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 November 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-7422 ----------------------------------------------------------------- STANDARD MICROSYSTEMS CORPORATION - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 11-2234952 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 80 ARKAY DRIVE, HAUPPAUGE, NEW YORK 11788 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 516-435-6000 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 ________ As of January 13, 1998 there were 15,903,952 shares of the registrant's common stock outstanding. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) November 30, February 28, 1997 1997 Assets Current assets: Cash and cash equivalents $ 41,015 $ 8,382 Short-term investments 4,000 - Accounts receivable, net of allowance for doubtful accounts of $1,019 and $881, respectively 20,581 16,371 Inventories 20,880 31,460 Deferred tax benefits 3,932 5,412 Other current assets 18,621 10,781 ---------- ---------- Total current assets 109,029 72,406 ---------- ---------- Property, plant and equipment: Land 3,832 3,832 Buildings and improvements 28,739 28,870 Machinery and equipment 93,921 93,500 ---------- ---------- 126,492 126,202 Less: accumulated depreciation 81,127 74,171 ---------- ---------- Property, plant and equipment, net 45,365 52,031 ---------- ---------- Other assets 40,027 29,024 Net assets of discontinued operations 15,021 65,807 ---------- ---------- $ 209,442 $ 219,268 ========== ========== Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 11,925 $ 15,042 Accrued expenses and other liabilities 10,259 9,319 Income taxes payable 22 129 ---------- ---------- Total current liabilities 22,206 24,490 ---------- ---------- Long-term debt - 7,000 Other liabilities 4,520 4,584 Minority interest in subsidiary 11,460 11,397 Shareholders' equity: Preferred stock, $.10 par value- Authorized 1,000,000 shares, none outstanding - - Common stock, $.10 par value- Authorized 30,000,000 shares, outstanding 15,894,000 and 13,876,000 shares, respectively 1,589 1,388 Additional paid-in capital 106,324 87,095 Retained earnings 59,479 78,920 Unrealized gain on investment, net of tax 1,094 953 Foreign currency translation adjustment 2,770 3,441 ---------- ---------- Total shareholders' equity 171,256 171,797 ---------- ---------- $ 209,442 $ 219,268 ========== ========== Interim figures are subject to independent year-end audit. STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) Three Months Ended Nine Months Ended -------------------------- ------------------------- November 30, November 30, ------------------------- ------------------------- 1997 1996 1997 1996 Revenues $ 42,768 $ 50,450 $ 118,755 $ 164,678 Cost of goods sold 29,977 37,610 88,197 117,884 ---------- ---------- ---------- ---------- Gross profit 12,791 12,840 30,558 46,794 ---------- ---------- ---------- ---------- Operating expenses: Research and development 3,875 3,189 10,376 8,318 Selling, general and administrative 8,556 9,132 26,336 31,401 ---------- ---------- ---------- ---------- 12,431 12,321 36,712 39,719 ---------- ---------- ---------- ---------- Income (loss) from operations 360 519 (6,154) 7,075 ---------- ---------- ---------- ---------- Other income (expense): Interest income 331 155 561 420 Interest expense (44) (151) (205) (487) Litigation settlement - - (2,000) - Other income (expense), net (67) (15) 61 152 ---------- ---------- ---------- ---------- 220 (11) (1,583) 85 ---------- ---------- ---------- ---------- Income (loss) before minority interest and provision for income taxes 580 508 (7,737) 7,160 Minority interest in net income of subsidiary 24 10 63 10 ---------- ---------- ---------- ---------- Income (loss) before provision for income taxes 556 498 (7,800) 7,150 Provision for (benefit from) income taxes 195 191 (2,753) 2,918 ---------- ---------- ---------- ---------- Income (loss) from continuing operations 361 307 (5,047) 4,232 ---------- ---------- ---------- ----------- Discontinued operation: Loss from discontinued operation (net of income taxes of ($1,838), ($2,589), ($8,270) and ($3,855)) (3,413) (4,161) (15,424) (6,027) Gain on sale of discontinued operation (net of taxes of $555) 1,030 - 1,030 - ---------- ---------- ---------- ---------- Net loss $ (2,022) $ (3,854) $ (19,441) $ (1,795) ========== ========== ========== ========== Income (loss) per common and common equivalent share: Income (loss) from continuing operations $ 0.02 $ 0.02 $ (0.33) $ 0.31 Loss from discontinued operation (0.21) (0.30) (1.00) (0.44) Gain on sale of discontinued operation 0.06 - 0.07 - ---------- ---------- ---------- ---------- Net loss per common and common equivalent share $ (0.13) $ (0.28) $ (1.26) $ (0.13) ========== ========== ========== ========== Weighted average common and common equivalent shares outstanding 16,165 13,888 15,400 13,854 Interim figures are subject to independent year-end audit. STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Nine Months Ended ------------------------ November 30, ------------------------ 1997 1996 ---- ---- Cash flows from operating activities: Cash received from customers $ 114,054 $ 160,531 Cash paid to suppliers and employees (108,260) (157,754) Interest received 433 414 Interest paid (214) (611) Income taxes paid (97) (2,685) Cash paid for litigation settlement (2,000) - ---------- ---------- Net cash provided by (used for) operating activities 3,916 (105) ---------- ---------- Cash flows from investing activities: Capital expenditures (3,835) (11,913) Purchases of short-term investments (4,000) - Investment in Accelerix Incorporated (250) (1,483) Escrow investment (2,020) - Other 53 (240) ---------- --------- Net cash used for investing activities (10,052) (13,636) ---------- --------- Cash flows from financing activities: Proceeds from issuance of common stock 18,287 434 Borrowings under line of credit agreements 33,960 26,610 Repayments of borrowings under line of credit agreements (40,960) (26,610) ---------- --------- Net cash provided by financing activities 11,287 434 ---------- --------- Effect of foreign exchange rate changes on cash and cash equivalents (458) (564) ---------- --------- Net cash provided by (used for) discontinued operation (8,837) 5,619 ---------- --------- Net cash provided by sale of discontinued operation 36,777 - ---------- --------- Net increase (decrease) in cash and cash equivalents 32,633 (8,252) Cash and cash equivalents at beginning of period 8,382 18,459 ---------- --------- Cash and cash equivalents at end of period $ 41,015 $ 10,207 ========== ========== Reconciliation of net loss to net cash provided by (used for) operating activities: Net loss $ (19,441) $ (1,795) Add: net loss from discontinued operation 15,424 6,027 Subtract: gain from sale of discontinued operation (1,030) - ---------- ---------- Income (loss) from continuing operations (5,047) 4,232 Adjustments to reconcile income (loss) from continuing operations to net cash provided by (used for) operating activities: Depreciation and amortization 10,015 9,045 Other adjustments, net 897 1,026 Changes in operating assets and liabilities: Accounts receivable (4,807) (4,168) Inventories 10,471 (12,190) Accounts payable and accrued expenses and other liabilities (939) 3,044 Other changes, net (6,674) (1,094) ---------- -------- Net cash provided by (used for) operating activities $ 3,916 $ (105) ========== =========== Interim figures are subject to independent year-end audit. STANDARD MICROSYSTEMS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The interim financial statements furnished reflect all adjustments (consisting of only normal and recurring adjustments) which are, in the opinion of management, necessary to present a fair statement of the Company's financial position and results of operations for the three and nine month periods ended November 30, 1997. The financial statements should be read in conjunction with the summary of significant accounting policies and notes to consolidated financial statements included in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended February 28, 1997. 2. Cash, Cash Equivalents, and Short-term Investments Cash and cash equivalents consist principally of cash in banks and highly liquid debt instruments purchased with maturities of three months or less. These debt instruments are categorized as available for sale and are recorded at fair value which approximates cost. Short-term investments consist of debt instruments with original maturities of between three and twelve months. These investments are all classified as available-for-sale. While the Company's intent is to hold these investments to maturity, the Company has classified all securities as available-for-sale as the sale of such securities may be required prior to maturity to support current operations or to take advantage of other investment opportunities. Pursuant to Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities," such investments are stated at fair value and any unrealized gains and losses on such investments are reflected, net of taxes, in Shareholders' equity. 3. Inventories Inventories are valued at the lower of first-in, first-out cost or market and consist of the following (in thousands): Nov. 30, 1997 Feb. 28, 1997 Raw Materials $ 1,528 $ 1,788 Work in Process 15,428 23,619 Finished Goods 3,924 6,053 -------------- --------------- $ 20,880 $ 31,460 ============== =============== 4. Subsequent Event On December 17, 1997, the Company and Cabletron Systems, Inc. ("Cabletron") settled a lawsuit initiated in May 1997 by Cabletron. The action claimed violation of the non-competition clause included in the January 1996 Asset Purchase Agreement (the "Agreement") between the Company and Cabletron, and requested unspecified damages and an injunction. As part of this settlement, the Company paid Cabletron approximately $530,000 from an escrow account established for indemnification obligations as part of the Agreement. The remaining balance of the escrow account of $7,110,000 was released to the Company. 5. Discontinued operation In October 1997, the Company reorganized its System Products Division into a new corporation, SMC Networks, Inc., and sold an 80.1% interest in the new corporation to Accton Technology Corporation of Hsinchu, Taiwan (Accton) for approximately $40.2 million in cash. The Company retained a 19.9% interest in the new business, which supplies adapter cards, hubs and switches for local area networks. This investment is carried by the Company at cost. As a result of this transaction, the Company reported a pre-tax gain of approximately $1 million, after related costs, in the third quarter ended November 30, 1997. Approximately $2.0 million of the sale proceeds have been placed into an escrow account until January 2, 1999, as security for the Company's indemnity obligations in this transaction. The Company will also be providing certain administrative support services for the new business, including finance and information services, at fair value, until such time as either party elects to terminate such services, with notice as defined in the related agreement. As a result of this transaction, the net assets, operating results and cash flows of the System Products Division have been classified as a discontinued operation in the accompanying consolidated financial statements. Standard Microsystems Corporation's operations will now consist almost entirely of its Component Products Division, which supplies integrated circuits for the personal computer industry. Summarized financial information for the discontinued operation is as follows (in millions): Three Months Ended Nine Months Ended November 30, November 30, 1997 1996 1997 1996 -------------- ---------------- Revenues $ 5.4 $43.3 $ 65.4 $128.4 Income (loss) before income taxes (3.7) (6.8) (22.1) (9.9) Net income (loss) (2.4) (4.2) (14.4) (6.1) November 30, February 28, 1997 1997 ------------------------- Current assets $ 17.9 $57.7 Total assets 17.9 80.6 Current liabilities 2.9 14.8 Net assets 15.0 65.8 6 Commitments and Contingencies In September 1997, the Company signed an agreement to settle a class action lawsuit initiated in 1995. In June 1995, several actions were filed against the Company and certain of its officers and directors. These complaints were consolidated into a class action on behalf of the purchasers of Standard Microsystems common stock between September 19, 1994, and June 2, 1995. The consolidated complaint asserted claims under federal securities laws and alleged that the price of the Company's common stock had been artificially inflated during the class action period by false and misleading statements and the failure to disclose certain information. The Company, its officers and its directors strongly denied, and continue to deny, all of these allegations. On September 10, 1997, the Company and counsel for the class action plaintiffs signed an agreement to settle the consolidated action in its entirety. Although Standard Microsystems believes that the claims asserted in the class action were without merit, the Company believes that it was in the best interest of its shareholders to settle the case due to the continuing costs of defense, the distraction of management's attention and the uncertainties inherent in any litigation. As a result of this settlement, the Company recorded a net pre-tax charge of $2.0 million in its second quarter ended August 31, 1997. Several steps remain before this settlement can become effective. Before notice can be sent to the class, the settlement must be approved by the Federal judge who was assigned this case. If the court does not approve the settlement, or if certain other circumstances as set forth in a notice to class members occur, the proposed settlement may not become effective. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview: Discontinued Operation During the third quarter of fiscal 1998, Standard Microsystems Corporation (the Company) reorganized its former Systems Products Division, which designed, produced and marketed products used in the local area networking of personal computers, into a new corporation called SMC Networks, Inc. Following this reorganization, the Company sold an 80.1% interest in this new corporation to Accton Technology Corporation (Accton)of Hinschu, Taiwan, for approximately $40 million in cash. The Company retained a 19.9% ownership interest in SMC Networks, Inc., and carries this investment at cost on its consolidated balance sheet. The former Systems Products Division was discontinued on October 7, 1997 and is presented as a discontinued operation on the accompanying consolidated financial statements. For additional information about this discontinued operation, refer to the Company's Form 8-K report filed on October 22,1997. Continuing Operations The Company's continuing operations now consist almost entirely of the operations of its Component Products Division, which designs, develops, produces, and markets very-large-scale-integrated circuits, mainly for control of various personal computer functions. These integrated circuits (ICs) consist of input/output (I/O), local area network and embedded control devices. The Company also operates a wafer foundry that manufactures Microelectromechanical Systems (MEMS). The Company's 80% owned subsidiary, Toyo Microsystems Corporation (TMC), sells component and system products in the Japanese market. The accompanying financial statements have been restated to reflect the former System Products Division as a discontinued operation, and this Management's Discussion and Analysis of Financial Condition and Results of Operations discusses the continuing operation. As part of the System Products Division reorganization, the Company sold the rights to the SMC trade name and logo to SMC Networks, Inc. The Company has changed its trade name to SMSC, which is consistent with the Company's NASDAQ stock ticker symbol. Results of Continuing Operations Revenues The Company's revenues of $42.8 million for the third quarter of fiscal 1998 represent a decline of 15.2% from the year-earlier revenues of $50.5 million. Revenues of $118.8 million for the first nine months of fiscal 1998 have declined 27.9% compared to $164.7 million of revenues for the first nine months of fiscal 1997. The revenue decrease resulted from aggressive pricing by the Company's personal computer (PC) input/output (I/O) device competitors, in both the fiscal 1998 three and nine month periods. This pricing required the Company to lower unit prices more than planned and also hurt unit sales. Revenues from the Company's wafer foundry were 5.7% and 5.4% of total revenues for the three and nine month periods ended November 30, 1997, respectively, compared to 4.9% and 8.0% for the corresponding periods in the prior fiscal year. Gross Profit The Company's gross profit margin for the third quarter of fiscal 1998 was 29.9% compared with the 25.5% margin reported for the third quarter of fiscal 1997. For the nine month period ended November 30, 1997, the Company's gross profit margin was 25.7% compared with the year-earlier margin of 28.4%. Sales of new, higher-margin products contributed principally to greater gross margins in the third quarter. The principal factors contributing to the gross profit margin decrease for the first nine months of fiscal 1998, were sharply reduced selling prices on PC I/O devices, which were only partially offset by reductions in manufacturing costs, and a decline in wafer foundry revenues and the consequent increase in under-utilized wafer foundry manufacturing overhead. Operating Expenses Research and development expenses increased 21.9% to $3.9 million in the third quarter of fiscal 1998, from $3.2 million in the year-earlier period. For the current nine month period, research and development expenses increased by 25.3% to $10.4 million, from $8.3 million in the year-earlier period. These increases in spending for both the three month and nine month periods reflect an increased engineering staff, as well as increases in other development costs, compared to the comparable year-earlier periods. Selling, general and administrative expenses declined 5.5% to $8.6 million in the third quarter of fiscal 1998, compared to $9.1 million in the year-earlier quarter, and declined 16.2% to $26.3 million for the current nine month period, compared to the year-earlier expenses of $31.4 million. These lower selling, general and administrative expenses reflected lower sales commissions and other variable selling expenses associated with lower revenues and a reduction of staff levels in general and administrative areas. Other Income and Expenses During the second quarter of fiscal 1998, the Company recorded a $2.0 million charge for the settlement of a class action litigation initiated in 1995. Please refer to Note 6 to the Consolidated Financial Statements included herein for additional details. Income Taxes For the three and nine month periods of fiscal 1998, income tax benefits have been recorded at effective tax rates of 35.0% and 35.3%, respectively, compared to effective tax rates of 38.4% and 40.8%, respectively, for the corresponding year-earlier periods. The Company's effective income tax rate primarily reflects statutory tax rates, income tax credits, and the impact of certain non-deductible expenses and tax-exempt income. Liquidity and Capital Resources As of November 30, 1997, the Company's cash and cash equivalents totaled $41.0 million, an increase of $32.6 million from February 28, 1997. The Company's principal sources and uses of cash during the nine month period ended November 30, 1997 were as follows: - Cash provided from continuing operations of $3.5 million reflects a substantial decrease in inventories to $20.9 million as of November 30, 1997, from $31.5 million as of February 28, 1997. This decrease resulted from higher than planned inventories at February 28, 1997 (due to sharply reduced revenues in the fourth quarter of fiscal 1997), and the subsequent efforts by the Company to restore inventories to planned levels. - Cash used for investing activities of $10.0 million included capital expenditures of $3.8 million, down from $12.0 million in the year-earlier nine month period. The Company expects future capital spending to increase to support an expansion of the Company's production testing and wafer foundry manufacturing capacity. Also included within the current fiscal year's investing activities is $4.0 million of short-term investments in securities with maturities from three and twelve months. - Cash provided by financing activities of $11.3 million during the first nine months of fiscal 1998 includes $18.3 million of cash received from the issuance of the Company's common stock, offset by the repayment of $7.0 million of long-term bank debt. As of November 30, 1997, the Company had no long-term bank debt. The majority of the cash received from the issuance of common stock was provided by a March 1997 equity investment of $14.6 million in the Company by Intel Corporation of Santa Clara, California. - Cash used by the discontinued operation was $8.8 million, and cash provided from the sale of the discontinued operation was $36.7 million, after related expenses. As previously reported, the Company received $40.2 million in cash in October 1997 pursuant to the reorganization of its System Products Division and the concurrent sale of an 80.1% interest in the reorganized business. $2.0 million of these proceeds have been deposited into an escrow account until January 1999, as security for the Company's indemnification obligations on this transaction. The Company's working capital increased $38.9 million to $86.8 million as of November 30,1997, from $47.9 million as of February 28, 1997, most of which was provided by cash received pursuant to the System Products Division reorganization. Included within Other current assets at November 30, 1997 and February 28, 1997 were $7.6 million and $7.3 million, respectively, held in an interest-bearing escrow account. This account was established pursuant to the Company's January 1996 sale of a business unit to Cabletron Systems, Inc. (Cabletron), as security for the Company's indemnification obligations in that transaction. These funds were scheduled to be released to the Company in July 1997. In April 1997, Cabletron filed a claim against the escrow account, and in May 1997 filed a related lawsuit, alleging breach by the Company of the non-competition clause of a related agreement. In December 1997, the Company and Cabletron agreed to settle this action. The settlement resulted in a payment from the escrow account of $0.5 million to Cabletron, and the remainder was released to the Company. The Company maintains a $25.0 million line of credit with several banks, which permits the Company to borrow funds on a revolving basis, primarily to finance working capital needs. In May 1997, the Company and its banks renegotiated the terms of the credit line, extending the agreement through July 1998. This agreement provides the banks with a general security interest in the Company's trade accounts receivable and inventory. As of November 30, 1997, the Company had no outstanding borrowings against this line of credit. The Company believes that its current cash and cash equivalents, cash flows generated from operations, and its existing line of credit will be sufficient to meet both its cash requirements for the next twelve months. Factors That May Affect Future Results Certain statements and information contained in this quarterly report constitute "forward-looking statements" within the meaning of the Federal Securities laws. These forward-looking statements involve risks and uncertainties which may cause actual results and performance to be different from those expressed or implied in such statements. The Company competes in the personal computer semiconductor market, which is characterized by intense competition, rapid changes in technology and price erosion. Many of the Company's competitors in this market are larger and have significantly greater financial and other resources than the Company. The Company's quarterly and annual operating results may be influenced by factors, including, among other things: worldwide demand for personal computers, the ability to introduce competitive products on a timely basis, constraints on the availability and fluctuations in the cost of subcontract manufacturing, the ability to forecast market and customer demand and new products and technologies introduced by competitors. Sales of most of the Company's products depend largely on sales of personal computers. Reductions in the rate of growth in the PC market could adversely affect the Company's operating results. In addition, as a component supplier to PC manufacturers, the Company often experiences a greater magnitude of demand fluctuation then the Company's customers themselves experience. Also, some of the Company's products are used in PCs for the consumer market, which tends to be more volatile than other segments of the PC marketplace. The Company's success is highly dependent upon its ability to develop new products, bring them to the market ahead of its competitors and induce customers to select its products for their needs. In an environment of accelerating changes in technology and short product life cycles, these factors have become increasingly challenging and important. The vast majority of the Company's products are manufactured, assembled and tested by independent foundries and subcontract manufacturers. This reliance upon foundries and subcontractors involves certain risks, including potential lack of manufacturing availability, reduced control over delivery schedules, availability of advanced process technologies, changes in manufacturing yields and potential cost fluctuations. The Company generally must order inventory to be built by its foundries and subcontract manufacturers well in advance of product shipments. Because the Company's markets are volatile, there is risk that the Company may forecast incorrectly and produce excess or insufficient inventories. This inventory risk is increased by the recent trend for customers to place orders with increasingly shorter lead times. A significant number of the Company's foundries and subcontractors are located in Asia. Many of the Company's customers also manufacture in Asia or subcontract their manufacturing to Asian companies. This concentration of manufacturing and selling activity in Asia poses risks that could affect demand for and supply of the Company's products, including currency exchange rate fluctuations, economic and trade policies and the Asian political environment. Several countries in the Asia and Pacific Rim region have recently been experiencing economic uncertainty and devalued currencies. The Company is currently monitoring the backlog and order input from its customers in this region, as well as reviewing the credit position of these customers. Management is currently unable to determine the impact these conditions may have, if any, on its business in the future. The Company's performance is inherently dependent upon hiring and retaining employees with specific skills. The inability to hire and retain such employees could hinder the Company's product development and ability to manufacture, market and sell its products. A limited number of customers account for a significant portion of the Company's revenues. The Company's revenues from any one customer can fluctuate from period to period depending upon market demand for that customer's products, the customer's inventory management and the overall financial condition of the customer. Item 3 - Quantitative and Qualitative Disclosures About Market Risk Not applicable. PART II - OTHER INFORMATION Item 1. Legal Proceedings On December 17, 1997, the Company and Cabletron Systems, Inc. ("Cabletron") settled a lawsuit initiated in May 1997 by Cabletron. The action claimed violation of the non-competition clause included in the January 1996 Asset Purchase Agreement (the "Agreement") between the Company and Cabletron, and requested unspecified damages and an injunction. As part of this settlement, the Company paid Cabletron approximately $530,000 from an escrow account established for indemnification obligations as part of the Agreement. The remaining balance of the escrow account of $7,110,000 was released to the Company. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K A report on Form 8-K dated October 22, 1997, was filed during the last quarter of the period covered by this report. The Form 8-K reported the sale of the assets and liabilities of the Systems Products Division and contained the following financial statement pursuant to Item 7: Unaudited Pro Forma Consolidated Condensed Statement of Income for the year ended February 28, 1997. SIGNATURE 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. STANDARD MICROSYSTEMS CORPORATION (Registrant) DATE: January 13, 1998 /S/ Eric M. Nowling --------------------------------- (Signature) Eric M. Nowling Vice President and Controller (Chief Financial and Accounting Officer)