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 January 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File No. 0-22598
ORTEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-3494360
(State or Other Jurisdiction of (I.R.S.Employer
Incorporation or Organization) Identification No.)
2015 West Chestnut Street, Alhambra, California 91803-1542
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (818) 281-3636
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
---- ----
As of January 31, 1997, there were 11,508,443 shares of the registrant's
$.001 par value Common Stock outstanding.
Page 1 of 17
Exhibit Index on Page 16
ORTEL CORPORATION
INDEX
Page(s)
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of January 31, 1997
(unaudited) and April 30, 1996 (audited).............................. 3
Condensed Consolidated Statements of Income (unaudited) for the
fiscal quarter and nine months ended January 31, 1997 and 1996........ 4
Condensed Consolidated Statements of Cash Flows (unaudited) for
the nine months ended January 31,1997 and 1996........................ 5
Notes to Condensed Consolidated Financial Statements.................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................... 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K........................................ 14
Signatures.......................................................................... 15
Index to Exhibits................................................................... 16
2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORTEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
January 31, April 30,
1997 1996
-------------------------------
ASSETS (unaudited) (audited)
- ------
Current assets:
Cash and cash equivalents......................................... $ 8,862 $15,573
Short-term investments............................................ 25,451 23,299
Accounts receivable (net)......................................... 13,444 9,024
Other receivables................................................. 1,490 668
Inventories (note 4).............................................. 12,036 9,736
Prepaid and other current assets.................................. 3,040 2,339
------- -------
Total current assets................................................ 64,323 60,639
Property, equipment and improvements (net).......................... 17,703 13,396
Intangible assets (note 5).......................................... 2,929 1,804
Other assets (note 5)............................................... 3,428 1,618
------- -------
Total assets........................................................ $88,383 $77,457
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable.................................................. 5,757 $ 3,470
Accrued liabilities............................................... 6,223 5,539
Income taxes payable.............................................. 1,130 503
------- ------
Total current liabilities........................................... 13,110 9,512
Deferred income..................................................... 427 456
Deferred income taxes............................................... 1,301 1,032
Notes payable....................................................... - 6
Minority interest................................................... 230 177
Stockholders' equity:
Preferred stock, $.001 par value; authorized 5,000,000 shares, none
issued and outstanding............................................ - -
Common stock, $.001 par value; authorized 25,000,000 shares, issued
and outstanding 11,508,443 and 11,358,810 at January 31, 1997 and
April 30, 1996, respectively..................................... 12 11
Additional paid-in capital......................................... 53,167 51,369
Retained earnings.................................................. 22,419 16,397
Loans receivable................................................... (1,312) (1,506)
Deferred distribution costs (note 6)............................... (708) -
Unrealized gains on investments.................................... (22) -
Cumulative effect of foreign currency translation.................. (241) 3
------- -------
Net stockholders' equity............................................ 73,315 $66,274
------- -------
Total liabilities and stockholders'................................ $88,383 $77,457
equity............................................................. ======= =======
See accompanying notes to condensed consolidated financial statements.
3
ORTEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
January 31, January 31,
------------------ -------------------
1997 1996 1997 1996
------- ------- ------- -------
Revenues................................................... $22,967 $13,400 $61,093 $42,268
Cost of revenues........................................... 11,829 6,850 31,631 21,431
------- ------- ------- -------
Gross profit............................................ 11,138 6,550 29,462 20,837
Operating expenses:
Research and development................................ 3,808 2,330 9,584 6,807
Sales and marketing..................................... 2,643 1,919 7,337 5,795
General and administrative.............................. 1,809 784 4,661 2,446
------- -------- ------- -------
Total operating expenses............................... 8,260 5,033 21,582 15,048
------- -------- ------- -------
Operating income........................................... 2,878 1,517 7,880 5,789
Interest income (net)...................................... 335 445 1,110 1,395
Other non-operating income/(expense)....................... (257) (36) (221) (38)
------- -------- ------- -------
Income before income taxes................................. 2,956 1,926 8,769 7,146
Provision for income taxes................................. 867 514 2,747 2,421
------- -------- ------- -------
Net income (note 3)........................................ $ 2,089 $ 1,412 $ 6,022 $ 4,725
======= ======= ======= =======
Shares and common equivalent shares used in computation
of net income per share (000s)............................ 12,585 11,741 12,598 12,151
======= ======= ======= =======
Net income per share (note 2)............................. $ .17 $ .12 $ .48 $ .39
======= ======= ======= =======
See accompanying notes to condensed consolidated financial statements.
4
ORTEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Nine Months Ended
-------------------------------------
January 31, January 31,
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................... $ 6,022 $ 4,725
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization......................... 3,250 2,238
Gain on disposal of equipment......................... (92) (10)
Minority interest in subsidiaries..................... 53 (46)
Changes in operating assets and liabilities:
(Increase) decrease in:
Receivables........................................... (5,241) 865
Inventories........................................... (2,300) (1,337)
Prepaid and other assets.............................. (844) (772)
Increase (decrease) in:
Accounts payable and accrued liabilities.............. 2,965 (203)
Deferred income....................................... (28) -
Income taxes payable.................................. 896 (611)
--------- ---------
Net cash (used in) provided by operating activities...... 4,681 4,849
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures..................................... (7,168) (5,520)
Proceeds from sale of equipment.......................... - 19
Investment in Photon..................................... (1,708) -
Intangible assets........................................ (1,382) -
Short-term investments................................... (2,153) (10,074)
Increase in valuation of short-term investments.......... (22) 195
--------- ---------
Net cash provided by (used in) investing activities (12,433) (15,380)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net.............. 1,799 299
Notes receivable from stockholders....................... 194 (436)
Deferred distribution costs.............................. (708) -
--------- ---------
Net cash provided by (used in) financing activities...... 1,285 (137)
Effect of exchange rate changes on cash.................. (244) (141)
--------- ---------
Net increase (decrease) in cash and equivalents.......... (6,711) (10,809)
Cash and cash equivalents, beginning of period........... 15,573 23,804
--------- ---------
Cash and cash equivalents, end of period................. $ 8,862 $ 12,995
========= ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for
Interest paid.......................................... $ 8 $ 2
Income taxes paid...................................... $ 2,435 $ 3,087
See accompanying notes to condensed consolidated financial statements.
5
ORTEL CORPORATION
Notes to Condensed Consolidated Financial Statements
1. Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company without audit (except for the balance sheet
information as of April 30, 1996, which was derived from audited consolidated
financial statements) and, in the opinion of management, contain all adjustments
necessary to present fairly the consolidated financial position at January 31,
1997, and the condensed consolidated results of operations for the three-month
and nine-month periods ended January 31, 1997 and January 31, 1996, and the
condensed consolidated cash flows for the nine-month periods ended January 31,
1997, and January 31, 1996, in accordance with generally accepted accounting
principles. Certain information and footnote disclosures normally included in
financial statements have been condensed or omitted pursuant to rules and
regulations of the Securities and Exchange Commission, although the Company
believes that the disclosures in the consolidated financial statements are
adequate to ensure the information presented is not misleading. These
consolidated financial statements should be read in conjunction with the audited
financial statements included in the Company's annual report for the fiscal year
ended April 30, 1996.
The results of operations for the three-month and nine-month periods ended
January 31, 1997, are not necessarily indicative of the results to be expected
for the entire fiscal year.
2. Per Share Information
---------------------
Net income per share is based on the weighted average common and common
equivalent shares outstanding for each period including common shares issuable
upon the exercise of stock options.
Net income per share for all periods presented is summarized as follows (in
thousands, except per share data):
Three Months Ended Nine Months Ended
January 31 January 31
-----------------------------------------
1997 1996 1997 1996
------- ------- ------- -------
Net income............................. $ 2,089 $ 1,412 $ 6,022 $ 4,725
======= ======= ======= =======
Weighted average shares outstanding:
Common shares issued................. 11,490 11,384 11,441 11,298
Stock options........................ 1,095 357 1,157 853
------- ------- ------- -------
Total............................. 12,585 11,741 12,598 12,151
======= ======= ======= =======
Net income per share................... $ .17 $ .12 $ .48 $ .39
======= ======= ======= =======
For the three-month and nine-month periods ended January 31, 1997 and 1996,
fully diluted income per share did not differ materially from primary income per
share; accordingly, fully diluted income per share has not been presented.
6
ORTEL CORPORATION
Notes to Condensed Consolidated Financial Statements (continued)
3. Income taxes
------------
Income taxes for the respective periods were computed using the effective
tax rate estimated to be applicable for the fiscal year, which is subject to
ongoing review and evaluation by management.
4. Inventories
-----------
Inventories are stated at the lower of cost (first-in, first-out) or market
and consist of the following (in thousands):
January 31, 1997 April 30, 1996
--------------------------------------
(unaudited) (audited)
Raw materials..... $ 3,780 $2,617
Work-in-process... 7,537 6,797
Finished goods.... 719 322
------- ------
$12,036 $9,736
======= ======
5. Investment in unconsolidated subsidiary
---------------------------------------
In October, 1996, the Company acquired a minority (34%) interest in Photon
Technology Co., Ltd. "Photon" based in Shenzhen, China, with a cash investment
of $2.4 million plus associated acquisition costs for a total investment of $2.9
million. The investment includes net assets valued at $1.7 million with the
remainder classified as goodwill to be amortized over ten years. The operating
results of Photon will be presented based on the equity basis of accounting.
6. Deferred distribution costs
---------------------------
During the period ended October 31, 1996, 70,000 shares of non-qualified
stock options were issued to the management of Photon. The value of those
options under SFAS 123 "Accounting for Stock Options", is estimated to be
$731,000 which will be amortized and incorporated into the operating results
over seven years.
7. Cash and cash equivalents
--------------------------
Cash consists of cash and cash equivalents (defined as marketable securities
with original maturities of 90 days or less) in the amount of $8.9 million and
$15.6 million as of January 31, 1997 and April 30, 1996 respectively, and short-
term investments (marketable securities with maturities of more than 90 days) of
$25.5 million and $23.3 million as of January 31, 1997, and April 30, 1996,
respectively. Under Financial Accounting Standards Board Statement 115, the
Company has classified its short-term investments as available-for-sale.
Available-for-sale securities are stated at market value and unrealized holding
gains and losses, net of the related tax effect, are excluded from earnings and
are reported as a separate component of stockholders' equity until realized. A
decline in the market value of the security below cost that is deemed other than
temporary is charged to earnings resulting in the establishment of a new cost
basis for the security.
7
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the unaudited condensed consolidated
financial statements included herein. The discussion in this section contains
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from those discussed herein. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed in this Item.
RESULTS OF OPERATIONS
The following table sets forth the statements of income as a percentage of
revenues.
Three Months Ended Nine Months Ended
January 31, January 31,
--------------------------------------------
1997 1996 1997 1996
----- ----- ----- -----
Revenues....................... 100.0% 100.0% 100.0% 100.0%
Cost of revenues............... 51.5 51.1 51.8 50.7
----- ----- ----- -----
Gross profit................. 48.5 48.9 48.2 49.3
Operating expenses:
Research and development..... 16.6 17.4 15.7 16.1
Sales and marketing.......... 11.5 14.3 12.0 13.7
General and administrative... 7.9 5.9 7.6 5.8
----- ----- ----- -----
Total operating expenses..... 36.0 37.6 35.3 35.6
----- ----- ----- -----
Operating income............... 12.5 11.3 12.9 13.7
Other income, net.............. .4 3.1 1.5 3.2
----- ----- ----- -----
Income before income taxes... 12.9 14.4 14.4 16.9
Provision for income taxes..... 3.8 3.8 4.5 5.8
----- ----- ----- -----
Net income................... 9.1% 10.6% 9.9% 11.1%
===== ===== ===== =====
The Company's quarterly operating results have fluctuated and may continue
to fluctuate as a result of factors including changes in market demand, prices
of the Company's or its competitors' products, increased competition, new
product introduction by the Company or its competition, market acceptance of new
or existing products, manufacturing yields, the cost and availability of
components, the mix of the Company's customer base or sales channels, the mix of
products sold, the level of international sales and general economic conditions.
In addition, since a significant portion of the Company's business is derived
from orders placed by a few large customers, the timing of such orders has
caused and may continue to cause material fluctuations in the Company's business
and operating results.
8
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
The following table highlights certain aspects of the Company's revenues for
the three-month and nine-month periods ended January 31, 1997 and 1996.
Three Months Ended Nine Months Ended
January 31, January 31,
----------------- ------------------
1997 1996 1997 1996
------- ------- ------- -------
Revenues (thousands)
Broadband products........... $18,274 $ 9,984 $49,093 $30,343
Other products............... 4,693 3,416 12,000 11,925
------- ------- ------- -------
Total................ $22,967 $13,400 $61,093 $42,268
======= ======= ======= =======
Geographic coverage:
Domestic..................... $15,597 $ 8,192 $42,311 $29,496
International................ 7,370 5,208 18,782 12,772
------- ------- ------- -------
Total................ $22,967 $13,400 $61,093 $42,268
======= ======= ======= =======
As a percent of revenues:
Broadband products........... 79.6% 74.5% 80.4% 71.8%
Other products............... 20.4 25.5 19.6 28.2
------- ------- ------- -------
Total................ 100.0% 100.0% 100.0% 100.0%
======= ======= ======= =======
Geographic coverage:
Domestic..................... 67.9% 61.1% 69.3% 69.8%
International................ 32.1 38.9 30.7 30.2
------- ------- ------- -------
Total................ 100.0% 100.0% 100.0% 100.0%
======= ======= ======= =======
THIRD QUARTER
Revenues
Revenues of $23.0 million for the third quarter ended January 31, 1997,
increased by $9.6 million or 71% from $13.4 million in the comparable quarter of
the previous year. Total revenues from broadband products were $18.3 million,
83% higher than prior year period, due primarily to increased sales to the
Company's core broadband customers and the addition of a new domestic broadband
customer. Revenues of $4.7 million from the sale of products for wireless,
satellite communications and all other applications increased $1.3 million or
37% compared to the prior year period.
Sales to international customers totaled $7.4 million or approximately 32%
of revenues for the third quarter of fiscal 1997 compared to $5.2 million or
approximately 39% of revenues for the comparable quarter last year, an increase
of 42%. Sales made through the Company's subsidiaries in Germany, France and
Sweden accounted for approximately 48% of these total international revenues.
In addition, the Company is aware that some sales to domestic customers
ultimately have international destinations.
9
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
Revenues (continued)
In conjunction with its earnings release on February 24, 1997, the Company
stated that it has reduced expectations for the core broadband business based on
a recent slowing of domestic orders that will have an effect on the current
fourth quarter and the first quarter of fiscal 1998. Order rates for repeaters
and other new product introductions are not expected to fully offset the
domestic broadband weakness. Revenues for the fourth quarter may be relatively
flat or slightly less than this year's third quarter, although well ahead of
last year's fourth quarter.
Gross Profit
Gross profit of $11.1 million for the third quarter of fiscal 1997
represented 48.5% of revenue compared to 48.9% in the comparable period last
year. The decrease in gross margin percentage is primarily due to the inclusion
of results of operations for Avitec AB of Sweden acquired in March, 1996. The
Company expects that the results of Avitec will continue to impact year-to-year
gross margin percentage comparisons for the balance of the current fiscal year.
Research and Development
Research and development expenses of $3.8 million for the third quarter of
fiscal 1997 increased by $1.5 million or 63% from the comparable quarter last
year. The increase in spending primarily reflects additional compensation
expense and the cost of materials associated with an expansion in the Company's
R&D program as well as the effect of the acquisition of Avitec in March of last
year. With a 71% increase in revenues, research and development expense as a
percentage of revenues decreased to 16.6% compared to 17.4% in the comparable
quarter last year.
Because the Company nets research and development contract revenues against
research and development costs, R&D spending also increased compared to the
prior year as total contract revenues for the third quarters of fiscal 1997 and
1996 were $163,000 and $444,000, respectively.
Sales and Marketing
Sales and marketing expenses of $2.6 million for the third quarter of fiscal
1997 increased by $724,000 or 38% from $1.9 million for the comparable quarter
last year, but decreased as a percentage of revenues to 11.5% for the third
quarter of fiscal 1997 from 14.3% for the comparable quarter of fiscal 1996.
The increase in spending primarily reflects additional compensation expense
associated with an increase in personnel.
10
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
General and Administrative
General and administrative expenses of $1.8 million for the third quarter of
fiscal 1997 increased by $1.0 million or 131% from $784,000 for the comparable
period last year and increased as a percentage of revenues to 7.9% for the third
quarter of fiscal 1997 from 5.9% for the comparable quarter of fiscal 1996. The
increase over the prior year period is primarily related to including the
administrative costs of Avitec and the amortization of intangible assets related
to that acquisition which occurred in the fourth quarter of fiscal year 1996 and
an increase in manpower and personnel related expenses.
Other Non-Operating Expense
Other non-operating charges of $257,000 for the third quarter include
approximately $100,000 for charges related to efforts to purchase a new building
which were terminated during the third quarter primarily due to an inability to
secure zoning variances as well as $120,000 related to unfavorable foreign
currency swings during the quarter.
YEAR-TO-DATE
Revenues
Revenues of $61.1 million for the nine months ended January 31, 1997
increased by $18.8 million or 45% from $42.3 million in the comparable period of
the previous year. Total revenues from broadband products increased $18.8
million or 62% compared to the prior year period due primarily to increased
sales to the Company's core broadband customers and the addition of a new
domestic broadband customer. Revenues of $12.0 million from the sale of products
for wireless, satellite communications, and all other applications were
unchanged compared to the prior year period. Year-to-year comparisons reflect
the loss of revenue from a domestic customer who now competes with the Company
for the sale of certain wireless products as a result of the acquisition of
Avitec AB.
Sales to international customers were $18.8 million or 31% of revenues for
the first nine months of fiscal 1997 compared to $12.8 million or 30% of
revenues for the comparable period last year, an increase of 47%. Sales made
through the Company's subsidiaries in Germany, France and Sweden accounted for
approximately 50% of these total international revenues. In addition, the
Company is aware that some sales to domestic customers ultimately have
international destinations.
11
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
Gross Profit
Gross profit of $29.5 million for the first nine months of fiscal 1997
represented 48.2% of revenue compared to 49.3% in the comparable period last
year. The decrease in gross margin percentage is primarily due to the inclusion
of results of operations for Avitec AB of Sweden acquired in March, 1996. The
Company expects that the results of Avitec will continue to impact year-to-year
gross margin percentage comparisons for the last quarter of the current fiscal
year.
Research and Development
Research and development expenses of $9.6 million for the first nine months
of fiscal 1997 increased by $2.8 million or 41% from the comparable period last
year which was in line with the increase in revenue. The increase primarily
reflects additional compensation expense and the cost of materials associated
with an expansion in the Company's R&D program as well as the development
expense at Avitec. As a percentage of revenue, research and development
decreased to 15.7% for the first nine months of fiscal 1997 from 16.1% in the
comparable period of fiscal 1996.
The Company nets research and development contract revenues against research
and development costs. The total contract revenues for the first nine months of
fiscal 1997 and 1996 were $1.3 million and $1.0 million, respectively.
Sales and Marketing
Sales and marketing expenses of $7.3 million for the first nine months of
fiscal 1997 increased by $1.5 million or 27% from $5.8 million for the
comparable period last year. The increase in spending primarily reflects
additional compensation expense associated with an increase in personnel. Sales
and marketing as a percentage of revenues decreased to 12.0% in the first nine
months of fiscal 1997 from 13.7% in the same period in fiscal 1996.
General and Administrative
General and administrative expenses of $4.7 million for the first nine
months of fiscal 1997 increased by $2.2 million or 90% from $2.5 million for the
comparable period last year and increased as a percentage of revenues to 7.6% in
fiscal 1997 from 5.8% in fiscal 1996. The increase over the prior year period
is primarily related to including the administrative costs of Avitec and the
amortization of intangible assets related to that acquisition which occurred in
the fourth quarter of fiscal year 1996 and an increase in manpower and personnel
related expense
12
PART I - FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS. (CONTINUED)
Other Non-Operating Expense
Other non-operating charges of $221,000 includes third quarter charges of
approximately $100,000 related to efforts to purchase a new building which were
terminated primarily due to an inability to secure zoning variances as well as
unfavorable foreign currency swings.
LIQUIDITY AND CAPITAL RESOURCES
At January 31, 1997, the Company had working capital of $51.2 million,
including $8.9 million in cash and $25.5 million in short-term investments. For
the nine-month period ended January 31, 1997, the Company's operating activities
provided cash of $4.7 million. Cash from operating activities includes net
income of $6.0 million plus depreciation of $3.3 million offset by an increase
in trade receivable of $4.4 million (up 47% from April 30, 1996, compared to an
increase in revenue of 49% for the third quarter end January 31, 1997, as
compared to the fourth quarter end April 30, 1996) and an increase of $.8
million primarily in contracts receivable. An increase in inventory of $2.3
million is primarily related to the introduction of recently announced new
products and is more than offset by an increase in trade accounts payable and
accrued liabilities.
As of January 31,1997, the Company maintained an unsecured line of credit
totaling $5.0 million expiring on May 1, 1997. Interest rates vary according to
market rates of interest. There were no borrowings outstanding under this
credit facility at January 31, 1997.
13
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a. Exhibits.
Reference is hereby made to the Exhibit Index commencing on page 16.
b. No reports were filed on Form 8-K during the quarter ended January 31,
1997.
14
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.
DATE: March 10, 1997 ORTEL CORPORATION
(Registrant)
By: /s/Wim H.J. Selders
-------------------
Wim H.J. Selders,
President and Chief Executive Officer
By: /s/Stephen K. Workman
---------------------
Stephen K. Workman,
Vice President, Finance and Chief Financial
Officer
15
EXHIBIT INDEX
Exhibit No. Document Description Page No.
- ----------- -------------------- --------
3.1 Certificate of Incorporation. (Note 1)
3.2 Bylaws of Ortel Corporation. (Note 1)
10.1 Lease, dated September 23, 1991, (Note 1)
between Ortel Corporation and Rim
Development Co.
10.2 Lease, dated May 20, 1994, between (Note 1)
Ortel Corporation and Wai Fong Un.
10.3 Consulting Agreement, dated January 3, (Note 1)
1994, between Ortel Corporation and
Wayne Tyler.
10.4 Consulting Agreement, dated March 2, (Note 1)
1990, as amended, between Ortel
Corporation and Amnon Yariv.
10.5 Employment Agreement, dated September (Note 1)
14, 1990, between Ortel Corporation and
Wim H.J. Selders.
10.6 Employment Agreement, dated September (Note 1)
14, 1990, between Ortel Corporation and
Israel Ury.
10.7 Employment Agreement, dated September (Note 1)
14, 1990, between Ortel Corporation and
Nadav Bar-Chaim.
10.8 1981 Incentive Stock Option Plan of (Note 1)
Ortel Corporation.
10.9 1990 Stock Option Plan of Ortel (Note 1)
Corporation.
10.10 Loan Agreement, dated September 30, (Note 1)
1993, between Ortel Corporation and
First Interstate Bank.
10.11 Form of Indemnification Agreement. (Note 1)
10.12 Common Stock Purchase Agreement, dated (Note 1)
March 26, 1990, between Sumitomo Cement
Co., Ltd. and Ortel Corporation.
10.13 Key Shareholders Agreement, dated as of (Note 1)
March 26, 1990, among Wim H.J. Selders,
Dr. Ury, Dr. Yariv, Dr. Bar-Chaim,
Sumitomo Cement Co., Ltd., The Ury
Family Trust and Ortel Corporation.
10.14 Agreement Concerning Certain Financial (Note 1)
and Business Arrangements, dated as of
March 26, 1990 between Sumitomo Cement
Co., Ltd. and Ortel Corporation.
10.15 Voting Agreement of Sumitomo Cement (Note 1)
Co., Ltd., dated as of March 26, 1990
between Sumitomo Cement Co., Ltd. and
Ortel Corporation.
10.16 Agreement dated as of November 19, (Note 1)
1993, between Ortel Corporation and
General Instrument Corporation.
10.17 Agreement, dated as of January 24, (Note 1)
1994, between Ortel Corporation and
General Instrument Corporation.
10.18 Modification Agreement, dated 1985, (Note 1)
between Ortel Corporation and certain
investors.
10.19 Class A Common Stock Purchase (Note 1)
Agreement, dated as of December 14,
1981, between Ortel Corporation and
certain investors.
10.20 1994 Equity Participation Plan of Ortel (Note 1)
Corporation.
10.21 Severance Agreement, dated as of August (Note 1)
26, 1994, between Ortel Corporation and
Stephen K. Workman.
16
EXHIBIT INDEX (CONTINUED)
Exhibit No. Document Description Page No.
- ----------------------------- --------------------- --------
10.22 Stock Purchase Agreement dated (Note 2)
March 12, 1996 between Hakan
Samuelsson and Ortel Corporation
10.23 Stock Purchase Agreement dated (Note 2)
March 12, 1996 between Christa
Samuelsson and Ortel Corporation
10.24 Loan Agreement, dated June 2, 1995 (Note 3)
between Ortel Corporation and Bank
of America
10.25 Amendment to Loan Agreement dated (Note 3)
September 30, 1995 between Ortel
Corporation and First Interstate
Bank.
11.1 Statement Regarding Computation of (Note 1)
Per Share Earnings.
21.1 Subsidiaries of Ortel Corporation. (Note 3)
23.1 Consent of KPMG Peat Marwick LLP. (Note 3)
27. Financial Schedule
Note 1 Previously filed by the Registrant
in Registration No. 33-79188 and
incorporated by reference herein
pursuant to Rule 12b-32 of the
Exchange Act.
Note 2 Previously filed by the Registrant
in its 8-K filing dated March 26,
1996
Note 3 Previously filed by the Registrant
in its 10-K filing for the year
ended
April 30, 1996
17