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[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 28, 1997 or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to .
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 requirements for the past 90 days.
YES X NO
Class Shares Outstanding at June 28, 1997
Common Stock, $.01 par value
73,593,796
Three Months Ended
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Net revenues | $ 160,761 | $ 150,200 |
Costs and expenses: | ||
Cost of revenues | 60,906 | 53,325 |
Research and development | 19,938 | 17,837 |
Marketing, general and administrative | 32,666 | 29,548 |
Operating costs and expenses | 113,510 | 100,710 |
Operating income | 47,251 | 49,490 |
Interest income and other | 5,786 | 4,360 |
Interest expense | (3,491) | (3,475) |
Income before provision for taxes on income | 49,546 | 50,375 |
Provision for taxes on income | 16,102 | 17,883 |
Net income | $ 33,444 | $ 32,492 |
Net income per share | $ 0.41 | $ 0.41 |
Weighted average common and common equivalent shares used | ||
in computing per share amounts | 81,326 | 78,944 |
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ASSETS | ||
Current assets: | ||
Cash and cash equivalents | $ 130,531 | $ 215,903 |
Short-term investments | 334,954 | 209,944 |
Accounts receivable, net | 72,704 | 72,248 |
Inventories | 51,232 | 62,367 |
Advances for wafer purchases | 18,000 | - |
Deferred income taxes and other current assets | 43,581 | 41,093 |
Total current assets | 651,002 | 601,555 |
Property, plant and equipment, at cost | 158,777 | 154,443 |
Accumulated depreciation and amortization | (73,331) | (67,863) |
Net property, plant and equipment | 85,446 | 86,580 |
Restricted investments | 36,743 | 36,257 |
Investment in joint venture | 35,522 | 35,286 |
Advances for wafer purchases | 72,000 | 60,000 |
Developed technology and other assets | 27,510 | 28,015 |
$ 908,223 | $ 847,693 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Current liabilities: | ||
Accounts payable | $ 24,082 | $ 16,758 |
Accrued payroll, other accrued liabilities and interest payable | 27,313 | 33,282 |
Income taxes payable | 19,887 | 10,858 |
Deferred income on shipments to distributors | 43,750 | 36,355 |
Total current liabilities | 115,032 | 97,253 |
Long-term debt | 250,000 | 250,000 |
Deferred tax liabilities | 11,943 | 9,760 |
Stockholders' equity: | ||
Preferred stock, $.01 par value | - | - |
Common stock, $.01 par value | 736 | 733 |
Additional paid-in capital | 119,957 | 114,530 |
Retained earnings | 411,325 | 377,881 |
Treasury Stock, at cost | - | (1,847) |
Cumulative translation adjustment | (770) | (617) |
Total stockholders' equity | 531,248 | 490,680 |
$ 908,223 | $ 847,693 | |
Three Months Ended
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Cash flows from operating activities: | ||
Net income | $ 33,444 | $ 32,492 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 7,715 | 6,498 |
Undistributed earnings of joint venture | (518) | - |
Changes in assets and liabilities: | ||
Accounts receivable | (456) | 7,524 |
Inventories | 11,135 | (3,456) |
Deferred income taxes and other | 4,630 | 6,200 |
Accounts payable, accrued liabilities and income taxes payable | 10,384 | 8,019 |
Deferred income on shipments to distributors | 7,395 | (3,390) |
Total adjustments | 40,285 | 21,395 |
Net cash provided by operating activities | 73,729 | 53,887 |
Cash flows from investing activities: | ||
Purchases of short-term available-for-sale investments | (172,063) | (36,822) |
Proceeds from sale or maturity of short-term available-for-sale investments | 46,927 | 34,305 |
Advances for wafer purchases | (30,000) | (30,000) |
Property, plant and equipment | (5,377) | (10,112) |
Net cash used in investing activities | (160,513) | (42,629) |
Cash flows from financing activities: | ||
Acquisition of Treasury Stock | (8,899) | - |
Principal payments on capital lease obligations | - | (284) |
Proceeds from issuance of common stock | 10,311 | 7,959 |
Net cash provided by financing activities | 1,412 | 7,675 |
Net (decrease)/increase in cash and cash equivalents | (85,372) | 18,933 |
Cash and cash equivalents at beginning of period | 215,903 | 110,893 |
Cash and cash equivalents at end of period | $ 130,531 | $ 129,826 |
Schedule of non-cash transactions: | ||
Tax benefit from stock options | $ 5,940 | $ 2,657 |
Issuance of Treasury Stock under employee stock plans | 10,746 | - |
Receipts against advances for wafer purchases | - | 6,630 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 6,469 | 6,145 |
Income taxes paid | $ 6,168 | $ 490 |
1. The accompanying interim consolidated financial statements have been prepared in conformity with generally accepted accounting principles and should be read in conjunction with the Xilinx, Inc. (Xilinx or the Company) consolidated financial statements for the year ended March 29, 1997. The balance sheet at March 29, 1997 is derived from audited financial statements. The interim financial statements are unaudited but reflect all adjustments which are in the opinion of management of a normal, recurring nature necessary to present fairly the statements of financial position, results of operations and cash flows for the interim periods presented. The results for the three month period ended June 28, 1997 are not necessarily indicative of the results that may be expected for the year ending March 28, 1998.
2. Inventories are stated at the lower of cost (first-in, first-out) or market (estimated net realizable value). Inventories at June 28, 1997 and March 29, 1997 are as follows:
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Raw materials | $ 5,668 | $ 4,477 |
Work-in-process | 22,479 | 43,553 |
Finished goods | 23,085 | 14,337 |
$ 51,232 | $ 62,367 |
The statements in this Management's Discussion and Analysis that are forward looking involve numerous risks and uncertainties and are based on current expectations. Actual results may differ materially. Certain of these risks and uncertainties are discussed below.
Results of operations - First three months of fiscal 1998 compared to the first three months of fiscal 1997
Revenues
Revenues for the first quarter of fiscal 1998 of $160.8 million represented a 7.0% increase over the corresponding period of fiscal 1997. The revenue increase was primarily attributable to increases in the volume of shipments relating to the Company's XC4000, XC4000X and XC5200 product families. Relative to the prior year quarter, revenues for the XC4000 family increased by $2.6 million while revenues for the XC4000X product, introduced in the second quarter of fiscal 1997, represented $5.0 million during the first quarter of fiscal 1998. In addition, revenues for the XC5200 family increased 91.8% to $12.9 million in the first quarter of fiscal 1998 from $6.7 million in the prior year quarter. The XC4000 and XC4000X integrated circuits represented 49.3% of revenue in the first quarter of fiscal 1998 as compared to 47.7% in the comparable quarter of last year for the XC4000 family.
Revenues for the Company's first generation FPGA products, which include the XC2000, XC3000 and XC3100 families, represented 27.8% of aggregate revenues in the first quarter of fiscal 1998, compared to 33.3% of aggregate revenues during the comparable quarter of the prior fiscal year. The decrease is a function of the slowing requirements for these products and the increasing demand for the functionality and performance provided by the second generation FPGA products. Revenues for the Company's second generation FPGA products, which include the XC4000, XC4000X and XC5200 families, represented 57.4% of aggregate revenues compared to 52.2% of aggregate revenues in the comparable quarter of the prior fiscal year. The other product generations, consisting primarily of the CPLD families, HardWire Arrays and serial proms, represented 12.5% of aggregate revenues in the first quarter of fiscal 1998 compared to 11.6% of aggregate revenues relative to the results of the comparable quarter of the prior year. Proprietary products constituted 93.0% of revenues for the first quarter of fiscal 1998, as compared to 90.1% in the comparable quarter last year. Additionally, software revenues represented approximately 2% of total revenues for the first quarter of 1998, representing approximately 1700 revenue seats, and 3%, which represented approximately 1200 revenue seats, for the first quarter of fiscal 1997.
International revenues constituted approximately 37% of total revenues in the first quarter of fiscal 1998 in comparison to approximately 36% in the prior year quarter. International revenues include customers in Europe, Japan and Rest of World. Revenue growth in the European and Rest of World markets was 10.1% and 75.5%, respectively, in the first quarter of 1998 as compared to the first quarter in 1997, while revenues declined during the same periods by 5% in the Japanese market.
Research and Development
Research and development expenditures were $19.9 million for the first quarter of fiscal 1998, or 12.4% of revenues, compared to $17.8 million, or 11.9% of revenues, in the comparable fiscal 1997 period. The 11.8% increase in expenditures resulted primarily from increased labor related expenses partially offset by a decline in engineering wafer purchases. The Company remains committed to a significant level of research and development effort in order to continue to compete aggressively in the programmable logic marketplace.
Marketing, General and Administrative
Marketing, general and administrative expenses for the first quarter of fiscal 1998 increased by 10.6% to $32.7 million, or 20.3% of revenues, versus $29.5 million, or 19.7% of revenues, during the comparable fiscal 1997 period. These expenses have increased in amount primarily as a result of increased staffing and labor related expenses as well as increased legal costs. The Company remains committed to controlling administrative expenses and believes that most of these expenses should grow at a lower rate than revenue growth. However, the timing and extent of future legal costs associated with the ongoing enforcement of the Company's intellectual property rights are not readily predictable and may significantly increase the level of general and administrative expenses in the future.
Operating Income
Operating income of $47.3 million, or 29.4% of revenues, was generated during the first quarter of fiscal 1998, a decrease of 4.5% from the $49.5 million, or 32.9% of revenues, for the prior year comparable period. The decrease in the first quarter of 1998 compared to the first quarter of 1997 is primarily a result of the 7.0% revenue growth in comparison to the 12.7% increase in operating costs and expenses. Operating income as a percentage of revenues could be adversely impacted in future years by the factors noted herein.
Interest, net
The Company incurs interest expense on the $250 million of 5 1/4% convertible subordinated notes issued in November 1995. The Company earns interest income on its cash, cash equivalents, short-term investments and restricted investments. The amount of interest earned is a function of the balance of cash invested as well as prevailing interest rates. The Company also records 25% of the net income of United Silicon Inc. (USI), a wafer fabrication joint venture in which the Company participates, as joint venture equity income. To date, USI's net income has resulted primarily from interest earned on its investment portfolio. Net interest and other income increased by $1.4 million over the comparable period in the prior year. The increased interest and other income is primarily attributable to higher investment portfolio balances and joint venture equity income. The Company expects that as the USI wafer fabrication facility begins to ramp up operations over the next year to eighteen months the Company may incur joint venture equity losses.
The Company's investment portfolio contains tax-advantaged municipal securities, which have pretax yields that are less than the interest rate on the convertible subordinated notes. For financial reporting purposes, the Company effectively records the difference between the pretax and tax-equivalent yields as a reduction in provision for taxes on income. As a result of the difference in yields, future uses of the investment portfolio and operating results for USI, levels of net interest and other income could decrease in the future.
Provision for Income Taxes
The Company recorded a tax provision of $16.1 million (32.5% of income before taxes) for the first three months of fiscal 1998 as compared to a provision for taxes for the three months ended June 29, 1996 of $17.9 million (35.5% of income before taxes). The lower tax rate for the first three months of fiscal 1998 is due to legislation reinstating the R&D Tax Credit through May 3, 1997 as well as increased profits in foreign operations.
Risk Factors
The following risk factors may be associated with the Company's business:
Factors Affecting Future Operating Results
The semiconductor industry is characterized by rapid technological change, intense competitive pressure and cyclical market patterns. The Company's results of operations are affected by a wide variety of factors, including general economic conditions, conditions relating to technology companies, conditions specific to the semiconductor industry, decreases in average selling prices over the life of any particular product, the timing of new product introductions (by the Company, its competitors and others), the ability to manufacture in a timely manner sufficient quantities of a given product, the timely implementation of new manufacturing technologies, the ability to safeguard patents and intellectual property from competitors, and the impact of new technologies resulting in rapid escalation of demand for some products in the face of equally steep decline in demand for others. Market demand for the Company's products, particularly for those most recently introduced, can be difficult to predict, especially in light of customers' demands to shorten product lead times and minimize inventory levels. Unpredictable market demand could lead to revenue volatility if the Company were unable to provide sufficient quantities of specified products in a given quarter. In addition, any difficulty in achieving targeted wafer production yields could adversely impact the Company's financial condition and results of operations. The Company attempts to identify changes in market conditions as soon as possible; however, the dynamics of the market make prediction of and timely reaction to such events difficult. Due to the foregoing and other factors, past results, including those described in this report, are much less reliable predictors of the future than is the case in many older, more stable and less dynamic industries. Based on the factors noted herein, the Company may experience substantial period-to-period fluctuations in future operating results.
The semiconductor industry has historically been cyclical and subject to, at various times, significant economic downturns characterized by diminished product demand, limited visibility to demand for products further out than three months, accelerated erosion of average selling prices and overcapacity. The Company may experience substantial period-to-period fluctuations in future operating results due to general semiconductor industry conditions, overall economic conditions or other factors.
The Company's future success depends in large part on the continued service of its key technical, sales, marketing and management personnel and on its ability to continue to attract and retain qualified employees. Particularly important are those highly skilled design, process and test engineers involved in the manufacture of existing products and the development of new products and processes. The competition for such personnel is intense, and the loss of key employees could have a material, adverse effect on the Company's financial condition and results of operations.
Sales outside of the United States carry a number of inherent risks, including risks of currency exchange fluctuations, government regulation of exports, tariffs and other potential trade barriers, reduced protection for intellectual property rights in some countries, the impact of recessionary environments in economies outside the United States and generally longer receivable collection periods. The Company's business is also subject to the risks associated with the imposition of legislation and regulations relating specifically to the import or export of semiconductor products. The Company cannot predict whether quotas, duties, taxes or other charges or restrictions will be imposed by the United States or other countries upon the importation or exportation of the Company's products in the future or what, if any, effect such actions would have on the Company's financial condition and results of operations.
In order to expand international sales and service, the Company will need to maintain and expand existing foreign operations or establish new foreign operations. This entails hiring additional personnel and maintaining or expanding existing relationships with international distributors and sales representatives. This will require significant management attention and financial resources and could adversely affect the Company's financial condition and results of operations. There can be no assurance that the Company will be successful in its maintenance or expansion of existing foreign operations, in its establishment of new foreign operations or in its efforts to maintain or expand its relationships with international distributors or sales representatives.
Many of the Company's operations are centered in an area of California that has been seismically active. Should there be a major earthquake in this area, the Company's operations may be disrupted resulting in the inability of the Company to ship products in a timely manner, thereby materially adversely affecting the Company's financial condition and results of operations.
In addition, the securities of many high technology companies have historically been subject to extreme price and volume fluctuations, which may adversely affect the market price of the Company's common stock.
Dependence Upon Independent Manufacturers
The Company does not manufacture the wafers used for its products. During the past year, most of the Company's wafers have been manufactured by Seiko Epson Corporation (Seiko Epson) and United Microelectronics Corporation (UMC). The Company has depended upon these suppliers and others to produce wafers with competitive performance and cost attributes, including transitioning to advanced process technologies, producing wafers at acceptable yields, and delivering them to the Company in a timely manner. While the timeliness, yield and quality of wafer deliveries have met the Company's requirements to date, there can be no assurance that the Company's wafer suppliers will not experience future manufacturing problems, including delays in the realization of advanced process technologies. The Company is also dependent on subcontractors to provide semiconductor assembly services. Any prolonged inability to obtain wafers or assembly services with competitive performance and cost attributes, adequate yields or timely deliveries from these manufacturers/subcontractors, or any other circumstance that would require the Company to seek alternative sources of supply, could delay shipments, and have an adverse effect on the Company's financial condition and results of operations.
The Company's long-term growth will depend in large part on the Company's ability to obtain increased wafer fabrication capacity from suppliers. A significant increase in general industry demand or any interruption of supply could reduce the Company's supply of wafers or increase the Company's cost of such wafers, thereby materially adversely affecting the Company's financial condition and results of operations.
In order to secure additional wafer capacity, the Company from time to time considers alternatives, including, without limitation, equity investments in, or loans, deposits, or other financial commitments to, independent wafer manufacturers to secure production capacity, or the use of contracts which commit the Company to purchase specified quantities of wafers over extended periods. Although the Company is currently able to obtain wafers from existing suppliers in a timely manner, the Company has at times been unable, and may in the future be unable, to fully satisfy customer demand because of production constraints, including the ability of suppliers and subcontractors to provide materials and services in satisfaction of customer delivery dates, as well as the ability of the Company to process products for shipment. The Company's future growth will depend in part on its ability to locate and qualify additional suppliers and subcontractors and to increase its own capacity to ship products, and there can be no assurance that the Company will be able to do so. Any increase in these constraints on the Company's production could result in a material adverse impact on the Company's financial condition and results of operations. In this regard, the Company has entered into the USI joint venture with UMC and other parties to obtain wafer capacity from a new wafer fabrication facility. However, there are many risks associated with the construction of a new facility, and there can be no assurance that such facility will become operational and/or cost effective in a timely manner. In addition, the Company has entered into an agreement with Seiko Epson to obtain additional capacity from a facility currently under construction and expected to provide wafers in calendar 1998. If the Company requires additional capacity and such capacity is unavailable, or unavailable on reasonable terms, the Company's financial condition and results of operations could be materially adversely affected.
Litigation
The Company is currently engaged in patent litigation with Altera Corporation (Altera). See "Legal Proceedings" in Part II.
Dependence on New Products
The Company's future success depends in large part on its ability to develop and introduce on a timely basis new products which address customer requirements and compete effectively on the basis of price and performance. The success of new product introductions is dependent upon several factors, including timely completion of new product designs, the ability to utilize advanced process technologies, achievement of acceptable yields, availability of supporting design software and market acceptance. No assurance can be given that the Company's product development efforts will be successful or that its new products will achieve market acceptance. Revenues relating to the Company's first generation FPGA products are expected to continue to decline in the future as a percentage of aggregate revenues, and the Company will be increasingly dependent on revenues derived from second generation FPGAs and future generation products. In addition, the average selling price for any particular product tends to decrease rapidly over the product's life. To offset such decreases, the Company relies primarily on obtaining yield improvements and corresponding cost reductions in the manufacture of existing products and on introducing new products which incorporate advanced features and other price/performance factors such that higher average selling prices and higher margins are achievable relative to mature product lines. To the extent that such cost reductions and new product introductions do not occur in a timely manner, or the Company's products do not achieve market acceptance at prices with higher margins, the Company's financial condition and results of operations could be adversely affected.
Competition
The Company's FPGA and CPLD products compete in the programmable logic marketplace, with a substantial majority of the Company's revenues derived from its FPGA product families. The industries in which the Company competes are intensely competitive and are characterized by rapid technological change, rapid product obsolescence and continuous price erosion. The Company expects significantly increased competition both from existing competitors and from a number of companies that may enter its market.
Xilinx believes that important competitive factors in the programmable logic market include price, product performance and reliability, adaptability of products to specific applications, ease of use and functionality of design software, and the ability to provide timely customer service and support. The Company's strategy for expansion in the programmable logic market includes continued price reductions commensurate with the ability to lower the cost of manufacture for established products and continued introduction of new product architectures which address high volume, low cost applications as well as high performance, leading edge density applications. However, there can be no assurance that the Company will be successful in achieving these strategies.
The Company's major sources of competition are comprised of three elements: the manufacturers of custom CMOS gate arrays, providers of high density programmable logic products characterized by FPGA-type architectures and other providers of programmable logic products. The Company competes with custom gate array manufacturers on the basis of lower design costs, shorter development schedules and reduced inventory risks. The primary attributes of custom gate arrays are high density, high speed and low production costs in high volumes. The Company continues to develop lower cost architectures intended to narrow the gap between current custom gate array production costs (in high volumes) and FPGA production costs. The Company competes with high density programmable logic suppliers on the basis of performance, the ability to deliver complete solutions to customers and customer support, taking advantage of the primary characteristics of flexible, high speed implementation and quick time-to-market capabilities of the Company's PLD product offerings. In addition, the Company competes with manufacturers of other programmable logic products on the basis of price, performance, design and software utility. Some of the Company's current or potential competitors have substantially greater financial, manufacturing, marketing and technical resources than Xilinx. To the extent that such efforts to compete are not successful, the Company's financial condition and results of operations could be materially adversely affected.
Intellectual Property
The Company relies upon patent, trademark, trade secret and copyright law to protect its intellectual property. There can be no assurance that such intellectual property rights can be successfully asserted in the future or will not be invalidated, circumvented or challenged. From time to time, third parties, including competitors of the Company, have asserted exclusive patent, copyright and other intellectual property rights to technologies that are important to the Company. There can be no assurance that third parties will not assert infringement claims against the Company in the future, that assertions by third parties will not result in costly litigation or that the Company would prevail in such litigation or be able to license any valid and infringed patents from third parties on commercially reasonable terms. Litigation, regardless of its outcome, could result in substantial cost and diversion of resources of the Company. Any infringement claim or other litigation against or by the Company could materially, adversely affect the Company's financial condition and results of operations.
Financial Condition, Liquidity and Capital Resources
The Company's financial condition at June 28, 1997 remained strong. Total current assets exceeded total current liabilities by 5.7 times, compared to 6.2 times at March 29, 1997. Since its inception, the Company has used a combination of equity and debt financing and cash flow from operations to support on-going business activities, make acquisitions and investments in complementary technologies, obtain facilities and capital equipment and finance inventory and accounts receivable.
The Company continued to generate positive cash flow from operations during the first three months of fiscal 1998. As of June 28, 1997, the Company had cash, cash equivalents and short-term investments of $465.5 million and working capital of $536 million. Cash generated by operations of $73.7 million for the first three months of fiscal 1998 was $19.8 million higher than the $53.9 million generated for the first three months of fiscal 1997. The increase in cash generated by operations during the first three months of fiscal 1998 over the comparable fiscal 1997 period resulted primarily from the favorable cash flow impact of changes in inventories and deferred income on shipments to distributors partially offset by the unfavorable cash flow impact of changes in accounts receivable.
Cash flows used for investing activities for the three months ended June 28, 1997, included a $30 million advance to Seiko Epson for wafer purchases, $125.1 million of net short-term investment purchases and $5.4 million of property, plant and equipment acquisitions. Net purchases of short-term investments increased $122.6 million over the prior year as the Company has increased its investments in securities with maturities over 90 days during fiscal 1998, yielding higher interest rates. Property, plant and equipment additions decreased $4.7 million from the comparable fiscal 1997 period. This decrease is primarily due to reduced expenditures relating to the Company's facility constructed last year in Boulder, Colorado.
Net cash flows provided by financing activities were $1.4 million in the first three months of fiscal 1998 and were attributable to $10.3 million in proceeds from the issuance of common stock under employee stock plans offset by acquisition of Treasury Stock during the quarter of $8.9 million. For the comparable fiscal 1997 period, $8.0 million in proceeds from issuance of common stock under corporate stock plans was offset by $0.3 million in principal payments on capital lease obligations.
Stockholders' equity increased by $40.6 million at June 28, 1997, principally as a result of the net income for the three months ended June 28, 1997, proceeds from the issuance of common stock under employee stock plans and related tax benefits from stock options, offset by the Treasury Stock repurchased in the period.
The Company has available credit line facilities for up to $46.2 million of which $6.2 million is intended to meet occasional working capital requirements for the Company's wholly owned Irish subsidiary. At June 28, 1997, no borrowings were outstanding under the lines of credit.
The Company, United Microelectronics Corporation (UMC) and other parties have entered into a joint venture to construct a wafer fabrication facility in Taiwan, known as United Silicon Inc. (USI). In July 1997, the Company invested an additional $67.4 million, bringing the amount invested to date to $101.7 million. The Board of Directors of USI has recently determined that the originally scheduled final installment of approximately $34 million will not be required in the foreseeable future. The Company will retain its 25% equity ownership in the joint venture. United Microelectronics Corporation has committed to supply the Company with wafers manufactured in an existing facility until capacity is available in the new facility. In addition, during the first quarter of fiscal 1997, the Company entered into an agreement with Seiko Epson. The agreement provides for an advance to Seiko Epson of up to $200 million to be used in the construction of a wafer fabrication facility in Japan. Through June 28, 1997, the Company has advanced $90 million to Seiko Epson under the agreement. Additional $30 million installments are currently scheduled for November 1, 1997 and February 1, 1998 or upon the start of mass production, whichever is later. The final installment for the advance payment of $50 million is due on or after the later of April 1, 1998 or the date the outstanding balance of the advance payment is less than $125 million. In addition to the advance payments, the Company may also provide further funding to Seiko Epson in the amount of $100 million. This additional funding would be paid after the final installment of the advance and the form of the additional funding will be negotiated at that time.
The Company anticipates that
existing sources of liquidity and cash flow from operations will be sufficient
to satisfy the Company's cash needs for the foreseeable future. The Company
will continue to evaluate opportunities for investments to obtain additional
wafer supply capacity, procure additional capital equipment and facilities,
develop new products, and potential acquisitions of businesses, products
or technologies that would complement the Company's businesses and may
use available cash or other sources of funding for such purposes.
Part II. Other Information
Item 1. Legal Proceedings.
On June 7, 1993, the Company filed suit against Altera Corporation (Altera) in the United States District Court for the Northern District of California for infringement of certain of the Company's patents. Subsequently, Altera filed suit against the Company, alleging that certain of the Company's products infringe certain Altera patents. Fact and expert discovery has been completed in both cases, which have been consolidated. On April 20, 1995, Altera filed an additional suit against the Company in the Federal District Court in Delaware, alleging that the Company's XC5200 family infringes an Altera patent. The Company answered the Delaware suit denying that the XC5200 family infringes the patent in suit, asserting certain affirmative defenses and counterclaiming that the Altera Max 9000 family infringes certain of the Company's patents. The Delaware suit was transferred to the United States District Court for the Northern District of California and is also before the same judge. The ultimate outcome of these matters cannot be determined at this time. Management believes that it has meritorious defenses to such claims and is defending them vigorously. The foregoing is a forward-looking statement subject to risks and uncertainties, and the future outcome could differ materially due to the uncertain nature of the litigation with Altera and because the lawsuits are still in the pre-trial stage.
There are no other pending legal proceedings of a material nature to which the Company is a party or of which any of its property is the subject. The Company knows of no legal proceedings contemplated by any governmental authority or agency.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 11: Statement of Computation of Net Income Per Share
Exhibit 12: Statement of Computation of Ratio of Earning to Fixed Charges
(b) Reports on Form 8-K - None
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.
XILINX, INC.
Date August 8, 1997 /s/ Gordon M. Steel
Gordon M. Steel
Senior Vice President of Finance and
Chief Financial Officer
(as principal accounting and financial
officer and on behalf of
Registrant)
EXHIBIT 11
Three Months Ended
June 28, | June 29, | |
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Primary | ||
Weighted average number of common shares outstanding | 73,495 | 72,176 |
Incremental common shares | ||
attributable to outstanding options | 7,831 | 6,768 |
Total shares | 81,326 | 78,944 |
Net income | $ 33,444 | $ 32,492 |
Net income per share | $ 0.41 | $ 0.41 |
Fully Diluted | ||
Weighted average number of common shares outstanding | 73,495 | 72,176 |
Incremental common shares | ||
attributable to outstanding options | 7,831 | 6,768 |
Total shares | 81,326 | 78,944 |
Net income | $ 33,444 | $ 32,492 |
Net income per share | $ 0.41 | $ 0.41 |
Three Months Ended
June 28, | June 29, | |
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Income before taxes | $ 49,546 | $ 50,375 |
Add fixed charges | 3,680 | 3,635 |
Earnings (as defined) | $ 53,226 | $ 54,010 |
Fixed charges | ||
Interest expense | $ 3,273 | $ 3,252 |
Amortization of debt issuance costs | 218 | 223 |
Estimated interest component of rent expenses | 189 | 160 |
Total fixed charges | $ 3,680 | $ 3,635 |
Ratio of earnings to fixed charges | 14.5 | 14.9 |