of over and under capacity, and
accelerated erosion of average selling prices. A material change in
industry-wide production capacity, shift in industry capacity toward products
competitive with the Company's products, rapidly fluctuating demand, or other
factors could result in a rapid decline in product pricing or unit volumes which
could have a material adverse affect on the Company's operating results.
10
<PAGE>
The Company is in the process of an extensive production expansion at its
primary manufacturing facility in Milpitas, California. The facilities expansion
is expected to be completed late in the fourth quarter of fiscal 1998.
Manufacturing is expected to be phased in through the first two quarters of
fiscal 1998. This will result in a significant increase in fixed and operating
expenses which could reduce gross margins. Specifically, the Company could incur
substantial operating costs and depreciation expense relating to the expanded
facility before production of substantial volume is achieved. If revenue levels
do not increase sufficiently to offset these additional expense levels, or if
the Company is unable to achieve gross margin greater than or comparable to the
Company's current products, the Company's future results of operations could be
materially adversely impacted. Additionally, the project faces a number of
substantial risks including, but not limited to, project termination, delays in
construction, cost overruns, equipment delays or shortages, manufacturing
start-up or process problems, or difficulties in hiring key managers and
technical personnel.
New products, process technology and start-up costs associated with the
Company's new Milpitas wafer fabrication facility will require significant
research and development expenditures. However, there can be no assurance that
the Company will be able to develop and introduce new products in a timely
manner, that new products will gain market acceptance or that new process
technologies can be successfully implemented. If the Company is unable to
develop new products in a timely manner, and to sell them at gross margins
comparable to the Company's current products, the future results of operations
could be adversely impacted.
Part of the Company's future bipolar product development strategy includes the
development of an alternative form of silicon-on-insulator ("SOI") technology
called bonded wafers. The Company currently believes that, if successful, the
bonded wafer technology could provide technologically advanced products at a
lower cost than the current dielectric isolation complementary bipolar
technology. There can be no assurance that bonded wafer technology can be
successfully accomplished in a timely manner or that it will provide the desired
improvements over the Company's current technology. Significant delays or
cancellation of the development of the bonded wafer technology and/or
manufacturing problems associated with transferring the Company's current
product line to this technology would have a material adverse affect on the
Company's business and results of operations. In addition, delays or
cancellation of the development of this technology could adversely affect the
Company's new product development program.
The semiconductor industry is extremely capital intensive. To remain
competitive, the Company must continue to invest in advanced manufacturing
equipment and process technologies. The Company expects to expend approximately
$3.0 million on capital expenditures during the remainder of fiscal 1998.
Additionally, the Company anticipates significant continuing capital
expenditures in the next several years. There can be no assurance that the
Company will not be required to seek debt or equity financing to satisfy its
cash and capital needs or that such financing will be available on terms
satisfactory to the Company. If such financing is required and if such financing
were not available on terms satisfactory to the Company, its operations would be
materially adversely affected.
Vigorous protection and pursuit of intellectual property rights or positions,
which have resulted in significant and often protracted and expensive
litigation, characterize the semiconductor industry. In recent years, there has
been a growing trend of companies to resort to litigation to protect their
semiconductor technology from unauthorized use by others. The Company believes
its products do not infringe upon any valid patents. However, there can be no
assurance that the Company's position in these matters will prevail. There can
be no assurance that additional future claims alleging infringement of
intellectual property rights will not be asserted against the Company. The
intellectual property claims that have been made, or may be asserted against the
Company in the future, could require that the
11
<PAGE>
Company discontinue the use of certain processes or cease the manufacture, use
and sale of infringing products. Additionally, the Company may incur significant
litigation costs and damages to develop noninfringing technology. There can be
no assurance that the Company would be able to obtain such licenses on
acceptable terms or to develop noninfringing technology without a material
adverse effect on the Company.
The Company is subject to a variety of regulations related to hazardous
materials used in its manufacturing process. Any failure by the Company to
control the use of, or to restrict adequately the discharge of, hazardous
materials under present or future regulations could subject it to substantial
liability or could cause its manufacturing operations to be suspended.
The Company's Common Stock has experienced substantial price volatility and such
volatility may occur in the future, particularly as a result of
quarter-to-quarter variations in the actual or anticipated financial results of
the Company, the companies in the semiconductor industry or in the markets
served by the Company, or announcements by the Company or its competitors
regarding new product introductions. In addition, the stock market has
experienced extreme price and volume fluctuations that have affected the market
price of many technology companies' stock in particular. These factors may
adversely affect the price of the Common Stock.
The Company initiated a year 2000 remediation plan during fiscal 1997 to make
the Company's operating and ancillary systems year 2000 compliant. This plan
included implementing a manufacturing execution system and financial
applications software that is year 2000 compliant. The new software has been
purchased and that portion of the project has already been implemented. The
implementation is expected to be completed during by the end of the fourth
quarter of fiscal 1998. The costs of implementing such a plan are not expected
to be material to the Company's operating results.
The Company has initiated formal communications with all its significant
suppliers and will be working with them to ensure that they are year 2000
compliant.
The Company's current revenue is generated from products that will not generate
any product warranty or product defect liability issues related to the year 2000
compliance.
The cost of the year 2000 project and the date on which the Company believes it
will complete the year 2000 modification are based on management's best
estimates, which were derived utilizing numerous assumptions of future events,
including the continued availability of certain resources and other factors.
However, there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those anticipated. Specific factors
that might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.
Liquidity and Capital Resources - Cash and equivalents and short-term
investments were $13.7 million at March 31, 1998, a decrease of $2.3 million
from September 30, 1997. The decrease is primarily a result of cash outflows
from investing activities, including capital expenditures of approximately $7.0
million, and cash outflows from financing activities including payments on
capital leases and other debt of approximately $0.8 million. These cash outflows
were partially offset by cash generated by operations of $5.4 million.
Accounts receivable increased 91.6% from September 30, 1997 to March 31, 1998
while revenues grew by 38.8% during the same period. This increase was due to
increased volumes of product shipped during
12
<PAGE>
the first six months of fiscal 1998 combined with an unusually high collection
rate during the last quarter of fiscal 1997. Inventories increased 1.0% from
September 30, 1997 to March 31,1998 primarily due to improved manufacturing
yields that were almost entirely offset by increased provisions for inventory
reserves. Inventory management remains an area of focus as the Company balances
the need to maintain strategic inventory levels to ensure competitive lead times
versus the risk of inventory obsolescence because of rapidly changing technology
and customer requirements.
Accounts payable and accrued liabilities increased by 72.2% at March 31, 1998
over September 30, 1997. This increase is primarily due to unpaid invoices
relating to the Company's expansion of its Milpitas manufacturing facility at
March 30, 1998. Deferred revenue increased by 48.6% primarily due to higher
deferred revenues on distributor sales.
At March 31, 1998 there was approximately $4.1 million available credit under
lease lines. There were outstanding commitments to purchase capital assets and
leasehold improvements of approximately $2.2 million at March 31, 1998. The
Company expects to expend $3.0 million on capital expenditures during the
remainder of fiscal 1998.
The Company's management believes that its current cash and equivalents,
short-term investments, line of credit, borrowing capacity, and cash generated
from operations will satisfy its expected working capital and capital
expenditure requirements for the next twelve months.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1998 Annual Meeting of Stockholders of the Company ("Annual Stockholders
Meeting") was held on February 20, 1998, in Milpitas, California. At the Annual
Stockholders Meeting the stockholders elected members of the Company's Board of
Directors; amended the 1995 Equity Incentive Plan to increase the number of
shares of Common Stock reserved for issuance by 400,000 shares; amended the 1995
Directors Stock Option Plan to increase the number of shares automatically
granted to non-employee directors from 5,000 shares to 10,000 shares per year
and removed the limit of 40,000 shares per non-employee director over the life
of such plan; and ratified the Company's appointment of Ernst & Young LLP as
independent auditors.
The vote for nominated directors was as follows:
Nominee In Favor Withheld
- ---------------------------- ------------------- ---------------------
Chuck K. Chan 7,436,481 62,474
James V. Diller 7,438,181 60,774
B. Yeshwant Kamath 7,437,981 60,974
Alan V. King 7,438,481 60,474
David O'Brien 7,420,843 78,112
The results of voting for approval of an amendment to the 1995 Equity Incentive
Plan to increase the number of shares reserved for issuance by 400,000 shares
were:
Broker
For Against Abstain Non-Votes
- ------------------- ----------------- -------------- ---------------
6,807,458 323,860 42,631 325,006
The results of voting for approval of an amendment to the 1995 Directors Stock
Option Plan to increase the number of shares automatically granted to
non-employee directors from 5,000 shares to 10,000 shares per year and to remove
the limit of 40,000 shares per non-employee director over the life of the plan
were:
Broker
For Against Abstain Non-Votes
- ------------------- ----------------- -------------- ---------------
6,688,706 321,699 163,544 325,006
The results of voting for ratification of appointment of Ernst & Young LLP as
independent auditors for the company for the next fiscal year were:
For Against Abstain
- ------------------- ----------------- --------------
7,458,329 21,826 18,800
14
<PAGE>
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed as part of this report:
Exhibit 27.1 - Financial Data Schedule
Exhibit 27.2 - Restated Financial Data Schedule
Exhibit 27.3 - Restated Financial Data Schedule
(b) Reports on Form 8-K:
The Company filed no reports on Form 8-K during the quarter ended March
31, 1998.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to report to be signed on its behalf
by the undersigned thereunto duly authorized.
ELANTEC SEMICONDUCTOR, INC.
(Registrant)
Date: May 27, 1998 By: /s/ Ephraim Kwok
-----------------------------
Ephraim Kwok
Chief Financial Officer (duly authorized officer and
principal financial officer)
16
<PAGE>
EXHIBIT INDEX
Exhibit
Financial Data Schedule
27.1 Financial Data Schedule
27.2 Restated Financial Data Schedule
27.3 Restated Financial Data Schedule
17
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1998 SEP-30-1998
<PERIOD-START> JAN-01-1998 OCT-01-1997
<PERIOD-END> MAR-31-1998 DEC-31-1997
<CASH> 6,410 8,036
<SECURITIES> 7,240 8,038
<RECEIVABLES> 7,378 4,937
<ALLOWANCES> 1,026 840
<INVENTORY> 7,440 6,881
<CURRENT-ASSETS> 28,164 27,920
<PP&E> 24,952 27,601
<DEPRECIATION> 9,513 11,005
<TOTAL-ASSETS> 44,304 38,517
<CURRENT-LIABILITIES> 13,713 9,487
<BONDS> 3,118 3,013
0 0
0 0
<COMMON> 91 91
<OTHER-SE> 27,382 25,926
<TOTAL-LIABILITY-AND-EQUITY> 44,304 38,517
<SALES> 11,132 10,917
<TOTAL-REVENUES> 11,660 11,234
<CGS> 5,999 5,858
<TOTAL-COSTS> 5,999 5,858
<OTHER-EXPENSES> 4,318 4,229
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 122 116
<INCOME-PRETAX> 1,465 1,263
<INCOME-TAX> 92 126
<INCOME-CONTINUING> 1,373 1,137
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,373 1,137
<EPS-PRIMARY> 0.15 0.13
<EPS-DILUTED> 0.14 0.12
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS 3-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1997 SEP-30-1997 SEP-30-1997 SEP-30-1997
<PERIOD-START> OCT-01-1996 APR-01-1997 JAN-01-1997 OCT-01-1996
<PERIOD-END> SEP-30-1997 JUN-30-1997 MAR-31-1997 DEC-31-1996
<CASH> 9,839 9,153 11,239 7,097
<SECURITIES> 6,089 5,964 3,478 7,010
<RECEIVABLES> 4,155 3,956 5,031 5,024
<ALLOWANCES> 840 606 493 469
<INVENTORY> 7,369 7,190 6,933 6,722
<CURRENT-ASSETS> 27,239 26,213 26,854 26,090
<PP&E> 19,618 18,822 17,890 17,177
<DEPRECIATION> 10,388 9,823 9,319 8,848
<TOTAL-ASSETS> 37,091 35,769 36,051 35,055
<CURRENT-LIABILITIES> 8,952 8,259 9,785 9,020
<BONDS> 3,336 3,249 2,183 2,033
0 0 0 0
0 0 0 0
<COMMON> 90 90 88 88
<OTHER-SE> 24,713 24,171 23,995 23,914
<TOTAL-LIABILITY-AND-EQUITY> 37,091 35,769 36,051 35,055
<SALES> 34,091 8,886 7,822 7,687
<TOTAL-REVENUES> 35,388 9,195 8,494 8,001
<CGS> 20,111 5,223 4,703 4,810
<TOTAL-COSTS> 20,111 5,223 4,703 4,810
<OTHER-EXPENSES> 15,100 3,983 3,830 3,389
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 759 122 128 62
<INCOME-PRETAX> 647 112 77 (111)
<INCOME-TAX> 81 14 10 (14)
<INCOME-CONTINUING> 566 98 67 (97)
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 566 98 67 (97)
<EPS-PRIMARY> 0.06 0.01 0.01 (0.01)
<EPS-DILUTED> 0.06 0.01 0.01 (0.01)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 12-MOS 3-MOS 3-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1996 SEP-30-1996 SEP-30-1996 SEP-30-1996
<PERIOD-START> OCT-01-1995 APR-01-1996 JAN-01-1996 OCT-01-1995
<PERIOD-END> SEP-30-1996 JUN-30-1996 MAR-31-1996 DEC-31-1995
<CASH> 9,377 12,259 7,033 12,900
<SECURITIES> 6,663 3,451 7,526 1,255
<RECEIVABLES> 4,515 5,396 5,227 4,618
<ALLOWANCES> 340 326 308 271
<INVENTORY> 6,475 5,935 5,607 5,358
<CURRENT-ASSETS> 27,244 27,087 25,566 24,383
<PP&E> 15,726 14,917 14,350 13,090
<DEPRECIATION> 8,366 8,194 7,835 7,488
<TOTAL-ASSETS> 35,246 34,428 32,658 30,532
<CURRENT-LIABILITIES> 9,606 9,515 9,220 8,570
<BONDS> 1,566 1,604 1,549 1,440
0 0 0 0
0 0 0 0
<COMMON> 87 86 85 81
<OTHER-SE> 23,987 23,225 21,804 20,441
<TOTAL-LIABILITY-AND-EQUITY> 35,246 34,428 32,658 30,532
<SALES> 35,350 9,390 9,289 8,174
<TOTAL-REVENUES> 36,806 9,782 9,597 8,567
<CGS> 18,008 4,627 4,557 4,062
<TOTAL-COSTS> 18,008 4,627 4,557 4,062
<OTHER-EXPENSES> 14,498 3,830 3,841 3,394
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 687 111 116 105
<INCOME-PRETAX> 4,761 1,436 1,315 1,216
<INCOME-TAX> 372 113 102 95
<INCOME-CONTINUING> 4,389 1,323 1,213 1,121
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 4,389 1,323 1,213 1,121
<EPS-PRIMARY> 0.52 0.15 0.14 0.14
<EPS-DILUTED> 0.47 0.14 0.13 0.12
</TABLE>
