UNITED STATES 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 quarterly period ended: August 26, 2000
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: 012182
CALIFORNIA AMPLIFIER, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-3647070
- ---------------------- --------------
(State or Other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
460 Calle San Pablo
Camarillo, California 93012
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(Address of principal executive offices) (Zip
Code)
(805) 987-9000
--------------
(Registrant's telephone number including area code)
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 close of the period covered by this report.
Common Stock Outstanding as of August 26, 2000: 13,482,859
Number of pages in this Form 10-Q: 13
PART I - FINANCIAL INFORMATION
ITEM 1: Financial Statements
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
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Aug. 26, Feb. 26,
2000 2000
(unaudited) (audited)
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ASSETS
Current assets:
Cash and cash equivalents $ 8,322 $ 3,074
Accounts receivable, net 15,590 16,038
Inventories 15,261 12,948
Deferred tax asset 9,935 8,487
Prepaid expenses and other current assets 336 685
- --------------------------------------------------------------------------------
Total current assets 49,444 41,232
Property and equipment, at cost, net of
accumulated depreciation and amortization 9,955 9,731
Goodwill, net of accumulated amortization 3,692 3,827
Other assets 457 762
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$63,548 $55,552
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,029 $ 9,242
Accrued liabilities 11,795 13,099
Current portion of long-term obligations 450 4,973
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Total current liabilities 18,274 27,314
Long-term obligations, net of current portion 4,808 144
Minority interest share in net assets of
Micro Pulse, Inc. 525 342
Stockholders' equity:
Preferred stock, 3,000 shares authorized;
no shares outstanding --- ---
Common stock, $.01 par value; 30,000 shares authorized;
13,483 shares outstanding at August 26, 2000 and
12,658 at February 26, 2000 135 127
Additional paid-in capital 30,993 23,177
Accumulated other comprehensive income (223) (226)
Retained earnings 9,036 4,674
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Total stockholders' equity 39,941 27,752
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$63,548 $55,552
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See Notes to Unaudited Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF INCOME
(unaudited; in thousands, except per share data)
Three Months Ended Six Months Ended
-------------------- ------------------
Aug. 26, Aug. 28, Aug. 26, Aug. 28,
2000 1999 2000 1999
- -------------------------------------------------------------------------------
Sales $34,032 $18,575 $66,316 $31,668
Cost of sales 26,049 13,331 50,401 22,511
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Gross profit 7,983 5,244 15,915 9,157
Research and development 1,674 1,331 3,345 2,530
Selling 1,216 1,217 2,492 2,337
General and administrative 1,386 1,166 2,819 2,233
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Income from operations 3,707 1,530 7,259 2,057
Interest and other, net (86) (70) (188) (39)
Minority interest share in income
of Micro Pulse (117) (53) (256) (51)
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Income before income taxes 3,504 1,407 6,815 1,967
Provision for income taxes (1,264) (506) (2,453) (708)
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Net income $ 2,240 $ 901 $4,362 1,259
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Net income per share Basic $ .17 $ .08 $ .33 $ .11
Diluted $ .16 $ .07 $ .31 $ .10
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Shares used in per share
calculations Basic 13,382 11,894 13,168 11,860
Diluted 14,354 13,450 14,250 12,765
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See Notes to Unaudited Consolidated Financial Statements
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended
-----------------------
Aug. 26, Aug. 28,
2000 1999
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Cash flows from operating activities:
Net income $ 4,362 $ 1,259
Adjustments to reconcile net income
to net cash provided by
operating activities:
Non-cash income tax provision 2,327 609
Provision for doubtful accounts (44) (213)
Depreciation and amortization 1,844 1,472
Loss on sale of property and equipment 4 3
Minority interest share in net income
of Micro Pulse, net of tax 183 33
Deferred tax asset
Change in assets and liabilities,
net of effect of Gardiner
acquisition in fiscal year 2000:
Accounts receivable 491 (5,774)
Inventories (2,313) (113)
Prepaid expenses and other assets 655 (20)
Accounts payable (3,213) 3,358
Accrued liabilities (1,304) 1,409
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Net cash provided by operating activities: 2,992 2,023
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Cash flows from investing activities:
Purchase of property and equipment (1,937) (979)
Net assets acquired from Gardiner 0 (3,153)
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Net cash used in investing activities: (1,937) (4,132)
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Cash flows from financing activities:
Debt borrowings 5,000 0
Debt repayments (2,628) (297)
Issuances of common stock 1,818 355
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Net cash provided by financing activities: 4,190 58
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Effect of foreign exchange rates 3 (75)
Net increase (decrease) in cash and cash equivalents 5,248 (2,126)
Cash and cash equivalents at the beginning of period 3,074 9,312
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Cash and cash equivalents at end of period $ 8,322 $ 7,186
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See Notes to Unaudited Consolidated Financial Statements
CALIFORNIA AMPLIFIER, INC.
Notes to Unaudited Consolidated Financial Statements
1. BASIS OF PRESENTATION - The accompanying unaudited consolidated
financial statements have been prepared in accordance with the requirements of
Form 10-Q and, therefore, do not include all information and footnotes which
would be presented were such financial statements prepared in accordance with
generally accepted accounting principles. These statements should be read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
February 26, 2000. In the opinion of management, these interim financial
statements reflect all adjustments necessary for a fair presentation of the
financial position and results of operations for each of the periods presented.
The results of operations and cash flows for such periods are not necessarily
indicative of results to be expected for the full fiscal year.
2. INVENTORIES - Inventories include the cost of material, labor and
manufacturing overhead and are stated at the lower of cost (first-in, first-out)
or market and consist of the following (in 000's):
Aug. 26, 2000 Feb. 26, 2000
------------- -------------
Raw materials $12,062 $10,202
Work in process 989 1,073
Finished goods 2,210 1,673
------ -----
$15,261 $12,948
======= =======
3. NET INCOME PER SHARE - Basic income per share is computed by dividing
reported earnings available to common stockholders by weighted average shares
outstanding. Diluted income per share increases the weighted average shares
outstanding for the dilutive effect of stock options, warrants, and convertible
debt arrangements.
For the three and six months ended August 26, 2000 there were 431,000 options
not considered in the diluted weighted average shares calculation because their
inclusion would be anti-dilutive. No anti-dilutive options were excluded from
the earnings per share computations for the three and six month periods ending
August 28, 1999.
Three Months Ended (in 000's)
----------------------------
Aug. 26, Aug. 28,
2000 1999
----------- ---------
Weighted average shares outstanding - Basic 13,382 11,894
Effect of dilutive securities
Options 784 1,031
Litigation settlement 188 ---
Convertible debt --- 525
----------- ---------
Weighted average shares outstanding - Diluted 14,354 13,450
=========== =========
Six Months Ended (in 000's)
-----------------------------
Aug. 26, Aug. 28,
2000 1999
----------- ---------
Weighted average shares outstanding - Basic 13,168 11,860
Effect of dilutive securities
Options 774 512
Litigation settlement 156 ---
Convertible debt 152 393
----------- ---------
Weighted average shares outstanding - Diluted 14,250 12,765
=========== =========
4. COMPREHENSIVE INCOME - Comprehensive income is defined as the total of
net income and all non-owner changes in equity. The following table details the
components of comprehensive income for the three months ended August 26, 2000
and August 28, 1999 (in 000's):
Quarter Ended
-----------------------------
Aug. 26, Aug. 28,
2000 1999
----------- ---------
Net income $2,240 901
Foreign currency translation adjustment 30 (7)
----------- ---------
Comprehensive income $2,270 $ 894
=========== =========
Six Months Ended
-----------------------------
Aug. 26, Aug. 28,
2000 1999
----------- ---------
Net income $4,362 $1,259
Foreign currency translation adjustment 3 (75)
----------- ---------
Comprehensive income $4,365 $1,184
=========== =========
5. CONCENTRATION OF RISK - As of August 26, 2000, the Company had accounts
receivable due from one customer of $3,260,000 or 21% of consolidated accounts
receivable, and another customer of $3,749,000 or 24% of consolidated accounts
receivable.
For the three and six month period ended August 26, 2000 one customer accounted
for 26% and 22% of sales respectively, while another customer accounted for
24.4% and 26.6% of sales, respectively and 12.9% of sales for the three months
ended august 28, 1999. For the three and six month period ended August 28, 1999
another customer accounted for 26.2% and 22.9% of sales respectively.
All of the three customers referenced above were purchasers of Satellite
products.
6. STATEMENT OF CASH FLOWS - In fiscal year 2001, the Company recorded the tax
effect related to the exercise of stock options by increasing paid-in-capital
and deferred tax assets by $3,775,000. These amounts were excluded from the
statement of cash flows.
In fiscal year 2001, the Company issued 525,000 shares of its common stock for
retirement of $2,231,000 of debt. These amounts were excluded from the statement
of cash flows.
In fiscal year 2000, the Company recorded goodwill of $3,827,000 in conjunction
with the acquisition of certain assets from Gardiner Communications and issued a
note payable for $3,100,000. These amounts were excluded from the statement of
cash flows.
7. SEGMENTS - The Company currently manages its business under three
identifiable business segments, Satellite Products, Wireless Access Products and
Antenna Products.
Segment information for the three months ended August 26, 2000 and August 28,
1999 is as follows:
Three Months Ended August 26, 2000
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Satellite Wireless Access Antenna Corporate Total
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Sales $24,679 $7,278 $2,075 $ --- $34,032
Gross Profit 4,442 2,795 746 --- 7,983
Gross Margin 18.0% 38.4% 35.9% --- 23.5%
Income (Loss) Before Taxes 3,233 1,529 189 (1,447) 3,504
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Three Months Ended August 28, 1999
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Satellite Wireless Access Antenna Corporate Total
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Sales $13,000 $3,984 $1,591 $ --- $18,575
Gross Profit 4,124 582 538 --- 5,244
Gross Margin 31.7% 14.6% 33.8% --- 28.2%
Income (Loss) Before Taxes 2,684 (214) 131 (1,194) 1,407
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Six Months Ended August 26, 2000
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Satellite Wireless Access Antenna Corporate Total
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Sales $49,410 $12,744 $4,162 $ --- $66,316
Gross Profit 10,016 4,219 1,680 --- 15,915
Gross Margin 20.3% 33.1% 40.4% --- 24.0%
Income (Loss) Before Taxes 7,646 1,588 467 (2,886) 6,815
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Six Months Ended August 28, 1999
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Satellite Wireless Access Antenna Corporate Total
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Sales $20,031 $8,953 $2,684 $ --- $31,668
Gross Profit 5,996 2,157 1,004 --- 9,157
Gross Margin 29.9% 24.1% 37.4% --- 28.9%
Income (Loss) Before Taxes 3,797 134 126 (2,090) 1,967
- -----------------------------------------------------------------------------------------------
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999
SALES
Total sales increased by $15.4 million, or 83%, from $18.6 million for the three
months ended August 28, 1999 to $34.0 million for the three months ended August
26, 2000. Sales of Satellite Products increased $11.7 million from $13.0 million
to $24.7 million. Sales of Wireless Access Products increased $3.3 million from
$ 4.0 million to $7.3 million. Sales of Antenna Products by Micro Pulse
increased $484,000 from $1.6 million to $2.1 million.
The increase in sales of Satellite Products is primarily attributable to
significantly higher unit shipments of U.S. DBS products as a result of the
satellite service providers significant subscriber additions year-over-year, and
the Company's increase in market share since its acquisition of these products
in April 1999. In addition, the Company also began to ship DBS products to
certain European markets. Although year-over-year sales comparison show
significant unit growth, sequential growth has slowed considerably due to
satellite subscriber additions flattening in the United States. At this time
operators are reducing inventory levels and their ordering patterns are slowing.
Accordingly, the sales outlook for U.S. DBS products for each of the remaining
two quarters of fiscal year 2001 appear to be less than the shipments in the
second fiscal quarter.
The increase in the sale of Wireless Access Products resulted from higher unit
shipments of two-way MMDS transceivers, primarily to North American customers as
they introduce Wireless Internet in certain cities.
The increase in the sale of Antenna Products by Micro Pulse resulted primarily
from slightly higher demand in certain markets.
GROSS PROFITS AND GROSS MARGINS
Gross profits increased by $2.7 million, or 52%, from $5.2 million to $8.0
million. Gross margins decreased, however, to 23.5% from 28.2%. The 52% increase
in gross profits resulted from an 83% increase in sales offset by lower product
gross margins. Satellite gross margins for the three months ended August 26,
2000 decreased to 18% from 22.5% in the immediate preceding quarter and 31.7%
for the comparable three month period of the prior year. The significant
reduction in satellite gross margins for both period comparisons resulted from
continued pricing pressures on Satellite products coupled with higher material
costs, operational inefficiencies associated with the difficulties in obtaining
certain electronic components on a timely basis, and higher than anticipated
scrap. The significant reduction in gross margins relating to satellite products
was offset by a significant gross margin improvement in Wireless Access
products. Wireless Access product gross margins for the three months ended
August 26, 2000 were 38.4% as compared to 26% for the immediate preceding
quarter, and 14.6% for the comparable three month period of the prior year. The
higher gross margins are a result of approximately $4.0 million of sales of
two-way transceivers, at higher margins than current MMDS video products, and
significantly higher absorption of factory overhead than in the comparable
periods. Overall gross margins for the quarter ended August 26, 2000 still
decreased, however, because the quarterly product sales mix was so heavily
weighted toward the lower gross margin Satellite products, which accounted for
72.5% of quarterly sales.
The Company is still experiencing significant pricing pressures in Satellite
products and is currently working on lower cost designs to reverse the gross
margin decline and improve the availability of certain electronic components,
however, the timing of these cost reductions will not be fully implemented until
the fourth quarter. Any improvement in gross margins in the third quarter will
be from an improved product sales mix with increased sales of Wireless Access
products at higher product gross margins.
OPERATING EXPENSES
Research and development expenses increased by $343,000 from $1.33 million to
$1.67 million. The increase results from increased personnel, higher salaries
and related expenses, and higher development expenditures relating to new
product design, primarily fixed wireless products.
Selling expenses remained relatively the same at $1.2 million. The Company
continues to monitor discretionary spending as it analyzes new market
opportunities.
General and administrative expenses increased by $220,000 from $1.2 million to
$1.4 million. The increase relates primarily to increased salaries and legal
related expenses.
INCOME FROM OPERATIONS
Income from operations, for the reasons noted above, increased by $2.2 million
from income of $1.5 million for the three months ended August 28, 1999 to $3.7
million for the three months ended August 26, 2000.
MINORITY INTEREST SHARE IN INCOME OF MICRO PULSE
The Company consolidates 100% of the sales and expenses of Micro Pulse. The
minority interest share in income of Micro Pulse eliminates the 49.5% of the
income of Micro Pulse relating to the minority stockholders' share in Micro
Pulse.
PROVISION FOR INCOME TAXES
The provision for income taxes for the three months ended August 26, 2000 is
based upon an estimated annualized tax rate of 36%, the same tax rate as fiscal
year 2000. This tax rate assumes savings from benefits allowed for export sales
through a foreign sales corporation and research and development tax credits.
NET INCOME
Net income, for reasons outlined above, increased by $1.3 million from net
income of $901,000 for the three months ended August 28, 1999 to $2.2 million
for the three months ended August 26, 2000.
SIX MONTHS ENDED AUGUST 26, 2000 AND AUGUST 28, 1999
SALES
Total sales increased by $34.6 million from $31.7 million for the six months
ended August 28, 1999 to $66.3 million for the six months ended August 26, 2000.
Sales of Satellite Products increased $29.4 million from $20.0 million to $49.4
million. Sales of Wireless Access Products increased $3.8 million from $9.0
million to $12.7 million. Sales of Antenna Products increased $1.5 million from
$2.7 million to $4.2 million.
The increase in sales of Satellite Products is primarily attributable to
significantly higher unit shipments of U.S. DBS products as a result of the
satellite service providers significant subscriber additions year-over-year, and
the Company's increase in market share since its acquisition of these products
in April 1999. In addition, the Company also began to ship DBS products to
certain European markets.
The increase in the sale of Wireless Access Products resulted from shipments of
two-way MMDS transceivers primarily to North American customers.
The increase in the sale of Antenna Products by Micro Pulse resulted primarily
from a broadening of the Company's products and customer base.
GROSS PROFIT AND GROSS MARGIN
Gross profits increased by $6.7 million, or 74%, from $9.2 million to $15.9
million. The 74% increase in gross profits resulted from a 109% increase in
sales, offset by lower product gross margins in satellite products. The
reduction in gross margins resulted from a higher mix of Satellite product sales
at significantly lower gross margins, offset by improved gross margins for
Wireless Access products. The Company's Satellite products gross margin for the
six month period ended August 26, 2000 was 20.3% as compared to 29.97% for the
prior year period. Wireless Access products gross margins for the six month
period ended August 26, 2000 were 33.1% as compared to 24.1% for the prior year
period. The decline in gross margins for Satellite products relates to pricing
pressures because of the competitive environment, coupled with component
shortages and manufacturing inefficiencies. The improvement in gross margins for
Wireless Access products relates to significantly higher volume shipments of the
Company's two-way transceiver products and higher levels of factory overhead
absorption because of higher volumes. (See also Gross Profit and Gross Margin
for the three months ended August 26, 2000 and August 28, 1999 included
elsewhere herein.)
The Company is currently attempting to reduce the product cost on its Satellite
DBS products to improve gross margins, however, the Company must also continue
to participate in the U.S. DBS satellite market at its current market share of
approximately 40% thereby maintaining or increasing quarterly satellite sales to
ensure improvements in gross margins result in an increase to gross profits.
OPERATING EXPENSES
Research and development expenses increased $815,000 from $2.53 million to $3.3
million. The increase results from increased personnel, higher salaries and
related expenses, and higher development expenditures relating to new product
design, primarily fixed wireless products.
Selling expenses increased $155,000 from $2.3 million to $2.5 million. The
Company continues to monitor discretionary spending as it analyzes new market
opportunities.
General and Administrative expense increased $586,000 from $2.2 million to $2.8
million. The increase relates primarily to increased salaries and related
expenses, increased legal and other miscellaneous corporate expenses.
INCOME FROM OPERATIONS
Income from operations, for the reasons outlined above, increased $5.2 million,
from $2.1 million to $7.3 million.
MINORITY INTEREST SHARE IN INCOME OF MICRO PULSE
The Company consolidates 100% of the sales and expenses of Micro Pulse. The
minority interest share in income of Micro Pulse eliminates the 49.5% of the
income of Micro Pulse relating to the minority stockholders' share in Micro
Pulse.
PROVISION FOR INCOME TAXES
The provision for income taxes for the first six months of fiscal 2001 is based
upon an estimated annualized tax rate of 36%, the same tax rate as fiscal year
2000. This tax rate assumes savings from benefits allowed for export sales
through a foreign sales corporation and research and development tax credits.
NET INCOME
Net income, for reasons outlined above, increased by $3.1 million from $1.3
million to $4.4 million.
LIQUIDITY AND CAPITAL RESOURCES
The Company has an $8.0 million working capital facility with U.S. Bank at the
bank's prime rate (9.5% at August 26, 2000). As of August 26, 2000, no amounts
were outstanding under the credit facility. The $8.0 million credit facility
with U.S. Bank expires in June 2001.
The Company believes that cash flow from operations, together with the funds
available under its credit facility, are sufficient to support operations and
capital equipment requirements over the next twelve months.
The Company believes that inflation and foreign currency exchange rates have not
had a material effect on its operations. The Company believes that the remainder
of fiscal year 2001 will not be impacted significantly by foreign exchange since
a significant portion of the Company's fiscal year 2001 projected sales are to
U.S. markets, or to international markets where its sales are negotiated in U.S.
dollars. Import tariffs in countries such as Brazil and China have made it more
difficult to compete with in-country manufacturers.
A significant percentage of the Company's sales are generated by a few number of
customers, who order product under short-term purchase orders. A change in their
ordering pattern could adversely affect future sales.
SAFE HARBOR STATEMENT
Forward looking statements in this 10-Q which include, without limitation,
statements relating to the Company's plans, strategies, objectives,
expectations, intentions, projections and other information regarding future
performance, are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The words "believes," "anticipates,"
"expects," and similar expressions are intended to identify forward-looking
statements. These forward-looking statements reflect the Company's current views
with respect to future events and financial performance and are subject to
certain risks and uncertainties, including, without limitation, product demand,
market growth, new competition, competitive pricing and continued pricing
declines in the DBS market, supplier constraints, manufacturing yields, meeting
demand with multiple facilities, timing and market acceptance of new product
introductions, new technologies, and other risks and uncertainties that are
detailed from time to time in the Company's periodic reports filed with the
Securities and Exchange Commission, copies of which may be obtained from the
Company upon request. Such risks and uncertainties could cause actual results to
differ materially from historical results or those anticipated. Although the
Company believes the expectations reflected in such forward-looking statements
are based upon reasonable assumptions, it can give no assurance that its
expectations will be attained. The Company undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On June 11, 1997, the Company and certain of its directors and officers had
two legal actions filed against them, one in the United States District Court,
Central District of California, entitled Yourish v. California Amplifier, Inc.,
et al., Case No. 97-4293 CBM (Mcx), and the other in the Superior Court for the
State of California, County of Ventura, entitled Yourish v. California
Amplifier, Inc. et al., Case No. CIV 173569. On June 30, 1997, another legal
action was filed against the same defendants in the Superior Court for the State
of California, County of Ventura, entitled Burns, et al., v. California
Amplifier, Inc., et al., Case No. CIV 173981. All three actions were purported
class actions on behalf of purchasers of the common stock of the Company between
September 12, 1995 and August 8, 1996. The actions claimed that the defendants
engaged in a scheme to make false and misleading statements and omit to disclose
material adverse facts to the public concerning the Company, allegedly causing
the Company's stock price to artificially rise, and thereby allegedly allowing
the individual defendants to sell stock at inflated prices. Plaintiffs claimed
that the purported stockholder class was damaged when the price of the stock
declined upon disclosure of the alleged adverse facts. On September 21, 1998,
the Federal legal action was dismissed in the United States District Court. The
dismissal was upheld by the U.S. Court of Appeals for the Ninth Circuit on
October 8, 1999.
On March 27, 2000 the trial began for the lawsuit filed in the Superior Court
for the State of California, County of Ventura, entitled Yourish v. California
Amplifier, Inc., et al., Case No. CIV 173569. On March 29, 2000 the parties
reached a settlement. The terms of the settlement called for the issuance by the
Company of 187,500 shares of stock along with a cash payment of $3.5 million,
funded in part by insurance proceeds, for a total settlement of approximately
$11.0 million. Of the total settlement, $9.5 million was accrued in the
accompanying consolidated financial statements for the year ended February 26,
2000 and August 26, 2000. By Order dated September 14, 2000, the court approved
the terms of the settlement and dismissed the action with prejudice.
In connection with the settlement of the Yourish action, the Company and certain
of its former and current officers and directors have filed a lawsuit
(California Amplifier, Inc., et al. v. RLI Insurance Company, et al., Ventura
County Superior Court Case No. CIV196258), against one of its insurance carriers
to recover $2.0 million of coverage the insurance carrier has stated was not
covered under its policy of insurance. Discovery has commenced and the insurance
carrier has filed a Motion for Judgment on the Pleadings, to which the Company
has filed opposition, which is set to be heard by the court on October 5, 2000.
On March 7, 2000, the Company announced that it had received a complaint of
patent infringement from Andrew Corporation. The complaint, filed against
California Amplifier in the U.S. District Court for the Eastern District of
Texas, alleges that certain California Amplifier products infringe Andrew
Corporation's patent rights. The complaint was served with this initial pleading
on or about June 5, 2000. A first amended complaint was filed by Andrew
Corporation on June 28, 2000. On July 18, 2000, Andrew Corporation filed a
motion for a preliminary injunction seeking to enjoin the Company from selling
the products that Andrew Corporation alleges infringe its patent rights. The
parties agreed to continue the scheduled hearing on Andrew Corporation's motion
to permit the parties to engage in discovery and briefing related to the motion,
which is currently ongoing. The Company believes that the allegations of the
first amended complaint and the motion lack merit and the Company intends to
vigorously defend the action.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of stockholders of California Amplifier, Inc. was held
July 14, 2000.
At the annual meeting of stockholders proposals were considered for the
election of Ira Coron, Fred Sturm, Arthur H. Hausman, Frank Perna, Jr. and
Thomas L. Ringer as directors to serve until the 2001 annual meeting of
stockholders. All of the five director-nominees were elected. The voting results
are summarized below:
Proposal
--------
1) Election of Directors:
For Withheld Against
------------------------------------
Ira Coron 11,441,025 35,260 0
Fred Sturm 11,458,005 18,280 0
Arthur Hausman 11,440,040 36,245 0
Frank Perna, Jr. 11,449,280 27,005 0
Thomas Ringer 11,451,685 24,600 0
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter ended August 26,
2000.
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.
California Amplifier, Inc.
(Registrant)
October 4, 2000 /s/ Michael R. Ferron
Michael R. Ferron
Vice President, Finance and
Chief Accounting Officer