UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 24, 1999
Tektronix, Inc.
(Exact name of registrant as specified in its charter)
OREGON 1-4837 93-0343990
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) 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)
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Item 5. Other Events
On June 24, 1999, Tektronix, Inc. announced that its Board of Directors
unanimously approved a plan to separate into two independent publicly traded
companies. One will be comprised of Tektronix' Measurement Business Division,
and the other will contain the Color Printing and Imaging Division. Jerry Meyer,
who is currently the chairman, president and chief executive officer of
Tektronix, Inc., will become chief executive officer of the new color printing
and imaging company. Carl Neun, currently the chief financial officer of
Tektronix, Inc., will become the chief executive officer of the measurement
company. Both Meyer and Neun will continue in their current positions at
Tektronix until the separation is complete. Rick Wills, currently president of
the Measurement Business Division, will become president of the measurement
company, and Gerry Perkel, currently president of CPID, will become president of
the new color printing and imaging company. In addition, Tektronix announced
that it intends to sell or find a strategic alliance for its Video and
Networking Division, excluding the VideoTele.com business unit. The news release
is attached as Exhibit 99.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
99 News release dated June 24, 1999
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Tektronix, Inc.
By: JAMES F. DALTON
-------------------------------------
Date: June 30, 1999 Vice President, General Counsel
and Secretary
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EXHIBIT INDEX
Exhibit No. Description
----------- -----------
99 News release dated June 24, 1999
Media Contact: Heather Wyse Analyst Contacts: Carl Neun
503/685-4155
Colin Slade
503/685-3759
Tektronix Announces Plan to Create Two
Independent Companies
- -- Tektronix to Form Separate Measurement and Color Printing
and Imaging Companies --
- -- Will Sell or Seek Alliance for Video and Networking Division --
- -- Company on Track With Announced Cost Reductions --
WILSONVILLE, Ore., June 24, 1999 - Tektronix, Inc. (NYSE: TEK) today
announced that its board of directors unanimously approved a plan that would
result in the formation of two separate, publicly traded companies. One company
will be comprised of Tektronix' Measurement Business Division (MBD); the other
company will be comprised of Tektronix' Color Printing and Imaging Division
(CPID). In addition, Tektronix announced today that it intends to sell or find a
strategic alliance for its Video and Networking Division, excluding the
VideoTele.com business unit.
Jerry Meyer, chairman and chief executive officer, said, "While Tektronix
today is a leading designer, manufacturer and marketer of both measurement
equipment and color printers for companies all over the world, fundamentally,
color printing and measurement are two separate businesses, each with its own
operational requirements, marketing strategies and competitive realities. Right
now, both businesses compete for management focus and investment dollars. This
plan will allow each business to concentrate on its strengths and to respond
with greater flexibility and speed to the needs of its customers. The two
companies, both leaders in their respective markets, will be financially strong.
We believe that this plan will enable each business to pursue its optimal
long-term strategy without the limitations necessarily imposed by a larger, more
diverse company. We are also confident that we will sell or find a strategic
partner for our video division and that it will continue to be a leading
provider of operational equipment to the professional video and broadcast
markets."
The New Measurement Company
The new measurement company will retain the "Tektronix" name and be
headquartered in Beaverton, Oregon. Tektronix' MBD had fiscal 1999 net sales of
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approximately $845 million and approximately 3,600 employees worldwide. MBD is a
worldwide market leader in telecommunications test products, oscilloscopes,
signal measurement and television test equipment.
The new company would continue to capitalize on the growth opportunities in
the computer, communications and video markets as these three markets converge.
Tektronix' VideoTele.com business unit is now a part of MBD.
Meyer continued, "Throughout our more than 50-year history, Tektronix'
Measurement Business Division has enjoyed a strong and reliable brand name. MBD
offers innovative products, including the fastest oscilloscopes in the world,
that provide solutions in the rapidly-growing industries of communications
equipment, computers and semiconductors."
The New Color Printing and Imaging Company
The new color printing and imaging company, which has not yet been named,
will be headquartered in Wilsonville, Oregon. CPID had fiscal 1999 net sales of
approximately $725 million and approximately 2,100 employees worldwide. The new
color printing and imaging company will continue to be a recognized market
leader in business color printing. Building on more than 15 years of
market-leading research and development, Tektronix color printers provide print
solutions that are easy to use and affordable. CPID develops and markets the
award-winning family of Phaser(R) color printers, which include color laser and
solid ink technologies.
Meyer added, "The new color printing and imaging company will have the
advantage of being a market leader in desktop color printers. CPID will continue
its history of developing innovative new products to address this rapidly
growing market. Furthermore, we believe its large installed base will continue
to generate substantial recurring revenues from the sale of consumables."
Tektronix is considering an initial public offering (IPO) for approximately
15 percent of the new color printing and imaging company prior to the end of its
current fiscal year. The remaining shares would be distributed, on a tax-free
basis, to Tektronix shareholders at some time after the offering.
Management
Upon completion of the separation of the two companies, Jerry Meyer will
become chief executive officer of the new color printing and imaging company.
Carl Neun, senior vice president and chief financial officer of Tektronix, will
become chief executive officer of the new measurement company. Both Meyer and
Neun will continue in their current positions at Tektronix until the spin-off is
complete. Rick Wills, currently president of MBD, will become president
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of the new measurement company and Gerry Perkel, currently president of CPID,
will become president of the new color printing and imaging company. The Company
expects the separation of the businesses to have no significant impact on
employment levels.
Video and Networking Division
In addition, Tektronix intends to sell or find a strategic alliance for its
Video and Networking Division (VND). The company's video business has operations
in Grass Valley, California; Beaverton, Oregon; and around the world. Its
products include the award-winning and market-leading Profile(R) video server
product line.
Meyer said, "VND just finished its strongest quarter of the year. We are
close to two major product introductions, and we expect our new cost structure
to help return the business to solid profitability."
Continued Cost Reductions and Reduced Capital Expenditures
Tektronix is continuing on its plan, announced in November 1998, to
eliminate $65 million in total annual operating expenses by September 1999. The
company anticipates that the revenue opportunities of CPID and MBD, combined
with the continued initiatives to reduce operating expenses, will allow the
company to deliver improved operating margins and profitability during the next
fiscal year.
Any proceeds from the sale of the video division or other asset
dispositions may be utilized to pay down outstanding debt or for other corporate
purposes. Meyer noted that over the past several years, Tektronix has made
significant investments in systems upgrades, facility renovations and
manufacturing. With these improvements largely in place, capital expenditures
are expected to be in the $70 million to $80 million range for fiscal 2000, down
from $117 million in fiscal 1999 and $155 million for fiscal 1998.
J.P. Morgan & Co. is acting as a financial advisor to Tektronix.
About Tektronix
Tektronix is a portfolio of measurement, color printing and video and
networking businesses dedicated to applying technology excellence to customer
challenges. Tektronix is headquartered in Wilsonville, Oregon, and has
operations in 26 countries outside the United States. Founded in 1946, the
company had revenues of approximately $1.9 billion in fiscal 1999.
Forward Looking Statement
Statements and information in this press release that relate to future
results and the strategic restructuring plan are based on the company's current
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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.
Risk factors include, but are not limited to: the ability of Tektronix to
successfully separate and operate the MBD and CPID businesses and complete the
strategic restructuring plan; the potential disruption in the company's business
and to its employee base during this process; risks that the initial public
offering and the subsequent distribution of stock to Tektronix shareholders will
not be feasible or will not be successfully consummated; and risks that the
company will be unable to find a strategic partner for its Video and Networking
Division.
Tektronix has other risk factors in its business, including but not limited
to: the company's ability to successfully implement the strategic direction and
restructuring actions announced in fiscal 1999, including reducing its
expenditures; the effects of year 2000 compliance issues; the timely
introduction of new products scheduled during the current year, which could be
affected by engineering or other development program slippage, the ability to
ramp up production or to develop effective sales channels; customers' acceptance
of and demand for new products; changes in the regulatory environment affecting
the transition to high-definition television within the time frame anticipated
by the company; the significant operational and strategic uncertainties the
company faces within the Video and Networking Division; worldwide economic and
business conditions in the electronics industry, including the continuing
effects of the Asian economic crisis and its secondary effects on demand of the
company's products; competitive factors, including pricing pressures,
technological developments and new products of competitors; and other risk
factors listed from time-to-time in the company's Securities and Exchange
Commission reports, including but not limited to the quarterly reports on Form
10-Q and the annual reports on Form 10-K and press releases.
