==============================================================================
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 quarter ended
February 28, 1998 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 1-4837
TEKTRONIX, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0343990
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
26600 SW PARKWAY
WILSONVILLE, OREGON 97070-1000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 627-7111
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 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______
AT MARCH 28, 1998 THERE WERE 50,526,231 COMMON SHARES OF
TEKTRONIX, INC. OUTSTANDING.
(Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.)
<PAGE>
TEKTRONIX, INC. AND SUBSIDIARIES
- --------------------------------
INDEX
- -----
PAGE NO.
--------
Financial Statements:
Condensed Consolidated Balance Sheets - 2
February 28, 1998 and May 31, 1997
Condensed Consolidated Statements of Operations - 3
for the Quarter ended February 28, 1998
and the Quarter ended March 1, 1997
for the Three Quarters ended February 28, 1998
and the Three Quarters ended March 1, 1997
Condensed Consolidated Statements of Cash Flows - 4
for the Three Quarters ended February 28, 1998
and the Three Quarters ended March 1, 1997
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial 9
Condition and Results of Operations
Part II. Other Information 14
Signatures 14
1
<PAGE>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Feb. 28, May 31,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 112,040 $ 142,726
Accounts receivable - net 294,771 305,832
Inventories 214,492 238,040
Other current assets 64,907 64,913
---------- ----------
Total current assets 686,210 751,511
Property, plant and equipment - net 386,224 343,130
Deferred tax assets 23,858 12,540
Other long-term assets 191,669 209,560
---------- ----------
Total assets $1,287,961 $1,316,741
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 5,182 $ 6,155
Accounts payable 172,068 181,366
Accrued compensation 99,403 90,946
Deferred revenue 12,461 25,622
---------- ----------
Total current liabilities 289,114 304,089
Long-term debt 150,708 151,579
Other long-term liabilities 86,637 89,790
Shareholders' equity:
Common stock 224,272 226,591
Retained earnings 496,192 473,582
Currency adjustment 25,036 34,447
Unrealized holding gains - net 16,002 36,663
---------- ----------
Total shareholders' equity 761,502 771,283
---------- ----------
Total liabilities and shareholders' equity $1,287,961 $1,316,741
========== ==========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Quarter ended Three quarters ended
(In thousands Feb. 28, Mar. 1, Feb. 28, Mar. 1,
except for per share amounts) 1998 1997 1998 1997
- ------------------------------------------------------------------------------
Net sales $517,570 $478,886 $1,527,890 $1,396,167
Cost of sales 292,716 273,653 909,768 799,900
-------- -------- ---------- ----------
Gross profit 224,854 205,233 618,122 596,267
Research and development expenses 52,944 45,621 149,373 137,684
Selling, general, and administrative
expenses 123,277 117,496 374,717 345,535
Equity in business ventures'
earnings (loss) (34) (861) 430 (467)
Non-recurring charges -- -- 40,478 --
-------- -------- ---------- ----------
Operating income 48,599 41,255 53,984 112,581
Other income - net 2,507 1,042 5,329 2,026
-------- -------- ---------- ----------
Earnings before taxes 51,106 42,297 59,313 114,607
Income taxes 16,865 13,535 19,573 36,674
-------- -------- ---------- ----------
Net earnings $ 34,241 $ 28,762 $ 39,740 $ 77,933
======== ======== ========== ==========
Basic earnings per share $ 0.68 $ 0.58 $ 0.79 $ 1.58
Diluted earnings per share $ 0.67 $ 0.57 $ 0.77 $ 1.56
Dividends per share $ 0.12 $ 0.10 $ 0.34 $ 0.30
Average shares outstanding-basic 50,483 49,616 50,438 49,362
Average shares outstanding-diluted 51,408 50,409 51,381 49,928
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three quarters ended
Feb. 28, Mar. 1,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 39,740 $ 77,933
Adjustments to reconcile net earnings to cash
provided by operating activities:
Depreciation expense 48,328 41,768
Inventory write-down related to restructuring 38,482 --
Non-recurring charges 40,478 --
Gains on sale of investments (18,941) (15,100)
Accounts receivable 16,374 98,032
Inventories (4,779) 8,152
Other current assets (6,514) 24,562
Accounts payable (17,301) (12,032)
Accrued compensation (16,234) (48,305)
Other-net (16,763) (1,515)
---------- ----------
Net cash provided by operating activities 102,870 176,525
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (95,921) (66,419)
Acquisition of CTE (46,600) --
Proceeds from sale of fixed assets 9,510 1,845
Proceeds from sale of investments 22,083 22,519
---------- ----------
Net cash used by investing activities (110,928) (42,055)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in short-term debt (1,183) (37,622)
Issuance of long-term debt 111 358
Repayment of long-term debt (893) (50,708)
Issuance of common stock 21,835 11,330
Repurchase of common stock (24,154) --
Dividends (17,130) (14,796)
---------- ----------
Net cash used by financing activities (21,414) (91,438)
Effect of exchange rate changes (1,214) (929)
---------- ----------
Decrease in cash and cash equivalents (30,686) 42,103
Cash and cash equivalents at beginning of year 142,726 36,644
---------- ----------
Cash and cash equivalents at end of quarter $ 112,040 $ 78,747
========== ==========
4
<PAGE>
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
Income taxes paid- net $ 38,763 $ 7,455
Interest paid 12,204 14,408
NON-CASH INVESTING ACTIVITIES
Fair value adjustment to securities available-for-sale $ (33,584) $ 3,314
Income tax effect related to fair value adjustment 12,923 (95)
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The condensed consolidated financial statements and notes have been
prepared by the Company without audit. Certain information and footnote
disclosures normally included in annual financial statements, prepared in
accordance with generally accepted accounting principles, have been
condensed or omitted. Management believes that the condensed statements
include all necessary adjustments which are of a normal and recurring
nature and are adequate to present financial position, results of
operations and cash flows for the interim periods. The condensed
information should be read in conjunction with the financial statements and
notes incorporated by reference in the Company's latest annual report on
Form 10-K. The Company's fiscal year is the 52 or 53 weeks ending the last
Saturday in May. Fiscal year 1998 is 52 weeks and fiscal year 1997 was 53
weeks. The first quarter of 1998 was 13 weeks compared to 14 weeks in the
first quarter of 1997 and the first three quarters of 1998 were 39 weeks
compared to 40 weeks in the first three quarters of 1997.
RESTRUCTURING
In the second quarter of 1998, the Company announced and began to implement
a restructuring plan designed to return the Video and Networking Division
business to profitable growth, and recorded a pre-tax provision of $60.0
million to account for these actions, which include streamlining its
product offerings and reducing the unit's cost structure to increase
operational efficiency. The plan will result in the separation of some
employees worldwide and the exiting of certain facilities and product lines
at a cost of $21.5 million. These costs are included in Non-recurring
charges for the three quarters ended February 28, 1998 in the Condensed
Consolidated Statements of Operations. In addition, the decision to
streamline product offerings required a $38.5 million write-down of
inventories, which is included in cost of sales for the three quarters
ended February 28, 1998.
ACQUISITION
On September 30, 1997, the Company acquired Siemens' Communications Test
Equipment GmbH (CTE), a wholly owned subsidiary of Siemens based in Berlin,
Germany, for approximately $46.6 million in cash, including direct
acquisition costs. The transaction was accounted for by the purchase
method of accounting, and accordingly, the results of operations of CTE
have been included in the Company's financial statements since the date of
acquisition. Pro forma comparative results of operations are not presented
because they are not material relative to the Company's results of
operations. The purchase price was allocated as follows:
(In thousands)
- ------------------------------------------------------------------------------
Fair value of identified net assets acquired $ 6,600
Acquired in-process research and development 17,000
----------
Identified intangibles 23,000
----------
$ 46,600
==========
Acquired in-process research and development of $17,000 was expensed in the
second quarter of the current year. (see Non-recurring charges footnote).
The identified intangibles include $18.0 million of completed
technology and $5.0 million of workforce-in-place and will be amortized on
a straight-line basis over 15 years.
6
<PAGE>
INVENTORIES
Inventories consisted of:
Feb. 28, May 31,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------
Materials and work in process $ 72,649 $ 134,743
Finished goods 141,843 103,297
---------- ----------
Inventories $ 214,492 $ 238,040
========== ==========
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of:
Feb. 28, May 31,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------
Land $ 5,957 $ 6,096
Buildings 193,818 199,396
Machinery and equipment 571,945 493,791
---------- ----------
771,720 699,283
Accumulated depreciation and amortization (385,496) (356,153)
---------- ----------
Property, plant and equipment - net $ 386,224 $ 343,130
========== ==========
NON-RECURRING CHARGES
Non-recurring charges consisted of:
Three quarters ended
Feb. 28,
(In thousands) 1997
- ------------------------------------------------------------------------------
Restructuring of the Video and Networking Division $ 59,960
In-process research and development acquired in the
purchase of CTE 17,000
Accrued integration costs associated with the
purchase of CTE 2,000
----------
Total non-recurring charges $ 78,960
Less: Inventory write-down included in cost of sales (38,482)
----------
Non-recurring charges $ 40,478
==========
7
<PAGE>
INCOME TAXES
The provision for income taxes consisted of:
Quarter ended Three quarters ended
Feb. 28, Mar. 1, Feb. 28, Mar. 1,
(In thousands) 1998 1997 1998 1997
- ------------------------------------------------------------------------------
United States $ 19,196 $ 8,000 $ 19,961 $ 21,442
State 800 1,999 832 5,360
Foreign (3,131) 3,536 (1,220) 9,872
-------- -------- ---------- ----------
Income taxes $ 16,865 $ 13,535 $ 19,573 $ 36,674
========= ======== ========== ==========
The provision for income taxes was calculated at estimated annual effective
rates of 33% and 32%, respectively, for the quarters ended February 28,
1998, and March 1, 1997.
COMMON STOCK SPLIT AND DIVIDEND INCREASE
On September 24, 1997, the Company's Board of Directors approved a three-
for-two stock split of the Company's common stock, effected in the form of
a 50% stock dividend, to holders of record on October 10, 1997. The Board
of Directors also approved a 20% increase in the quarterly cash dividend to
holders of record on October 10, 1997. The cash dividend rate was twelve
cents on each post-split share. Financial information contained in this
report has been restated to reflect the impact of the common stock split.
EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share." SFAS No. 128 requires all companies whose capital structures
include convertible securities and options to make a dual presentation of
basic and diluted earnings per share. The new standard became effective
beginning with the Company's third quarter ending on February 28, 1998.
Prior period amounts have been restated to conform with the presentation
requirements of SFAS No. 128. For all periods presented, net earnings are
the same for the calculation of both basic and diluted earnings per share.
The difference between basic and diluted average shares outstanding is the
dilutive potential shares from stock options outstanding.
FUTURE ACCOUNTING CHANGES
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." SFAS No. 130 establishes requirements for disclosure of
comprehensive income and becomes effective for the Company's fiscal year
ending May 1999. Reclassification of earlier financial statements for
comparative purposes is required.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131
establishes standards for disclosure about operating segments in annual
financial statements and selected information in interim financial reports.
It also establishes standards for related disclosures about products and
services, geographic areas, and major customers. This statement supersedes
SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise."
The new standard becomes effective for the Company's fiscal year ending May
1999, and requires that comparative information from earlier years be
restated to conform to the requirements of this standard.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Financial Condition
BALANCE SHEET AT FEBRUARY 28, 1998
vs.
BALANCE SHEET AT MAY 31, 1997
The Company's financial condition is strong. Cash flows from operating
activities and borrowing capacity from existing lines of credit are
expected to be sufficient to meet current and anticipated future needs. At
the end of the third quarter (February 28, 1998), the Company maintained
bank credit facilities totaling $307.7 million, of which $302.0 million was
unused. Unused facilities include $152.0 million in lines of credit and
$150.0 million under a revolving credit agreement from United States and
foreign banks.
Current assets decreased by $65.3 million from the year end balance at
May 31, 1997, as cash, accounts receivable and inventory all declined. The
net use of cash was due to high capital expenditures, reductions in trade
payables and the funding of restructuring measures. Inventory was lower
because of the $38.5 million write-down related to the restructuring of the
Video and Networking Division discussed below, partly offset by the
addition of inventory acquired in the second quarter as a result of the
acquisition of Siemens' Communications Test Equipment business, and the
normal seasonal increase in finished products. Current liabilities
decreased $15.0 million, due primarily to the timing of trade payables.
Property, plant and equipment increased by $43.1 million due to $97.6
million of capital expenditures as the Company is expanding printer
equipment and facilities for future manufacturing capacity and continues to
invest in information systems software and hardware. The capital
expenditures were partly offset by depreciation of $48.3 million.
Other long-term assets declined $17.9 million as a result of sales of,
and a decline in market value of, some held-for-sale investments, partly
offset by the addition of intangible assets on the acquisition of CTE
discussed below. Deferred tax assets showed a net increase due to the
reduction of the deferred tax liability on held-for-sale investments.
Shareholders' equity decreased by $9.8 million due primarily to a
decline in unrealized holding gains on investments in other companies and a
reduction in currency adjustment caused by weak foreign currencies, partly
offset by the increase in retained earnings.
9
<PAGE>
Restructuring
In the second quarter of 1998, the Company announced and began to implement
a restructuring plan designed to return the Video and Networking Division
business to profitable growth, and recorded a pre-tax provision of $60.0
million to account for these actions, which include streamlining its
product offerings and reducing the unit's cost structure to increase
operational efficiency. The plan will result in the separation of some
employees worldwide and the exiting of certain facilities and product lines
at a cost of $21.5 million. These costs are included in Non-recurring
charges in the Condensed Consolidated Statements of Operations. In
addition, the decision to streamline product offerings required a $38.5
million write-down of inventories in the second quarter, which is included
in Cost of sales. The Company expects that approximately $16 million of
the non-recurring charges require expenditures of cash, of which
approximately $5 million has been expended to date and about $5 million
will be expended in the fourth quarter of this fiscal year. The remaining
$6 million will affect cash flows in fiscal year 1999.
Acquisition
On September 30, 1997, the Company acquired Siemens' Communications Test
Equipment GmbH (CTE), a wholly owned subsidiary of Siemens based in Berlin,
Germany, for approximately $46.6 million in cash, including direct
acquisition costs. The transaction was accounted for by the purchase
method of accounting. $17.0 million of the purchase was identified as in-
process technology, which had not completed the development process and had
no alternative future use, and was written off in the second quarter. In
addition, integration costs of $2.0 million associated with the acquisition
were accrued.
Results of Operations
THREE QUARTERS ENDED FEBRUARY 28, 1998
vs.
THREE QUARTERS ENDED MARCH 1, 1997
The Company continued to experience significant improvements in
working capital. Compared to the third quarter of fiscal 1997, accounts
receivable improved from 14.3% to 14.2% of annualized sales and inventory
improved from 13.4% to 10.4% of annualized sales. These improvements
reduced the working capital required to support the business by $64
million.
Net sales were $1,527.9 million, an increase of 9% from the prior
year's total of $1,396.2 million. Net earnings were $39.7 million, or
$0.79 per share ($0.77 diluted) compared with $77.9 million, or $1.58 per
share ($1.56 diluted) in the first nine months of fiscal 1997. Results for
the first nine months of fiscal 1998 include charges of $79.0 million
($52.9 million after taxes, or $1.05 per share) related to the
restructuring of the Video and Networking Division and the acquisition of
CTE. Shares and earnings per share have been restated to reflect a three-
for-two stock split in October 1997.
10
<PAGE>
Excluding the after-tax charges of $52.9 million, 1998 net earnings would
have been $92.6 million, or $1.84 per share ($1.80 diluted).
Measurement Business Division sales of $715.6 million increased 15%
from the prior year, with growth in broadcast and telecommunications test
products and logic analyzers. Product orders increased 12% from $565.9
million to $636.1 million with growth in all geographic regions except
Pacific.
Color Printing and Imaging Division sales increased 17% from $449.0
million to $525.0 million and product orders increased 16% from $427.1
million to $494.1 million, with strong sales of the Phaser* 560 printer,
introduced in the first quarter, the successful launch of the Phaser 380
during the second quarter and the Phaser 360 in the current quarter.
*(Phaser is a registered trademark of Tektronix, Inc.).
Video and Networking Division sales decreased 12% from $327.1 million
to $287.3 million. The decline in sales was in the netstation business, as
the current results compare with a very strong nine months last year for
that business which included two large installations of network computers.
Sales for the video content production business were up, led by the Profile
video file server and the Lightworks V.I.P digital video editing system.
Product orders declined 11% from $315.0 million to $280.4 million.
Sales to customers in the United States increased from $736.1 million
to $781.9 million, and represented 51% of total sales. International sales
of $746.0 million were up 13%, with growth in all regions but particular
strength in the Americas and Japan. Product orders from customers in the
United States of $715.7 million were up 7% from last year while
international product orders of $694.9 million were up 9%. International
orders and sales growth were even stronger when stated in local currencies,
particularly in Europe and the Pacific, where some currencies declined
significantly, year over year, against the dollar.
Without the $38.5 million one-time inventory write-down related to the
restructuring of Video and Networking Division in the second quarter, cost
of sales for 1998 would have declined slightly as a percentage of net sales
to 57.0%. Including the write-down, cost of sales increased as a
percentage of sales from 57.3% to 59.5%. Research and development and
selling, general and administrative expenses declined slightly, year-to-
year, as a percentage of sales.
Excluding the non-recurring charges, the operating margin would have
improved from 8.1% to 8.7%. With the charges, operating income as a
percentage of sales declined to 3.5%.
The provision for income taxes declined from $36.7 million to $19.6
million due to the lower earnings before taxes. The estimated effective
annual tax rate is 33% for the current year compared to 32% for last year.
11
<PAGE>
QUARTER ENDED FEBRUARY 28, 1998
vs.
QUARTER ENDED MARCH 1, 1997
In the third quarter of fiscal 1998, net earnings were $34.2 million, or
$0.68 per share ($0.67 diluted), an increase of 19% over earnings of $28.8
million, or $0.58 per share ($0.57 diluted) in the third quarter of fiscal
1997. Net sales were $517.6 million, up 8% from $478.9 million in the
prior year. Product orders increased 3%, from $449.4 million to $461.2
million.
Measurement Business sales of $240.2 million were up 14% from the
prior year reflecting strong growth in logic analyzers and
telecommunications test products. The communication test equipment
business, acquired in the second quarter of 1998, contributed about $14
million to third quarter sales. Sales were strong in the United States, but
declined in Japan and the rest of the Pacific. Product orders were $196.5
million, an increase of 4% over product orders of $189.2 million in the
second quarter of 1998 with strong growth in Europe offset by a sharp
decline in the Pacific region. In addition to the direct impact in Asia,
the Company experienced a slowdown in orders from United States
manufacturers affected by business conditions in that region. The Company
expects these conditions will exist for the next few quarters.
Color Printing and Imaging sales increased 10% from $167.2 million to
$183.7 million, with strong growth in unit shipments into the office
market. The Phaser 560 color laser printer performed well and sales of the
new solid ink Phaser 360, announced during the period, were exceptionally
strong. Product orders increased 7% from $161.9 million to $173.2 million.
Video and Networking sales were $93.7 million for the 1998 quarter,
down 8% from $101.7 million in 1997. The decline in sales was in the
netstation business. Sales for the video content production business were
up, led by the Profile video file server. Product orders were $91.5
million, a decline of 7% from 1997 product orders of $98.3 million. Video
and Networking operated at a small profit for the quarter, compared to a
significant loss in the prior year quarter, and the Company expects the
division to continue to operate profitably during the fourth quarter.
Sales to customers in the United States increased by 8% from $235.9
million to $254.1 million, and represented 49% of total sales.
International sales of $263.5 million were up 8% from $243.0 million in the
prior year, with particularly strong growth in the Americas and improvement
in Europe. Product orders from customers in the United States of $232.4
million were up 2% from last year's third quarter while international
product orders of $228.8 million rose 3%.
Cost of sales as a percentage of sales improved from 57.1% to 56.6%.
The improvement is due primarily to a heavier sales mix of higher margin
new products and supplies, and manufacturing cost reductions, particularly
in the Video and Networking division. Research and development expense
(R&D) increased as a percentage of sales, from 9.5% to 10.2% while selling,
general and administrative expenses (SG&A) decreased from 24.5% to 23.8%.
The operating margin increased from 8.6% to 9.4%, primarily due to
gross margin improvement and cost control in SG&A, partly offset by higher
R&D.
The estimated effective annual tax rate is 33% for the current quarter
compared to 32% for the prior year's third quarter.
12
<PAGE>
YEAR 2000
In connection with the Company's ongoing program to standardize and upgrade
its key financial, information and operational systems, an assessment has
been made of the ability of these systems to operate in, and to process
transactions and data involving, the year 2000 and beyond. The Company
believes that all key systems that are not already year 2000 compliant will
be modified, upgraded or replaced prior to the year 2000, and that any
related costs will not have a material impact on the results of operations,
financial condition or cash flows of future periods.
Forward Looking Statements
Statements and information included in this Form 10-Q that relate to
the Company's goals, strategies and expectations as to future results,
events and expectations are based on the Company's current expectations.
They constitute forward looking statements subject to a number of risk
factors that could cause actual results to differ materially from those
currently expected or desired. From time to time, information provided by
the Company, or statements made by its employees, may contain other forward
looking statements. As with many high technology companies, risk factors
that could cause the Company's actual results or activities to differ
materially from these forward looking statements include but are not
limited to: world-wide economic and business conditions in the electronics
industry, 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 and sales mix, and
the related effects on gross margins; the Company's ability to deliver a
timely flow of competitive new products and market acceptance of these
products; the availability of parts and supplies from third party suppliers
on a timely basis and at reasonable prices; inventory risks due to changes
in market demand or the Company's business strategies; changes in effective
tax rates; customer demand; currency fluctuations; the fact that a
substantial portion of the Company's sales are generated from orders
received during the quarter, making prediction of quarterly revenues and
earnings difficult; and other risk factors listed from time to time in the
Company's reports filed with the Securities and Exchange Commission and
press releases.
Additional risk factors specific to the Company's current plans and
expectations that could cause the Company's actual results or activities to
differ materially from those stated include: the significant operational
issues the Company faces in executing its strategy in Video and Networking;
changes in the regulatory environment affecting the transition to high-
definition television within the time frame anticipated by the Company; the
timely introduction of new products scheduled during the Company's fiscal
year, which could be affected by engineering or other development program
slippages, the ability to ramp up production or to develop effective sales
channels; and the demand for and acceptance of new and other Company
products by the Company's customers, which could be affected by the current
uncertainties in economic conditions around the world and by activities of
the Company's competitors.
13
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) (i) Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
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.
April 9, 1998 TEKTRONIX, INC.
By___________________________
Carl W. Neun
Senior Vice President and
Chief Financial Officer
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS 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> May-30-1998
<PERIOD-END> Feb-28-1998
<CASH> 112,040
<SECURITIES> 0
<RECEIVABLES> 298,993
<ALLOWANCES> 4,222
<INVENTORY> 214,492
<CURRENT-ASSETS> 686,210
<PP&E> 771,720
<DEPRECIATION> 385,496
<TOTAL-ASSETS> 1,287,961
<CURRENT-LIABILITIES> 289,114
<BONDS> 150,708
<COMMON> 224,272
0
0
<OTHER-SE> 537,230
<TOTAL-LIABILITY-AND-EQUITY> 1,287,961
<SALES> 0
<TOTAL-REVENUES> 1,527,890
<CGS> 0
<TOTAL-COSTS> 909,768
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,111
<INCOME-PRETAX> 59,313
<INCOME-TAX> 19,573
<INCOME-CONTINUING> 39,740
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,740
<EPS-PRIMARY> 0.79
<EPS-DILUTED> 0.77
</TABLE>
