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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended May 25, 1996 or
[ ] Transition report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______ to ______
Commission file number 1-4837
TEKTRONIX, INC.
(Exact name of Registrant as specified in its charter)
Oregon 93-0343990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26600 S.W. Parkway Avenue
Wilsonville, Oregon 97070
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 627-7111
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
___________________ ________________________
Common Shares, New York Stock Exchange
without par value Pacific Stock Exchange
Series A No Par Preferred New York Stock Exchange
Shares 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 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__________.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant was approximately $1,223,211,765 at August 5,
1996.
At August 5, 1996 there were 32,793,086 Common Shares of the
Registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
___________________________________
Document Part of 10-K into which incorporated
________ ____________________________________
Registrant's Proxy Statement Part III
dated August 14, 1996
1996 Annual Report to Shareholders Parts I, II and IV
PART I
Item 1. Business.
Tektronix is an Oregon corporation organized in 1946. Its
principal executive offices are located at 26600 S.W. Parkway
Avenue, Wilsonville, Oregon 97070, approximately 18 miles south of
Portland. Its telephone number is (503) 627-7111. References
herein to "Tektronix" or the "Company" are to Tektronix, Inc. and
its wholly-owned subsidiaries unless the context indicates
otherwise.
Tektronix' products cover a wide range of electronic
equipment. Measurement business products include general purpose
test instruments, such as digital and analog oscilloscopes, logic
analyzers, digital multimeters, VXI card-modular products, and
probes; RF and wireless test instruments, such as spectrum
analyzers, communication test sets and high frequency signal
sources; telecommunications instruments, such as optical time domain
reflectometers (OTDRs), and cable testers; and television test
instruments, such as audio and video measurement sets, waveform
monitors, vectorscopes, signal generators, and RF/cable measurement
products. Color printing and imaging products include color
printers, ink and related products and supplies. Video and
networking products include studio production equipment, signal
processing and distribution equipment, transmission systems, video
editing systems, video disk recorders, netstations (X terminals) and
related products.
Products
________
The table below sets forth the contribution to total net
sales of the Company's product groupings for the last three fiscal
years (in thousands of dollars).
Measurement Color Printing Video and
Business and Imaging Networking Other
Products Products Products (2) Products (3)
________________ _______________ __________________ ________________
Amount Percent Amount Percent Amount Percent Amount Percent
______ _______ ______ _______ _______ _______ ______ _______
1994 (1) $671,042 50.0% $313,475 23.4% $259,347 19.3% $98,632 7.3%
1995 (1) $731,061 48.8% $454,961 30.4% $303,213 20.2% $ 8,727 .6%
1996 (1) $812,250 45.9% $561,642 31.8% $394,966 22.3% $ - 0.0%
_______
(1) During 1995 and 1996 the Company acquired Microwave Logic, Inc.
(MLI), Lightworks Editing Systems Limited and Lightworks Editing
Systems, Inc. under poolings of interests, and the Company's financial
results for 1994 and 1995 have been restated to include MLI and
Lightworks results for these fiscal years.
(2) This is a combination of the Video Systems and Network Displays
products groups which were reported as separate groups in 1994.
(3) The Other Products grouping includes the historic net sales to
third parties by the non-strategic components and other business
operations that the Company divested in 1994 and 1995.
1
Measurement Business Products
_____________________________
Because of their wide range of capabilities, measurement
business products are used in a variety of applications, including
research, design, testing, installation, manufacturing and service in
the computer, military, commercial aerospace, telecommunications,
television, process control and automotive industries.
Tektronix pioneered the development of high precision
oscilloscopes over 50 years ago, and the oscilloscope is the Company's
primary measurement product. Oscilloscopes are used by engineers and
technicians when an electrical signal needs to be viewed, measured,
tested or calibrated. Oscilloscopes are used extensively in the
computer, communications, aerospace and other industries for design,
manufacturing and maintenance. In addition to electrical signals,
oscilloscopes can be adapted to measure mechanical motion (vibration),
sound, light, heat, pressure, strain and velocity.
Oscilloscopes produce graphic representations of electrical
signals on a cathode ray tube or other display device. Normally, the
display shows the signal as a graph of its amplitude over a certain
period of time, which may range from minutes to less than a billionth of
a second. Oscilloscopes provide a convenient way to visually monitor
and interpret analog electrical fluctuations, mechanical motion and
sound.
The development of the microprocessor and associated growth in
microprocessor-based devices stimulated both the existing analog markets
and new digital markets. In addition, the microprocessor made possible
significant improvements in oscilloscope design and performance. Many
of the oscilloscopes and other measurement products manufactured by
Tektronix feature digital storage and conversion functions, programmable
operations, the ability to work in conjunction with personal computers
and workstations and combinations of these capabilities. In addition,
trends toward smaller microelectronic devices have opened new
segments for specialized measurement equipment, such as connectors,
probes, adapters,and cameras and plotters to record displayed waveforms.
Recently, Tektronix has designed a substantial portion of its
oscilloscope product line to provide a consistent "architecture" across
products and to enhance ease of use. Because the Company manufactures
oscilloscopes in a wide range of configurations, bandwidths and other
performance characteristics and in sizes ranging from hand-held to large
laboratory units, this design provides customers with reduced learning
time and higher productivity. The design also reduces the time required
by the Company to develop new products because many essential user
interface aspects have been standardized. Some elements of this design
also have been patented and provide the Company with certain competitive
advantages.
The Company also offers modular instruments delivered on
printed circuit cards that can be mixed and matched by customers and
plugged directly into the backplane of industry-standard VXI-
2
based card cages. These are controlled by personal computers or workstations to
form complete instrument systems tailored to customers' particular
requirements. A number of measurement products are now available in the
VXI standard, which products are used primarily in manufacturing
applications. Tektronix has been instrumental in the development of
VXI-based hardware and software industry standards.
Measurement business products also include video and audio
test products. Video and audio test products include vectorscopes,
waveform monitors, signal generators, automated test equipment,
demodulators, aural modulation monitors and synchronizers which are used
primarily by the television industry to test and display the quality of
video and audio signals. The resolution of images and the fidelity of
sounds, as well as the stability of the signals that carry them, are
essential to program quality. Tektronix' video and audio test products
excel at the many forms of test and measurement vital to creating and
maintaining signals of the highest quality.
Market changes are driving the development of new categories
of products from Tektronix. The proliferation of electronic technology
requires technicians and field engineers to use smart electronic tools
for servicing, maintaining and troubleshooting problems in electrical
equipment. Tektronix' broad line of hand-held instruments, sold through
distributors, are smart, rugged products designed specifically to
address these needs.
Tektronix offers a full range of sophisticated, easy-to-use
handheld instruments, including digital multimeters and the
award-winning TekScope, a handheld oscilloscope/digital multimeter
combination. Tektronix' handheld instruments range in price from below
$100 up to about $2,500.
The Company also makes benchtop basic instruments.
Applications include education, light manufacturing, electronic
troubleshooting and basic electronic design.
Logic analyzers are a principal tool for electronic designers,
engineers and technicians in testing and trouble-shooting computers,
computer peripheral devices and digital electronic systems and
instruments. Logic analyzers capture, display and examine streams of
data coded as binary digits (bits), which are transmitted simultaneously
over many channels. The Company offers several lines of logic analyzers,
including the 3000 Series, a standalone, mid-range analyzer targeted at
medium sized designs, the newer TLA 500 Series, a high performance,
mid-priced anlayzer optimized for embedded software debug, and the DAS
Digital Analysis System, a broad application logic analyzer that
combines logic analysis and pattern generation by using card modular
plug-in units to permit a range of performance in one system. DAS
systems are also used by software engineers in the development and
optimization of microprocessor-based designs.
Spectrum analyzers are used in communications and other
industries to display and measure signal amplitude versus frequency
3
rather than amplitude versus time (the latter being what an oscilloscope
displays). It is an essential tool used to design, check and adjust
communications transmitting and receiving equipment.
Products designed for the telecommunications industry play an
increasingly important role in the Company's measurement business
portfolio. Tektronix is a leading supplier of a broad range of test
solutions for emerging networks, designed for ensuring integrity and
optimizing performance of networks, and verifying design and assuring
quality of communications equipment. Cable testers and fiber optic
testers use time-domain-reflectometry techniques to locate faults in
metallic and fiber optic cables. Essentially, these instruments send
signals from one end of a cable and then measure the reflection time of
the signals to determine the location of the fault. Cable testers and
fiber optic testers are widely used in the telecommunication and cable
television industries. The Company also has developed a series of
products for SDH or SONET transmission testing in the telecommunications
industry, and has developed an MPEG based signal generator and analyzer.
The Company's 1995 acquisition of Microwave Logic, Inc., which
was merged into Tektronix in May of 1996, strengthens the Company's
offerings in this product area, as well as in the area of ATM
asynchronous transfer mode products. Tektronix also sells and supports
German manufacturer Rohde and Schwarz' wireless communications and TV
products in the United States and Canada, including the first
measurement solutions for Personal Communications Services (PCS), mobile
phones and base stations available to North American manufacturers.
Rohde and Schwarz also works with Tektronix to facilitate distribution
in Russia, the Middle East and Eastern European countries.
Tektronix' distributorship arrangement with Advantest, the
Japanese instruments manufacturer, expands the company's offering within
North America and Mexico, adding more than 100 solutions to the
communications test product portfolio.
Other measurement business products include digitizers, signal
sources, curve tracers, wireless and modular lines of general purpose
test instruments.
Color Printing and Imaging Products
___________________________________
Tektronix' color printing and imaging products include color
printers and related products and supplies. Color printers produce full
color hard copies of images produced by personal computers, workstations
and terminals. The Company's Phaser brand printers are compatible with
the PostScript industry standard page description language, which
specifies how an image is transferred to hard copy. By adopting the
Postscript standard, color printers can be used in conjunction with a
wide range of third-party graphics software. Tektronix produces Phaser
color printers using thermal wax, liquid ink jet, dye sublimation and
laser technologies. In addition, Tektronix has developed a proprietary
printing technology that uses sticks of solid ink, of the Company's
4
own formulation, that are melted and then jetted onto the paper. This
technology produces vivid and stable images, allows printing on plain
rather than coated paper, and can be applied to a wide range of sizes
and gauges of paper. Tektronix' printers are controlled by software
designed and implemented by the Company.
The use of color in computing and printing has been stimulated
by enhancements in the underlying microprocessor technology of personal
computers and workstations, by increasingly larger system and peripheral
storage capabilities, and by enhancements in computer display
capability. As personal computers increasingly become capable of
displaying complex, colorful images, there has been an accompanying
growth in demand for printers that can print such images in color.
Tektronix has been manufacturing and selling color printers
for over eleven years. Early users were graphics artists, engineers and
scientists. More recently, workgroup office users have also become
significant users of the Company's color printers.
In January of 1996, the Company introduced its Phaser 550, a
new desktop color laser printer that provides a high print speed and
high resolution on letter and legal size paper and transparencies. The
Phaser 550 printer combines laser-class speed, low cost per page, and
high quality output intended to broaden the appeal of color for the
average business user and help move color into the office printing
environment. This product compliments the Company's Phaser 340,
introduced in 1995, which is a solid ink printer with laser-class speed.
The Company continues to produce high quality output color printers for
the specialty graphics and office markets.
While the market for color printers is currently growing
rapidly, it is still much smaller than the market for monochrome
printers. Moreover, it is characterized by intense and increasing
competition, resulting in a competitive pricing environment. Because
the market for color hard copy is still small compared to the market for
monochrome printers, distribution of products from manufacturer to end
user is less efficient. The Company expects distribution channels to
expand as color hard copy becomes a more prominent feature in computer
applications.
Also included in color printing and imaging products are
supplies for use with the Company's color printers, including inks,
toner, transfer ribbons, maintenance kits and media (paper and
transparencies). These supplies are a very significant source of
ongoing color printing and imaging revenue and profit. The Company also
manufactures a scanner accessory that enables a color printer to
function as a color copier.
Video and Networking Products
_____________________________
As television continues to expand its offering content and
distribution, markets have emerged for products capable of supporting
development of content through the integration of computer applications.
These trends, coupled with the increasing use of cable and satellite to
distribute content, are expanding the
5
market for Tektronix' video products. These trends may result in increased
demand for lower cost production products based on industry standard
platforms and for systems that support the development and distribution
of new forms of content.
Most video products are produced at the Company's facility in
Grass Valley, California. The subsidiary owning this property was
merged into the Company in January of 1996. Grass Valley products are
used by the television industry for program production and distribution.
Products include studio production equipment, signal processing and
distribution equipment and transmission systems. Studio production
equipment is used in the creative process of television program
production and assembly. Production equipment products include
production switchers, special effects devices and editing controllers.
Production switchers allow an operator to select signals from various
sources, such as cameras, video tape recorders and network or remote
transmissions, and to combine these signals into the continuous program
seen by the viewing audience. Signal processing and distribution
equipment is used in the process of moving signals within a television
production facility or between facilities. Such equipment includes
routing switchers, amplifiers, timing systems and signal conversion
devices. Transmission systems are used in the process of transporting
signals between facilities. Transmission system products include fiber
optic video transmitter/receiver systems, digital video coders/decoders,
cross-connect switches and interactive conferencing systems including
distance learning systems. Customers for Grass Valley products include
the television networks, local television stations, post-production
houses (which assemble commercials and television programs from recorded
footage), telephone and cable companies and corporate and educational
users.
Lightworks Editing Systems Limited, a United Kingdom company
which was acquired by the Company in fiscal year 1996, designs,
manufactures and distributes non-linear editing systems used for film
and video editing. Video products also include the Company's Profile
disk-based, multi-channel video storage and playback system. In
contrast to conventional tape storage technology, the Profile system
provides instant access to stored video images and better reliability
due to the durability of the media.
The Company's main networking product is a line of
netstations, which are X windows-based graphics terminals that provide
multiple windowing and networking capability. Also commonly referred to
as X terminals, netstations allow users to communicate with one or more
host computers and other devices such as printers, that make up a
networked computing system. Most applications include a central
"server" (containing applications and data) connected to multiple
netstations, thereby allowing a number of users to access those
applications and data. The Company no longer manufactures its older
line of proprietary graphics terminals, but it still has a service
business for its installed base for such products. This service
business has continually declined as the installed base of these
proprietary graphics
6
terminals declines.
Netstation products are based on standard architecture
originally developed by the Massachusetts Institute of Technology.
Consequently, it is difficult for any manufacturer to develop a
proprietary advantage in either the underlying hardware or in elements
of the operating system, and competition in the netstation market is
accordingly intense. The Company's terminals have historically been
used in technical applications such as mechanical engineering design,
drafting and mapping. As a result, the Company has enjoyed a strong
position in the technical and scientific segments of the market.
Recently, the market has expanded and shifted to commercial applications
from scientific and engineering applications. In accordance with this
trend, recent additions to the Company's netstation product line focus
on new commercial and business applications, as well as engineering
applications. Commercial customers now account for a major portion of
the Company's netstation revenues.
The Company's networking products also include WinDD
software, which allows workstation or netstation users on a Unix
network to run Microsoft Windows based applications in native mode (that
is, without translation or emulation).
Manufacturing
_____________
During fiscal 1994, the Company sold its integrated circuits
operation to Maxim Integrated Products, Inc. and transferred its hybrid
circuits operation to a joint venture with Maxim, and in early 1995
completed the sale of approximately 65% of the stock of its printed
circuit board operation in the initial public offering of Merix
Corporation. As a result of these activities and other recent component
operation divestitures, the Company's manufacturing operations are no
longer highly integrated. The Company has entered into supply agreements
with each of the companies now operating the respective component
operations.
Tektronix also purchases raw materials, additional components,
data processing equipment and computer peripheral devices for use in its
products and systems. In addition, the Company purchases components of
its products from a variety of third party suppliers. Such purchased
materials and components are generally available to Tektronix as needed.
Although shortages are experienced from time to time, the Company
currently believes that it will be able to acquire the required
components as needed. Because some of these components are unique,
disruptions in supply can have an effect on Company operations.
Tektronix owns substantially all of its manufacturing
facilities. Its primary manufacturing facilities are located in or near
the Portland, Oregon metropolitan area. Some of Tektronix' products,
components and accessories are assembled in the Peoples Republic of
China. A logistics center is maintained in Heerenveen, The Netherlands.
The Grass Valley products are manufactured near Grass Valley,
California. The Lightworks video editing products
7
are manufactured in Reading, U.K. See Item 2, "Properties", for a more
detailed description of the Company's manufacturing facilities.
Certain Tektronix products are manufactured for the Japanese
market at a plant in Gotemba, Japan by Sony/Tektronix Corporation, a
Japanese corporation equally owned by Tektronix and Sony Corporation.
Sony/Tektronix also designs and manufactures arbitrary waveform and
function generators and benchtop semiconductor testers in Japan for
sale worldwide by Tektronix.
Sales and Distribution
______________________
Tektronix maintains its own worldwide sales and field
maintenance organization, staffed with technically trained personnel.
Sales in the United States, Canada, Brazil, the United Kingdom, Germany,
France, Italy, Spain, The Netherlands, Belgium, Sweden, Denmark, Norway,
Finland, Switzerland, The Republic of Ireland, Australia, Austria, Hong
Kong, Taiwan, Korea, Singapore, China and Mexico are made through the
Company and its subsidiaries and their field offices or distribution
channels located in principal market areas. In most countries, all sales
are made either directly by Tektronix or by independent distributors to
whom Tektronix provides direct technical and administrative assistance.
Certain of the Company's independent distributors also sell products
manufactured by the Company's competitors. Sales of joint venture
products in the Peoples Republic of China are made by three companies
which are joint ventures between Tektronix and three different Peoples
Republic of China corporations. Except for Grass Valley products, sales
in Japan are made by Sony/Tektronix Corporation. Sales in India are
made by Tektronix (India) Limited, an Indian company which is 62% owned
by Tektronix and the balance held publicly. A number of the Tektronix
field offices in the U.S. also perform major maintenance and
reconditioning operations. Tektronix' principal customers are electronic
and computer equipment manufacturers and service providers, private
industrial concerns engaged in commercial or governmental projects,
military and nonmilitary agencies of the United States and of foreign
countries, public utilities, educational institutions, radio and
television stations and networks, graphics arts companies and users of
sophisticated office products. Certain products are sold both to
equipment users and to original equipment manufacturers.
During the last fiscal year, United States Government agencies
accounted directly for approximately 1.4 percent of Tektronix'
consolidated sales as compared with approximately two percent for the
prior year. During the last five years, direct sales to United States
Government agencies ranged from one to six percent. The balance of
sales during each year was distributed among several thousand other
customers, with no other single customer accounting for as much as three
percent. The Company believes that sales directly related to United
States Government expenditures (excluding sales to the United States
Government) were approximately two percent of Tektronix' consolidated
sales for the last fiscal year. Contracts involving the United States
Government are subject, as is customary, to termination by the
Government at its convenience.
8
Most Tektronix product sales are sold as standard catalog
items. Tektronix attempts to fill its orders as promptly as possible.
In video and networking, the Company is moving towards complete system
sales.
At May 25, 1996, Tektronix' unfilled product orders amounted
to approximately $163 million, as compared to approximately $167 million
at May 27, 1995. Tektronix expects that substantially all unfilled
product orders at May 25, 1996 will be filled during its current fiscal
year. Orders received by the Company are subject to cancellation by the
customer.
International Sales
___________________
The following table sets forth the breakdown between U.S. and
international sales, based upon purchaser location, for each of the last
three fiscal years (in thousands of dollars):
U.S. Sales International Sales
___________________ ___________________
Amount Percent Amount Percent
______ _______ ______ _______
1994 $751,401 56.0% $591,095 44.0%
1995 $766,991 51.2% $730,971 48.8%
1996 $890,930 50.4% $877,928 49.6%
See "Business Segments" in the Notes to Consolidated Financial
Statements at page 27 of the Company's 1996 Annual Report to
Shareholders, containing information on sales, operating income and
assets by geographic area based upon the location of the seller, which
is incorporated by reference.
Tektronix products are sold worldwide. European sales are
made principally in Germany, France, the United Kingdom, Switzerland,
Italy, Spain, Sweden, and The Netherlands. Other international sales
are principally in Japan, Korea, Canada and Australia. International
sales include both export sales from the United States and sales by
non-U.S. subsidiaries. Fluctuating exchange rates and other factors
beyond the control of Tektronix, such as the stability of international
monetary conditions, tariff and trade policies and domestic and foreign
tax and economic policies, affect the level and profitability of
international sales. The Company does not believe it is materially
exposed to exchange rate fluctuation, although the Company is unable to
predict the effect of these factors on its business. The Company hedges
against certain currency exposures in order to minimize their impact.
Research and Development
________________________
Tektronix operates in an industry characterized by rapid
technological change and research and development are important elements
in its business. Expenditures during fiscal years ended May 28, 1994,
May 27, 1995 and May 25, 1996 for research and development amounted to
approximately $159,377,000, $166,171,000, and $164,292,000 respectively.
Almost all of these funds were Company generated.
9
Research and development activities are conducted by research
and design groups and specialized product development groups within the
three product groups. These activities include: (i) research on basic
devices and techniques (ii) the design and development of products and
components and specialized equipment and (iii) the development of
processes needed for production. Most of Tektronix' research and
development is devoted to enhancing and developing its own products.
Patents and Intellectual Property
_________________________________
It is Tektronix' policy to seek patents in the United States
and appropriate foreign countries for its significant patentable
developments. However, electronic equipment as complex as most
Tektronix products is generally not patentable in its entirety. The
Company also seeks to protect significant trademarks and software
through trademark and copyright registration. The Company has entered
into license arrangements for components important to the manufacturing
of some of its printers. The Company's printer business relies on an
integrated strategy of licensed and internally developed technology to
produce its industry leading products. This technology includes
software, equipment, printing process and ink developments. As with any
company whose business involves intellectual property, Tektronix is
subject to claims of infringement. There are no material pending
claims.
Competition
___________
The electronics industry continues to become more
competitive, both in the United States and abroad. Primary
competitive factors are product performance, technology, customer
service, product availability and price. Tektronix believes that its
reputation in the marketplace is a significant positive competitive
factor. With respect to many of its products, the Company competes with
companies that have substantially larger resources.
Tektronix is the world's largest manufacturer of oscilloscopes
and no single competitor offers as complete a product line. The Company
is also the leader in sales of test and measurement equipment for the
television industry. Tektronix competes with a number of companies in
specialized areas of other test and measurement products, and it
competes with one very large company that sells a broad line of test and
measurement products.
Tektronix is also the leader in unit sales of office workgroup
laser-class color printers, including color laser, solid ink jet and
thermal wax color printers.
Tektronix competes with a number of large, worldwide
electronics firms that manufacture specialized equipment for the
television industry, both with respect to its television test and
measurement products and its Grass Valley products. Grass Valley
products include leading high-performance production switchers and
high-performance distribution/processing equipment.
Tektronix is a leading supplier of netstations.
10
Employees
_________
At May 25, 1996, Tektronix had 7,929 employees, of whom 1,572
were located in foreign countries. Tektronix' employees in the United
States and most foreign countries are not covered by collective
bargaining agreements. The Company believes that relations with its
employees are good.
Environment
___________
The Company's facilities are subject to numerous laws and
regulations concerning the discharge of materials into the environment,
or otherwise relating to protection of the environment. Compliance with
these laws has not had and is not expected to have a material effect
upon the capital expenditures, earnings or competitive position of the
Company.
Executive Officers of the Company
_________________________________
The following are the executive officers of the Company:
Has Served As
An Executive
Officer of
Name Position Age Tektronix Since
____ ________ ___ _______________
Jerome J. Meyer Chairman of the 58 1990
Board, Chief
Executive Officer
and President
William D. Walker Vice Chairman of 65 1992 (also
the Board, Director served in
1990 and
from 1969
to 1984)
John P. Karalis Senior Vice President, 58 1992
Corporate Development
and Secretary
Carl W. Neun Senior Vice President 52 1993
and Chief Financial
Officer
Daniel R. Brophy Vice President and 58 1996
President, Americas
Operations
Lucie J. Fjeldstad Vice President and 52 1995
President, Video and
Networking Division
11
Has Served As
An Executive
Officer of
Name Position Age Tektronix Since
____ ________ ___ _______________
Gerald Perkel Vice President and 40 1995
President, Color
Printing and
Imaging Division
Daniel Terpack Vice President and 55 1993
President, Measurement
Business Division
Timothy E. Vice President and 43 1991
Thorsteinson President, Pacific
Operations
John W. Vold Vice President and 66 1991
President, European
Operations
The executive officers are elected by the board of directors
of the Company at its annual meeting, except for interim elections to
fill vacancies. Executive officers hold their positions until the next
annual meeting or until their successors are elected, or until such
tenure is terminated by death, resignation or removal in the manner
provided in the bylaws. There are no arrangements or understandings
between executive officers or any other person pursuant to which the
executive officers were elected and none of the executive officers are
related.
All of the executive officers named have been employed by
Tektronix in management positions for the last five years except: Mr.
Timothy E. Thorsteinson who joined Tektronix in October 1991 and from
1990 to 1991 was Director of Quality Performance of National
Semiconductor Corporation ("National Semiconductor") and prior to that
time held a number of management positions in human resources management
at National Semiconductor; Mr. John P. Karalis who joined Tektronix in
September 1992 and prior to that time was with the law firm of Brown and
Bain (from 1989 to 1992) and Vice President and General Counsel of Apple
Computer, Inc. (from 1987 to 1989); Mr. Carl W. Neun who joined
Tektronix in March 1993 and prior to that time served as Senior Vice
President of Administration and Chief Financial Officer of Conner
Peripherals, Inc., (from 1987 to 1993); Ms. Lucie Fjeldstad who joined
Tektronix in January 1995 and prior to that time was President and CEO
of Fjeldstad International (from 1993 to 1995) and Vice President and
General Manager, Multimedia of IBM Corporation (from 1990 to 1993); Mr.
William D. Walker, who is not an employee of the Company and has been a
director of the Company since 1980; and Mr. Daniel R. Brophy, who joined
the company in December 1994 and prior to that time served as Assistant
Vice President of Ascom Timeplex, a division of Ascom Holding AG, an
international telecommunications company.
12
Item 2. Properties.
A brief description of the location and general
characteristics of the significant properties occupied by Tektronix in
August of 1996 is set forth below. Tektronix believes that its
operations are in compliance in all material respects with requirements
relating to environmental quality, safety and energy conservation.
Tektronix owns a 265 acre industrial park (the "Howard Vollum
Park") near Beaverton, Oregon. The Howard Vollum Park includes 23
buildings arranged in a campus-like setting and containing an aggregate
of approximately 2.6 million gross square feet of enclosed floor space.
A substantial portion of the company's product manufacturing and
administrative activities are located at Howard Vollum Park. Most of
the Company's Measurement Business Division and a variety of the Video
Networking Division products are manufactured at Howard Vollum Park.
The Company leases certain excess space at the Howard Vollum Park to
other corporations. The Company also owns property near Howard Vollum
Park which is leased to another corporation.
The Company's Color Printing and Imaging Division, and
corporate headquarters occupy three buildings containing approximately
596,000 square feet on a 167 acre tract owned by the Company in
Wilsonville, Oregon, approximately 16 miles south of Howard Vollum
Park. An additional 192,000 square foot building on the Company's
Wilsonville property is currently leased to another corporation.
Tektronix' Video and Networking Division also has operating
facilities in Grass Valley, California, which includes ten buildings
containing a total of approximately 190,000 square feet of floor space
on a 320 acre site, and three buildings containing a total of
approximately 151,000 square feet on the Company's 116 acre tract of
land in the neighboring town of Nevada City. The Company intends to
consolidate these operations on the Nevada City site, and the 320 acre
Grass Valley site is currently offered for sale.
The buildings described above were constructed after 1957 and
are maintained in good condition. Warehouses, production facilities and
other critical operations are protected by fire sprinkler installations.
Most manufacturing, office and engineering areas are air-conditioned.
The Company believes that its facilities described above are adequate
for their intended uses.
Tektronix owns a 43 acre site six miles east of Vancouver,
Washington (Vancouver is across the Columbia River from Portland,
Oregon). The Company has leased the 485,000 square foot manufacturing
facility that is situated on the site to another corporation.
A 109,000 square foot logistics center owned by Tektronix is
located on 23 acres of land in Heerenveen, The Netherlands.
Field offices near London (83,000 square feet) and Sydney,
Australia (23,000 square feet) are located in buildings owned by the
Company. The Lightworks video editing manufacturing operations are
13
located on leased premises in Reading, U.K. Field Offices in other
foreign countries occupy leased premises.
Tektronix also owns a seven-acre site in Hoddesdon, England,
with manufacturing buildings containing about 47,000 square feet which
is leased to another corporation. Tektronix is attempting to sell this
facility.
Tektronix' US Sales and Service field offices aggregate
approximately 245,000 square feet of leased space. A surplus office in
Chicago, Illinois, consisting of approximately 60,000 square feet is
offered for sale. Tektronix also owns an approximately 9,000 square
foot facility in Nanticoke, Pennsylvania.
Item 3. Legal Proceedings.
Fluke Corporation filed suit against the Company in the
Federal District Court for the Western District of Washington, alleging
the Company violated trademark and unfair competition laws by copying
certain trade dress of one of Fluke's digital multimeter product lines.
The Court has issued a preliminary injunction prohibiting the Company
from selling, distributing, advertising or promoting its 800 Series
digital multimeters in the United States. The Company will comply with
the order which it intends to appeal. It is not anticipated that the
order will have a material adverse effect on the Company's operating
results.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
Forward Looking Statements
__________________________
Information included in this Report on Form 10-K relating to
orders, sales and earnings expectations constitute forward-looking
statements that involve a number of risks and uncertainties. From
time to time, information provided by the Company, or statements made by
its employees, may contain other forward-looking statements. As with
many high technology companies, factors that could cause the company's
actual results or activities to differ materially from these forward
looking statements include but are not limited to: general economic
conditions, and business conditions in the electronics industry,
including the effect on purchases by the Company's customers;
competitive factors, including pricing pressures, technological
developments and products offered by competitors; changes in product and
sales mix, including an increase in indirect and systems sales by the
Company and the related effects on gross margins; the company's ability
to deliver a timely flow of competitive new products and market
acceptance of these products; the availability of parts and supplies
from third party suppliers on a timely basis and at reasonable prices;
inventory risks due to changes in market demand or the Company's
business strategies; changes in effective tax rates; customer demand;
currency fluctuations; the fact that a substantial portion of the Company's
14
sales are generated from orders received during the quarter, making
prediction of quarterly revenues and earnings difficult; and other
risk factors listed from time to time in the Company's reports
filed with the Securities and Exchange Commission and press releases.
Additional risk factors specific to the Company's current
plans and expectations that could cause the Company's actual results or
activities to differ materially from those stated include: the
significant organizational and operational challenges that could
adversely affect the Company's ability to integrate and transform its
Video and Networking business successfully in the planned time frame;
the timely introduction of new products scheduled during the Company's
fiscal year which could be affected by engineering or other development
program slippages, the ability to ramp up production or to develop
effective sales channels, and demand for and acceptance of those and
other Company products by the Company's customers which could be
affected by the current uncertainties in economic conditions around the
world and by activities of the Company's competitors.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
The information required by this item is included on page 25
of the Company's 1996 Annual Report to Shareholders and is incorporated
herein by reference.
Item 6. Selected Financial Data.
The information required by this item is included on page 35
of the Company's 1996 Annual Report to Shareholders and is incorporated
herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The information required by this item is included on pages 16
through 20 of the Company's 1996 Annual Report to Shareholders and is
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is included on pages 22
through 35 of the Company's 1996 Annual Report to Shareholders and is
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
15
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this item regarding directors is
included under "Board of Directors" and "Election of Directors" on pages
3 to 8 of the Company's Proxy Statement dated August 14, 1996.
The information required by this item regarding officers is
contained under "Executive Officers of the Company" in Item 1 of Part I
hereof.
The information required by Item 405 of Regulation S-K is
included under "Section 16(a) Compliance. Beneficial Ownership
Reporting" on page 19 of the Company's Proxy Statement dated August 14,
1996.
Item 11. Executive Compensation.
The information required by this item is included under
"Directors' Compensation" and "Executive Compensation" on pages 7 to 13
of the Company's Proxy Statement dated August 14, 1996.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information required by this item is included under
"Ownership of Shares" and "Election of Directors" on page 2 and 4 to 7
of the Company's Proxy Statement dated August 14, 1996.
Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form
8-K.
(a) (1) Financial Statements.
____________________
The following documents are included in the Company's 1996
Annual Report to Shareholders at the pages indicated and are
incorporated herein by reference:
Page in 1996 Annual
Report to Shareholders
______________________
Independent Auditors' Report 21
Consolidated Statements of Operations 22
Consolidated Balance Sheets 23
Consolidated Statements of Cash Flows 24
Consolidated Statements of Shareholders' 25
Equity
Notes to Consolidated Financial Statements 26 to 34
16
(2) Financial Statement Schedules.
No financial statement schedules are required to be filed
with this report.
Separate financial statements for the registrant have been
omitted because the registrant is primarily an operating company
and the subsidiaries included in the consolidated financial
statements are substantially totally held. All subsidiaries of the
registrant are included in the consolidated financial statements.
Summarized financial information for 50 percent or less owned
persons in which the registrant has an interest is included in the
Notes to Consolidated Financial Statements appearing in the
Company's Annual Report to Shareholders.
(3) Exhibits:
(3)(i) Restated Articles of Incorporation, as
amended. Incorporated by reference to
Exhibit (3) of Form 10-Q dated September
28, 1990, SEC File No. 1-4837.
(ii) Bylaws, as amended.
(4)(i) Indenture dated as of November 16, 1987, as
amended by First Supplemental Indenture Dated
as of July 13, 1993, covering the registrant's
7-1/2% notes due August 1, 2003,and the
registrant's 7-5/8% notes due August 15, 2002.
Indenture incorporated by reference to Exhibit
4(i) of Form 10-K dated August 22, 1990,
SEC File No. 1-4837.
(ii) Pursuant to Item 601(b)(4)(iii) of Regulation
S-K, the registrant agrees to furnish to the
Commission upon request copies of agreements
relating to other indebtedness.
+(10)(i) 1982 Stock Option Plan, as amended.
Incorporated by reference to Exhibit 10(iii)
of Form 10-K dated August 22, 1989, SEC File
No. 1-4837.
+(ii) Stock Incentive Plan, as amended.
Incorporated by reference to Exhibit 10(ii)of
Form 10-Q dated April 9, 1993, SEC File
No. 1-4837.
+(iii) Restated Annual Performance Improvement Plan.
Incorporated by reference to Exhibit 10(i) of
Form 10-Q dated April 9, 1993, SEC File No.
1-4837.
17
+(iv) Restated Deferred Compensation Plan.
Incorporated by reference to Exhibit 10(i)of
Form 10-Q dated December 20, 1984, SEC File
No. 1-4837.
+(v) Retirement Equalization Plan, Restatement
+(vi) Severance Agreement entered into between the
Company and its named officers. Incorporated
by reference to Exhibit 10(viii)of Form 10-K
dated August 18, 1993, SEC File No. 1-4837.
+(vii) Indemnity Agreement entered into between the
Company and its named officers and directors.
Incorporated by reference to Exhibit 10(ix)
of Form 10-K dated August 18, 1993, SEC File
No. 1-4837.
+(viii) Executive Severance Agreement entered into
between the Company and its named officers.
Incorporated by reference to Exhibit 10(ix)
of Form 10-K dated August 9, 1995, SEC File
No. 1-4837.
+(ix) Executive Compensation and Benefits
Agreement dated as of October 24, 1990.
Incorporated by reference to Exhibit
10(ii) of Form 10-Q dated December 21,
1990, SEC File No. 1-4837.
+ (x) Executive Compensation and Benefits Agreement
dated as of March 29, 1993. Incorporated by
reference to Exhibit 10(xiv) of Form 10-K
dated August 11, 1994, SEC File No. 1-4837.
+ (xi) Rights Agreement dated as of August 16, 1990.
Incorporated by reference to Exhibit 1 of
Form 8-K dated August 27, 1990, SEC File
No. 1-4837.
+(xii) Non-Employee Directors' Deferred Compensation
Plan, 1995 Restatement dated July 1, 1995.
Incorporated by reference to Exhibit 10 (xv)
of Form 10-K dated August 9, 1995, SEC File
No. 1-4837.
+(xiii) Non-Employee Directors Stock Compensation
Plan. Incorporated by reference to Exhibit
10(xvi) of Form 10-K dated August 9, 1995,
SEC File No. 1-4837.
18
+(xiv) Executive Severance Agreement, as amended.
Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated October 7, 1994, SEC File
No. 1-4837.
+(xv) Amendment to Supplemental Executive
Retirement Agreement. Incorporated by
reference to Exhibit 10(ii) of Form 10-Q
dated October 7, 1994, SEC File No. 1-4837.
+(xvi) Employment Agreement dated January 20, 1995.
(13) Portions of the 1996 Annual Report to
Shareholders that are incorporated herein by
reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.
(i) Restated Financial Data Schedule.
+ Compensatory Plan or Arrangement
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this Report.
19
SIGNATURES
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.
TEKTRONIX, INC.
By CARL W. NEUN
______________________
Carl W. Neun
Senior Vice President and
Chief Financial Officer
Dated: August 20, 1996
Pursuant to the requirements of the Securities Exchange 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.
Signature Capacity Date
_________ ________ ____
JEROME J. MEYER* Chairman, Chief August 20, 1996
Jerome J. Meyer Executive Officer,
and President
CARL W. NEUN* Senior Vice President August 20, 1996
Carl W. Neun and Chief Financial
Officer, Principal
Financial and
Accounting Officer
PAULINE LO ALKER* Director August 20, 1996
Pauline Lo Alker
A. GARY AMES* Director August 20, 1996
A. Gary Ames
PAUL E. BRAGDON* Director August 20, 1996
Paul E. Bragdon
20
Signature Capacity Date
_________ ________ ____
PAUL C. ELY, JR.* Director August 20, 1996
Paul C. Ely, Jr.
A. M. GLEASON* Director August 20, 1996
A. M. Gleason
WAYLAND R. HICKS* Director August 20, 1996
Wayland R. Hicks
KEITH R. MCKENNON* Director August 20, 1996
Keith R. McKennon
MERRILL A. MCPEAK* Director August 20, 1996
Merrill A. McPeak
JEAN VOLLUM* Director August 20, 1996
Jean Vollum
WILLIAM D. WALKER Director August 20, 1996
William D. Walker
*By JOHN P. KARALIS August 20, 1996
John P. Karalis
as attorney-in-fact
21
EXHIBIT LIST
(3)(i) Restated Articles of Incorporation, as
amended. Incorporated by reference to
Exhibit (3) of Form 10-Q dated September
28, 1990, SEC File No. 1-4837.
(ii) Bylaws, as amended.
(4)(i) Indenture dated as of November 16, 1987, as
amended by First Supplemental Indenture Dated
as of July 13, 1993, covering the registrant's
7-1/2% notes due August 1, 2003,and the
registrant's 7-5/8% notes due August 15, 2002.
Indenture incorporated by reference to Exhibit
4(i) of Form 10-K dated August 22, 1990,
SEC File No. 1-4837.
(ii) Pursuant to Item 601(b)(4)(iii) of Regulation
S-K, the registrant agrees to furnish to the
Commission upon request copies of agreements
relating to other indebtedness.
+(10)(i) 1982 Stock Option Plan, as amended.
Incorporated by reference to Exhibit 10(iii)
of Form 10-K dated August 22, 1989, SEC File
No. 1-4837.
+(ii) Stock Incentive Plan, as amended.
Incorporated by reference to Exhibit 10(ii)of
Form 10-Q dated April 9, 1993, SEC File
No. 1-4837.
+(iii) Restated Annual Performance Improvement Plan.
Incorporated by reference to Exhibit 10(i) of
Form 10-Q dated April 9, 1993, SEC File No.
1-4837.
+(iv) Restated Deferred Compensation Plan.
Incorporated by reference to Exhibit 10(i)of
Form 10-Q dated December 20, 1984, SEC File
No. 1-4837.
+(v) Retirement Equalization Plan, Restatement
+(vi) Severance Agreement entered into between the
Company and its named officers. Incorporated
by reference to Exhibit 10(viii)of Form 10-K
dated August 18, 1993, SEC File No. 1-4837.
+(vii) Indemnity Agreement entered into between the
Company and its named officers and directors.
Incorporated by reference to Exhibit 10(ix)
of Form 10-K dated August 18, 1993, SEC File
No. 1-4837.
+(viii) Executive Severance Agreement entered into
between the Company and its named officers.
Incorporated by reference to Exhibit 10(ix)
of Form 10-K dated August 9, 1995, SEC File
No. 1-4837.
+(ix) Executive Compensation and Benefits
Agreement dated as of October 24, 1990.
Incorporated by reference to Exhibit
10(ii) of Form 10-Q dated December 21,
1990, SEC File No. 1-4837.
+ (x) Executive Compensation and Benefits Agreement
dated as of March 29, 1993. Incorporated by
reference to Exhibit 10(xiv) of Form 10-K
dated August 11, 1994, SEC File No. 1-4837.
+ (xi) Rights Agreement dated as of August 16, 1990.
Incorporated by reference to Exhibit 1 of
Form 8-K dated August 27, 1990, SEC File
No. 1-4837.
+(xii) Non-Employee Directors' Deferred Compensation
Plan, 1995 Restatement dated July 1, 1995.
Incorporated by reference to Exhibit 10 (xv)
of Form 10-K dated August 9, 1995, SEC File
No. 1-4837.
+(xiii) Non-Employee Directors Stock Compensation
Plan. Incorporated by reference to Exhibit
10(xvi) of Form 10-K dated August 9, 1995,
SEC File No. 1-4837.
+(xiv) Executive Severance Agreement, as amended.
Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated October 7, 1994, SEC File
No. 1-4837.
+(xv) Amendment to Supplemental Executive
Retirement Agreement. Incorporated by
reference to Exhibit 10(ii) of Form 10-Q
dated October 7, 1994, SEC File No. 1-4837.
+(xvi) Employment Agreement dated January 20, 1995.
(13) Portions of the 1996 Annual Report to
Shareholders that are incorporated herein by
reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.
(i) Restated Financial Data Schedule.