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 March 31, 1999
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 May 12, 1999 was 48,265,848.
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONCURRENT COMPUTER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
-------- -------- -------- --------
Net sales:
Computer systems . . . . . . . . . . . . . $ 8,566 $ 9,544 $24,362 $28,169
Service and other. . . . . . . . . . . . . 9,110 10,850 29,369 33,846
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . . . . 17,676 20,394 53,731 62,015
Cost of sales:
Computer systems . . . . . . . . . . . . . 3,403 5,123 10,661 13,916
Service and other. . . . . . . . . . . . . 5,016 5,670 15,230 17,852
-------- -------- -------- --------
Total. . . . . . . . . . . . . . . . . . 8,419 10,793 25,891 31,768
-------- -------- -------- --------
Gross margin . . . . . . . . . . . . . . . . 9,257 9,601 27,840 30,247
Operating expenses:
Research and development . . . . . . . . . 2,371 2,739 7,620 8,253
Selling, general and administrative. . . . 6,324 5,845 18,907 17,739
Restructuring. . . . . . . . . . . . . . . - - - (607)
-------- -------- -------- --------
Total operating expenses . . . . . . . . . . 8,695 8,584 26,527 25,385
-------- -------- -------- --------
Operating income . . . . . . . . . . . . . . 562 1,017 1,313 4,862
Interest expense . . . . . . . . . . . . . . (45) (159) (194) (609)
Interest income. . . . . . . . . . . . . . . 34 51 127 109
Other non-recurring gain (loss). . . . . . . - - (88) 420
Other income (expense) - net . . . . . . . . (205) 120 (237) (122)
-------- -------- -------- --------
Income before provision for income taxes . . 346 1,029 921 4,660
Provision for income taxes . . . . . . . . . 52 24 138 932
-------- -------- -------- --------
Net income . . . . . . . . . . . . . . . . . $ 294 $ 1,005 $ 783 $ 3,728
Preferred stock dividends and accretion of
mandatory redeemable preferred shares. . . - - - (18)
-------- -------- -------- --------
Net income available to common shareholders. $ 294 $ 1,005 $ 783 $ 3,710
======== ======== ======== ========
Basic and diluted net income per share . . . $ 0.01 $ 0.02 $ 0.02 $ 0.08
======== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
CONCURRENT COMPUTER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
MARCH 31, JUNE 30,
1999 1998
------------ ----------
ASSETS (UNAUDITED)
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . $ 5,607 $ 5,733
Accounts and notes receivable - net. . . . . . . . . . . . . 16,203 18,996
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . 5,832 6,263
Prepaid expenses and other current assets. . . . . . . . . . 1,599 1,487
------------ ----------
Total current assets . . . . . . . . . . . . . . . . . . . 29,241 32,479
Property, plant and equipment - net. . . . . . . . . . . . . . 12,503 12,419
Other long-term assets . . . . . . . . . . . . . . . . . . . . 1,104 1,337
Total assets . . . . . . . . . . . . . . . . . . . . . . . $ 42,848 $ 46,235
============ ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable. . . . . . . . . . . . . . . . . . . . . . . . $ - $ 365
Revolving credit facility. . . . . . . . . . . . . . . . . . - 1,123
Accounts payable and accrued expenses. . . . . . . . . . . . 9,512 13,321
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . 3,598 4,018
------------ ----------
Total current liabilities. . . . . . . . . . . . . . . . . 13,110 18,827
Other long-term liabilities. . . . . . . . . . . . . . . . . . 1,968 1,898
------------ ----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . 15,078 20,725
------------ ----------
Stockholders' equity:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . 481 476
Capital in excess of par value . . . . . . . . . . . . . . . 98,100 97,136
Accumulated deficit after eliminating accumulated deficit of
$81,826 at December 31, 1991, date of quasi-reorganization (70,408) (71,191)
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . (58) (58)
Cumulative translation adjustment. . . . . . . . . . . . . . (345) (853)
------------ ----------
Total stockholders' equity . . . . . . . . . . . . . . . . 27,770 25,510
------------ ----------
Total liabilities and stockholders' equity . . . . . . . . . . $ 42,848 $ 46,235
============ ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
CONCURRENT COMPUTER CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED
MARCH 31,
1999 1998
----------- ---------
Cash flows provided by operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . $ 783 $ 3,728
Adjustments to reconcile net income
to net cash provided by operating activities:
Realized gain on trading securities . . . . . . . . - (420)
Gain on sale of facility. . . . . . . . . . . . . . - (706)
Loss on dissolution of subsidiary . . . . . . . . . 429 -
Depreciation, amortization and other. . . . . . . . 3,701 4,317
Other non-cash expenses . . . . . . . . . . . . . . 19 1,027
Decrease (increase) in assets:
Accounts and notes receivable . . . . . . . . . . 2,782 4,189
Inventories . . . . . . . . . . . . . . . . . . . 423 1,703
Prepaid expenses and other current assets . . . . (753) (775)
Other long-term assets. . . . . . . . . . . . . . 192 83
Increase (decrease) in liabilities:
Accounts payable, accrued expenses and
other current liabilities . . . . . . . . . (4,229) (9,197)
Other long-term liabilities . . . . . . . . . . . 70 297
----------- ---------
Total adjustments to net income . . . . . . . . . . . 2,634 518
----------- ---------
Net cash provided by operating activities . . . . . . . 3,417 4,246
----------- ---------
Cash flows (used in) provided by investing activities:
Net additions to property, plant and equipment. . . . (2,957) (1,977)
Proceeds from sale of facility. . . . . . . . . . . . - 5,406
Proceeds from sale of trading securities. . . . . . . - 2,668
----------- ---------
Net cash (used in) provided by investing activities . . (2,957) 6,097
----------- ---------
Cash flows used in financing activities:
Payments of notes payable . . . . . . . . . . . . . . (425) (462)
Proceeds of revolving credit facility . . . . . . . . 39,995 48,965
Payments of revolving credit facility . . . . . . . . (41,118) (52,083)
Repayment of long-term debt . . . . . . . . . . . . . - (6,161)
Proceeds from sale and issuance of common stock . . . 969 679
----------- ---------
Net cash used in financing activities . . . . . . . . . (579) (9,062)
----------- ---------
Effect of exchange rates on cash and cash equivalents . (7) (428)
----------- ---------
(Decrease) increase in cash and cash equivalents. . . . $ (126) $ 853
=========== =========
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . $ 190 $ 594
=========== =========
Income taxes (net of refunds) . . . . . . . . . . . $ 875 $ 891
=========== =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
CONCURRENT COMPUTER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of Concurrent
Computer Corporation ("Concurrent" or the "Company") 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 condensed
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. EARNINGS PER SHARE
In the quarter ended March 31, 1998, the Company adopted Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("FAS No. 128"),
which supersedes APB Opinion No. 15, "Earnings Per Share", and specifies the
computation, presentation, and disclosure requirements for earnings per share
("EPS") for entities with publicly held common stock or potential common stock.
FAS No. 128 replaces primary and fully diluted EPS with basic and diluted EPS,
respectively. It also requires dual presentation of basic EPS and diluted EPS
on the face of the income statement and requires a reconciliation of the
numerator and denominator of the basic EPS computation to the numerator and
denominator of the diluted EPS computation.
Basic EPS is computed by dividing income after deduction of preferred stock
dividends by the weighted average number of common shares outstanding during
each year. Diluted EPS is computed by dividing income after deduction of
preferred stock dividends by the weighted average number of shares giving effect
to all dilutive potential shares that were outstanding during the period, as
calculated under the treasury stock method.
The number of shares used in computing basic and diluted EPS for the three
months ended March 31, 1999 was 48,043,000 and 50,981,000, respectively. The
number of shares used in computing basic and fully diluted EPS for the three
months ended March 31, 1998 was 47,260,000 and 49,058,000, respectively. The
number of shares used in computing basic and fully diluted EPS for the nine
months ended March 31, 1999 was 47,855,000 and 49,186,000, respectively. The
number of shares used in computing basic and fully diluted EPS for the nine
months ended March 31, 1998 was 46,816,000 and 48,641,000, respectively.
3. 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)
MARCH 31, JUNE 30,
1999 1998
---------- ---------
Raw materials . $ 4,610 $ 4,780
Work-in-process 804 959
Finished goods. 418 524
---------- ---------
$ 5,832 $ 6,263
========== =========
4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The components of accounts payable and accrued expenses are as follows:
(DOLLARS IN THOUSANDS)
MARCH 31, JUNE 30,
1999 1998
---------- ---------
Accounts payable, trade . . . $ 3,169 $ 4,946
Accrued payroll, vacation and
other employee expenses . . 3,519 4,695
Restructuring reserve . . . . 213 661
Other accrued expenses. . . . 2,611 3,019
---------- ---------
$ 9,512 $ 13,321
========== =========
5. PROVISION FOR RESTRUCTURING
As of June 30, 1998, the Company's restructuring reserve consisted of
$177,000 of accrued severance payments and $484,000 of estimated payments to be
made to the Industrial Development Authority of Ireland (the "IDA") during
fiscal year 1999. On May 5, 1992, the Company entered into an agreement with
the IDA to maintain a presence in Ireland through April 30, 1998. The Company
closed its Ireland operations in December 1996. As a result of the closing, the
Company is required to repay grants to the IDA of approximately $500,000.
During the first quarter of fiscal year 1999, the severance payments were made
and taken against the restructuring reserve, leaving $484,000 as of September
30, 1998. During the second and third quarters of fiscal year 1999, IDA
payments of $135,000 and $136,000, respectively, were made leaving $213,000 of
restructuring reserve as of March 31, 1999.
6. COMPREHENSIVE INCOME
Effective July 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income" ("FAS No. 130"). FAS No. 130 requires the reporting of
comprehensive income in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosure of certain financial information that historically has not been
recognized in the calculation of net income. The Company's total comprehensive
is as follows:
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
------ ------- ------ -------
Net income. . . . . . . . . . . . . . . . . . $ 294 $1,005 $ 783 $3,728
Other comprehensive income (loss):
Foreign currency translation gains (losses) (559) (26) 508 (145)
------ ------- ------ -------
Total comprehensive income. . . . . . . . . . $(265) $ 979 $1,291 $3,583
====== ======= ====== =======
7. YEAR 2000
The Company converted its computer systems and believes such systems
are Year 2000 compliant. The Year 2000 problem is the result of computer
programs being written using two digits rather than four to define the
applicable year. The Company has expensed all costs associated with these
systems changes.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THE QUARTER ENDED MARCH 31, 1999 COMPARED WITH THE QUARTER ENDED MARCH 31, 1998.
Net Sales. Net sales decreased to $17.7 million for the quarter ended March
31, 1999 from $20.4 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 $8.6 million for the quarter ended March 31, 1999 as
compared with $9.5 million for the quarter ended March 31, 1998. Sales of
proprietary systems continue to decline, and the selling price of open systems
is significantly lower than the selling price of proprietary products.
Maintenance sales decreased from $10.9 million in the quarter ended March 31,
1998 to $9.1 million in the quarter ended March 31, 1999, continuing the decline
experienced over the past years as customers move from proprietary systems to
open systems which require less maintenance.
Gross Margin. Gross margin decreased approximately $0.3 million during the
current quarter to $9.3 million (52% as a percentage of sales) compared to $9.6
million (47%) for the three months ended March 31, 1998. The overall decrease
in gross margin reflects the Company's lower sales this quarter. The improved
margin percentage resulted from a more favorable product mix, changes in pricing
structure, the move toward open systems which have a higher margins than
proprietary systems, and the Company's ongoing cost reduction efforts.
Operating Income. Operating income decreased $0.4 million to $0.6 million
in the current quarter compared with an income of $1.0 million in the quarter
ended March 31, 1998 due to the decrease in gross margin discussed above and a
$0.1 million increase in operating expenses. The increase in operating expenses
is largely due to the increase in marketing expenses primarily relating to
Interactive Video on Demand ("IVOD") products.
Net Income. Net income decreased from $1.0 million in the quarter ended
March 31, 1998 to $0.3 million in the current quarter. The decrease of $0.7
million is primarily due to the $0.4 million decrease in operating income, and a
$0.3 million decrease in other income (expense) - net due to miscellaneous
adjustments.
THE NINE MONTHS ENDED MARCH 31, 1999 COMPARED WITH THE NINE MONTHS ENDED MARCH
31, 1998.
Net Sales. Net sales decreased to $53.7 million for the nine months ended
March 31, 1999 from $62.0 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 $24.4 million for the nine months ended March 31, 1999 as
compared with $28.2 million for the nine months ended March 31, 1998. Sales of
proprietary systems continue to decline, and the selling price of open systems
is significantly lower than that of proprietary products. Furthermore, in the
first quarter of fiscal year 1999, international sales decreased due to the
economic crisis in Asia.
Maintenance sales decreased from $33.8 million in the nine months ended March
31, 1998 to $29.4 million for the comparable nine months of 1999, continuing the
decline experienced over the past years as customers move from proprietary to
open systems which require less maintenance.
Gross Margin. Gross margin decreased $2.4 million during the current
nine-month period to $27.8 million compared to $30.2 million for the nine months
ended March 31, 1998. The decrease reflects the Company's lower sales this
quarter. The gross margin as a percentage of sales increased from 49% in the
nine months ended March 31, 1998 to 52% in the current nine months. The improved
margin percentage resulted from a more favorable product mix, changes in pricing
structure, the move toward open systems which have a higher margins than
proprietary systems, and the Company's ongoing cost reduction efforts.
Operating Income. Operating income decreased $3.5 million to a profit of
$1.3 million in the current nine-month period compared with an income of $4.8
million in the nine months ended March 31, 1998 due to the $2.4 million decrease
in gross margin discussed above and a $1.1 million increase in operating
expenses. The increase in operating expenses is largely due to a $0.6 million
gain on the sale of the Company's Oceanport, New Jersey building recorded as an
offset to restructuring expense in the prior nine month period, increased legal
expenses in the current period relating to subsequently resolved lawsuits, and
an increase in marketing expenses in the current nine months primarily relating
to IVOD products. This increase was partially offset by a slight decrease in
research and development costs resulting from cost reduction efforts.
Net Income. Net income decreased from a profit of $3.7 million in the nine
months ended March 31, 1998 to an income of $0.8 million in the current nine
months. This decrease of $2.9 million is primarily due to the $3.5 million
decrease in operating income discussed above, a $0.5 decrease in other
non-recurring gain (loss) and a $0.1 million decrease in other income (expense)
- - net. The decrease in other non-recurring gain (loss) is primarily due to a
$0.1 million loss in the current nine months consisting of a $0.4 million loss
due to the dissolution of the Company's French Branch and a $0.3 exchange gain
resulting from the settlement of a subsidiary's short term loan to the Company,
as compared to a $0.4 million gain in the nine months ended March 31, 1998 due
to a gain on the sale of trading securities. The decrease in other income
(expense) - net is primarily due to miscellaneous adjustments. These decreases
to net income were partially offset by a $0.8 million decrease in the tax
provision resulting from an income shift towards subsidiaries with net operating
losses sufficient to offset the gains and a $0.4 million decrease in interest
expense resulting from decreased borrowings.
LIQUIDITY AND CAPITAL RESOURCES
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; and (iii)
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; and (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 ongoing operations through its operating results and existing financing
facilities.
On March 1, 1998, the Company entered into a new agreement providing for an
$8 million revolving credit facility through August 1, 2000. At March 31, 1999,
the outstanding balance under the revolving credit facility was $0. The
revolving credit facility bears interest at the prime rate plus .75% (8.5% at
March 31, 1999). The revolving credit facility may be repaid and reborrowed,
subject to certain collateral requirements, at any time prior to its maturity.
The Company has pledged substantially all of its domestic assets as collateral
for the revolving credit facility. Certain early termination fees apply if the
Company terminates the facility in its entirety prior to June 30, 1999.
The Company had debt to outside financial institutions of $0 at March 31,
1999 as compared to $1.5 million at June 30, 1998.
The Company and Nippon Steel Corporation ("NSC") terminated the joint
venture in Concurrent Nippon Corporation ("CNC") in the quarter ended June 30,
1998, and the Company acquired 100% of the stock in CNC. In connection with
this transaction, NSC paid the Company $1.2 million and the Company paid off
debt owed to certain Japanese banks on behalf of CNC.
The Company had cash and cash equivalents on hand of $5.6 million at March
31, 1999 representing a slight increase from $5.7 million as of June 30, 1998
primarily due to timing differences.
YEAR 2000
The Company has been aggressively addressing Year 2000 issues related to
the processing of date-sensitive data. A cross-functional team was assembled,
and a determination was made as to which systems were Year 2000 non-compliant.
The Company believes that all of the Company's critical financial,
manufacturing, R&D and other systems are fully compliant.
Concurrent has reviewed customer and supplier relationships, and has a Year
2000 software product available which many of its customers have implemented.
While the Company is taking all reasonable efforts, including direct mailings
and internet web site offerings, to make information on the Year 2000 readiness
of its products available to its customers, this information may not reach all
customers, particularly third-party customers. Although the Company believes it
has addressed Year 2000 readiness issues related to its products, there may be
disruptions and/or product failures that are unforeseen.
The Company is requesting assurances from its major suppliers that
they are addressing these issues and that products procured by the Company will
function properly in the Year 2000. It is expected that certain critical
suppliers may be unwilling or unable to provide such assurances. As a result,
it is difficult for the Company to assess the impact on its business of such
entities' failure to be Year 2000 compliant.
The additional costs to be incurred in achieving Year 2000 compliance are
not expected to be material.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
Certain matters discussed in this Form 10-Q may be "forward-looking statements"
as defined in the Private Securities Litigation Reform Act of 1995. Concurrent
Computer Corporation cautions investors that any forward-looking statements made
herein are not guarantees of future performance and that a variety of factors
could cause its actual results and experience to differ materially from the
anticipated results or other expectations expressed in such forward-looking
statements. The risks and uncertainties which could affect Concurrent Computer
Corporation's performance or results include, without limitation, changes in
product demand; economic conditions; various inventory risks due to changes in
market conditions; uncertainties relating to the development and ownership of
intellectual property; uncertainties relating to the ability of Concurrent
Computer Corporation and other companies to enforce their intellectual property
rights; the pricing and availability of equipment, materials and inventories;
technological developments; delays in testing of new products; rapid technology
changes; the highly competitive environment in which Concurrent Computer
Corporation operates; the entry of new well-capitalized competitors into
Concurrent Computer Corporation's markets, and other risks and uncertainties.
SELECTED OPERATING DATA AS A PERCENTAGE OF NET SALES
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1999 1998 1999 1998
------ ------ ------ ------
Net sales:
Computer systems. . . . . . . . . . . . 48.5% 46.8% 45.3% 45.4%
Service and other . . . . . . . . . . . 51.5% 53.2% 54.7% 54.6%
------ ------ ------ ------
Total . . . . . . . . . . . . . . . . 100.0% 100.0% 100.0% 100.0%
Cost of sales:
Computer systems. . . . . . . . . . . . 39.7% 53.7% 43.8% 49.4%
Service and other . . . . . . . . . . . 55.1% 52.3% 51.9% 52.7%
Total . . . . . . . . . . . . . . . . 47.6% 52.9% 48.2% 51.2%
------ ------ ------ ------
Gross margin. . . . . . . . . . . . . . . 52.4% 47.1% 51.8% 48.8%
Operating expenses:
Research and development. . . . . . . . 13.4% 13.4% 14.2% 13.3%
Selling, general and administrative . . 35.8% 28.7% 35.2% 28.6%
Restructuring . . . . . . . . . . . . . 0.0% 0.0% 0.0% (1.0%)
------ ------ ------ ------
Total operating expenses. . . . . . . . . 49.2% 42.1% 49.4% 40.9%
------ ------ ------ ------
Operating income. . . . . . . . . . . . . 3.2% 5.0% 2.4% 7.8%
Interest expense. . . . . . . . . . . . . (0.3%) (0.8%) (0.4%) (1.0%)
Interest income . . . . . . . . . . . . . 0.2% 0.3% 0.2% 0.2%
Other non-recurring gain (loss) . . . . . 0.0% 0.0% (0.2%) 0.7%
Other income (expense) - net. . . . . . . (1.2%) 0.6% (0.4%) (0.2%)
------ ------ ------ ------
Income before provision for income taxes. 2.0% 5.0% 1.7% 7.5%
Provision for income taxes. . . . . . . . 0.3% 0.1% 0.3% 1.5%
------ ------ ------ ------
Net income. . . . . . . . . . . . . . . . 1.7% 4.9% 1.5% 6.0%
====== ====== ====== ======
PART II OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K
(a) Exhibits:
* 10.1(a) Employment Agreement dated as of November 17, 1998 between the
Company and Steve G. Nussrallah.
* 10.1(b) Amendment to Employment Agreement dated as of January 1, 1999
between the Company and E. Courtney Siegel.
(11) Statement on computation of per share earnings.
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
None.
_________________________________________________________
* Management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this quarterly report for the quarter ended March 31,
1999 to be signed on its behalf by the undersigned thereunto duly authorized.
Date: May 14, 1999 CONCURRENT COMPUTER CORPORATION
By: /s/ Daniel S. Dunleavy
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DANIEL S. DUNLEAVY
President, Real-Time Division and Acting Chief
Financial Officer
(Principal Financial and Accounting Officer)