Back to GetFilings.com
- --------------------------------------------------------------------------------
UNITED STATES
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 January 4, 1998
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission file number 000-22221
FIELDWORKS, INCORPORATED
(Exact name of registrant as specified in its charter)
Minnesota 41-1731723
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7631 Anagram Drive, Eden Prairie, Minnesota 55344
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 974-7000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of Each Class On Which Registered
------------------- ----------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of Class)
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, based upon the closing sale price of the Common Stock on
March 23, 1998 as reported on the Nasdaq National Market, was approximately
$18,507,304. Shares of Common Stock held by each officer and director and by
each person who owns 5% or more of the outstanding Common Stock have been
excluded in that such persons may be deemed to be affiliates. The determination
of affiliate status for purposes of this paragraph is not necessarily a
conclusive determination for other purposes.
The number of shares of the registrant's Common Stock, $.001 par value,
outstanding as of March 23, 1998 was 8,780,526.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Shareholders for the fiscal year ended
January 4, 1998 are incorporated by reference into Parts II and IV. Portions of
the Proxy Statement for the Registrant's 1997 Annual Meeting of Shareholders to
be held May 20, 1998 are incorporated by reference in Part III.
- --------------------------------------------------------------------------------
PART I
ITEM 1. BUSINESS
THE COMPANY
FieldWorks designs, manufactures, markets and supports portable computing
platforms and computer system solutions for use in demanding field environments.
The Company's portable computing platforms have been designed to meet military
standards for ruggedness and to function despite exposure to extreme
temperature, mechanical shock, vibration and moisture. The Company's computing
platforms are expandable through multiple expansion slots to provide a flexible
electronic "toolbox" that can integrate a user's application-specific,
multi-media and communications needs into one portable, rugged device. The
Company's products have been designed with a modular system configuration that
allows a user to easily upgrade the central processing unit, processor or any of
the other technological components without purchasing a new computer. Further,
the Company has the ability to customize its computing platforms to meet the
unique needs of its customers.
The Company targets markets requiring portable computing platforms that can
perform multiple functions, including diagnostics, data acquisition, electronic
testing and monitoring, and simultaneously provide communications and computer
capability even under adverse conditions in the field. The Company believes that
its rugged computing technology has enabled its customers to create new
applications that improve the productivity of their field personnel and believes
further that additional markets and customers will develop as more businesses
recognize the benefits of providing field personnel with effective,
sophisticated computing power.
FIELD COMPUTING MARKET
Due to rapid technological advances over the past several years,
organizations have become increasingly dependent on mobile computing and
communications devices, such as portable computers, pagers and cellular
telephones, to enhance workforce productivity. Organizations are increasingly
seeking to computerize field personnel. Such computerization can provide
sophisticated field diagnostic and analytic capabilities, enhance field access
to data and on-line information, eliminate paperwork and improve electronic
dispatching and communication.
Industries such as transportation, utilities, public safety, military and
medical have recognized the need for computerization and automation in the
field. However, the effectiveness of field force computerization and automation
efforts has often been limited by the nature of the products that have been
available. Computers are now being used in the field to perform a wide range of
tasks, but both off-the-shelf, consumer portable computers and custom-designed
portable computers generally have significant shortcomings that limit their use
by field personnel. In part as a result of these limitations, some companies
still prefer to employ only single-purpose diagnostic and data collection
machines in the field, foregoing the benefits of full computerization.
The field force automation markets for the Company's products consist of
those businesses and other entities that are seeking effective mobile computing
platforms for field personnel and functions. Users of the Company's field
computing platforms and their demands vary widely, and include: (i)
transportation/heavy equipment, which needs diagnostic service tools in a single
PC-based tool with integrated software modules and hardware peripherals (ii)
utilities and telecommunications test crews, which require electronic toolboxes
that can perform data acquisition, diagnostic, communications and analysis tasks
to expedite installation, repair and troubleshooting, (iii) public safety, which
use computers as mobile data terminals that link into central dispatch, (iv) the
military, which needs mobile units capable of withstanding battlefield
conditions, and (v) medical, where medical testing and diagnosis, including
ultrasound capabilities, can be moved out of the hospital and into the doctors
office. Customers have found a wide variety of specific uses for the Company's
rugged computing platforms in the field.
FIELDWORKS PRODUCTS
DESIGN CHARACTERISTICS
The Company has focused on delivering products that address the varied and
specialized requirements of field force personnel. The Company's products
feature the following four critical design characteristics that it believes
purchasers of field computing platforms require.
Rugged. The Company's computing platforms have been designed to meet
military standards of ruggedness, and to function despite extreme temperatures,
mechanical shock, vibration and moisture. The Company achieves this by using,
among other things: (i) high-strength cast magnesium chassis, (ii) special shock
absorbers for internal components, (iii) durable gold-plated interconnect
systems and (iv) rubber sealing.
Expandable. The Company has focused on providing computing platforms that
are expandable to accommodate both current and future needs of the field force
user. The Company's computing platforms allow for the integration of
application-specific equipment, including auxiliary test, measurement and
diagnostic subsystems and multi-media and communications modules.
Upgradeable. The pace of change in technology such as processors, memory
and display methods can rapidly render non-upgradeable computers obsolete.
Unlike typical consumer portable computers, the Company's computing platforms
are designed to be easily upgraded using standard component parts. The
modularity of the Company's computing platforms allows for easy replacement of
all major subsystems, including processors, screens, disk drives, memory and
keyboards, thereby extending the useful life and reducing the overall cost of
ownership.
Customizable. Many of the Company's customers have unique needs that
require some degree of customization, from the incorporation of unique functions
to the design and production of special purpose machines. The modular design of
the Company's computing platforms allows the Company to readily adapt its
machines to a customer's specifications. Customization has ranged from fairly
simple mechanical adaptations to sophisticated electrical and mechanical
modifications.
PRODUCT SERIES
7000 Series Field WorkStation Laptop Computing Platform. The 7000
Series offers significant expansion capacity and is targeted at the high end of
the rugged field computing platform market. The structure of this laptop
computing platform is based on a high-strength cast magnesium alloy external
housing. Internal components that are sensitive to shock and vibration are
contained within this housing and isolated with special tuned shock absorbing
polymers, while a shock absorbing bushing system suspends all drives and the
CPU. The 7000 Series incorporates the Company's backplane/card cage design,
which provides up to six ISA/PCI expansion card slots within the housing. These
slots permit the integration of instrumentation, data acquisition and
communications capabilities in the computing platform. Also contained within the
housing are PCMCIA expansion capability, integrated AC/DC power, battery
capability, desktop ISA/PCI slots, optional integrated CD-ROM, optional dual
removable hard drive system and optional Motion Picture Experts Group
("MPEG-II") video compression decoding boards. The units in the 7000 Series
weigh approximately 14 1/2 pounds.
5000 Series Field WorkStation Notebook Computing Platform. The 5000 Series
is designed to meet the needs of those customers with uses that require a
smaller, more lightweight toolbox but do not require the same degree of
expandability. The structure of this notebook computing platform is based on an
internal frame cast from a high-strength magnesium alloy. The skeleton and
rubber coating protect internal sub-systems from shock and vibration. In
addition, some of the internal subsystems are suspended by a shock absorbent
bushing system. Virtually all of the electronics of the 5000 Series are
contained in a "technology module" that has been designed for easy removal,
making it possible for customers to service the units themselves and simplifying
upgrades. In addition to two optional ISA or PCI expansion slots, all computing
platforms in the 5000 Series have four universal bays in two sizes. The two
larger bays can house batteries, CD-ROM drives, an internal AC adapter, hard
drives or floppy drives. The two smaller bays can house removable drives and/or
PCMCIA slots. 5000 Series units weigh approximately 10 1/2 pounds.
SERVICE AND SUPPORT
The Company maintains a service and support program for the benefit of
its customers. The Company's staff is available to monitor order status, to
provide troubleshooting, to provide product information and to answer technical
questions and questions on post-installation issues. The Company provides a
one-year warranty program under which the Company agrees to diagnose, repair and
test any product. In addition to the standard warranty, the Company also offers
limited warranty programs for extended periods. The Company can provide
replacement unit pools for large volume customers to minimize downtime. Software
integration, including load and test of multiple software applications, can be
provided to manage potential communications conflicts. The Company provides
product training, either at the Company or at the customer's site.
STRATEGY
The Company's vision is to be the worldwide leader in customer-specific
computing solutions for demanding field environments. The Company's strategy
consists of the following key components:
Penetrate Key Vertical Markets. The Company is seeking to penetrate
key vertical markets including transportation, utilities, public safety,
government/military and medical. Where appropriate, the Company develops
specialized product features and functions to address the special needs of
a particular vertical market. The Company intends to employ a variety of
approaches in these various markets, including building strategic original
equipment manufacturer (OEM) relationships and focusing on relationships
with large volume repeat customers, depending on the characteristic
purchasing patterns of each vertical market.
Expand Direct Sales Force. The Company intends to focus the efforts of
its direct sales on its stated key vertical markets. The Company believes
that its products are attractive to customers within these markets given
the Company's ability to customize its computing platforms for specialized
needs and the ease with which the Company's computing platforms can be
upgraded and standardized throughout an organization. The Company believes
that its ability to accommodate developing technologies addresses the
concerns many large organizations have regarding the impact of
technological obsolescence in the context of large computer equipment
investments.
New Product Development / Product Enhancements. The Company has made
a substantial investment in developing its current computing platform
technologies. The Company intends to leverage this expertise while
expanding its technical resources to develop new products and enhance
existing products. The Company is currently developing additional series of
computing platforms designed to address broader customer preferences for
products with varying degrees of expandability, size and price, all of
which provide users with the customization, processing power and ease of
upgrade that characterize the Company's current products. The Company has
introduced the prototype of the 2000 Series, a mobile embedded server
product for in-vehicle applications. This product is currently in
development. The Company is also working to add new features and functions
to its existing products.
MANUFACTURING
The Company's manufacturing process consists primarily of the mechanical
subassembly, final assembly and testing of components and subassemblies acquired
from third party suppliers and subcontractors. These functions, along with the
final packaging of its products, are performed at the Company's worldwide
headquarters in Eden Prairie, Minnesota. The Company generally assembles
products according to its customers specifications, as orders are received. This
enables the Company to provide each customer with a computing platform that
satisfies the customers specific requirements. As a result, the Company operates
with minimal finished goods inventory.
The Company works with a number of subcontractors to assemble mechanical
components, to manufacture printed circuit boards, and to produce certain
components, all to the Company's design specifications. A number of these
components are made using tools that have been designed for, and belong to, the
Company, but that are
located on the manufacturer's premises. The Company has relationships with
subcontractors who provide subassemblies on a turn-key basis. The Company also
purchases components directly from one or more third party suppliers before
forwarding them to subcontractors for assembly. In general, the Company believes
that these services are available from a number of different companies.
The Company employs extensive quality control systems and has a quality
assurance department. The Company received ISO 9001 quality assurance
certification in March 1996.
SALES AND MARKETING / CUSTOMERS
The Company markets its products worldwide through a direct sales force,
independent sales representatives and distributors, OEMs, value-added resellers
and systems integrators. The Company's sales and marketing efforts are based on
the recognition that each of the Company's target vertical markets purchases
from different channels.
The Company's direct sales force focuses its efforts on building and
maintaining relationships with large-volume, repeat purchasers of the Company's
computing platforms and with dominant manufacturers or sales channel entities
within their vertical markets. The Company also utilizes a network of
independent sales representatives for domestic sales. Other segments of the
market are addressed by sales to value-added resellers and systems integrators
that typically sell systems that have been configured for specific end-user
applications through the addition of hardware, software or service. For
international sales, the Company maintains a network of international
distributors, which are managed by the Company's director of international
sales. To date, the Company's international sales have been principally in
Europe.
The Company conducts its sales activities from its worldwide headquarters
in Eden Prairie, Minnesota as well as sales offices in Alabama, California,
Florida, New Jersey, New York, Texas, Virginia and Washington D.C.
The Company had one customer in 1997, Navistar International, which
represented 13% of net sales. During the same period, sales to international
customers represented approximately 25% of net sales. The Company does not
believe that it is dependent upon sales to any single customer given the
Company's history of a relatively large number of different customers and wide
variations in the size and timing of orders from both new and repeat customers.
The top five customers of FieldWorks in 1996 and 1997 were Navistar
International Transportation Corporation, Phototelesis (a division of Raytheon
Corporation), Mobile Data Solutions Inc. (for sale to the City of San Antonio
Public Service), UroMetrics, Inc. and Boards Technologies AG.
BACKLOG
The Company believes that backlog is not a meaningful indicator of future
business prospects due to the potentially long customer sales cycle and
significant variations in the size and delivery schedules of orders received by
the Company. As a result, the Company does not believe that backlog at any
particular date is necessarily indicative of future results.
COMPETITION
The Company believes that it currently occupies a niche in the field force
automation market with its customer-specific computing solutions. The Company
currently faces direct competition in this market niche from companies producing
portable computers intended for field use such as Dolch Computer Systems, Getac
Corporation, XL Computing Corporation (a subsidiary of Cycomm International,
Inc.), Itronix Corporation, Kontron Elektronik Corporation (a subsidiary of
Kontron Elektronik GmbH) and Panasonic Personal Computer Company. To the extent
the Company and its direct competitors expand and develop this market niche,
other manufacturers may turn their attention to this niche and begin to produce
products directly competitive with those offered by the Company. The Company's
computing platforms also face indirect competition from a variety of different
companies and products, including consumer portable personal computers,
customized portable personal computers and single-purpose diagnostic and data
collection instruments.
Both the computer industry and the diagnostic and data collection
instrument industry are intensely competitive. Many of the companies that
produce or may produce devices that compete, directly or indirectly, with the
Company's products have substantially greater financial, technological and
marketing resources than the Company. Among other effects, increased competition
may require the Company to reduce the prices it charges for its products. There
can be no assurance that the Company will be able to compete effectively against
current or future competitors, or that such competitors will not succeed in
adapting more rapidly and effectively to changes in technology or in the market
or in developing or marketing products that will be more widely accepted.
RESEARCH AND DEVELOPMENT
The Company designs many of the aspects and components of its computing
platforms, including lay-out, housings and circuit boards, rather than
incorporating other manufacturers' products. The Company believes that its past
efforts in this area have provided it with technological advantages and the
Company intends to continue to focus research and development efforts on
improving its core technologies. In addition, the Company is continuing research
and development efforts that are focused on developing additional series of
products, such as the 2000 Series, that will address broader customer
preferences by providing toolboxes with a greater range of expandability, size
and price. Finally, the Company's research and development efforts also involve
developing customized solutions for its customers who have unique, specialized
requirements.
The Company spent approximately $1.9 million (representing 8% of net
sales), $1.9 million (representing 14% of net sales) and $0.9 million
(representing 12% of net sales) on research and development in 1997, 1996 and
1995, respectively.
INTELLECTUAL PROPERTY
In April 1996 the Company filed a provisional patent application related to
certain aspects of the design of its 5000 Series Field WorkStation notebook
computing platforms, including the technology module and features that enhance
its upgradeability and ruggedness. In March 1997, the Company filed a
nonprovisional United States patent application, and filed an international
patent application under the international Patent Cooperation Treaty ("PCT"),
both of which claimed priority to the provisional patent application. In July
1996, the Company filed a nonprovisional United States patent application
related to the backplane design employed in its 7000 Series Field WorkStation
laptop computing platforms. In July 1997, the Company filed a PCT application
which claimed priority to the nonprovisional United States patent application.
The Company uses the following marks in connection with its products:
FieldWorks, FieldWorks with Design, Field MousePad, Field WorkStation, and
Technology Module. Registrations have been issued in the U.S. Patent and
Trademark Office with respect to FieldWorks with Design, Field MousePad, Field
WorkStation and Technology Module. FieldWorks with Design is registered on the
Principal Register. The remaining registrations are registered on the
Supplemental Register. Supplemental Registrations do not confer the same rights
as Principal Registrations. Specifically, Supplemental Registrations do not
serve as prima facie evidence of the validity of the registered mark, the
registration of the mark, the registrant's ownership of the mark, or the
registrant's exclusive right to use the mark. In addition, the filing date of
the application does not confer any right of priority and does not constitute
notice of the registrant's claim of ownership of the mark. The Company is aware
that there are third parties that have claimed and may claim superior rights, in
certain territories in the United States, to the use of certain of the marks in
which the Company claims rights.
EMPLOYEES
As of January 4, 1998, the Company employed 132 full-time employees, of
whom 55 were engaged primarily in manufacturing, 38 were engaged primarily in
sales and marketing, 22 were engaged primarily in engineering and research and
development, and 17 were engaged primarily in administration. The Company also
employs part-time or temporary employees, mostly in manufacturing. None of the
Company's employees are represented by any labor union or other collective
bargaining unit. The Company believes that its relations with its employees are
good.
The Company maintains $1 million key man life insurance policies on the
lives of each of Gary J. Beeman, the Company's Vice Chairman of the Board, and
Robert C. Szymborski, the Company's Executive Vice President and Chief Technical
Officer, with the proceeds payable to the Company.
ITEM 2. PROPERTIES
The Company signed a lease for a new, larger facility and moved its office
personnel during the fourth quarter of 1997. The production operations moved
into the new facility during the first quarter of 1998. The facility is
approximately 53,000 square feet and is located in Eden Prairie, Minnesota. The
lease term expires in November 2004. The Company's main operations had
previously been conducted at another leased site of approximately 24,000 square
feet in Eden Prairie, Minnesota. This space, the lease for which expires in June
1999, has been subleased for the remaining period.
The Company also leases approximately 2,700 square feet in Springfield,
Virginia, and approximately 200 square feet in Woodland Hills, California. The
office of the Company's director of federal business is located at the
Springfield facility, where the lease term expires in June 2000. The office of
the Company's regional sales manager for the Western Region is located at the
Woodland Hills facility, where the lease term expires on March 31, 1998.
ITEM 3. LEGAL PROCEEDINGS
The Company is involved in legal actions in the ordinary course of its
business. Although the Company cannot predict the outcome of any such legal
actions, management believes that there is no pending legal proceeding against
or involving the Company for which the outcome is likely to have a material
adverse effect upon the Company's financial position, results of operations or
cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
Company's fourth quarter ended January 4, 1998.
EXECUTIVE OFFICERS OF THE REGISTRANT
NAME AGE POSITION
---- --- --------
Gary J. Beeman 44 Vice Chairman of the Board
Karen L. Engebretson 34 Chief Financial Officer, Vice President of Finance
Ronald E. Lewis 53 President, Chief Executive Officer
Robert C. Szymborski 49 Executive Vice President, Chief Technical Officer
Gary J. Beeman was a co-founder of the Company and has served as its Vice
Chairman of the Board of Directors since March 1998 and as its Treasurer and a
member of the Board of Directors of the Company since the Company's inception in
October 1992. He also served as the Company's Chairman of the Board of Directors
until January 1997, as its President until April 1997 and as its Chief Executive
Officer until March 1998.
Karen L. Engebretson has served as Chief Financial Officer and Vice President of
Finance of the Company since July 1997. From 1994 to May 1997, Ms. Engebretson
was employed by EMPAK, Inc., a plastics manufacturer serving international
semiconductor and memory disk markets, most recently as Chief Financial Officer.
From 1985 to 1994, Ms. Engebretson held various positions with Honeywell, Inc.
and Alliant Techsystems, Inc.
Ronald E. Lewis has served as the Company's President and Chief Operating
Officer since April 1997 and its Chief Executive Officer since March 1998. From
1995 through April 1997, Mr. Lewis was President and Chief Executive Officer of
Pan Am Systems, Inc., a satellite communications company. From 1987 through
1994, Mr. Lewis was President and Chief Executive Officer of Vic Manufacturing
Company, a manufacturer of commercial cleaning and environmental compliance
equipment. Previously, he held various positions, including general management
positions, with Data Card Corporation and the Toro Company.
Robert C. Szymborski was a co-founder of the Company and has served as Executive
Vice President, Chief Technical Officer and Secretary and a member of the Board
of Directors since the Company's inception in October 1992.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
The information required by this Item is incorporated by reference to page
28 of the Company's 1997 Annual Report to Shareholders.
SHAREHOLDERS
As of March 23, 1998, there were 175 holders of record of the Company's
Common Stock.
DIVIDENDS
The Company has never paid dividends and intends to retain earnings for use
in its business. The Company does not anticipate paying any dividends for the
foreseeable future.
USE OF PROCEEDS
The Company's registration statement on Form S-1, file number
333-18335, was declared effective on March 19, 1997. The Company registered an
aggregate of 2,443,750 shares of common stock, $.001 par value (including
316,250 shares covered by a registration statement filed pursuant to Rule 462(m)
on March 20, 1997, file number 333-23637) with R.J. Steichen & Company as the
managing underwriter. The offering commenced on March 20, 1997, and on March 25,
1997, the Company closed on aggregate proceeds of $13,812,500 from the sale of
2,125,000 of these shares. The remainder of the shares registered were subject
to an underwriters' over-allotment option that subsequently expired unexercised.
The following expenses were incurred in connection with the issuance
and distribution of the securities:
Underwriters discount and commission $ 967,000
Expenses paid to underwriters 276,000
Other expenses 809,000
-----------
Total expenses $ 2,052,000
===========
Net offering proceeds $11,760,000
===========
The net offering proceeds have been used as follows as of January 4,
1998:
Construction of plant, building and $ 74,000
facilities
Purchase of machinery and equipment 687,000
Repayment of indebtedness 6,597,000
Working capital 1,183,000
Temporary investment in Norwest
Advantage Cash Investment Account 3,219,000
-----------
$11,760,000
===========
All such amounts were paid direct to third parties.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference to page
12 of the Company's 1997 Annual Report to Shareholders.
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 pages
13 through 16 of the Company's 1997 Annual Report to Shareholders.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference to pages
17 through 28 of the Company's 1997 Annual Report to Shareholders.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors of the Company is set forth in the Proxy
Statement under the heading Election of Directors and is incorporated herein by
reference. The information regarding executive officers of the Company is
contained in Part I, Item 4 of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is set forth in the Proxy Statement under
the heading Executive Compensation and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item is set forth in the Proxy Statement under
the heading Security Ownership of Certain Beneficial Owners and Management and
is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is set forth in the Proxy Statement under
the heading Certain Transactions and is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Report:
1. Consolidated Financial Statements: The following Consolidated
Financial Statements of FieldWorks, Incorporated and Report of
Arthur Andersen LLP, Independent Public Accountants, are
incorporated by reference to pages 17 through 28 of the
Registrant's 1997 Annual Report to Shareholders:
Consolidated Balance Sheets--January 4, 1998 and January 5, 1997
Consolidated Statements of Operations--Fiscal Years Ended
January 4, 1998, January 5, 1997 and December 31, 1995
Consolidated Statements of Shareholders' Equity--Three Year Period
Ended January 4, 1998
Consolidated Statements of Cash Flow--Fiscal Years Ended
January 4, 1998, January 5, 1997 and
December 31, 1995
Notes to Consolidated Financial Statements
Report of Arthur Andersen LLP, Independent Public Accountants
2. Financial Statement Schedule: The following financial statement
schedule of FieldWorks, Incorporated for the fiscal years ended
January 4, 1998, January 5, 1997, and December 31, 1995, is filed
as part of this Report and should be read in conjunction with the
Consolidated Financial Statements of FieldWorks, Incorporated.
Schedule II - Valuation and Qualifying Accounts
Schedules not listed above have been omitted because they are
not applicable or are not required or the information required to
be set forth therein is included in the Consolidated Financial
Statements or Notes thereto.
3. Exhibits: The Exhibits listed on the accompanying Index to
Exhibits are filed as part of, or incorporated by reference into,
this Report.
(b)Reports on Form 8-K: No reports on Form 8-K were filed by the Company
during the fiscal quarter ended January 4, 1998.
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.
FieldWorks, Incorporated
/S/ RONALD E. LEWIS
--------------------------------
Ronald E. Lewis
President,
Chief Executive Officer
Dated: April 3, 1998
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, in the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ RONALD E. LEWIS President, Chief Executive Officer April 3,1998
--------------------
Ronald E. Lewis
/s/ KAREN L. ENGEBRETSON Chief Financial Officer, April 3, 1998
-------------------- Vice President of Finance
Karen L. Engebretson (principal financial and
accounting officer)
/s/ GARY J. BEEMAN Vice Chairman of the Board April 3, 1998
-------------------- of Directors
Gary J. Beeman
/s/ ROBERT W. HELLER Director April 3, 1998
--------------------
Robert W. Heller
/s/ GEORGE E. KLINE Director April 3, 1998
--------------------
George E. Kline
/s/ DAVID C. MALMBERG Chairman of the Board April 3, 1998
-------------------- of Directors
David C. Malmberg
/s/ ROBERT C. SZYMBORSKI Director April 3, 1998
--------------------
Robert C. Szymborski
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
DEDUCTIONS -
BALANCE AT ADDITIONS WRITE-OFFS OF
FISCAL BEGINNING OF CHARGED TO BAD UNCOLLECTIBLE BALANCE AT END
YEAR YEAR DEBT EXPENSE ACCOUNTS OF YEAR
- ------ ------------ -------------- ------------ --------------
1997 Allowance for Doubtful Accounts 201,360 236,500 53,303 384,557
1996 Allowance for Doubtful Accounts 110,568 91,500 708 201,360
1995 Allowance for Doubtful Accounts 27,762 84,060 1,254 101,568
INDEX TO EXHIBITS
EXHIBIT
NO DESCRIPTION
- ------- -----------
3.1 Second Amended and Restated Articles of Incorporation of the Company
(incorporated by reference to the exhibit 3.1 filed with the Company's
Registration Statement filed on Form S-1, File No. 333-18335)
3.2 Second Amended and Restated Bylaws of the Company (incorporated by
reference to the exhibit 3.4 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
4.1 Form of Certificate for Common Stock (incorporated by reference to the
exhibit 4.1 filed with the Company's Registration Statement filed on
Form S-1, File No. 333-18335)
10.1 Form of Warrant to purchase Shares of Common Stock, including
registration rights provisions (incorporated by reference to the
exhibit 10.1 filed with the Company's Registration Statement filed on
Form S-1, File No. 333-18335)
10.2 Form of Promissory Note (May and June 1996) (incorporated by reference
to the exhibit 10.2 filed with the Company's Registration Statement
filed on Form S-1, File No. 333-18335)
10.3 Warrant, dated as of June 19, 1996, between the Company and Brightstone
Capital, Ltd. (incorporated by reference to the exhibit 10.3 filed with
the Company's Registration Statement filed on Form S-1, File No.
333-18335)
10.4 Form of Bridge Loan Agreement (July 1996) (incorporated by reference to
the exhibit 10.4 filed with the Company's Registration Statement filed
on Form S-1, File No. 333-18335)
10.5 Form of Promissory Note (July 1996) (incorporated by reference to the
exhibit 10.5 filed with the Company's Registration Statement filed on
Form S-1, File No. 333-18335)
10.6 Form of Warrant (July 1996) (incorporated by reference to the exhibit
10.6 filed with the Company's Registration Statement filed on Form S-1,
File No. 333-18335)
10.7 Purchase Agreement for Series A Convertible Preferred Stock, dated as
of July 29, 1996, by and between the Company and Network General
Corporation, including registration rights provisions (incorporated by
reference to the exhibit 10.7 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
10.8 Warrant, dated as of July 29, 1996, issued to Network General
Corporation (incorporated by reference to the exhibit 10.8 filed with
the Company's Registration Statement filed on Form S-1, File No.
333-18335)
10.9 Amendment to Bridge Loan Agreement and Promissory Note, dated as of
August 2, 1996, between the Company and Brightbridge Fund I L.P.
(incorporated by reference to the exhibit 10.9 filed with the Company's
Registration Statement filed on Form S-1, File No. 333-18335)
10.10 Form of Bridge Loan Agreement (September 1996) (incorporated by
reference to the exhibit 10.10 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
10.11 Form of Promissory Note (September 1996) (incorporated by reference to
the exhibit 10.11 filed with the Company's Registration Statement filed
on Form S-1, File No. 333-18335)
10.12 Form of Warrant (September 1996) (incorporated by reference to the
exhibit 10.12 filed with the Company's Registration Statement filed on
Form S-1, File No. 333-18335)
10.13 Amendment to Warrant, dated October 15, 1996, between the Company and
Brightstone Capital, Ltd. (incorporated by reference to the exhibit
10.13 filed with the Company's Registration Statement filed on Form
S-1, File No. 333-18335)
10.14 Agreement to Extend Promissory Notes and Amendment to Warrants, dated
as of October 15, 1996, between the Company and Brightstone Fund VI,
Brightstone Fund VII and Brightstone Capital, Ltd. (incorporated by
reference to the exhibit 10.14 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
10.15 Agreement to Extend Promissory Note and Amendment to Warrant, dated as
of October 15, 1996, between the Company and Stephen L. Becher
(incorporated by reference to the exhibit 10.15 filed with the
Company's Registration Statement filed on Form S-1, File No. 333-18335)
10.16 Amendment to Warrant, dated as of October 15, 1996, between the Company
and Brightbridge Fund I L.P. (incorporated by reference to the exhibit
10.16 filed with the Company's Registration Statement filed on Form
S-1, File No. 333-18335)
10.17 Form of Bridge Loan Agreement including registration rights provisions
(December 1996) (incorporated by reference to the exhibit 10.17 filed
with the Company's Registration Statement filed on Form S-1, File No.
333-18335)
10.18 Form of Subordinated Promissory Note (December 1996) (incorporated by
reference to the exhibit 10.18 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
10.19 Form of Warrant (December 1996) (incorporated by reference to the
exhibit 10.19 filed with the Company's Registration Statement filed on
Form S-1, File No. 333-18335)
10.20 Office/Warehouse Lease, dated May 10, 1994, by and between The
Northwestern Mutual Life Insurance Company and the Company
(incorporated by reference to the exhibit 10.20 filed with the
Company's Registration Statement filed on Form S-1, File No. 333-18335)
10.21 Amendment to Lease, dated as of May 22, 1996, between the Company and
The Northwestern Mutual Life Insurance Company (incorporated by
reference to the exhibit 10.21 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
10.22 Lease Agreement dated April 7, 1995, by and between Ronald C. Devine
and the Company (incorporated by reference to the exhibit 10.22 filed
with the Company's Registration Statement filed on Form S-1, File No.
333-18335)
10.23 1994 Long Term Incentive and Stock Option Plan, as amended, including
forms of option agreements (incorporated by reference to the exhibit
10.24 filed with the Company's Registration Statement filed on Form
S-1, File No. 333-18335)
10.24 Directors' Stock Option Plan (incorporated by reference to the exhibit
10.25 filed with the Company's Registration Statement filed on Form
S-1, File No. 333-18335)
10.25 Form of Mutual Confidentiality Agreement for use with third parties
(incorporated by reference to the exhibit 10.26 filed with the
Company's Registration Statement filed on Form S-1, File No. 333-18335)
10.26 Form of Employee Disclosure and Assignment Agreement (incorporated by
reference to the exhibit 10.27 filed with the Company's Registration
Statement filed on Form S-1, File No. 333-18335)
10.27 Form of OEM Agreement (incorporated by reference to the exhibit 10.28
filed with the Company's Registration Statement filed on Form S-1, File
No. 333-18335)
10.28 Form of Sales Representative Agreement (incorporated by reference to
the exhibit 10.29 filed with the Company's Registration Statement filed
on Form S-1, File No. 333-18335)
10.29 Form of System Integrator Agreement (incorporated by reference to the
exhibit 10.30 filed with the Company's Registration Statement filed on
Form S-1, File No. 333-18335)
10.30 Form of Extended Limited Warranty Agreement (incorporated by reference
to the exhibit 10.31 filed with the Company's Registration Statement
filed on Form S-1, File No. 333-18335)
10.31 Lease Agreement, dated November 11, 1996, by and between OMNI
Offices/Woodlawn Hills and the Company (incorporated by reference to
the exhibit 10.32 filed with the Company's Registration Statement filed
on Form S-1, File No. 333-18335)
10.32 Option Agreement, dated as of January 21, 1997, by and between the
Company and David C. Malmberg (incorporated by reference to the exhibit
10.33 filed with the Company's Registration Statement filed on Form
S-1, File No. 333-18335)
10.33 Warrant dated March 25, 1997, issued to R.J. Steichen & Company
(incorporated by reference to the exhibit 10.1 filed with the Company's
Report on Form 10-Q for the fiscal quarter ended April 6, 1997)
10.34 Employment Agreement with Ronald E. Lewis dated September 18, 1997
(incorporated by reference to the exhibit 10.1 filed with the Company's
Report on Form 10-Q for the fiscal quarter ended October 5, 1997)
10.35 Lease Agreement, dated May 16, 1997, by and between CSM Properties,
Inc. and the Company 10.36 Addendum to Lease, dated as of December 30,
1997, between the Company and CSM Properties, Inc.
10.37 Sublease Agreement, dated November 6, 1997, by and between Golf Galaxy
and the Company 10.38 Sublease Agreement, dated December 5, 1997, by
and between LSC, Inc. and the Company 10.39 Sublease Agreement, dated
January 6, 1998, by and between Apartment Search and the Company
11.1 Statement Re Computation of Per Share Earnings
13.1 Portions of the Annual Report to Shareholders for the fiscal year ended
January 4, 1998 expressly incorporated by reference herein
21.1 Subsidiaries of the Company (incorporated by reference to the exhibit
21.1 filed with the Company's Registration Statement filed on Form S-1,
File No. 333-18335)
23.1 Consent of Arthur Andersen LLP
27.1 Financial Data Schedule for the year ended January 4, 1998
27.2 Restated Financial Data Schedule for the nine month period ended
October 5,1997
27.3 Restated Financial Data Schedule for the six month period ended July 6,
1997
27.4 Restated Financial Data Schedule for the three month period ended April
6, 1997
27.5 Restated Financial Data Schedule for the year ended January 5, 1997
27.6 Restated Financial Data Schedule for the year ended December 31, 1995
and nine month period ended September 30, 1996
99.1 Cautionary Statement