TABLE OF CONTENTS
15 Selected Consolidated Financial Data
17 Management's Discussion and Analysis
of Financial Condition and Results of Operations
21 Independent Accountants' Report
22 Consolidated Balance Sheet
23 Consolidated Statement
of Operations
24 Consolidated Statement
of Cash Flows
25 Consolidated Statement
of Changes in Shareholders' Equity
26 Notes to Consolidated Financial Statements
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data of the
Company. The selected consolidated statement of operations and consolidated
balance sheet data of the Company for the fiscal years ended October 31,
1996, 1995, 1994, 1993 and 1992 are derived from the Company's Consolidated
Financial Statements that were audited by Price Waterhouse LLP, independent
accountants, whose report for the fiscal years ended October 31, 1996, 1995
and 1994 is included herein. The pro forma data set forth below, as of and
for the year ended October 31, 1995, is unaudited.
The Selected Consolidated Financial Data set forth below should be read in
conjunction with, and are qualified in their entirety by, the Consolidated
Financial Statements and related Notes, and other financial information
included herein.
(In thousands except per share amounts)
Year Ended October 31,
1996 1995 1994 1993 1992
-------------------------------------------------
Consolidated Statement of Operations Data:
Net sales $180,155 $129,603 $89,836 $39,236 $27,786
Cost of sales 144,879 110,129 73,213 30,726 20,901
-------------------------------------------------
Gross profit 35,276 19,474 16,623 8,510 6,885
-------------------------------------------------
Operating expenses:
Research and development 4,428 2,719 1,795 1,079 914
Sales and marketing 10,986 7,437 5,529 3,835 3,139
General and administrative 9,486 6,172 5,190 2,810 2,735
-------------------------------------------------
Total operating expenses 24,900 16,328 12,514 7,724 6,788
-------------------------------------------------
Income from operations 10,376 3,146 4,109 786 97
Interest expense, net 1,113 818 588 226 197
-------------------------------------------------
Income (loss) before income tax 9,263 2,328 3,521 560 (100)
-------------------------------------------------
Provision for income tax (1) 3,186 330 - - -
Net income (loss) $ 6,077 $ 1,998 $ 3,521 $ 560 $ (100)
-------------------------------------------------
-------------------------------------------------
Net income per share $ 1.34
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--------
Pro forma data (unaudited):
Pro forma adjustments (2) (315)
--------
Pro forma net income $ 1,683
--------
--------
Pro forma net income per share (3) $ 0.45
--------
--------
(In thousands except per share amounts)
As of October 31,
1996 1995 1994 1993 1992
-------------------------------------------------
Balance Sheet Data:
Working capital $ 25,192 $ 21,621 $ 4,373 $ 1,480 $ 1,423
Total assets 65,629 57,539 23,651 14,777 8,039
Accounts payable-trade 19,538 17,731 8,710 8,446 4,046
Short-term bank borrowings, 12,465 12,138 6,793 3,679 1,614
including current maturities
Long-term debt 1,000 1,982 2,164 38 37
Total shareholders' equity 29,597 23,362 4,196 2,088 1,829
(1) The Company operated as an S corporation from November 1, 1986 until
February 20, 1995, at which time the Company became fully subject to
federal and state income taxes.
(2) Reflects certain pro forma adjustments assuming (a) the company's profit-
sharing allocation to employees had been reduced from 25% to 10% of income
before taxes (as calculated prior to profit sharing expenses) effective
November 1, 1994; (b) the portion of indebtedness evidenced by the
Founding Shareholder Notes issued to the Founding Shareholders relating
to approximately one-half of the Undistributed S Corporation Earnings, or
$2.04 million, had been outstanding effective November 1, 1994 and bearing
interest at 9% per annum; and (c) the Company had been treated as a C
corporation rather than as an S corporation for federal and state income
tax purposes, effective November 1, 1994 (and assuming an effective tax
rate of approximately 33%).
(3) Pro forma net income per share is based on the Company's weighted average
number of shares outstanding, plus the common equivalent number of shares
that the Company would have had to issue to distribute to the Founding
Shareholders $2.04 million, which amount equals approximately one-half of
the Undistributed S Corporation Earnings at October 31, 1994.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company currently sells two broad categories of products, which the
Company refers to as multimedia subsystem products and specialized technology
products. The Company's multimedia subsystem product line includes a wide
selection of multimedia accelerators designed for use in mid-range to
high-end PCs and also features several complementary products, including
digital video products and sound cards. STB's specialized technology products
incorporate graphics technologies and are primarily designed to enable one
computer to simultaneously control the display of multiple monitors.
The Company sells it products to original equipment manufacturers ("OEMs"),
the commercial market and the specialized technology market. Multimedia
subsystem products are sold both to OEMs as subsystems for their PC products
and to the commercial market. Sales of multimedia accelerators and other
multimedia subsystems to OEMs are characterized by higher unit volumes and
lower gross profit margins. Sales of multimedia products to the commercial
market are characterized by modest unit volumes and higher gross profit
margins than the sale of similar products to OEMs. Although sales volumes of
specialized technology products are relatively low, the Company realizes
higher gross profit margins from the sale of these products than from the
sale of multimedia subsystem products. The Company began shipping significant
unit volumes of certain new multimedia subsystem products (products other
than multimedia accelerators) to OEM customers in the third quarter of fiscal
1996. The Company is not yet in a position to forecast the effect that the
sale of these new products will have upon the Company's results of operations.
For the fiscal year 1996, sales of the Company's products to OEMs represented
approximately 81% (of which approximately 4.5% is comprised of sales of new
multimedia subsystem products. Sales to the commercial market represented
approximately 11% of total net sales and sales to specialized technology
product markets constituted approximately 6%. The Company has experienced
substantial growth in each of its sales channels in recent periods. The
balance of total net sales was derived primarily from third party assembly
services, which comprised approximately 2% of total net sales for fiscal year
1996. Export sales of the Company's products, which are made through all of
the Company's sales channels, have grown more moderately in recent periods,
and as a result, declined as a percentage of net sales from 24% in fiscal
1995 to 20% in fiscal 1996.
The Company recognizes revenue upon shipment of its products. For products
sold through the commercial channel, the Company generally allows returns in
the form of stock rotation and price protection in the form of credits. The
Company's current stock rotation policies permit a commercial channel
customer to return approximately 10% of products purchased within the
previous 90 days if the customer places an order for other Company products
of equal or greater value. The Company has historically been able to resell
products returned through the stock rotation program. STB typically provides
price protection to commercial channel customers in the form of credits for
price reductions on products remaining in customer inventories at the time
of the price reduction. The Company maintains reserves related to these
programs, which it believes are adequate.
The Company has no guaranteed supply arrangements with any of its suppliers.
The Company obtains most of the primary components of its products,
consisting mainly of controller chips and memory chips, directly from the
component manufacturers. The prices of such components can change
significantly from time to time. In the past the Company has experienced,
and may in the future experience, increases in its unit component costs
without being able to increase the price of the related products. Such an
increase in component costs could negatively impact the Company's gross
profit margins and results of operations. In particular, occasional world
wide shortages of DRAM and other memory and controller chips and
international tariff disputes have in the past resulted in substantial unit
component cost increases that have materially adversely affected the
Company's gross profit margins and its results of operations. In recent
periods, a decline in the price of memory chips, together with the Company's
inventory management practices and other factors, has contributed to
improved gross profit margins. Although it is not possible to accurately
forecast the prices of memory chips or other components, the Company believes
that memory chip prices have recently stabilized and in certain instances
increased.
The Company's total gross profit margins and gross profits will likely
fluctuate from period to period as a result of the factors identified above,
among others. In particular, the Company's total gross profit margins and
gross profits will be substantially affected by the Company's product mix,
sales channel mix, component costs and competitive pricing pressures on the
Company's products. See "Risk Factors--Potential for Fluctuating Operating
Results; Seasonality."
RESULTS OF OPERATIONS
The following table sets forth certain items from the Company's Consolidated
Statements of Operations as a percentage of revenues from continuing
operations:
Percentage of Net Sales
Year Ended October 31,
1996 1995 1994
-----------------------
Net sales 100.0% 100.0% 100.0%
Cost of sales 80.4% 85.0% 81.5%
-----------------------
Gross profit 19.6% 15.0% 18.5%
-----------------------
Operating expenses:
Research & development 2.4% 2.1% 2.0%
Sales & marketing 6.1% 5.7% 6.2%
General & administrative 5.3% 4.8% 5.8%
-----------------------
Total operating expenses 13.8% 12.6% 14.0%
-----------------------
Income from operations 5.8% 2.4% 4.5%
Interest expense, net 0.6% 0.6% 0.7%
-----------------------
Income before income tax 5.2% 1.8% 3.8%
Provision for income tax (1) 1.8% 0.3% 0.0%
-----------------------
Net income 3.4% 1.5% 3.8%
-----------------------
-----------------------
Pro forma data (unaudited):
Pro forma adjustments (2) -0.2%
-------
Pro forma net income 1.3%
-------
-------
(1) The Company operated as an S corporation from November 1, 1986 until
February 20, 1995, at which time the Company became fully subject to federal
and state income taxes.
(2) Reflects certain pro forma adjustments assuming (a) the Company's profit-
sharing allocation to employees had been reduced from 25% to 10% of income
before taxes (as calculated prior to profit sharing expenses) effective
November 1, 1994; (b) the portion of indebtedness evidenced by the Founding
Shareholder Notes issued to the Founding Shareholders relating to
approximately one-half of the Undistributed S Corporation Earnings, or $2.04
million, had been outstanding effective November 1, 1994 and bearing
interest at 9% per annum; and (c) the Company had been treated as a
C corporation rather than as an S corporation for federal and state income
tax purposes, effective November 1, 1994 (and assuming an effective tax rate
of approximately 33%).
FISCAL YEAR ENDED OCTOBER 31, 1996
COMPARED TO FISCAL YEAR ENDED
OCTOBER 31, 1995
NET SALES. Net sales increased by $50.6 million, or 39.0%, from $129.6
million in fiscal 1995 to $180.2 million in fiscal 1996. This increase in
revenues was achieved primarily as a result of a 58% increase in unit volume
shipments, and despite a significant decrease in the average unit sales price
of the Company's products. This increase resulted primarily from continuing
growth in sales of the Company's products to established OEM customers, as
well as to new OEM customers. The Company also experienced continued growth
in the commercial channel from sales of the Company's products to new
commercial customers and increased sales to established customers. Sales in
the specialized technology market experienced moderate growth, primarily as
a result of increased sales to existing customers.
GROSS PROFIT. Gross profit increased by $15.8 million, or 81.1%, to $35.3
million in fiscal 1996, as compared to $19.5 million in fiscal 1995. For the
period, gross profit margin increased to 19.6% from 15.0%. The increase in
gross profit margin resulted primarily from economies of scale resulting from
higher production volumes, as well as from lower memory chip prices.
Increased sales of higher margin products sold in the commercial channel and
increased specialized technology product sales also contributed to the
increase in gross profit margin.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased by $1.7 million, or 62.8%, to $4.4 million in fiscal 1996, as
compared to $2.7 million in fiscal 1995. This increase resulted from
additional staffing and related expenses associated with new product
development, software development and continued enhancement and support of
the Company's existing products. Research and development expenses as a
percentage of net sales increased from 2.1% to 2.4%, for the period.
SALES AND MARKETING EXPENSES. Sales and marketing expenses increased by $3.5
million, or 47.7%, to $11.0 million in fiscal 1996, as compared to $7.4
million in fiscal 1995. This increase resulted primarily from additions to
the Company's sales staff in both the domestic and international sales forces
and increased commission payments due to higher sales levels. Increased
trade show expense, advertising and promotional efforts to support the higher
sales levels in the commercial channel and specialized technology product
sales also contributed to the increase. For the period, sales and marketing
expense as a percentage of net sales increased from 5.7% in 1995 to 6.1% in
1996.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased by $3.3 million, or 53.7%, to $9.5 million in fiscal 1996, as
compared to $6.2 million in fiscal 1995. General and administrative expenses,
excluding profit sharing expense, increased by $2.8 million, or 49.9%, to
$8.5 million in fiscal 1996, as compared to $5.7 million in fiscal 1995. The
increase is due primarily to increased occupancy costs, insurance expenses
and increased personnel, legal and data processing expenses associated with
the Company's growth.
NET INCOME. As a result of the foregoing factors, net income increased by
$4.1 million, or 205%, to $6.1 million in fiscal 1996, as compared to $2.0
million in fiscal 1995.
FISCAL YEAR ENDED OCTOBER 31, 1995
COMPARED TO FISCAL YEAR ENDED
OCTOBER 31, 1994
NET SALES. Net sales increased by $39.8 million, or 44.3%, from $89.8 million
in fiscal 1994 to $129.6 million in fiscal 1995. This increase resulted
primarily from continuing growth in sales of the Company's products to OEMs
and from growth in sales of the Company's products in the commercial channel.
GROSS PROFIT. Gross profit increased by $2.9 million, or 17.2%, from $16.6
million in fiscal 1994 to $19.5 million in fiscal 1995. During the period,
gross profit as a percentage of net sales declined from 18.5% to 15.0%. The
decline in gross profit margin resulted primarily from decreasing margins on
sales of multimedia accelerators to OEMs due to pricing pressures from the
Company's competitors and, to a lesser degree, from a decline in sales volume
of higher margin multi-monitor products that more than offset an increase in
sales volume of higher margin retail products.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses
increased by $924,000, or 51.5%, from $1.8 million in fiscal 1994 to $2.7
million in fiscal 1995. This increase resulted from increased staffing and
equipment requirements associated with the continuing enhancement and support
of the Company's existing products and the development of new products.
During the period, the expenses as a percentage of net sales increased from
2.0% to 2.1%.
SALES AND MARKETING EXPENSES. Sales and marketing expenses increased by $1.9
million, or 34.5%, from $5.5 million in fiscal 1994 to $7.4 million in fiscal
1995. The increase resulted from additions to the Company's sales staff,
increased advertising expenses and increased trade show and travel expenses.
During the period, the expenses as a percentage of net sales decreased from
6.2% in 1994 to 5.7%.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased by $982,000, or 18.9%, from $5.2 million in fiscal 1994 to $6.2
million in fiscal 1995. During this period, expenses as a percentage of net
sales declined from 5.8% to 4.8%. General and administrative expenses,
exclusive of profit sharing expenses, increased by $1.7 million, or 41.8%,
from $4.0 million in fiscal 1994 to $5.7 million in fiscal 1995, due
primarily to expenses associated with the Company's growth, including
increased personnel expenses and increased facility, equipment and insurance
expenses. The Company's profit sharing allocation to employees, which
amounted to 25% of income before taxes (as calculated prior to profit sharing
expenses) in fiscal 1994, was reduced to 10% of income before taxes following
the first quarter of fiscal 1995 concurrently with the completion of the
Company's initial public offering.
NET INCOME. As a result primarily of the factors discussed in the paragraphs
above that address net sales and gross profit, net income decreased by $1.5
million, or 43.3%, to $2.0 million in fiscal 1995 as compared to fiscal 1994.
SEASONALITY
The Company's quarterly operating results may vary significantly depending on
factors such as the timing of large customer orders, timing of new product
introductions, adequacy of component supply, changes in component costs,
variations in the Company's product mix, seasonal promotions by the Company
and its customers and competitive pricing pressures. Because the timing of
these factors may vary, the results of any particular quarter may not be
indicative of results for the entire year or any future period. In addition,
the PC market generally experiences weaker sales during the summer months.
Although the Company has experienced sales growth for each year since fiscal
1990, there can be no assurance that this growth will continue on a quarterly
or annual basis.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal capital and liquidity needs are for financing
inventory and accounts receivable and, to a lesser degree, purchasing
manufacturing and other equipment. The Company has financed these
requirements, and its operations, generally through a combination of cash
generated from operations, bank borrowings and proceeds from the Company's
initial public offering. As a result of the Company's rapid growth in recent
years, its capital requirements have increased substantially. The Company
recognizes that future growth will require additional capital, particularly
to support increased working capital needs, engineering and other staffing
expenses, promotional expenses, manufacturing facilities and equipment
requirements. The Company believes its various sources of available financing
will be adequate to meet its capital requirements for the foreseeable future.
The Company generated cash from operations of $3.5 million in fiscal 1996,
resulting primarily from increased net income and a reduction in inventory
costs along with increased accounts payable, partially offset by increased
accounts receivable as a result of higher sales, compared to fiscal 1995,
where net cash used in operations was $15.8 million. The Company's working
capital was $25.2 million at October 31, 1996, compared to $21.6 million at
October 31, 1995. Cash and cash equivalents was $3.4 million and $4.2 million
at October 31, 1996 and 1995, respectively.
In fiscal 1996, the Company invested $3.1 million in capital equipment,
compared with net purchases of equipment aggregating $2.5 million during
fiscal 1995. The Company's investment in equipment is primarily attributable
to manufacturing equipment additions and upgrades of existing equipment to
support the increased demand for the Company's products. During the fourth
quarter of fiscal 1996, the Company installed four new surface-mount
technology assembly lines at its manufacturing facility in Juarez, Mexico, at
an approximate cost totaling $4.2 million. This equipment was financed
through traditional lease financing arrangements. The Company expects that
additional capital expenditures for similar types of equipment may be
necessary to support future customer demand and production requirements.
The Company currently has a $25 million line of credit under a revolving
credit facility (the "Revolving Credit Facility"), which includes a $2.0
million term loan (the "Mezzanine Facility"). During fiscal 1996, the Company
increased the size of its Revolving Credit Facility by $10 million to its
current level. As of October 31, 1996 the Company had $11.8 million and $1.5
million outstanding under the Revolving Credit Facility and the Mezzanine
Facility, respectively. Principal amounts outstanding under the Revolving
Credit Facility bear interest at the rate of prime plus .75%. During the
first quarter of fiscal 1996, the interest rate on the principal amounts
outstanding under the Mezzanine Facility was reduced from prime plus 3% to
prime plus .75%. The Mezzanine Facility is payable in 48 monthly installments
in the amount of $41,667 plus interest, which began December 1, 1995. The
Revolving Credit Facility agreement provides for a minimum monthly interest
charge of $25,000, which can be satisfied through the accrual of interest
under both the Revolving Credit Facility and the Mezzanine Facility.
Availability under the Revolving Credit Facility is calculated on formulas
derived from accounts receivable and inventory balances as defined by the
Revolving Credit Facility agreement. All indebtedness under these facilities
mature on November 1, 1999. Commencing December 1, 1995, the company was
required to make the first of 48 successive monthly installments of principal
in the amount of $41,667 each, together with accrued interest.
In accordance with the provisions of a contingent payment agreement executed
in connection with the Revolving Credit and Mezzanine Facilities, the Company
was obligated to pay the lender a one-time fee equal to one percent (1%) of
the product of six times the Company's earnings before income taxes,
interest, depreciation and amortization for the fiscal year preceding the
fiscal year in which the payment is made. The Company paid this fee in
September 1996, in the amount of $250,234.
FORWARD LOOKING INFORMATION
All statements other than statements of historical fact contained in this
Annual Report, including statements in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" concerning the
Company's financial position and liquidity, results of operations, prospects
for continued growth, component and other costs, ability to maintain or
improve unit volumes, net sales or profit margins and other matters are
forward-looking statements. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove correct. Factors
that could cause the Company's results to differ materially for the results
discussed in or contemplated by such forward-looking statements include the
risks described under "Risk Factors" in Part I of the Company's Annual Report
on Form 10-K for the fiscal year ended October 31, 1996, as filed with the
Securities and Exchange Commission. Such risks include, without limitation,
the risks associated with the potential for fluctuating operating results,
dependence on suppliers and the multimedia accelerator market, rapid
technology change and short product life cycles, dependence on key customers
and the PC market, changes in product or sales channel mix, entry into new
product markets, price protection and stock rotation policies, intense
competition, dependence on key personnel, difficulties in managing growth,
reliance on a single manufacturing facility, international operations and
dependence on sales representatives and distributors and various proprietary
technology matters. All forward-looking statements in this Annual Report are
expressly qualified in their entirety by the cautionary statements in this
paragraph, in "Risk Factors" and elsewhere in this Annual Report.
REPORT OF PRICE WATERHOUSE LLP, INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
STB Systems, Inc.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations, of changes in shareholders' equity and
of cash flows present fairly, in all material respects, the consolidated
financial position of STB Systems, Inc. and subsidiaries at October 31, 1996
and 1995, and the results of their operations and their cash flows for each
of the three years in the period ended October 31, 1996, in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ PRICE WATERHOUSE LLP
- ---------------------------
Price Waterhouse LLP
Dallas, Texas
December 2, 1996
STB SYSTEMS, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
October 31, 1996 and 1995
(in thousands except share and per share amounts)
1996 1995
---------------------
ASSETS
Current Assets:
Cash and cash equivalents $3,420 $4,162
Accounts receivable - trade, net of allowance for
doubtful accounts of $332 and $449 28,032 20,634
Inventories, net 27,148 27,875
Other current assets 1,348 869
---------------------
Total current assets 59,948 53,540
---------------------
Property and equipment, net 5,231 3,397
Other assets 450 602
---------------------
Total assets $65,629 $57,539
---------------------
---------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Short-term debt $11,760 $11,411
Accounts payable - trade 19,538 17,731
Notes payable to related parties - 700
Accrued wages, commissions and bonuses 1,144 559
Other accrued liabilities 1,609 791
Current portion of long-term liabilities 705 727
---------------------
Total current liabilities 34,756 31,919
---------------------
Long-term liabilities:
Long-term notes payable 1,000 1,500
Obligations under capital leases and other
long-term liabilities 276 758
---------------------
Total long-term liabilities 1,276 2,258
---------------------
Shareholders' equity:
Preferred stock, 2,000,000 shares authorized,
none issued or outstanding - -
Common stock, $.01 par value, 20,000,000 shares
authorized, 4,513,598 and 4,500,000 shares issued
and outstanding 45 45
Additional paid-in capital 22,318 22,160
Retained earnings 7,479 1,402
---------------------
29,842 23,607
Treasury stock, 35 shares, at cost (245) (245)
---------------------
Total shareholders' equity 29,597 23,362
---------------------
Total liabilities and shareholders' equity $65,629 $57,539
---------------------
---------------------
The accompanying notes are an integral part of these financial statements.
STB SYSTEMS, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
For the Years Ended October 31, 1996, 1995 and 1994
(in thousands except share and per share amounts)
1996 1995 1994
--------------------------------
Net sales $180,155 $129,603 $89,836
Cost of sales 144,879 110,129 73,213
--------------------------------
Gross profit 35,276 19,474 16,623
--------------------------------
Operating expenses:
Research and development 4,428 2,719 1,795
Sales and marketing 10,986 7,437 5,529
General and administrative 9,486 6,172 5,190
--------------------------------
Total operating expenses 24,900 16,328 12,514
--------------------------------
Income from operations 10,376 3,146 4,109
Interest expense, net 1,113 818 588
--------------------------------
Income before income taxes 9,263 2,328 3,521
Provision for income taxes 3,186 330 -
--------------------------------
Net income $6,077 $1,998 $3,521
--------------------------------
Net income per share $1.34
----------
Weighted average shares outstanding 4,546,756
----------
Pro forma data: (unaudited)
Net income $1,998
Pro forma adjustment to general and
administrative expenses 220
Pro forma adjustment to reflect interest
on Founding Shareholder Notes (52)
Pro forma adjustment to reflect federal
income taxes (483)
-----------
Pro forma net income $1,683
-----------
Pro forma net income per share $0.45
-----------
Weighted average shares outstanding
used in the pro forma net income per
share calculation 3,746,395
-----------
The accompanying notes are an integral part of these financial statements.
STB SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Years Ended October 31, 1996, 1995 and 1994
(dollars in thousands)
1996 1995 1994
----------------------------
Cash flows from operating activities:
Net income $ 6,077 $ 1,998 $ 3,521
Adjustments to reconcile net income to
net cash flow from operating activities:
Depreciation and amortization 1,252 733 395
Deferred tax asset - - (45)
Changes in assets and liabilities:
Accounts receivable - trade (7,397) (9,542) (4,132)
Inventories, net 727 (17,923) (3,294)
Other current assets (479) (347) 31
Other assets 151 2 (304)
Accounts payable - trade 1,807 9,029 264
Accrued wages, commissions, and
bonuses 585 (182) 514
Other accrued liabilities 817 453 49
----------------------------
Net cash provided by (used in)
operating activities 3,540 (15,779) (3,001)
----------------------------
Cash flows from investing activities:
Purchases of property and equipment (3,086) (2,470) (1,434)
Proceed from sale of property and equipment - - 48
----------------------------
Net cash used in investing activities (3,086) (2,470) (1,386)
----------------------------
Cash flows from financing activities:
Borrowings (payments) on short-term debt (351) 4,727 3,042
Payments on Founding Shareholder Notes - (1,340) -
Borrowings on long-term debt - 436 2,278
Payments against long-term debt (1,003) - (81)
Issuance of common stock, net of issue costs 158 21,678 -
Distribution of S Corporation earnings - (2,082) -
Payment of dividends - (1,285) (990)
----------------------------
Net cash provided by(used in) financing
activities (1,196) 22,134 4,249
----------------------------
Net increase (decrease) in cash and
cash equivalents (742) 3,885 (138)
Cash and cash equivalents at beginning of
period 4,162 277 415
----------------------------
Cash and cash equivalents at end of period $ 3,420 $ 4,162 $ 277
----------------------------
Supplemental disclosure of cash flow information:
- Cash paid for interest in 1996, 1995 and 1994 was $1,243, $1,023, and $553,
respectively.
- Accrued and unpaid dividends at October 31, 1994 were $433
- Amounts relating to the Contingent Payment (see Note 6) included in
other assets were $150, $220 and $276 at October 31, 1996, 1995 and 1994,
respectively. Long-term liabilities include $276 at October 31, 1995 and
1994 related to the Contingent Payment.
The accompanying notes are an integral part of these financial statements.
STB SYSTEMS, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
For the years ended October 31, 1996, 1995 and 1994
(dollars in thousands)
Common Stock Additional Treasury Stock
------------------- paid-in Retained ----------------
Shares Amount capital earnings Shares Amount Total
--------------------------------------------------------------------------
BALANCE, OCTOBER 31, 1993 2,500,000 $25 $502 $ 1,805 35 ($245) $ 2,087
Dividends declared (1,413) (1,413)
Cumulative translation gain 1 1
Net Income 3,521 3,521
--------------------------------------------------------------------------
BALANCE, OCTOBER 31, 1994 2,500,000 25 502 3,914 35 (245) 4,196
Dividends declared (851) (851)
Establishment of deferred tax asset 455 455
Distribution of S Corporation earnings (4,122) (4,122)
Net proceeds from initial public
offering 2,000,000 20 21,658 21,678
Cumulative translation gain 8 8
Net Income 1,998 1,998
--------------------------------------------------------------------------
BALANCE, OCTOBER 31, 1995 4,500,000 45 22,160 1,402 35 (245) 23,362
Issuance of common stock 13,598 158 158
Net Income 6,077 6,077
--------------------------------------------------------------------------
BALANCE, OCTOBER 31, 1996 4,513,598 $45 $22,318 $ 7,479 35 ($245) $29,597
--------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
NOTE 1 - DESCRIPTION OF BUSINESS AND
SIGNIFICANT ACCOUNTING POLICIES
STB Systems, Inc. develops, manufactures and sells a wide selection of
graphics adapters and specialized technology products designed for use in
mid-range and high-end personal computers ("PCs"). STB Assembly, Inc. is a
wholly owned subsidiary and provides manufacturing services to STB Systems,
Inc.
Principles of consolidation - In conjunction with the Stock Offering (see
Note 2), STB Assembly, Inc. became a wholly owned subsidiary of STB Systems,
Inc. Consequently, the accompanying financial statements, which include the
historical accounts of STB Systems, Inc. and STB Assembly, Inc. (collectively
referred to as the "Company"; see also Note 2) have been consolidated for
fiscal years 1996 and 1995 and combined for fiscal 1994. STB Assembly, Inc.
has two majority owned subsidiaries, STB de Mexico and Maquilados
Continentales de Chihuahua ("MCC"). STB de Mexico is a Mexican corporation
operated as a maquiladora and performs assembly services for STB Systems,
Inc. As of December 1992, MCC became an inactive entity. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Minority interests in the subsidiaries are insignificant for financial
reporting purposes.
Cash and cash equivalents - Cash equivalents are short-term, highly liquid
investments that are both readily convertible to known amounts of cash and so
near to their maturity that they present insignificant risk of changes in
value because of changes in interest rates. Investments with initial
maturities of three months or less qualify under this definition.
Revenue recognition and accounts receivable - The Company recognizes revenue
from product sales upon shipment. Sales to original equipment manufacturers
("OEMs") account for a significant portion of the Company's sales. The
Company offers its OEM customers a limited warranty for a period of typically
15 to 36 months. Costs associated with the warranty program are accrued when
revenue is recognized and are determined on the basis of estimated future
costs to fulfill the warranty commitment.
Stock rotation returns, under specified conditions, are allowed to certain
retail customers for recently purchased products, provided an equivalent
dollar amount of other products is purchased at the time of the return. Also,
under the terms of some of the agreements, in the event the Company reduces
its selling prices, the retail customers receive price protection credit for
the difference between the original purchase price of product remaining in
specified levels of their inventories and the Company's reduced price for
such products. Sales adjustments resulting from stock rotation returns and
price protection programs are made as determined by management and have
historically been minor. Management's estimates of the costs associated with
the price protection and stock rotation programs are based on the Company's
historical experience with such arrangements and its evaluation of current
exposure resulting from these policies. The Company's sales are presented
net of stock rotation returns and price adjustments. The Company
participates in cooperative advertising programs with certain distributors.
These programs are used by the Company to reimburse distributors for certain
forms of advertising. In general, the programs allow distributors credits up
to a specified percentage of net purchases. The Company's costs associated
with these programs are accrued at the time of sale and are included in sales
and marketing expenses.
Inventories - Inventories are valued at the lower of cost or market. Cost is
determined on a first-in, first-out basis using a moving weighted average
methodology.
Property and equipment - Property and equipment are stated at cost.
Depreciation is computed for financial statement purposes using an
accelerated method over the estimated useful lives of the assets, which range
from three to five years. Amortization of assets recorded under capital
leases is included in depreciation expense. Depreciation and amortization
expense for each of the years ended October 31, 1996, 1995 and 1994 was
$1,252,000, $733,000 and $395,000, respectively.
Research and development - Research and development costs are charged to
expense as incurred.
Income taxes - Effective February 21, 1995 and in connection with the Company's
initial public offering ("Stock Offering"), the Company adopted Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes"
(SFAS 109) on a prospective basis (see Note 2). Under the asset and liability
method of SFAS 109, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to temporary differences between the
financial statement carrying amounts and the tax basis of existing assets and
liabilities measured using estimated tax rates expected to apply to taxable
income in the years in which the temporary differences are expected to be
recovered or settled.
Prior to the Stock Offering (see Note 2), the Company had been treated for
federal and certain state income tax purposes as an S Corporation under
Subchapter S of the Internal Revenue Code of 1986, as amended. As a result,
the income of the Company for federal and certain state income tax purposes
was included in the income tax returns of the individual shareholders
("Founding Shareholders"). Accordingly, prior to February 21, 1995, no
recognition of federal and certain state income taxes has been given in the
accompanying financial statements. Prior to the conversion to C Corporation
status, in connection with the Stock Offering, the Company paid dividends to
its shareholders in an amount equal to the taxable earnings of the Company
multiplied by the current personal income tax rate.
Accounting for Stock-based Compensation - In October 1995, Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-based
Compensation" (SFAS 123) was issued. This
statement requires the fair value of stock options and other stock-based
compensation issued to employees to either be included as compensation
expense in the statement of operations, or the pro forma effect on net income
and earnings per share of such compensation expense to be disclosed in the
footnotes to the Company's financial statements commencing with the Company's
1997 fiscal year. This Company expects to adopt SFAS 123 on a disclosure
basis only. As such, implementation of SFAS 123 is not expected to impact the
Company's consolidated balance sheet or statement of operations.
Financial Instruments - As of October 31, 1996 and 1995 the fair values of
the Company's revolving credit balance and the fair values of the Company's
fixed-rate debt approximates the related carrying values.
Pro forma net income and net income per share (unaudited) - Pro forma net
income and net income per share have been determined assuming that (1) the
Company had adopted the revised profit sharing plan effective November 1,
1994 (see Note 9), (2) the Founding Shareholder Notes in the aggregate amount
of $2,040,000 had been outstanding since November 1, 1994 bearing interest at
9% per annum (see Note 5), and (3) the Company had been taxed as a C
corporation for federal and certain state income tax purposes since November
1, 1994 (see Note 10).
Pro forma net income per share has been computed using the weighted average
number of common shares outstanding after giving retroactive effect to the
stock split (see Note 2). Common equivalent shares are also increased to
reflect the number of shares which would have been necessary to fund the
$2.04 million distribution paid to the Founding Shareholders from the
proceeds of the Stock Offering of the Company's common stock (see Note 5).
NOTE 2 - STOCK SPLIT, REORGANIZATION
AND STOCK OFFERING
Effective December 20, 1994, the Company consummated a common stock split at
a ratio of 8,333 to one which resulted in common stock with $.01 par value,
20,000,000 shares authorized, 2,500,000 shares issued and outstanding prior
to the Stock Offering (see below). The stock split, which was effected in the
form of a stock dividend, has been given retroactive effect in the
accompanying financial statements.
STB Systems, Inc. entered into a Share Exchange Agreement on December 16,
1994 with the shareholders of STB Assembly, Inc., providing for the issuance
of STB Systems, Inc. common stock in exchange for the outstanding common
stock of STB Assembly, Inc. on a one-for-333 basis immediately prior to
consummation of the Stock Offering. For purposes of these consolidated
financial statements, these shares are treated as outstanding for all periods
presented. As STB Systems, Inc. and STB Assembly, Inc. were under common
control, there was no change in basis for financial reporting purposes as a
result of the Share Exchange Agreement. As a result of the reorganization,
STB Assembly, Inc. became a wholly owned subsidiary of STB Systems, Inc.
Effective February 20, 1995, STB Systems, Inc. terminated its S Corporation
status and became a C Corporation and as a result, the Company became subject
to all federal and state taxes pursuant to the C Corporation rules of the
Internal Revenue Code.
On December 16, 1994, the Board of Directors of the Company authorized an
initial public offering of the Company's common stock ("Stock Offering").
Accordingly, the Company filed a Registration Statement on Form S-1 with the
Securities and Exchange Commission for the sale of common stock. On February
14, 1995, 2,000,000 shares of common stock were offered to the public at a
price of $12.00 per share. Proceeds from the Company's Stock Offering
totalled $24,000,000, net of $2,322,000 of Stock Offering expenses. The
Company's stock is listed on the NASDAQ National Market under the symbol
"STBI".
NOTE 3 - INVENTORIES
Inventories at October 31 consist of the following:
(in thousands)
1996 1995
-------------------
Raw materials $10,667 $15,599
Work-in-process 14,358 8,156
Finished goods 2,123 4,120
-------------------
Inventories, net $27,148 $27,875
-------------------
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment at October 31 consist of the following:
(in thousands)
1996 1995
-------------------
Furniture & equipment $ 8,614 $ 5,822
Leasehold improvements 628 419
-------------------
9,242 6,241
Less: accumulated
depreciation (4,011) (2,844)
-------------------
Property & equipment,
net $ 5,231 $ 3,397
-------------------
NOTE 5 - SHORT TERM DEBT AND NOTES
PAYABLE TO RELATED PARTIES
On January 5, 1996, the Company increased its borrowing capacity under its
revolving credit facility ("Revolving Credit Facility") from $13,000,000 to
$25,000,000. The Revolving Credit Facility is with a bank, payable upon
demand, with interest at prime plus .75% (9.0% at October 31, 1996).
Outstanding balances under the Revolving Credit Facility were $11,760,000 and
$11,411,000, at October 31,
1996 and 1995, respectively. All indebtedness under the Revolving Credit
Facility matures on November 1, 1999.
Availability under the Revolving Credit Facility is subject to limitations
determined by the Company's borrowing base, which is calculated based on
eligible accounts receivable and inventory, as defined in the Revolving
Credit Facility agreement.
On February 20, 1995 the Company issued notes payable aggregating $2,040,000
to the Founding Shareholders to be repaid within 12 months of the date of
issue with interest at 9%. As of October 31, 1996 the notes had been paid in
full, and $700,000 was outstanding on the notes at October 31, 1995.
NOTE 6 - LONG-TERM LIABILITIES
Long-term liabilities at October 31 consist of the following:
(In thousands)
1996 1995
-------------------
Mezzanine Facility, interest at
prime plus .75%, (prime plus 3%
prior to January 5, 1996) payable
in monthly installments of interest
only through November 1, 1995
and principal and interest from
December 1, 1995 through
November 1,1999, collateralized
by certain assets of the Company $ 1,500 $ 2,000
Contingent Payment (see below) - 276
Other loans, interest at 9.8%,
payable in monthly installments
of principal and interest through
July 1997, collateralized by
certain assets of the Company 4 9
Obligations under capital leases 477 700
-------------------
1,981 2,985
Less: current portion (705) (727)
-------------------
Long-term liabilities $ 1,276 $ 2,258
-------------------
In accordance with the provisions of a contingent payment agreement
("Contingent Payment") executed in connection with the Revolving Credit and
Mezzanine Facilities, the Company is obligated to pay the lender a one-time
fee equal to one percent (1%) of the product of six (6) times the Company's
earnings before income taxes, interest, depreciation and amortization for the
year immediately preceding the year in which the payment is made.
Accordingly, the Company paid the Contingent Payment on September 30, 1996,
which, based on fiscal 1995 earnings amounted to $250,000. The Company had
the option to pay this fee on any date following the successful completion
of an initial public offering up to October 17, 1996, at which time the fee
payment date was at the option of the lender. The Company originally recorded
a liability and related asset of $276,000 at October 31, 1994. The asset is
being amortized to interest expense over the term of the related debt as a
yield adjustment.
The combined aggregate amount of maturities for all longterm borrowings,
excluding obligations under capital leases, for each of the five years
following October 31, 1996 are:
Years ending October 31, (In thousands)
1997 $504
1998 500
1999 500
2000 -
2001 and thereafter -
------
$1,504
The Company leases certain equipment under capital leases. Future minimum
lease payments under capital leases and the present value of the minimum
capital lease payments at October 31, 1996 are:
Years ending October 31, (In thousands)
1997 $ 244
1998 153
1999 95
2000 64
2001 -
------
556
Less: amount representing interest (79)
------
Present value of the minimum
capital lease payments $ 477
------
NOTE 7 - COMMITMENTS
AND CONTINGENCIES
The Company leases office space and equipment under various noncancelable
operating lease agreements extending through 1999. Rental expense for each of
the years ended October 31, 1996, 1995 and 1994 was $856,000, $773,000, and
$660,000, respectively. At October 31, 1996, future minimum lease payments
for such operating leases are:
Years ending October 31, (In thousands)
1997 $1,644
1998 1,484
1999 1,139
2000 51
2001 39
------
Total $4,357
------
The Company installed four new surface-mount assembly lines at its facility
in Juarez, Mexico during the fourth quarter of fiscal 1996, at a total cost
of $4.2 million. This equipment was financed by a traditional capital lease
arrangement. Under the capital lease arrangement, the Company must make 36
monthly payments of $83,000 followed by two consecutive twelve month optional
renewel terms.
In September 1995, a class action lawsuit was filed against the Company
alleging the prospectus and Registration Statement for the Stock Offering
contained false and materially misleading facts, and omitted to state
material facts. The members of the class seek unspecified damages. The
Company denies the allegations. No formal discovery has yet been undertaken,
and the Company intends to vigorously defend its position. In the opinion of
management, this lawsuit is not likely to result in any loss that would have
a material adverse effect on the Company's operating results or financial
condition.
NOTE 8 - MAJOR CUSTOMERS
Sales to major customers, as a percentage of net sales, were as follows for
each of the years ended October 31:
Customer 1996 1995 1994
--------------------------------------
A 47% 42% 40%
B - 10% 6%
C 8% - 4%
Net sales to customers within the United States and to customers in foreign
countries were as follows for each of the years ended October 31:
(In thousands)
1996 1995 1994
------------------------------
United States $144,761 $ 98,742 $76,560
Europe 32,654 30,000 12,445
Other 2,740 861 831
------------------------------
$180,155 $129,603 $89,836
------------------------------
NOTE 9 - EMPLOYEE BENEFIT PLAN
AND PROFIT SHARING PLAN
The Company has a 401(K) plan for all full-time employees. The plan provides
for the Company to make contributions of up to 25% of the amount of an
employee's contribution, but not more than 1% of an employee's total cash
compensation. The Company incurred expense of $43,000, $34,000 and $28,000 in
the years ended October 31, 1996, 1995 and 1994, respectively, for its
contributions to this plan. On January 1, 1997, the Company modified the
existing plan, increasing its contribution to 50% of the employee's
contribution, up to 2% of the employee's total cash compensation.
The Company's profit sharing plan provides for a portion of the Company's
income before taxes to be paid as additional compensation to participants in
this plan. Concurrent with the Stock Offering, the profit sharing percentage
was reduced from 25% to 10%. Employees meeting eligibility requirements
participate in the plan. The Company incurred compensation expense of
$991,000, $503,000 and $1,195,000 in the years ended October 31, 1996, 1995
and 1994, respectively, as a result of the Company's obligations under the
profit sharing plan.
NOTE 10 - CHANGE IN S CORPORATION STATUS AND INCOME TAXES
Immediately preceeding the Stock Offering (see Note 2), STB Systems, Inc.
terminated its S Corporation status, and accordingly, the Company is subject
to federal and state income taxes.
The Company paid cash distributions to its Founding Shareholders in the
aggregate amounts of $1,285,000 and $990,000 for fiscal years 1995 and 1994
respectively. Following the Stock Offering, the Company made final
distributions of the Company's undistributed S Corporation earnings to its
Founding Shareholders. Such undistributed S Corporation earnings aggregated
$4,100,000. The Company paid approximately onehalf of the undistributed S
Corporation earnings from the proceeds of the Stock Offering, and the
remainder in the form of Founding Shareholder Notes. As of October 31, 1996,
these notes had been repaid in full.
As a result of the termination of its S Corporation status, the Company is
required to provide deferred income taxes for cumulative temporary
differences between income for financial and income tax reporting purposes at
the date of termination. A deferred tax asset of $455,000 was recorded at the
date of change in tax status resulting primarily from differing methods of
recognizing inventory reserves and bad debt allowances for financial and
income tax reporting purposes. The deferred tax assets at October 31 is
composed of the following and included in other current assets in the
consolidated balance sheets:
(In thousands)
1996 1995
---------------------
Bad debt reserves $ 113 $ 153
Inventory reserves 476 340
Depreciation 62 55
Various expense accruals 408 80
---------------------
Deferred tax asset $ 1,059 $ 628
---------------------
Provision for Income Taxes - The components of the income tax provision for
the C Corporation period for the years ended October 31, 1996 and 1995 are as
follows:
(In thousands)
1996 1995
----------------
Current provision
Federal $ 3,536 $ 485
State 81 18
----------------
3,617 503
----------------
Deferred benefit
Federal (431) (173)
State - -
----------------
(431) (173)
----------------
Provision for income taxes $ 3,186 $ 330
----------------
A reconciliation of taxes based on the federal statutory rate of 34% and the
provision for income taxes is summarized as follows for the years ended October
31:
1996 1995
----------------
Income taxes at the federal statutory rate 34.0% 34.0%
S Corporation earnings - (17.5%)
State income taxes, net of federal benefit - .5%
Other, net .4% (2.8%)
----------------
Provision for income taxes 34.4% 14.2%
----------------
NOTE 11 - RELATED PARTY TRANSACTIONS
In July 1993, the Company entered into an agreement with a financial
consulting firm to provide advisory services and arrange certain credit
facilities for the Company. The president of this firm, who is also an equity
holder in the firm, serves as a member to the Company s board of directors.
The Company incurred costs of $58,000 and $138,000 for each of the years
ended October 31, 1996 and 1994, respectively, related to these services.
In April 1994, this financial consulting firm agreed to provide certain
advisory services, including services relating to the Stock Offering. A flat
fee of $150,000 was paid to the firm in connection with the Stock Offering.
The Company recognized costs of $133,000 and $17,000 with respect to these
services in the years ended October 31, 1995 and 1994, respectively.
A business consulting firm has provided consulting services to the Company
since March 1990, for which the Company incurred fees of $25,000 and $104,000
in the years ended October 31, 1995 and 1994, respectively. A general partner
in this consulting firm is an officer of the Company and a member of the
Company s board of directors.
NOTE 12 - STOCK PLANS
The Company's 1995 Long Term Incentive Plan provides for the granting of
incentive stock options and non-qualified stock options to purchase common
stock, stock appreciation rights, restricted stock and performance units to
key executives and other key employees of the Company. The plan authorized
850,000 shares of common stock to be used for stock options, stock
appreciation rights, or restricted stock. All options vest at the rate of 20%
per year on each of the first five anniversaries of the date of grant. At
October 31, 1996, options to purchase 81,300 shares were exercisable. The
plan will terminate on December 31, 2004. Stock option activity during fiscal
1996 is as follows:
Number Option Price
of Shares Range per Share
----------------------------
Balance at October 31, 1994 - -
Granted 478,000 $12.00 - $13.88
Terminated (56,500) $12.00 - $13.75
Exercised - -
----------------------------
Balance at October 31, 1995 421,500 $12.00 - $13.88
----------------------------
Granted 409,500 $ 9.25 - $23.38
Terminated (20,000) $10.38 - $12.00
Exercised (11,000) $12.00 - $12.00
----------------------------
Balance at October 31, 1996 800,000 $ 9.25 - $23.38
----------------------------
Employee Stock Purchase Plan - The 1995 Employee Stock Option Purchase Plan
provides a method whereby eligible employees may purchase common stock
through voluntary payroll deductions, not to exceed 10% of the employee's
base salary. Payroll deductions are made over a twelve month period. At the
end of the deduction period, employees will have a subsequent twelve month
period during which they may either exercise their options in whole or in
part, or withdraw their funds with interest at a rate determined by the Stock
Option Committee. The purchase price under the plan will be determined by the
Stock Option Committee, however, the option price will not be less than 85%
of the fair market value of the common stock on the date the option is
granted or, such price will not be less than 85% of the fair market value of
the Common Stock on the date the option is exercised. As of October 31, 1996,
2,598 shares have been issued under this plan.
NOTE 13 - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
(In thousands)
31-Oct 31-Jul 30-Apr 31-Jan 31-Oct 31-Jul 30-Apr 31-Jan
Three Months Ended 1996 1996 1996 1996 1995 1995 1995 1995
---------------------------------------------------------------------------
Net sales $48,122 $42,537 $44,592 $44,905 $39,832 $25,663 $33,370 $30,738
Gross profit 10,996 8,616 8,403 7,262 6,117 3,550 4,712 5,095
Net income(loss) 2,131 1,380 1,351 1,214 941 (497)
Net income(loss)
per share $0.45 $0.30 $0.30 $0.27 $0.21 $(0.11)
Pro forma net income 410 828
Pro forma net income per share $0.10 $0.31