Item 1 of this Annual Report has been omitted pursuant to Rule 12b-25 under the Securities Exchange Act of 1934 and will be filed with the Commission on or before April 14, 1995. PART I
ITEM 1. BUSINESS.
The information required by this Item has been omitted pursuant to Rule 12b-25 of the Securities Exchange Act of 1934 and will be filed by amendment.
ITEM 2.
ITEM 2. PROPERTIES.
The Company's executive offices, as well as its principal manufacturing and diagnostic product engineering and marketing operations, are located in an approximate 58,200 square-foot facility in Calabasas, California under a lease which expires in November 2004 with an option to extend for an additional five years. The aggregate monthly rental under this lease is approximately $59,700, subject to certain periodic increases.
The Company also occupies a 21,600 square-foot facility in Morrisville, North Carolina (the "Morrisville Facility") under a lease expiring in July 1996, and a 6,800 square-foot facility in Columbus, Ohio under a lease expiring in March 1999, primarily for engineering, product development, customer support and regional sales activities. The Company recently signed two leases for two additional facilities in Morrisville, North Carolina to provide for anticipated growth. The first is a five-year lease (cancelable by the Company under certain circumstances) for an 8,800 square-foot facility to which the Network Diagnostic Division employees of the Morrisville Facility will relocate in April 1995. The second is a seven-year lease for a 40,000 square-foot facility to which the Network Switching Division employees of the Morrisville Facility will relocate during the fourth quarter of 1995. The aggregate monthly rental under the two new leases will be approximately $32,500, subject to certain periodic increases. The Company also has eight regional sales offices occupying an aggregate of approximately 14,500 square feet under leases expiring between 1995 and 1997 in Milbrae, California; Boulder, Colorado; Lombard, Illinois; Nashville, Tennessee; Iselin, New Jersey; Irving, Texas; Reston, Virginia; and Whitby, Canada. The Company's Japanese subsidiary occupies, at a monthly rental of approximately $37,000, approximately 10,600 square feet in Tokyo under leases expiring between August 1995 and November 1996. The Company believes that its existing facilities, together with the additional facilities it has leased in Morrisville, North Carolina, will be adequate to meet its needs at least through 1995. The Company believes it will be able to obtain additional space when and as needed on acceptable terms.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS.
Inapplicable.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Inapplicable.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's Common Stock has traded on the Nasdaq National Market under the symbol "TKLC." The following table sets forth, for the periods indicated, the high and low last reported sale prices for the Common Stock, giving effect to the March 1995 two-for-one stock split. As of March 1, 1995, there were approximately 203 record holders of the Company's Common Stock.
The Company has never paid a cash dividend. It is the present policy of the Company to retain earnings to finance the future growth and development of its business and, therefore, the Company does not anticipate paying cash dividends on its Common Stock in the foreseeable future. Certain financial covenants in one of the Company's bank line of credit agreements restrict the Company's ability to pay dividends.
ITEM 6.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA.
The selected consolidated financial data set forth below as of and for the years ended December 31, 1994, 1993 and 1992 are derived from, and are qualified in their entirety by reference to, the Company's audited consolidated financial statements and notes thereto which are incorporated herein by reference. The selected consolidated financial data set forth below as of and for the years ended year December 31, 1991 and 1990 are derived from audited consolidated financial statements of the Company which are not included herein.
_____________________________
* Weighted average number of shares outstanding and earnings (loss) per share have been retroactively adjusted to reflect the two-for-one stock split effected March 17, 1995.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The information required by this Item is incorporated by reference to the section of the Company's Annual Report to Shareholders entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" appearing at pages 9-13 thereof.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this Item is (i) incorporated by reference to the Consolidated Financial Statements and the notes thereto and the Report of Independent Accountants appearing at pages 15-26 of the Company's Annual Report to Shareholders or (ii) filed as Financial Statement Schedules pursuant to Item 14 of this Annual Report.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Inapplicable.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this Item is incorporated by reference to the sections of the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 12, 1995, entitled "Election of Directors," "Executive Officers" and "Common Stock Ownership of Principal Shareholders and Management - Compliance with Section 16(a) of the Securities Exchange Act of 1934," to be filed with the Commission.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this Item is incorporated by reference to the sections of the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 12, 1995, entitled "Election of Directors - Compensation of Directors," "Executive Compensation and Other Information," "Board of Directors and Compensation Committee Reports on Executive Compensation" and "Performance Graph," to be filed with the Commission.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT.
The information required by this Item is incorporated by reference to the section of the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 12, 1995, entitled "Common Stock Ownership of Principal Shareholders and Management," to be filed with the Commission.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information required by this Item is incorporated by reference to the section of the Company's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on May 12, 1995, entitled "Certain Relationships and Related Transactions," to be filed with the Commission.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)
Schedules which are not listed above have been omitted because they are not applicable or the information required to be set forth therein is included in the consolidated financial statements or notes thereto.
3. LIST OF EXHIBITS
-----------------------------
(1) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1987.
(2) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1986.
(3) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-22370) filed with the Commission on June 8, 1988.
(4) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-30475) filed with the Commission on August 11, 1989.
(5) Incorporated by reference to the Registrant's Statement on Form S-8 (Registration No. 33-40612) filed with the Commission on May 16, 1991.
(6) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1991.
(7) Constitutes a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report.
(8) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-16094) filed with the Commission on December 9, 1986.
(9) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-63102) filed with the Commission on May 24, 1993.
(10) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-87558) filed with the Commission on December 19, 1994.
(11) Incorporated by reference to the Registrant's Registration Statement on Form S-8 (Registration No. 33-82124) filed with the Commission on July 28, 1994.
(12) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended June 30, 1988.
(13) Incorporated by reference to the Registrant's Registration Statement on Form S-1 (Registration No. 33-4123) filed with the Commission on March 19, 1986.
(14) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended September 30, 1993.
(15) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended June 30, 1994.
(16) Incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 0-15135) for the year ended December 31, 1993.
(17) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended March 31, 1994.
(18) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q (File No. 0-15135) for the quarter ended September 30, 1994. Confidential treatment has been granted with respect to portions of this exhibit, and such confidential portions have been deleted and filed with the Commission pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934.
(B) REPORTS ON FORM 8-K
No reports on Form 8-K were filed or required to be filed by the Registrant during the quarter ended December 31, 1994.
(C) EXHIBITS
See the list of Exhibits under Item 14(a)3 of this Annual Report on Form 10-K.
(D) FINANCIAL STATEMENT SCHEDULES
See the list of Schedules under Item 14(a)2 of this Annual Report on Form 10-K.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Calabasas, California.
TEKELEC
By: PHILIP J. ALFORD ------------------------------- Philip J. Alford, President
Dated: March 31, 1995
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
REPORT OF INDEPENDENT ACCOUNTANTS
Our report on the consolidated financial statements of Tekelec has been incorporated by reference in this Form 10-K from page 26 of the 1994 Annual Report to Shareholders. In connection with our audits of such financial statements, we have also audited the related financial statement schedule listed under PART IV, Item 14(a)2 on page 6 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Sherman Oaks, California February 3, 1995
S-1 SCHEDULE II
TEKELEC
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
S-2
EXHIBIT INDEX