-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Zc7/P4QLQyEt8AKbI9ZVetnMn+sBezv58DfQGOTg/3HsPFCPxZQvQuHc6GzZzFXp 1WJfd/PQm0J6rICHZp6azA== 0000891618-94-000113.txt : 19940610 0000891618-94-000113.hdr.sgml : 19940610 ACCESSION NUMBER: 0000891618-94-000113 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19940401 FILED AS OF DATE: 19940512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARIAN ASSOCIATES INC /DE/ CENTRAL INDEX KEY: 0000203527 STANDARD INDUSTRIAL CLASSIFICATION: 3670 IRS NUMBER: 942359345 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07598 FILM NUMBER: 94527575 BUSINESS ADDRESS: STREET 1: 3050 HANSEN WAY CITY: PALO ALTO STATE: CA ZIP: 94304-1000 BUSINESS PHONE: 4154934000 MAIL ADDRESS: STREET 1: 3050 HANSEN WAY CITY: PALO ALTO STATE: CA ZIP: 94304-1000 FORMER COMPANY: FORMER CONFORMED NAME: VARIAN DELAWARE INC DATE OF NAME CHANGE: 19761123 10-Q 1 VARIAN FORM 10-Q 1 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 quarterly period ended April 1, 1994 OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transistion period from _______ to _______ Commission File Number: 1-7598 Exact name of registrant as specified in it charter: VARIAN ASSOCIATES, INC. State or other jurisdiction of IRS Employer incorporation or organization: Identification No.: DELAWARE 94-2359345
Address of principal executive offices: 3050 Hansen Way, Palo Alto, California 94304-1000 Telephone No., including area code: (415) 493-4000 Securities registered pursuant to Section 12(b)of the Act:
Name of each exchange Title of each class on which registered ------------------- -------------------- Common Stock, New York Stock Exchange $1 par value Pacific Stock Exchange Preferred Stock New York Stock Exchange Purchase Rights Pacific Stock Exchange
Securities registered pursuant to Section 12(g)of the Act: None 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ---- ---- An index of exhibits filed with this Form 10-Q is located on page 15. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of April 29, 1994: 34,380,000 shares of $1 par value common stock. 1 of 17 2 PART 1. FINANCIAL INFORMATION VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF EARNINGS UNAUDITED
Second Quarter Ended Six Months Ended ------------------------- ----------------------- (Dollars in thousands April 1, April 2, April 1, April 2, except per share amounts) 1994 1993 1994 1993 ----------- ---------- ----------- ---------- SALES $ 394,534 $ 325,304 $ 718,284 $ 616,636 ---------- ---------- ---------- ---------- OPERATING COSTS AND EXPENSES Cost of sales 264,762 216,692 484,407 417,111 Research and development 21,480 19,137 39,905 36,098 Marketing 46,126 44,059 87,833 84,819 General and administrative 31,523 29,072 55,620 51,027 ---------- ---------- ---------- ---------- Total operating costs and expenses 363,891 308,960 667,765 589,055 ---------- ---------- ---------- ---------- OPERATING EARNINGS 30,643 16,344 50,519 27,581 Interest expense, net 1,065 1,351 2,127 2,005 ---------- ---------- ---------- ---------- EARNINGS BEFORE TAXES 29,578 14,993 48,392 25,576 Taxes on Earnings 11,240 5,700 18,390 9,720 ---------- ---------- ---------- ---------- NET EARNINGS $ 18,338 $ 9,293 $ 30,002 $ 15,856 ========== ========== ========== ========== Average Shares Outstanding Including Common Stock Equivalents (1) 35,697 36,508 35,742 36,730 ========== ========== ========== ========== EARNINGS PER SHARE - FULLY DILUTED (1) $ 0.51 $ 0.25 $ 0.84 $ 0.43 ========== ========== ========== ========== - - ---------------------------------------------------------------------------------------- Dividends Declared Per Share (1) $ 0.06 $ 0.05 $ 0.11 $ 0.10 Order Backlog $ 753,500 $ 612,200 - - ----------------------------------------------------------------------------------------
(1) Note: Prior periods restated for two-for-one stock split effected in the form of a stock dividend in Q2 FY94. See accompanying notes to the consolidated financial statements. -2- 3 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONSOLIDATED BALANCE SHEETS UNAUDITED
April 1, October 1, (Dollars in thousands except par values) 1994 1993 ASSETS Current Assets Cash and cash equivalents $ 65,036 $ 73,307 Accounts receivable 325,130 290,513 Inventories Raw materials and parts 109,740 89,708 Work in process 59,988 44,705 Finished goods 21,294 27,000 --------- ---------- Total Inventories 191,022 161,413 Other current assets 68,004 65,793 --------- ---------- Total Current Assets 649,192 591,026 Property, Plant, and Equipment 557,591 544,316 Accumulated depreciation and amortization (330,019) (313,841) --------- --------- Net Property, Plant, and Equipment 227,572 230,475 Other Assets 52,444 57,506 --------- --------- TOTAL ASSETS $ 929,208 $ 879,007 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Notes payable $ 49,276 $ 22,858 Accounts payable - trade 65,195 58,654 Accrued expenses 210,059 203,848 Product warranty 38,801 35,615 Advance payments from customers 65,955 61,282 -------- -------- Total Current Liabilities 429,286 382,257 Long-Term Debt 60,399 60,470 Deferred Taxes 21,355 21,361 -------- -------- Total Liabilities 511,040 464,088 --------- --------- Shareholders' Equity Preferred stock Authorized 1,000,000 shares, par value $1, issued none - - Common stock Authorized 99,000,000 shares, par value $1, issued and outstanding 34,423,000 shares at April 1,1994 and 34,684,000 shares at October 1, 1993 (1) 34,423 17,342 Retained earnings 383,745 397,577 -------- -------- Total Shareholders' Equity 418,168 414,919 --------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 929,208 $ 879,007 ========= =========
(1) Outstanding shares have been adjusted on a retroactive basis for the two-for-one stock split effected in the form of a stock dividend in Q2 FY94. See accompanying notes to the consolidated financial statements. -3- 4 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS UNAUDITED
Six Months Ended ------------------------ April 1, April 2, (Dollars in thousands) 1994 1993 ---------- ---------- OPERATING ACTIVITIES Net Cash Provided by Operating Activities $ 14,046 $ 16,397 INVESTING ACTIVITIES Purchase of property, plant, and equipment (25,563) (19,235) Other, net 3,123 (1,143) --------- --------- Net Cash Used by Investing Activities (22,440) (20,378) FINANCING ACTIVITIES Net borrowings on short-term obligations 26,418 830 Proceeds from long-term borrowings - 20,000 Proceeds from common stock issued to employees 16,124 12,395 Purchase of common stock (39,079) (40,516) Other, net (3,843) (8,868) ---------- --------- Net Cash Used by Financing Activities (380) (16,159) EFFECTS OF EXCHANGE RATE CHANGES ON CASH 503 1,960 ---------- --------- Net Decrease in Cash and Cash Equivalents (8,271) (18,180) Cash and Cash Equivalents at Beginning of Period 73,307 66,743 ---------- ---------- Cash and Cash Equivalents at End of Period $ 65,036 $ 48,563 ========== ==========
See accompanying notes to the consolidated financial statements. -4- 5 VARIAN ASSOCIATES, INC. AND SUBSIDIARY COMPANIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Unaudited (Dollars in Millions) NOTE 1: The consolidated financial statements include the accounts of Varian Associates, Inc. and its subsidiaries and have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest Form 10-K annual report. In the opinion of management, the consolidated financial statements include all normal recurring adjustments necessary to present fairly the information required to be set forth therein. The results of operations for the second quarter ended April 1, 1994, and April 2, 1993 are not necessarily indicative of the results to be expected for a full year or for any other periods. NOTE 2: Inventories are valued at the lower of cost or market (realizable value) using last-in, first-out (LIFO) cost for the U.S. inventories of the Health Care Systems (except for X-Ray Tube Products), Instruments, and Semiconductor Equipment segments. All other inventories are valued principally at average cost. Approximately half of total gross inventories are valued using the LIFO method. If the first-in, first-out (FIFO) method had been used for those operations valuing inventories on a LIFO basis, inventories would have been higher than reported by $50.8 at April 1, 1994, $50.8 at October 1, 1993, and $52.0 at April 2, 1993. NOTE 3: The Company enters into forward exchange contracts to mitigate the effects of operational (sales orders and purchase commitments) and balance sheet exposures to fluctuations in foreign currency exchange rates. When the Company's foreign exchange contracts hedge operational exposure, the effects of movements in currency exchange rates on these instruments are recognized in income when the related revenue and expenses are recognized. When foreign exchange contracts hedge balance sheet exposure, such effects are recognized in income when the exchange rate changes. Because the impact of movements in currency exchange rates on foreign exchange contracts generally offsets the related impact on the underlying -5- 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 3: (Continued) items being hedged, these instruments do not subject the Company to risk that would otherwise result from changes in currency exchange rates. At April 1, 1994, the Company had forward exchange contracts with maturities of twelve months or less to sell foreign currencies totalling $64.7 million (3.3 million Canadian dollars, 4.0 million Swiss francs, 12.1 million Deutsche marks, 6.0 million Finnish marks, 97.0 million French Francs, 4.1 million British pounds, 8.7 billion Italian lira, 2.2 billion Japanese yen and 20.0 million Swedish krona) and to buy foreign currencies totalling $17.0 million (8.6 million British pounds and 445.0 million Japanese yen). NOTE 4: In November 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) 112, Employers' Accounting for Postemployment Benefits. It is effective for the Company's fiscal year 1995. Its adoption will not have a material effect on the financial statements of the Company. NOTE 5: During the first quarter of fiscal year 1994, the Company adopted SFAS 109, "Accounting for Income Taxes". Adoption was made on a retroactive basis, and resulted in a charge against beginning retained earnings at September 28, 1991 of $6.9 million. The audited balance sheet at October 1, 1993 has been restated to reflect adoption of this new standard. Adoption of SFAS 109 did not have a material effect on income tax expense, as previously reported, for any periods subsequent to fiscal 1991. Significant components of deferred tax assets and liabilities as of the beginning of fiscal 1994 are as follows: Assets: Inventory $11.6 Product warranty 11.3 Deferred compensation 8.6 Estimated loss contingencies 6.3 Insurance 3.3 Other 7.3 ----- $48.4 ===== Liabilities: Depreciation $22.0 Other (0.6) ----- $21.4
===== -6- 7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 6: On September 21, 1988, Rodney Shields, who purports to be a stockholder of the Company, filed a stockholder's derivative action in the Superior Court of the State of California, County of Santa Clara. The complaint alleged that the Company obtained certain defense contracts by illegal means, overcharged the government in connection with other defense contracts, and that certain named individuals, including 17 present or former directors or officers of the Company, breached their fiduciary duties. On November 2, 1993, the California Court of Appeal issued a writ of mandate directing entry of summary judgment in favor of all defendants. Mr. Shields did not seek further judicial review of that writ, and a judgment of dismissal was entered by the Superior Court on December 27, 1993. In February 1990 a purported class action was brought by Panache Broadcasting of Pennsylvania, Inc. on behalf of all purchasers of electron tubes in the U.S. against the Company and a joint-venture partner, alleging that the activities of their joint venture in the power-grid tube industry violated antitrust laws. The complaint seeks injunctive relief and unspecified damages which may be trebled under the antitrust laws. In February 1993, the U.S. District Court in Chicago granted the Company's motion to dismiss the complaint with leave to amend. Panache Broadcasting filed an amended complaint in March 1993. The Company has moved to dismiss that complaint. No determination has been made regarding the plaintiffs' request to certify the purported class. The Company believes that it has meritorious defenses to the Panache lawsuit. In addition to the above-referenced matters, the Company is currently a defendant in a number of legal actions and could incur an uninsured liability in one or more of them. In the opinion of management, the outcome of the above litigation will not have a material adverse effect on the financial condition of the Company. The Company has also been named by the U.S. Environmental Protection Agency or third parties as a potentially responsible party under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, at six sites to which Varian is alleged to have shipped manufacturing waste for disposal. The Company is also involved in various stages of environmental investigation and/or remediation under the direction of, or in consultation with, local and/or state agencies at certain current or former Company facilities. -7- 8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 6: (Continued) Uncertainty as to (a) the extent to which the Company caused, if at all, the condition being investigated, (b) the extent of environmental contamination and risks, (c) the applicability of changing and complex environmental laws, (d) the number and financial viability of other potentially responsible parties, (e) the stage of the investigation and/or remediation, (f) the unpredictability of investigation and/or remediation costs (including as to when they will be incurred), (g) applicable clean-up standards, (h) the remediation (if any) which will ultimately be required, and (i) available technology make it difficult to assess the likelihood and scope of further investigation or remediation activities or to estimate the future costs of such activities if undertaken. In addition, the Company believes that it has rights to contribution and/or reimbursement from financially viable, potentially responsible parties and/or insurance companies, and has filed a lawsuit against 36 insurance companies with respect to most of the above-referenced sites. The Company has established reserves for these environmental matters, which reserves management believes are adequate. Based on information currently available, management believes that the costs of these matters are otherwise not reasonably likely to have a material adverse effect on the financial condition of the Company. NOTE 7: All share and per share information has been restated to reflect a two-for-one stock split, effected in the form of a stock dividend, which was distributed in March 1994. -8- 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS On April 21, Varian reported significantly higher orders, sales and profits for the second quarter and first half of 1994 from last year's comparable periods. Earnings per share also increased in the second quarter, reaching $0.51 (adjusted for the 2-for-1 stock split distributed in March 1994) from $0.25 a year ago. Net earnings for the quarter increased 97% to $18.3 million from $9.3 million in the year-ago period. Orders of $413 million rose 29% over last year's $319 million. Second quarter sales totaled $395 million, versus $325 million of a year ago. Backlog of $754 million was up 23% over the prior year. In the first six months of 1994, Varian had net earnings of $30 million ($0.84 per share) which nearly doubled the prior year's $15.9 million ($0.43 per share). First-half orders reached $853 million compared to 1993's $661 million. Sales rose to $718 million, from $617 million in 1993. First-half orders continued to grow, with all four core businesses contributing to this growth and experiencing higher profitability during the quarter as well as the first six months of 1994. Orders for Health Care Systems rose 16% for the half year, as the business posted its fourth straight quarter of over $100 million in bookings. First-half sales advanced 8%, pushing backlog to $297 million. The business also achieved better operating margins relative to the year-ago period. Demand for Varian's cancer therapy equipment remains strong, both domestically and internationally. This reflects growing appreciation of the cost-effectiveness of radiation therapy as well as the enhanced treatment capabilities of Varian's products. Orders for X-ray tube products also rose. Instruments' orders registered a 13% gain during the second quarter, and were up modestly from the first-half. Sales and profits were also ahead of 1993 levels, while backlog rose 27% over the prior year's mid-point. The increase in Instruments' orders was led by the nuclear magnetic resonance instrument business and the revitalized vacuum products operation. New instruments and accessories designed to match customer needs in several diverse markets also contributed to the higher business levels. -9- 10 MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) Semiconductor Equipment orders rose to $306 million during the first six months. Sales were 71% ahead of the year-ago period. Backlog rose for the fourth quarter in a row, increasing 119% over the prior year period to $193 million. Some moderation in demand is likely during the second-half of fiscal 1994. First-half orders for the Electron Devices business were slightly ahead of last year, while sales and backlog were modestly lower. Aggressive downsizing in this business over the last several years has allowed improved operating margins despite slow market conditions. In November 1992, the FASB issued SFAS 112, Employer's Accounting for Postemployment Benefits. It is effective for the Company's fiscal year 1995. Its adoption will not have a material effect on the financial statements of the Company. FINANCIAL CONDITION The Company's financial condition remained strong during the first six months of fiscal 1994. Operating activities provided $14.1 million in the first-half of fiscal 1994 compared to $16.4 million in the same period last year. Investing activities used $22.4 million and $20.4 million in the first half of fiscal years 1994 and 1993, respectively, mainly for the purchase of property, plant, and equipment. Financing activities used cash of $0.4 million in the first half of fiscal year 1994, compared to $16.2 million in the same period last year. Net borrowings of $26.4 million increased total debt as a percentage of total capital to 20.8% at the end of the second quarter of fiscal year 1994 as compared with 16.7% at the end of fiscal year 1993. The ratio of current assets to current liabilities decreased slightly to 1.51 at April 2, 1994, from 1.55 at fiscal year end, 1993. The Company has available $50 million in unused lines of credit. OUTLOOK Despite the favorable financial results described above, future revenue and profitability remain difficult to predict. The Company continues to face various risks associated with its business operations including uncertain general worldwide economic conditions, lingering worldwide recessionary conditions (particularly in Europe and Japan), and uncertainty regarding proposed legislation and private initiatives in the U.S. to control health care costs. Such conditions could affect the Company's future performance. -10- 11 MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) As discussed in the Annual Report Form 10-K for the fiscal year ended October 1, 1993, the Company is involved in certain environmental matters. The Company has established reserves for these environmental matters, which reserves management believes are adequate. Based on information currently available, management continues to believe that the costs of these matters, individually or in the aggregate, are otherwise not reasonably likely to have a material adverse effect on the financial condition or results of operations of the Company. -11- 12 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Varian Associates, Inc.: We have reviewed the consolidated balance sheet of Varian Associates, Inc. and subsidiary companies as of April 1, 1994, and the related consolidated statements of earnings and the condensed consolidated statements of cash flows for the quarters and semi-annual periods ended April 1, 1994 and April 2, 1993. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the aforementioned financial statements for them to be in conformity with generally accepted accounting principles. /s/ Coopers Lybrand COOPERS LYBRAND San Jose, California April 20, 1994 -12- 13 PART II. OTHER INFORMATION Item 4 Submission of Matters to a Vote of Security Holders At the Company's Annual Meeting of Stockholders held on February 17, 1994, the stockholders of the Company voted on the election of five directors to the Company's Board of Directors for three-year terms. The voting on each such nominee for director was as follows:
Votes Votes Votes Broker Nominee For Against Withheld Abstentions Nonvotes1 Ruth M. Davis 13,785,781 0 34,842 0 David W. Martin, Jr. 13,699,279 0 34,842 0 J. Tracy O'Rourke 13,785,322 0 34,842 0 Donald O. Pederson 13,792,089 0 34,842 0 Richard W. Vieser 13,785,711 0 34,842 0
1 Pursuant to the Rules of the New York Stock Exchange, this election of directors constituted a routine matter, and therefore brokers were permitted to vote without receipt of instructions from clients. Item 6 Exhibits and Reports on Form 8-K (a) Exhibit 11-Computation of Earnings Per Share. (b) Exhibit 15-Letter Regarding Unaudited Interim Financial Information. (c) Reports on Form 8-K: There were no reports on Form 8-K filed for the second quarter ended April 1, 1994. -13- 14 SIGNATURE 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. VARIAN ASSOCIATES, INC. ------------------------------ Registrant May 12, 1994 ------------------------------ Date /s/ Wayne P. Somrak ------------------------------ Wayne P. Somrak Vice President and Controller -14- 15 INDEX OF EXHIBITS
Exhibit Number Page - - ---------- --------- 11 Computation of Earnings Per Share 16 15 Letter Regarding Unaudited Interim Financial Information 17
-15- EX-11 2 VARIAN EX 11 1 EXHIBIT 11 COMPUTATION OF EARNINGS PER SHARE IN ACCORDANCE WITH INTERPRETIVE RELEASE NO. 34-9083 UNAUDITED Second Quarter Ended Six Months Ended Apr 1, Apr 2, Apr 1, Apr 2, (Shares in Thousands) 1994 1993 1994 1993 Actual weighted average shares outstanding for the period (1) 34,486 35,662 34,522 35,866 Dilutive employee stock options (1) 1,211 846 1,220 864 Weighted average shares outstanding for the period (1) 35,697 36,508 35,742 36,730 (Dollars in thousands, except per share amounts) Earnings applicable to fully diluted earnings per share $ 18,338 $ 9,293 $ 30,002 $ 15,856 Earnings per share based on SEC interpretive release No. 34-9083: Earnings per share - Fully Diluted (1) (2) $ 0.51 $ 0.25 $ 0.84 $ 0.43
(1) Prior periods restated for two-for-one stock split effected in the form of a stock dividend in March 1994. (2) There is no significant difference between fully diluted earnings per share and primary earnings per share. -16- EX-15 3 VARIAN EX 15 1 Exhibit 15 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 RE: Varian Associates, Inc. Registrations on Forms S-8 and S-3 We are aware that our report dated April 20, 1994 on our review of the interim financial information of Varian Associates, Inc. for the quarter ended April 1, 1994 included in this Form 10-Q is incorporated by reference in the Company's registration statements on Forms S-8, Registration Statement Numbers 33-46000, 33-33661, 33-33660, and 2-95139 and Forms S-8 and S-3, Registration Statement Number 33-40460. Pursuant to Rule 436(c) under the Securities Act of 1933 this report should not be considered a part of the registration statements prepared or certified by us within the meaning of Sections 7 and 11 of that Act. /s/ Coopers & Lybrand --------------------------- COOPERS & LYBRAND San Jose, California May 11, 1994 -17- -----END PRIVACY-ENHANCED MESSAGE-----