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FORM 8-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
August 8, 1997
Commission File No.: 0-14685
GENICOM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 51 - 0271821
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14800 CONFERENCE CENTER DRIVE
SUITE 400, WESTFIELDS
CHANTILLY, VIRGINIA 20151
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (703) 802-9200
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GENICOM CORPORATION AND SUBSIDIARIES
FORM 8-K/A INDEX
Item 2. Acquisition Activities
In connection with the Marketing Agreement discussed in Item
5 below, on August 10, 1997 Genicom acquired through purchase
or license, certain inventory, equipment and intellectual
property from Digital Equipment Corporation ("Digital"). In
addition, Genicom agreed to acquire additional related
inventory from Digital during October 1997. The property
acquired or to be acquired was used by Digital in its
Printing Systems Business and is to be employed by Genicom in
connection with its performance under the Marketing Agreement
discussed in Item 5.
Item 5. Other Events
On August 10, 1997, Genicom entered into a Cooperative
Marketing, Support and Development Agreement (the "Marketing
Agreement") with Digital. The Marketing Agreement creates a
cooperative alliance between Genicom and Digital whereby
Genicom is to provide printer product planning, product
pricing, channel distribution and inventory management to
Digital's marketing channels in various geographic regions.
Under the Marketing Agreement, Digital and Genicom are to
work cooperatively as each other's supplier of complementary
products and services to provide full service customer
solutions such that Genicom will promote Digital computer
systems with Genicom branded printers and Digital will offer
Digital branded printers ("DEC Branded Printers") with
Digital systems. The Marketing Agreement also states that
Genicom is to provide technical and customer support to
Digital's installed base of legacy products and DEC Branded
Printers purchased from Genicom. Also, Genicom and Digital,
from time to time, will operate joint marketing programs and
sharesales leads for each other's capabilities, products and
services.
The Marketing Agreement is designed to benefit both Digital
and Genicom. It allows Digital to negotiate with just one
company, Genicom, to obtain printers to complement Digital's
computer systems. In essence, Digital and Genicom have
entered into a supply agreement for printer products. Genicom
benefits by obtaining an alternative distribution channel to
which it did not previously have access.
No separate financial statements have ever been prepared for
the Digital Printing Systems Business and this business has
never operated as a stand-alone entity. The financial
information provided to Genicom was derived from Digital's
management reporting system and contained numerous
allocations and adjustments. Genicom expects to rely on its
own supply sources, production techniques and infrastructure
and, therefore, historical Digital operating results would
not provide meaningful information regarding future financial
performance as Digital's and Genicom's cost structures differ
significantly.
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Digital's Printing Systems Business experienced significant
fiscal revenue erosion in recent years (from $272 million in
1995 to $160 million in 1997). Genicom believes this erosion
was primarily attributable to Digital terminating incentives
for printer sales and a lack of focus by Digital on its
printer business. As a consequence, the Marketing Agreement
provides that a portion of the royalty which Genicom is to
pay to Digital for printer sales is to be used by Digital to
pay incentives to the Digital sales force for selling printer
products along with Digital computer systems. The
reinstatement of such incentives along with Genicom's printer
focus should bolster revenues derived by Genicom under the
Marketing Agreement. Therefore, Genicom believes that it can
expect to realize approximately $100 million of revenue
associated with the Marketing Agreement during the next year.
The Marketing Agreement along with the other related
agreements will require Genicom to increase its working
capital requirements by approximately $20 million with a
corresponding increase in long term debt. During September
1997, Genicom increased its available credit facilities from
$80 million to $110 million with its bank syndicate lead by
NationsBank of Texas, N.A. Capital expenditures required to
support the agreements are estimated at $400,000 per year.
The gross margin percentage associated with the sales of
Digital branded products is expected to be slightly lower
than the gross margin percentage of Genicom's other printer
products, though Genicom expects to incur minimal additional
operating expense as a result of the Marketing Agreement.
In connection with the Marketing Agreement, Genicom has
assumed certain of Digital's supply contracts. As these
contracts expire, they will either be renewed or those
products for which the contracts are not renewed will be
replaced by Genicom produced or sourced products. It is
expected that current Genicom suppliers can accommodate the
increased demand for products from Genicom.
Except for the historical information contained here, the
matters discussed in this 8-K/A include forward-looking
statements that involve a number of risks and uncertainties.
Terms such as "believes", "expects", "plans", "intends",
"estimates", or "anticipates", and variations of such words
and similar expressions are intended to identify such forward
looking statements. Certain important factors and risks
including the ability of Genicom to perform under the
Marketing Agreement and related agreements with Digital, the
ability of Genicom and Digital to integrate their respective
operations, and others factors which are detailed from time
to time in Genicom's SEC reports, including reports on Form
10-K and 10-Q, could cause results to differ materially from
those anticipated by the statements contained herein.
Item 7. Financial Statements and Exhibits
(a) Not applicable
(b) Not applicable
Signatures
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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.
GENICOM Corporation
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Registrant
Date: October 22, 1997
/s/James C. Gale
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Signature
James C. Gale
Senior Vice President and
Chief Financial Officer
(Mr. Gale is a Corporate Vice
President and has been duly
authorized to sign on behalf of
the Registrant)