SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended December 28, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition Period from ____ to ____
Commission File No. 0-13150
_____________
CONCURRENT COMPUTER CORPORATION
Delaware 04-2735766
(State of Incorporation) (I.R.S. Employer Identification No.)
2101 West Cypress Creek Road, Ft. Lauderdale, FL 33309
Telephone: (954) 974-1700
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___
---
Number of shares of the Registrant's Common Stock, par value $0.01 per share,
outstanding as of February 10, 1997 were 44,956,539.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONCURRENT COMPUTER CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 28, DECEMBER 31, DECEMBER 28, DECEMBER 31,
-------------- -------------- -------------- --------------
1996 1995 1996 1995
-------------- -------------- -------------- --------------
Net sales
Computer systems $ 12,870 $ 10,332 $ 26,244 $ 21,865
Service and other 13,755 14,151 28,138 29,070
-------------- -------------- -------------- --------------
Total 26,625 24,483 54,382 50,935
Cost of Sales
Computer systems 6,796 5,892 13,905 12,363
Service and other 7,156 8,004 14,914 16,780
Transition 64 0 802 0
-------------- -------------- -------------- --------------
Total 14,016 13,896 29,621 29,143
-------------- -------------- -------------- --------------
Gross margin 12,609 10,587 24,761 21,792
Operating expenses
Research and development 3,443 3,339 6,799 7,054
Selling, general and administrative 7,797 7,319 15,028 15,271
Transition/Restructuring expense 872 1,300 2,106 1,300
Post-retirement benefit reversal (1,200) 0 (2,181) 0
Total operating expenses 10,912 11,958 21,752 23,625
-------------- -------------- -------------- --------------
Operating income (loss) 1,697 (1,371) 3,009 (1,833)
Interest expense (532) (626) (1,191) (1,320)
Interest income 29 70 81 181
Other income (expense) - net (161) (30) (420) (517)
Other non-recurring charges 0 0 0 (1,700)
Gain/loss CyberGuard stock 2,192 0 (1,876) 0
-------------- -------------- -------------- --------------
Income (loss) before provision 3,225 (1,957) (397) (5,189)
for income taxes
Provision for income taxes 530 600 970 1,000
-------------- -------------- -------------- --------------
Net income (loss) $ 2,695 ($2,557) ($1,367) ($6,189)
============== ============== ============== ==============
Net income (loss) per share $ 0.06 ($0.08) ($0.03) ($0.20)
============== ============== ============== ==============
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
CONCURRENT COMPUTER CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
DECEMBER 28, JUNE 30,
-------------- ----------
1996 1996
-------------- ----------
ASSETS
Current Assets
Cash and cash equivalents $ 2,672 $ 3,562
Trading securities 3,838 10,077
Accounts receivable - net 27,173 27,948
Inventories 13,573 11,683
Prepaid expenses and
other current assets 2,066 2,384
-------------- ----------
Total current assets 49,322 55,654
Property, plant and equipment - net 16,874 16,453
Facilities held for disposal 4,700 4,700
Other long-term assets 1,634 3,407
-------------- ----------
Total assets $ 72,530 $ 80,214
============== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable 5,423 5,013
Current portion of long-term debt 1,668 1,241
Revolving credit facilities 4,044 5,014
Accounts payable and accrued expenses 34,052 40,638
Deferred revenue 4,682 4,573
-------------- ----------
Total current liabilities 49,869 56,479
Long-term debt 5,564 6,603
Other long-term liabilities 2,094 4,454
Class B 9% cumulative convertible, redeemable,
exchangeable preferred stock, mandatory redemption
value of $6,263,000, $.01 par value per share,
1,000,000 authorized; 640,804.6 issued and
outstanding at December 28, 1996 3,757 5,610
Stockholder's equity
Common stock 448 412
Capital in excess of par value 89,817 84,252
Accumulated deficit after eliminating
accumulated deficit of $81,826 at December 31,
1991, date of quasi-reorganization (78,107) (76,740)
Treasury stock (58) (58)
Cumulative translation adjustment (854) (798)
-------------- ----------
Total stockholders' equity 11,246 7,068
-------------- ----------
Total liabilities and stockholders' equity $ 72,530 $ 80,214
============== ==========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
CONCURRENT COMPUTER CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
SIX MONTHS ENDED
DECEMBER 28, DECEMBER 31,
-------------- --------------
1996 1995
-------------- --------------
Cash flows provided by (used by) operating activities:
Net loss ($1,367) ($6,189)
Adjustments to reconcile net loss
to net cash provided by (used by) operating activities:
Unrealized loss on CyberGuard Stock 2,666 0
Realized gain on CyberGuard stock (785) 0
Depreciation, amortization and other 2,409 5,977
Other non-cash expenses 2,025 3,065
Decrease (increase) in current assets:
Accounts receivable 775 1,750
Inventories (2,215) 400
Prepaid expenses and other current assets 318 (25)
Decrease in current liabilities other than debt obligations
and restructuring reserve 0 (6,532)
Increase (decrease) to restructuring reserve (5,957) 1,300
Decrease in other long-term assets 1,745 934
Decrease in other long-term liabilities (2,360) (86)
-------------- --------------
Total adjustments to net loss (1,329) 6,783
-------------- --------------
Net cash provided by (used by) operating activities (2,696) 594
-------------- --------------
Cash flows provided by (used by) investing activities:
Additions to property, plant and equipment (2,435) (1,230)
Net proceeds from sale of trading securities 4,308 0
-------------- --------------
Net cash provided by (used by) investing activities 1,873 (1,230)
-------------- --------------
Cash flows used by financing activities:
Net proceeds (payments) of notes payable 410 (307)
Net payments of revolving credit facility (970) (830)
Repayment of long-term debt (612) (875)
Net proceeds from sale and issuance of common stock 1,161 109
-------------- --------------
Net cash used by financing activities (11) (1,903)
-------------- --------------
Effect of exchange rate changes on cash and
cash equivalents (56) 244
-------------- --------------
Decrease in cash and cash equivalents ($890) ($2,295)
============== ==============
Cash paid during the period for:
Interest $ 961 $ 921
============== ==============
Income taxes (net of refunds) $ 615 $ 1,261
============== ==============
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS.
CONCURRENT COMPUTER CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and therefore do not
include all information and footnotes necessary for a fair presentation of
financial position, results of operations and cash flows in conformity with
generally accepted accounting principles. The foregoing financial information
reflects all adjustments which are, in the opinion of management, necessary
for a fair presentation of the results for the periods presented. All such
adjustments are of a normal recurring nature.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these consolidated
financial statements be read in conjunction with the audited consolidated
financial statements and the notes included in the Annual Report on Form 10-K
as filed with the Securities and Exchange Commission.
The results of interim periods are not necessarily indicative of the
results to be expected for the full fiscal year.
2. CHANGES IN ACCOUNTING POLICY
Post-retirement Benefits Other Than Pensions
On July 1, 1993, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 106 "Employers' Accounting for
Post-retirement Benefits Other Than Pensions" (FAS No. 106). This standard
requires companies to accrue post-retirement benefits throughout the
employees' active service periods until they attain full eligibility for those
benefits. The transition obligation (the accumulated post-retirement benefit
obligation at the date of adoption) may be recognized either immediately or by
amortization over the longer of the average remaining service period of active
employees or 20 years.
In connection with the adoption of this standard in fiscal year 1994, the
Company recorded a non-cash charge of $3.0 million representing the immediate
recognition of the accumulated post-retirement benefit obligation at the date
of the adoption.
As a result of the Acquisition as defined in Management's Discussion and
Analysis, the Company has decided to terminate the retirement benefits of
current employees and former employees who are not yet retired. In the
current quarter, a curtailment gain of $1.2 million was recorded relating to
the active participants. The total year-to-date curtailment gain is $2.1
million.
Stock-Based Compensation
On July 1, 1996, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 123 "Accounting for Stock-Based
Compensation" (FAS No. 123). This standard established a fair value method
for accounting for stock-based compensation plans based upon the fair value of
stock options and similar instruments, but does not require the adoption of
this preferred method. The adoption of this standard will not impact results
of operations, financial position or cash flows.
INCOME (LOSS) PER SHARE
Income (loss) per share for the three and six months ended December 28,
1996 and December 31. 1995, respectively, is based on the weighted average
number of shares of common stock outstanding. The number of shares used in
computing primary and fully diluted earnings per share for the three months
ended December 28, 1996 was 45,310,000 and 45,317,000 respectively. For the
three months ended December 31, 1995, the weighted average number of shares
outstanding was 30,567,000. The number of shares used in computing net loss
per share for the six months ended December 28, 1996 was 43,417,000 and for
the six months ended December 31, 1995 was 30,439,000.
3. TRADING SECURITIES
As of June 30, 1996, the company held 683,178 shares of CyberGuard stock
with a market value of $14.75 per share. During the quarter ended September
27, 1996 the company had sold 91,500 shares at $10.645 per share, resulting in
a realized loss of $376 thousand. In addition, the value of the stock at the
end of the quarter ended September 27, 1996 was $8.50 per share, resulting in
an unrealized loss of $3.7 million. During the quarter ended December 28,
1996, the company sold 261,500 shares at an average price of $12.748 per
share, and sold a call option on an additional 300,000 shares. At December
28, 1996, the company held 330,178 shares, including the 300,000 shares
subject to the call option. The market value of these shares was $3,838,319
or $11.625 per share.
4. INVENTORIES
Inventories are valued at the lower of cost or market, with cost being
determined by using the first-in, first-out ("FIFO") method. The components
of inventories are as follows:
(DOLLARS IN THOUSANDS)
DECEMBER 28, JUNE 30,
1996 1996
------------ --------
Raw materials $ 8,924 $ 8,789
Work-in-process 2,699 352
Finished goods 1,950 2,542
------------ --------
TOTAL $ 13,573 $ 11,683
============ ========
5. ACCUMULATED DEPRECIATION
Accumulated depreciation for property, plant and equipment at December
28, 1996 and June 30, 1996 was $47,117,000 and $44,213,000 respectively.
6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
(DOLLARS IN THOUSANDS)
DECEMBER 28, JUNE 30,
1996 1996
------------- ---------
Accounts payable, trade $ 12,393 $ 9,453
Accrued payroll, vacation and other
employee expenses 7,135 7,934
Restructuring reserve 7,018 12,975
Other accrued expenses 7,506 10,276
------------- ---------
$ 34,052 $ 40,638
============= =========
7. SALE/LEASEBACK
On September 27, 1996, the Company entered into a Purchase and Sale
Agreement providing for the sale/leaseback of its Oceanport, New Jersey
facility. The transaction is contingent upon the buyer's ability to lease
approximately 100,000 square feet of the 280,000 square foot building. The
transaction was expected to close during the December, 1996 or January, 1997
timeframe. The contract has been extended in exchange for non-refundable
monetary consideration. It is expected that this transaction will close by
March or April, 1997. The $5.0 million sales price will be reduced by
estimated selling costs of approximately $0.3 million. In accordance with the
terms of the agreement under the New Term Loan, which is defined in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, the Company is required to prepay the New Term Loan in an amount
equal to 75% of the net proceeds of the sale of the facility. Accordingly,
the net proceeds will be applied to the remaining outstanding balance of the
New Term Loan (approximately $3.5 million). The remainder of the net proceeds
will be available for working capital purposes. However, there can be no
assurance that the transaction will be completed as contemplated.
8. PROVISION FOR RESTRUCTURING
The Company recorded a restructuring provision of $24.5 million during
the year ended June 30, 1996. This charge included the estimated costs
related to the rationalization of facilities, workforce reductions, asset
writedowns and other costs. The balance of the restructuring reserve at June
30, 1996 was $13.0 million. During the three and six months ended December
28, 1996, cash payments related to the 1996 restructuring amounted to
approximately $1.7 million and $6.0 million respectively. Approximately $5.2
million related to employee termination costs.
On May 5, 1992, the Company entered into an agreement with the Industrial
Development Authority (IDA) in Ireland to maintain a presence in Ireland
through April 30, 1998. In connection with the Acquisition, the Company has
decided to close its Ireland operations. As a result, the Company may be
required to pay approximately $575,000 (360,000 Irish pounds) to the IDA which
is provided for in the restructuring provision. The Company is currently in
negotiation with the IDA.
9. PREFERRED STOCK
During the quarter ended December 28, 1996, CyberGuard exchanged
359,195.4 shares of the company's Class B 9% cumulative convertible,
redeemable, exchangeable preferred stock for 900,000 shares of Concurrent
Common Stock.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
On June 27, 1996, the Company acquired the Real-Time Division of Harris
Computer Systems Corporation ("HCSC"), along with 683,178 shares of newly
issued shares of HCSC, which was renamed CyberGuard Corporation, in exchange
for 10,000,000 shares of Concurrent common stock, 1,000,000 shares of
convertible exchangeable preferred stock of Concurrent with a 9% cumulative
annual dividend payable quarterly in arrears and a mandatory redemption value
of $6,263,000 and the assumption of certain liabilities related to the HCSC
Real-Time Division ("Acquisition"). The aggregate purchase price of the
Acquisition was approximately $18.7 million. The Acquisition has been
accounted for as a purchase effective June 30, 1996.
RESULTS OF OPERATIONS
The quarter ended December 28, 1996 compared with the quarter ended December
31, 1995.
Net Sales. Net sales increased to $26.6 million for the quarter ended
December 28, 1996 from $24.5 million in the comparable period a year ago. The
Company considers its computer systems and service business to be one class of
products.
Net product sales were $12.9 million for the quarter ended December 28, 1996
as compared with $10.3 million for the quarter ended December 31, 1995. Sales
of proprietary systems continue to decline, while sales of open systems
products are increasing. Maintenance sales decreased from $14.2 million in
the second quarter of 1995 to $13.8 million in the second quarter of 1996,
continuing the decline experienced over the past years as customers move from
proprietary to open systems which require less maintenance.
Gross Margin. Gross margin as a percentage of sales increased to 47.4%
in the current quarter from 43.2% for the quarter ended December 31, 1995.
The increase reflects the Company's higher product sales this quarter and its
continued cost improvement efforts.
Operating Income. Operating income increased $3.1 million to a profit of
$1.7 million compared with a loss of $1.4 million in the quarter ended
December 31, 1995. Expenses decreased $1.0 million in the current quarter
compared with the quarter ended December 31, 1995, which was the net of $.4
million lower transition and restructuring costs, $.6 million higher selling,
general and administrative, and research and development costs, and the
recognition of a $1.2 million gain on discontinued post-retirement benefits
for current and former employees as a result of the Acquisition.
Net Income. Net income increased from a loss of $2.6 million in the
quarter ended December 31, 1995 to a profit of $2.7 million in the current
quarter. Of the $5.3 million increase in net income, $3.1 million resulted
from operations as described above, and $2.2 million resulted from realized
and unrealized gains on CyberGuard stock held for trading. The realized gain
of $1.1 million resulted from the sale of 261,500 shares of Cyberguard stock
at an average price of $12.748. The shares had been valued at $8.50 per share
for the quarter ended September 27, 1996. The unrealized gain of $1.0 million
is attributable to the revaluation of 330,178 shares of CyberGuard common
stock at $11.625 per share at December 28, 1996,
Six months ended December 28, 1996 compared with the six months ended December
31, 1995.
Net Sales. Net sales increased to $54.4 million for the six months ended
December 28, 1996 from $50.9 million in the comparable period a year ago. The
Company considers its computer systems and service business to be one class of
products.
Net product sales were $26.2 million for the quarter ended December 28, 1996
as compared with $21.9 million for the six months ended December 31, 1995.
Sales of proprietary systems continue to decline, while open systems products
are increasing. Maintenance sales decreased from $29.1 million for the six
months ended December 31, 1995 to $28.1 million for the comparable six months
of 1996, continuing the decline experienced over the past years as customers
move from proprietary to open systems which require less maintenance.
Gross Margin. Gross margin as a percentage of sales increased to 47.4%
in the current six month period from 42.8% for the six months ended December
31, 1995. The increase reflects the Company's higher product sales this
quarter and its continued cost improvement efforts.
Operating Income. Operating income increased $4.8 million to a profit of
$3.0 million compared with a loss of $1.8 million in the six months ended
December 31, 1995. Expenses decreased $1.9 million in the current six months
compared with the six months ended December 31, 1995, which was the net of $.8
million higher transition and restructuring costs, and the recognition of a
$2.2 million gain on discontinued post-retirement benefits for current and
former employees as a result of the Acquisition.
Net Income. Net income increased from a loss of $6.2 million in the six
months ended December 31, 1995 to a loss of $1.4 million in the current half.
The majority of the $4.8 gain in the half ended December 31, 1996 was from
operating income, explained above. Interest and other non-recurring charges
were similar in both periods.
LIQUIDITY AND CAPITAL RESOURCES
The Acquisition and related business integration and consolidation is
expected to improve the Company's liquidity through improved operating
performance, additional borrowing availability, and the planned disposition of
its Oceanport, New Jersey facility. The Company may also utilize its
remaining CyberGuard common stock holdings as an additional source of
liquidity if needed. The Company's liquidity is dependent on many factors,
including sales volume, operating profit ratio, debt service and the
efficiency of asset use and turnover. The future liquidity of the Company
depends to a significant extent on (i) the actual versus anticipated decline
in sales of proprietary systems and service maintenance revenue; (ii) revenue
growth from open systems; (iii) both the related costs and the length of time
to realize the anticipated benefits from the combination of the real-time
businesses of the Company and HCSC; and (iv) ongoing cost control actions.
Liquidity will also be affected by: (i) timing of shipments which
predominately occur during the last month of the quarter; (ii) the percentage
of sales derived from outside the United States where there are generally
longer accounts receivable collection cycles and which receivables are not
included in the Company's borrowing base under its revolving credit facility;
(iii) the sales level in the United States where related accounts receivable
are included in the borrowing base of the Company's revolving credit facility;
(iv) the number of countries in which the Company will operate, which may
require maintenance of minimum cash levels in each country and, in certain
cases, may restrict the repatriation of cash, such as cash held on deposit to
secure office leases. The Company believes that it will be able to fund the
acquisition costs, as well as fiscal year 1997 operations, through its
operating results, existing financing facilities and the planned disposition
of its Oceanport, New Jersey facility. There is no assurance that the
Company's plans will be achieved.
On June 28, 1996, the Company entered into a new agreement providing for
a $19.9 million credit facility which matures August 1, 1999. The facility
includes a $ 7.2 million term loan (the "New Term Loan") and a $12.7 million
revolving credit facility (the "New Revolver"). The New Revolver represents a
$4.7 million increase to the maximum revolver amount, subject to certain
restrictions. In addition, the Company can borrow up to $3.0 million in
standby letters of credit (the "LOC's") in connection with overseas lines of
credit. The LOC's mature July 31, 1997 at which time the Company must extend
the expiration date of the LOC's to August 1, 1999, or obtain alternative
financing or guaranties in lieu thereof.
At December 28, 1996, the outstanding balances under the New Term Loan
and the New Revolver were $6.8 million and $4.0 million, respectively. The
entire outstanding balance of the New Revolver has been classified as a
current liability at December 28, 1996. Both the New Term Loan and the New
Revolver bear interest at the prime rate plus 2.0%. The New Term Loan is
payable in 28 monthly installments of approximately $139,000 each, commencing
October 1, 1996 and ending January 1, 1999, with the final balance of
approximately $3.3 million payable August 1, 1999. The New Revolver may be
repaid and reborrowed, subject to certain collateral requirements, at any time
during the term ending August 1, 1999. The Company has pledged substantially
all of its domestic assets as collateral for the New Term Loan and the New
Revolver. The Company may repay the New Term Loan at any time without
penalty. In the event of a sale or sale/leaseback of its Oceanport facility,
the Company is required to make a prepayment of the New Term Loan up to an
amount equal to 75% of the net sale proceeds. Certain early termination fees
apply if the Company terminates the facility in its entirety prior to August
1, 1999.
The Company's joint venture agreement regarding its Japanese subsidiary
has been renewed through June, 1997. In the event such agreement is not
further extended, the Company could be required to satisfy the then
outstanding amount of demand notes which are guaranteed by the Company
($2,583,312 at December 28, 1996). There can be no assurance that the
agreement will be extended and, in the event the agreement is not extended,
the Company may be required to extend its guarantees, or repay the demand
notes and seek alternative financing. The Company expects to extend the joint
venture agreement.
The Company had cash and cash equivalents on hand of $2.7 million
representing a decrease from $3.6 million as of June 30, 1996. In addition,
the Company holds 330,178 shares of CyberGuard stock, which were valued at
approximately $3.8 million ($11.625 per share) on December 28, 1996. Prepaid
expenses and other current assets decreased by $0.3 million primarily due to
timing differences. Other long-term assets decreased by $1.8 million
primarily due to a reduction in the amount held in escrow to fund the
directors and officers liability policy deductible. This deductible was
reduced from $1.0 million to $0.25 million and the corresponding escrow amount
was reduced accordingly. Accounts payable and accrued expenses decreased by
$6.5 million due to primarily to reduction in the restructure reserve. Other
long-term liabilities decreased by $2.4 million due primarily to the reduction
in the post-retirement benefit obligation resulting from the plan termination.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This Form 10-Q contains forward-looking statements that are subject to
risks and uncertainties. Statements indicating that the Company "expects,"
"estimates" or "believes" are forward-looking as are all other statements
concerning future financial results, product offerings or other events that
have not yet occurred. There are several important factors that could cause
actual results or events to differ materially from those anticipated by the
forward-looking statements contained herein. Such factors include, but are
not limited to: the growth rates of the Company's market segments; the
positioning of the Company's products in those segments; the Company's ability
to effectively manage its business, and the growth of its business, in a
rapidly changing environment; the timing of new product introductions;
inventory risks due to changes in market conditions; the competitive
environment in the computer industry; the Company's ability to establish
successful strategic relationships; and general economic conditions.
SELECTED OPERATING DATA AS A PERCENTAGE OF NET SALES
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 28, DECEMBER 31, DECEMBER 28, DECEMBER 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
Net sales
Computer systems 48.3% 42.2% 48.3% 42.9%
Service and Other 51.7% 57.8% 51.7% 57.1%
------------- ------------- ------------- -------------
Total 100.0% 100.0% 100.0% 100.0%
Cost of Sales
Computer systems 25.5% 24.1% 25.6% 24.3%
Service and other 26.9% 32.7% 27.4% 32.9%
Transition 0.2% 0.0% 1.5% 0.0%
------------- ------------- ------------- -------------
Total 52.6% 56.8% 54.5% 57.2%
Gross margin 47.4% 43.2% 45.5% 42.8%
------------- ------------- ------------- -------------
Operating expenses
Research and development 12.9% 13.6% 12.5% 13.8%
Selling, genral and administrative 29.3% 29.9% 27.6% 30.0%
Transition/Restructure cost 3.3% 5.3% 3.9% 2.6%
Post-retirement benefit reversal (4.5%) 0.0% (4.0%) 0.0%
------------- ------------- ------------- -------------
Total operating expenses 41.0% 48.8% 40.0% 46.4%
Operating income (loss) 6.4% (5.6%) 5.5% (3.6%)
Interest expense (2.0%) (2.6%) (2.2%) (2.6%)
Interest income 0.1% 0.3% 0.1% 0.4%
Other income (expense) - net (0.6%) (0.1%) (0.8%) (1.0%)
Other non-recurring charges 0.0% 0.0% 0.0% (3.3%)
Gain/loss Cyberguard stock 8.2% 0.0% (3.4%) 0.0%
Income (loss) before provision 12.1% (8.0%) (0.7%) (10.2%)
for income taxes
Provision for income taxes 2.0% 2.5% 1.8% 2.0%
------------- ------------- ------------- -------------
Net income (loss) 10.1% (10.4%) (2.5%) (12.2%)
============= ============= ============= =============
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
(a) Exhibits:
(3) Amended and Restated By-laws of the Company (November, 1996)
(10) Amendment No. Twelve to the Loan and Security Agreement dated as
of October 21, 1996 between the Company and Foothill Capital
Corporation
(11) Amendment No. Thirteen to the Loan and Security Agreement dated
as of November 5, 1996 between the Company and Foothill
Capital Corporation
(12) Statement on computation of per share earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K.
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this quarterly report for the quarter ended
December 28, 1996 to be signed on its behalf by the undersigned thereunto duly
authorized.
Date: February 12, 1997 CONCURRENT COMPUTER CORPORATION
By: /s/ E. Courtney Siegel
--------------------------
E.COURTNEY SIEGEL
President and Chief Executive Officer
By: /s/ Daniel S. Dunleavy
------------------------
DANIEL S. DUNLEAVY
Vice President, Chief Financial Officer
and Chief Administrative Officer
(Principal Financial and Accounting
Officer)