Televideo Inc – ‘10-K’ for 10/31/97

As of:  Friday, 2/13/98   ·   For:  10/31/97   ·   Accession #:  1047469-98-5980   ·   File #:  0-11552

in

this entire Filing. an “Entity” Search.

Show

Documents searched

and

each “hit”. the 1st “hit”.

↓↑Hints

Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         40    187K 
 2: EX-21.0     Exhibit 21.0 Subsidiaries                              1      5K 
 3: EX-23.1     Exhibit 23.1 Consent of Grant Thornton                 1      6K 
 4: EX-27       Exhibit 27.1 FDS                                       2      6K 

10-K   —   Annual Report
Document Table of Contents

10-K
1st Page of 40
TOC
↑Top
Previous
Next
↓Bottom
Just 1st
 
   UNITED STATES

    SECURITIES AND EXCHANGE COMMISSION

   WASHINGTON, DC  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:  OCTOBER 31, 1997
                                ----------------

    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:  0-11552
                             -------

   TELEVIDEO, INC.
     -------------------------------------------------
    (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

     DELAWARE                               94-2383795
     -------------------------------         -------------------------------
(STATE OR OTHER JURISDICTION OF                 (IRS EMPLOYER     
INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)

    2345 HARRIS WAY, SAN JOSE, CALIFORNIA  95131
    --------------------------------------------
    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:         (408) 954-8333      
                                                      --------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:      NONE           
                                                      --------------

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:                     

   COMMON STOCK, $0.01 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   
       -----         -----

                                                                           1

10-K
2nd Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 2nd
  THE APPROXIMATE AGGREGATE MARKET VALUE OF REGISTRANT'S COMMON STOCK HELD
BY NON-AFFILIATES ON FEBRUARY 9, 1998 (BASED UPON THE CLOSING SALES PRICE OF    
SUCH STOCK AS REPORTED IN THE NASDAQ NATIONAL MARKET AS OF SUCH DATE) WAS       
$35,553,102.                                                                    

AS OF FEBRUARY 9, 1998, 45,507,970 SHARES OF REGISTRANT'S COMMON STOCK
WERE OUTSTANDING.                                                               

DOCUMENTS INCORPORATED BY REFERENCE                                             

PARTS OF THE DEFINITIVE PROXY STATEMENT FOR REGISTRANT'S 1998 ANNUAL  
MEETING OF STOCKHOLDERS (TO BE HELD APRIL 7, 1998) ARE INCORPORATED BY          
REFERENCE INTO PART III OF THIS REPORT ON FORM 10-K.                            

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.  [ ]                                   

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS                                 

This Prospectus and the Company's Annual Report on Form 10-K for the  
fiscal year ended October 31, 1997, which is incorporated by reference          
herein, include certain statements that may be deemed to be "forward-looking    
statements" within the meaning of Section 27A of the Securities Act and         
Section 21E of the Exchange Act.  All statements, other than statements of      
historical facts, included in this Prospectus that address activities, events   
or developments that the Company expects, believes or anticipates will or may   
occur in the future, including, but not limited to, such matters as future      
product development, business development, marketing arrangements, future       
revenues from contracts, business strategies, expansion and growth of the       
Company's operations and other such matters are forward-looking statements.     
These statements are based on certain assumptions and analyses made by the      
Company in light of its experience and perception of historical trends,         
current conditions, expected future developments and other factors it           
believes are appropriate in the circumstances. Such statements are subject to   
a number of assumptions, risks and uncertainties, including the risk factors    
discussed below, general economic and business conditions, the business         
opportunities (or lack thereof) that may be presented to and pursued by the     
Company, changes in law or regulations and other factors, many of which are     
beyond control of the Company.  Prospective investors are cautioned that any    
such statements are not guarantees of future performance and that actual        
results or developments may differ materially from those projected in the       
forward-looking statements.                                                     

   (Remainder of this page was intentionally left blank)

                                                                           2

10-K
3rd Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 3rd
INTRODUCTORY STATEMENT  

This Report on Form 10-K of TeleVideo, Inc. incorporates by reference,
pursuant to Rule 12b-23 under the general rules and regulations of the          
Securities Exchange Act of 1934, as amended, certain information contained in   
the definitive Proxy Statement to be filed for the Annual Meeting of            
Stockholders to be held on April 7, 1998 (herein the "Proxy Statement").        
References in this Form 10-K to "TeleVideo," the "Registrant" or the            
"Company" refer to TeleVideo, Inc. and its subsidiaries unless the context      
indicates otherwise.  This report contains registered and unregistered          
trademarks of other companies.                                                  

PART I  

ITEM 1.   BUSINESS                                                              

THE COMPANY                                                                     

Founded in 1975, TeleVideo is a market leader providing innovative    
high-end PC and Mac compatible  monitor and terminal display products;          
graphics boards, sound boards and multilingual multimedia upgrade kits. The     
Company markets its products worldwide through distributors, mass merchants,    
retail stores, value-added resellers ("VARs"), systems integrators and          
original equipment manufacturers ("OEMs").                                      

TeleVideo operates in one industry segment.                           

PRODUCTS                                                                        

COMPUTER MONITORS                                                               

Drawing on its heritage, TeleVideo announced in November 1996, two    
premier lines of quality PC and Mac compatible color monitors, the SuperView    
Pro Series and SuperView Series.  These finely crafted monitors allow a         
variety of utilization - home, business, the ever-evolving digital world of     
Internet, DVD, sophisticated point-oriented desktop publishing, CAD/CAM         
applications and more.                                                          

The high quality SuperView Pro Series monitors include the SVP350     
21-inch monitor (19.9" diagonal viewable area), the SVP300 19-inch monitor      
(18.0" diagonal viewable area), the SVP270 17-inch monitor (15.8" diagonal      
viewable area) and the SVP260 17-inch monitor (16.0" diagonal viewable area).   
These monitors feature high resolutions, advanced On Screen Display (OSD)     
and wide range of scanning frequency.  The SVP260, SVP270 and SVP350 monitors   
feature Mitsubishi's award winning Diamondtron Aperture Grille technology       
which delivers flicker-free, sharp, and crystal-clear images for graphic        
designers and engineers for rendering intricate images as in CAD/CAM design     
work.                                                                           

The SVP350 features an Aperture Grille pitch of 0.28mm and a maximum  
resolution of 1600 x 1200 at an exceptional 85Hz refresh rate.  Horizontal      
scanning frequencies range from 30 to 107KHz and vertical frequencies of 50 to  
160Hz.  The SVP270 has an Aperture Grille pitch of 0.25mm and a maximum         
resolution of 1600 x 1200 at 75Hz refresh rate for flicker-free display.  It's  
horizontal scanning frequency range from 30 to 95KHz and vertical frequencies   
from 50 to 160Hz.  The SVP260 features an Aperture Grille pitch of 0.25mm and a 
maximum resolution of 1600 x 1200 at 65Hz refresh rate, rising to a flicker-free
77Hz refresh rate at 1280 x 1024 resolution.  Horizontal scanning frequencies   
are from 24 to 82KHz and vertical frequencies from 50 to 120Hz.                 

                                                                           3

10-K
4th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 4th
The SuperView Series offers affordable, high-capability monitors      
designed primarily for conventional business use, home office, games,           
entertainment and education.  The SV210 17-inch color monitor (16.0" diagonal   
viewable area) is a flat-screen monitor featuring a dot pitch of 0.26mm, a      
maximum resolution of 1280 x 1024 at 65Hz refresh rate, scanning frequencies    
of 30 to 70KHz horizontal and 50 to 120Hz vertical for flicker-free             
operation.  The SV200 17-inch color monitor (16.0" diagonal viewable area)      
features a small footprint with a 0.28mm dot pitch, maximum resolution of       
1280 x 1024 with a 65Hz refresh rate, and scanning frequencies of 30 to 70KHz   
horizontal and 50 to 120Hz vertical for flicker-free display.  The SV100 15"    
(13.8" diagonal viewable area) has a fine 0.28mm dot pitch with resolution      
reaching 1280 x 1024 at 65Hz refresh rate.  All three SuperView Series          
monitors feature Shadow Mask technology producing vivid images needed for a     
full range of applications.                                                     

  All TeleVideo monitors include TELEXPRES (TeleVideo Exchange Program for
Resellers and End-User Service, the most comprehensive "hassle free" 3 year     
warranty and DOA replacement policy in the industry.  All TeleVideo monitors    
come with a 3-year CRT, parts and labor warranty, unlimited technical           
support, BBS and Internet access to customers.  Suggested retail prices range   
from $224 to $1,399.                                                            

  These products collectively accounted for approximately 18% of the total
revenues in fiscal 1997.                                                        

MULTIMEDIA PRODUCTS                                                             

TeleVideo develops and markets an array of video graphics cards, sound
boards and multilingual multimedia kit products for the personal computer       
(PC) market.  The current products include the:                                 

TeleSOUND 3D, a plug-and-play 16-bit sound board for PC audio systems 
and delivers true CD-quality stereophonic sound.  It features 32 polyphony,     
16 MIDI channels, 4 operator, 20-voice FM synthesis, and a General MIDI all     
in one board.  Based on an OPL3 FM synthesis device, the TeleSOUND 3D is        
compatible with existing multimedia sound standards including the Sound         
Blaster Pro, Ad Lib, Windows Sound System, MPU-40, and Windows 3.1 and          
Windows 95.  All kits are MPC compliant.                                        

TeleWAVE Q32/3D featuring surround sound, 32 polyphony, 16 MIDI       
channels, 4 operator, 22-voice FM music synthesizer, a General MIDI and 100     
MIPs DSP wavetable power all in one board.  It provides professional music      
studio quality stereophonic sound of real musical instruments.  Using           
advanced DSP technology, the TeleWAVE Q32/3D allows users to turn their PC      
into a professional PC audio system with 128 general MIDI musical instrument    
sounds.                                                                         

TeleGRAPHICS SX64V+, the next-generation ultra fast graphics and video
accelerator board.  It utilizes a 64-bit graphics engine with unique stream     
processor technology, enhanced 2D graphics acceleration and hardware assisted   
video playback.  Features include 64-bit graphics and video co-processor,       
integrated 24-bit RAM-DAC with 135 MHz output pixel rate and dual clock         
synthesizer for true color (up to 32-bit per pixel) acceleration.  It           
supports high resolution of up to 1600 x 1200 at color depth of 256 and 800 x   
600 with 16.7 million colors.                                                   

The TeleGRAPHICS 3D, a high performance plug-and-play 3D graphics     
accelerator board designed for high resolution true color and multimedia        
capabilities on PC hardware and software platforms.  It features an advanced    
64-bit PCI video graphics accelerator designed to give realistic 3              
dimensional graphics for educational, entertainment and other multimedia        
applications.  This highly advanced video processor with hardware-assisted      
video playback is capable of scaling full-screen MPEG video clips up to 30      
frames-per-second.  It is also capable of full-screen display resolutions up    
to 1600 x 1200 with high picture quality.                                       

TeleVideo also bundles CD-ROM drives with TeleVideo sound boards and  
other multimedia products to meet the needs and requirements of OEMs,           
distributors, Resellers and systems integrators.  CD-ROM bundles are            
configured according to customer needs and requirements.                        

Multimedia products retail from $25 to $190.  These products          
collectively accounted for approximately 35%, 48% and 23% of the total          
revenues in fiscal 1997, 1996 and 1995, respectively.                           

                                                                           4

10-K
5th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 5th
VIDEO DISPLAY TERMINALS                                                         

TeleVideo designs, manufactures, markets and supports a broad range of
industry standard, high performance character-based Windows, Point-of-Sale,     
ASCII, ANSI and PC TERM video display terminals and terminal boxes which        
feature high quality, low flicker, high contrast, high resolution and           
non-glare screens. Current terminal series include:                             

The TeleVideo 9099 color terminal box, a high-performance and low-cost
ASCII, ANSI, PC terminal is designed to meet productivity goals into the 21st   
century.  It features an IBM-compatible keyboard interface for wedge type bar   
code scanners, wand readers, credit card readers, and/or specialized            
keyboards for point-of-sale, bank teller, and similar applications.  The 9099   
also supports standard ANSI color commands and MicroColor (color substitution   
for visual attributes) for legacy software with 64 colors available for both    
foreground and background.  In addition, the 9099 offers increased              
flexibility by allowing user to select any monitor size for particular          
application.                                                                    

The TeleVideo 9089, a high-resolution, color windows terminal box that
provides 64 colors for both foreground and background selections in each of     
the six windows.  The 9089 allow the user to work in multiple applications      
and toggle or copy and paste between the applications in different windows or   
hosts. It also offers flexibility by allowing user to select any monitor size   
for particular application.                                                     

The TeleVideo 9060 high-performance 9-inch display terminal is a      
multi-session, multi-personality terminal with ASCII, ANSI and PC TERM          
operating modes.  It can function as an independent terminal in single or       
dual host computer environments.  It can also connect to light pen, bar code    
scanner and magnetic strip readers for point-of-sale, financial and similar     
applications.                                                                   

The TeleVideo 995 14-inch monochrome AlphaWindow terminal allows the  
user AlphaWindowing capability at a non-windowing price for new or existing     
software applications.  The windows capability provides increased               
productivity for applications running on UNIX.  The 995 also has a power        
management screen saver which protects the environment and promotes energy      
conservation.                                                                   

The TeleVideo 995-65 14-inch terminal is specifically designed to     
address the needs of customers who require a powerful, yet versatile solution   
which can emulate a wide range of industry-standard terminals.  It features     
multi-session, multi-personality emulation of over 34 terminals, and is         
capable of operating as an independent terminal in single or dual-host          
computer environments.                                                          

The TeleVideo 990 terminal is a general purpose terminal with ASCII,  
ANSI and PC TERM operating modes.  For maximum versatility and flexibility,     
the terminal provides a choice of ASCII, AT or DEC style keyboards.  The        
990's mini-DIN keyboard connector permits connection to low-cost industry       
standard wedge type devices.  This allows the user to interface to a bar code   
scanner, wand reader, credit card reader, electronics scale or a variety of     
specialized keyboards for point-of-sale or point-of-transaction processing.     

The video display terminal products retail from $200 to $430.  These  
products collectively accounted for approximately 38%, 34% and 44% of the       
total revenue in fiscal 1997, 1996 and 1995, respectively.                      

COMPUTER ENHANCEMENT PRODUCTS                                                   

The Company, through its OMTI product line, manufactures and markets  
multi-function data storage products for various bus architectures.  These      
products generally retail for $80 to $270, and collectively accounted for       
approximately 4%, 6% and 9% of total revenues in fiscal 1997, 1996 and 1995,    
respectively.                                                                   

                                                                           5

10-K
6th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 6th
PRODUCT DEVELOPMENT                                                             

Markets that TeleVideo serves are characterized by rapid technological
change.  TeleVideo has an ongoing program to develop new products.  The         
Company's research and development staff consists of 7 employees as of          
January 21, 1998.  During fiscal 1997, TeleVideo spent approximately $.8        
million on company-sponsored research and development.  Company-sponsored       
research and development expenses for fiscal 1996 and 1995 were approximately   
$1.1 million and $1.8 million, respectively.  The Company did not engage in     
any customer-sponsored research and development during such years.              

Because of the fast pace of technological advances, particularly for  
multimedia products, the Company must be prepared to design, develop and        
manufacture new and more powerful low-cost products in a relatively short       
time. TeleVideo believes it has had mixed success to date in accomplishing      
these goals simultaneously.  Like other companies in the computer industry,     
it will continue to experience delays in completing new product design and      
tooling.  There is no assurance that the Company will be able to design and     
manufacture new products that respond to the rapid changes in the market        
place.                                                                          

SALES, MARKETING AND CUSTOMERS                                                  

  North American sales are handled from TeleVideo sales offices located in
San Jose, CA; Morristown, New Jersey and Hoffman Estates, Illinois.  Products   
are sold through distributors, mass merchants, retail stores, VARs, systems     
integrators and OEMs.                                                           

Products sold in Europe, Asia Pacific, Africa and Latin America are   
handled by the Company's San Jose, California office through distributors,      
OEMs and international representatives.                                         

TeleVideo distributors generally do not have exclusive geographic     
territories.  Distributor contracts can be terminated by either party without   
cause upon 30 days or 60 days' written notice.  TeleVideo's distributors        
typically handle a variety of computer-related products, including products     
competitive with those of TeleVideo.  The typical distribution arrangement      
requires the distributor to purchase TeleVideo products with certain limited    
stock rotation rights.  Distributors may also exercise price protection         
rights should the Company's product price be reduced.                           

TeleVideo, through its headquarters' marketing and supporting staff,    
plans to continue to work closely with its distributors, mass merchants,        
retail stores, value-added VARs, systems integrators and original OEMs.         
TeleVideo marketing staff also provide the customers with training, sales and   
promotional materials, cooperative advertising programs, trade show             
participation and sales leads.  The marketing organization also lead the        
product marketing role giving direction to product management, direction and    
competitive positioning.  The Company spent approximately 6.6%, 2.4% and 4.6%   
of its revenues on advertising in fiscal 1997, 1996 and 1995, respectively.     

TeleVideo's customers typically purchase the Company's products on an 
as-needed basis.  Therefore, the Company will continue to manufacture its       
products based on sales forecasts and upon customer orders.  As a result of     
this strategy, the Company believes that backlog is not material to its         
business taken as a whole.  The Company's order backlog as of October 31,       
1997 was approximately $1.4 million, as compared with approximately  $2.8       
million at October 31, 1996, and approximately $3.0 million at October 31,      
1995. TeleVideo's order backlog includes orders with a specified delivery       
schedule within twelve months.  Because of the possibility of customer          
changes in delivery schedules or cancellation of orders, which is not           
uncommon in the computer industry, the Company's backlog as of any particular   
date may not be indicative of actual net sales for any succeeding period.       
See "Management's Discussion and Analysis of Financial Condition and Results    
of Operations."                                                                 

                                                                           6

10-K
7th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 7th
TeleVideo's largest customer accounted for approximately 16.6% ($3.3  
million) of net sales in fiscal 1997.  Another customer accounted for 16%       
($3.2 million) of net sales in fiscal 1997.  The Company believes that loss     
of either or both of these customers could  have a material adverse effect on   
the net sales of the Company.                                                   

  TeleVideo's product sales are primarily made for cash, due net 30, 45 or
60 days,  or in the case of some foreign sales, payment by letter of credit     
is required.                                                                    

INTERNATIONAL SALES                                                             

International sales of TeleVideo's products constituted approximately 
$2.7 million (13.7%) of net sales for fiscal 1997, approximately $3.41          
million (15.8%) of net sales for fiscal 1996 and approximately $4.13 million    
(24%) of net sales for fiscal 1995.                                             

TeleVideo's international sales are subject to certain risks common to
non-United States operations, including but not limited to governmental         
regulations, import restrictions and export control regulations, changes in     
demand resulting from fluctuations in exchange rates, as well as risks such     
as tariff regulations.  TeleVideo's international sales are U.S.                
dollar-denominated and, therefore, are not directly subject to international    
currency fluctuations.  The strength of the dollar in relation to certain       
international currencies may, however, adversely affect the Company's sales     
to international customers.                                                     

FOREIGN JOINT VENTURE ACTIVITY                                                  

COMMONWEALTH OF INDEPENDENT STATES                                    

TeleVideo continues to pursue business opportunities in the former    
Soviet Union, now referred to as the Commonwealth of Independent States.        
These may or may not involve sale or production of the Company's products,      
and TeleVideo may invest cash in these ventures.                                

THREE H                                                               

Three H Partners (owned equally by TeleVideo and a Russian entity) was
formed in fiscal 1991 and the initial investment was $16,000.  In July 1996,    
the Company further invested $60,000 in the joint venture.                      

In February 1993, the Company loaned the Three H joint venture $1.0   
million as working capital for the purpose of conducting short term             
commodities trading. The loan was unsecured and bears interest at 20% per       
annum. In fiscal 1994, a total amount of $800,000 was repaid to the Company.    
The remaining balance of $200,000 was received in fiscal 1996.                  

INTERTERMINAL                                                         

In April 1994, the Company acquired a 51% ownership of the            
"InterTerminal" joint venture in exchange for a $5,100 cash investment and a    
commitment to fund a $3.65 million loan, at a 20% interest rate, interest       
free for one year, to the venture. The main purpose of the joint venture was    
the construction of a truck terminal (approximately 100,000 square feet)        
approximately 25 miles outside of Moscow, and the construction was complete     
in early 1995.  TeleVideo sold its 51% ownership in May 1995. The $3.65         
million loan was repaid to the Company in fiscal 1995.  An additional amount    
of $1,369,500 was received and recognized as a gain in fiscal 1996.             

                                                                           7

10-K
8th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 8th
TELEVIDEO-RUS                                                         

In January 1996, TeleVideo set up a company called "TeleVideo-RUS" in 
the Commonwealth of Independent States with an initial investment of            
$150,000.  The main purpose of this company is to act as a liaison between      
TeleVideo and the authorities in the CIS.  One of the projects that the         
Company is anticipating will be the construction of truck terminals similar     
to the "InterTerminal" joint venture.                                           

In October 1997, the Company received $250,000 from the sale of       
TeleVideo-RUS. The Company recognized a $100,000 profit during fiscal 1997.     

RISKS OF OPERATIONS IN THE COMMONWEALTH OF INDEPENDENT STATES         

There are a number of risks involved in TeleVideo's participation in  
foreign joint ventures located in the Commonwealth of Independent States.       
These risks include the ability to execute and enforce the agreements, the      
future regulations governing the repatriation of funds, the political and       
economic instability and the dependence on future events which can influence    
the success or failure of the ventures and, thus, may affect the                
recoverability of the amounts invested by TeleVideo.  Management of the         
Company is aware of the attendant risks relating to these ventures and          
continually monitors the conditions in the CIS and the activities of the        
joint ventures.  Management further believes the investments to be secure and   
thus no reserves were required as of October 31, 1997.  However, there can be   
no assurance that conditions in the CIS will not deteriorate and place the      
Company's investments in jeopardy.                                              

KABIL ELECTRONICS COMPANY, LTD.                                       

The Company owned a 35% interest in Kabil Electronics Company, Ltd. of
South Korea and the total investments were approximately $3.3 million.  Since   
Kabil continued to sustain losses from operations, the Company wrote off its    
investments in fiscal 1990 and fiscal 1993.  In December 1994, the Company      
accepted an offer to sell its 35% interest in Kabil to the majority owners      
for $1.5 million, less expenses, which was paid in installments over the 1995   
and 1996 fiscal years.  Approximately $555,000 was received in fiscal 1995.     
An additional $866,652 was received in January of 1996 and had been accrued     
as income for the year ended October 31, 1995.                                  

TLK, INC.                                                             

In November 1996, the Company invested $150,000 in exchange for a 20% 
ownership in TLK, Inc. for the China Power Plant projects in Lin Zhang, Quin    
Yuan and Henan Provinces in China.  The Company expects to have a return on     
investment within the next twelve months.  However, there can be no assurance   
that this will materialize.                                                     

KORAM, INC.                                                           

On March 3, 1997, the Company deposited $224,820 in escrow in Korea,  
which amount is to be used to purchase a 50% interest in a restaurant venture   
in Seoul, Korea.  The amount deposited has been written down to $109,820 due    
to the devaluation of the Korean won.                                           

                                                                           8

10-K
9th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 9th
COMPETITION                                                                     

TeleVideo believes that brand recognition, product quality,           
availability, extensive standard product features, service and price are        
significant competitive factors in the Company's markets.  In addition to the   
factors listed above, the principal considerations for distributors and         
resellers in determining which products to offer include profit margins,        
immediate delivery, product support and credit terms.  TeleVideo has            
continued and in the future will likely continue to face significant            
competition, with respect to these factors, particularly from the large         
international manufacturers.  Most of these companies have significantly        
greater financial, marketing and technological resources than the Company,      
and may be able to command better terms with their suppliers due to higher      
purchasing volumes.  Therefore, there is no assurance that the Company will     
be able to successfully compete in the future.                                  

PRODUCTION                                                                      

  The Company subcontracts all of the manufacture of its terminal, monitor
and multimedia products to manufacturers in Japan, Taiwan, The People's         
Republic of China and South Korea. TeleVideo does not have any long term        
contracts with its overseas manufacturers.  The testing, inspection and some    
minor assembly work are done at its California headquarters.  The Company       
believes its current manufacturing facilities in California will continue to    
be adequate for its purposes for the foreseeable future.                        

Although for the most part, the Company generally uses standard parts 
and components for its products, certain components are presently available     
and secured only from a single source.  The Company's largest suppliers         
accounted for approximately 25.1% (approximately $3.9 million), 18.8%           
(approximately $2.9 million), 7.9% (approximately $1.2 million) and 4.6%        
(approximately $0.7 million), respectively, of net purchases in fiscal 1997.    
Loss of one of these suppliers might have an adverse effect on the product      
supply of the Company. The Company believes, however, that in most cases,       
alternative sources of supply could be arranged as and when needed by the       
Company.  To date, TeleVideo has not experienced any material difficulties or   
delays in production of its monitor, terminal and multimedia products.          

PRODUCT SERVICE AND WARRANTY                                                    

TeleVideo's products are serviced worldwide primarily by distributors 
and OEMs.                                                                       

  The Company provides end-user customers with a one-year factory warranty
on terminal products and a three-year factory warranty on monitor and           
multimedia products.                                                            

PROPRIETARY RIGHTS                                                              

The Company regards certain aspects of its products as proprietary and
relies upon a combination of trademark and copyright laws, trade secrets,       
confidentiality procedures and contractual provisions to protect its            
proprietary rights.  The Company has registered trademarks in the United        
States and in over 20 foreign countries for "TeleVideo" and the TeleVideo       
logo.                                                                           

                                                                           9

10-K
10th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 10th
The continuing development of the Company's products and business is  
dependent, primarily, on the knowledge and skills of certain of its             
employees. To protect its rights to its proprietary information, the Company    
requires all employees and consultants to enter into confidentiality            
agreements that prohibit the disclosure of confidential information to          
persons unaffiliated with the Company.  There can be no assurance, however,     
that these agreements will provide meaningful protection for the Company's      
technology or other confidential information in the event of any unauthorized   
use or disclosure.  There also can be no assurance that third parties will      
not independently develop products similar to or duplicative of products of     
the Company.  The Company believes that due to the rapid pace of                
technological change in its industry, the Company's success is likely to        
depend more upon continued innovation, technical expertise, marketing skill     
and customer support than on legal protection of the Company's proprietary      
rights.                                                                         

GOVERNMENT REGULATIONS                                                          

  Most of the Company's products are subject to regulations adopted by the
Federal Communications Commission ("FCC"), which establishes radio frequency    
emanation standards for computing equipment.  TeleVideo believes that all of    
the Company's products that are subject to such regulations comply with these   
regulations.  Although there can be no assurance, the Company has no reason     
to believe that new products will not also be approved.  Failure to comply      
with the FCC specifications could preclude the Company from selling             
non-complying systems in the United States until appropriate modifications      
are made.  To date, the Company has not encountered any FCC compliance          
problems.                                                                       

EMPLOYEES                                                                       

 As of January 26, 1998, the Company's full-time employees totaled 47, a
decrease of approximately 19% of the total number of employees (58) reported    
at the end of fiscal 1996.  Of the total number of employees, 23 are engaged    
in product research, engineering, development and manufacturing; 14 in          
marketing and sales; and 10 in general management and administration.   The     
decrease in the number of employees from the 1996 fiscal year end was the       
result of the reorganization of the sales and marketing departments for the     
multimedia products.  As a result, a higher sales volume was achieved with a    
smaller work force.  The Company believes that its future success will          
depend, in part, on its ability to continue to attract and retain highly        
skilled technical, marketing and management personnel.                          

None of the Company's employees is subject to a collective bargaining 
agreement or represented by a union, and the Company has never experienced a    
work stoppage.  The Company believes that its employee relations are good.      

ITEM 2.   PROPERTIES                                                            

 The Company's headquarters, research and development and administrative
operations are housed in a 69,630 square foot building located on 2.5 acres     
in San Jose, California, which is owned by the Company.  The Company's          
operations use approximately 80% of the building.  Management believes these    
facilities will be adequate for its anticipated growth for the foreseeable      
future.                                                                         

  The Company leases a domestic sales office in Hoffman Estates, Illinois.
The lease is on a monthly basis with a monthly rental rate of $716.23.          
Management believes that the Company would be able to secure extension to the   
lease if such extension is deemed necessary in the future.  In May 1997, the    
Company open an eastern regional sales office in Morristown, NJ.  The office    
is currently located at the residence of the employee until such time that an   
appropriate site is located.  During fiscal 1997, the Company closed its        
domestic sales office in Newport Beach, California.                             

                                                                            10

10-K
11th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 11th
ITEM 3.   LEGAL AND OTHER PROCEEDINGS                                           

TAX AUDITS                                                            

On July 14, 1977, the State of Massachusetts issued a certificate of  
withdrawal to do business in the state to the Company.  Consequently,           
$250,000 was removed from deferred taxes and was recognized as other income.    
The only issue pending is the California Franchise Tax exposure resulting       
from the previous Federal Income Tax audits.  The Company believes that a       
resolution of this audit could occur in fiscal 1998 and its maximum exposure    
will not exceed $350,000.  The Company has accrued this full amount at          
October 31, 1997.                                                               

OTHER LEGAL PROCEEDINGS                                               

The Company has been named, along with dozens of other manufacturers, 
designers, and distributors of computer equipment, as a defendant in several    
lawsuits regarding product liability in connection with the alleged defective   
design of computer terminal keyboards and the size of the computer monitor      
screens.  The first issue alleges that the various plaintiffs have suffered     
some form of severe wrist injury from the use of these keyboards.  The second   
issue alleges that there was false advertising which claimed that the video     
screens were 17 inches in size, when in reality they were only 15 inches.       
The Company's attorneys have prepared a defense for these cases and the         
Company's insurance carriers are informed of the plaintiffs' claims.  The       
Company intends to vigorously defend against the allegations of these suits.    
Management believes that the ultimate outcome of these lawsuits will not have   
a material adverse effect on the Company's financial position.                  

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                   

No matters were submitted to a vote of security holders during the    
fourth quarter of fiscal 1997.                                                  

   PART II

ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER     
MATTERS                                                     

 The Company's Common Stock is traded in the over-the-counter market and
prices are quoted on the Nasdaq National Market under the symbol "TELV."  The   
following table sets forth for the periods indicated the high and low last      
sales prices for the Common Stock as reported by Nasdaq.  The prices quoted     
below reflect inter-dealer prices, without retail mark-ups, mark-downs or       
commissions and may not necessarily represent actual transactions.              

                                                                [Download Table]


FISCAL 1996:              High        Low  
                         -------   --------
                                           
     First Quarter       $0.7500   $ 0.6563
     Second Quarter       0.6250     0.5000
     Third Quarter        0.5000     0.4688
     Fourth Quarter       0.4375    0.40631

FISCAL 1997:                               

     First Quarter       $0.5625   $0.3438 
     Second Quarter       0.4375    0.2188 
     Third Quarter        0.4688    0.2813 
     Fourth Quarter       1.0313    0.3125 


                                                                            11

10-K
12th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 12th
There were 2,645 holders of record of the Company's Common Stock at   
February 9, 1998.                                                               

 On February 9, 1998, the closing price of the Company's Common Stock in
the over-the-counter market, as reported on the Nasdaq National Market, was     
$0.78125 per share.  The Company expects to effect a 4-for-1 reverse stock      
split of its outstanding common stock during February 1998 in order to meet     
the Nasdaq National Market maintenance criteria.  Stock prices after the        
effective date of the reverse split will reflect the reverse stock split.       

The Company has never paid cash dividends on its Common Stock and does
not anticipate paying cash dividends in the foreseeable future.  The Company    
presently intends to retain any earnings for use in its business.               

ITEM 6.   SELECTED FINANCIAL DATA                                               

  The following selected financial data reflects the continuing operations
of TeleVideo.  The data below has been derived from the Company's audited       
consolidated financial statements for the fiscal years presented and should     
be read in conjunction with such audited financial statements and               
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations" presented elsewhere herein.                                         

                                                        [Enlarge/Download Table]


                    (IN THOUSANDS, EXCEPT PER SHARE DATA)                                                            

                                                                      Year Ended October 31,                         
                                              -----------------------------------------------------------------------
                                                 1997           1996           1995           1994           1993    
                                              -----------    -----------     ----------     --------      -----------
                                                                                                                     
STATEMENT OF OPERATIONS DATA:                                                                                        

Net sales                                     $19,884        $21,576         $16,914        $13,232       $15,251    
   Income (loss) from continuing                                                                                     
      operations                               (3,294)(4)     (2,917)(3)         415(2)        (907)       (9,618)(1)

Net income (loss)                              (3,294)(4)     (2,917)(3)         415(2)        (907)       (9,618)(1)
   Income (loss) from continuing                                                                                     
      operations (per share)                    (0.07)         (0.06)           0.01          (0.02)        (0.22)   
   Net income (loss) (per share)                (0.07)         (0.06)           0.01          (0.02)        (0.22)   

BALANCE SHEET DATA:                                                                                                  

Cash and cash equivalents                     $ 3,604        $ 4,496          $5,145        $ 2,131       $ 3,148    
Working capital                                 9,207         15,239          13,035          7,246         8,479    
Total assets                                   17,918         23,090          24,600         26,045        26,479    
Stockholders' equity                           15,287         18,544          21,345         20,832        21,738    


                                                                            12

10-K
13th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 13th
See "Management's Discussion and Analysis of Financial Condition and      
Results of Operations" and Note 2 of Notes to Consolidated Financial            
Statements for a discussion of operating results, liquidity needs and           
acquisitions and dispositions during the periods.                               

     (1)   Including a charge of $9,531,000 to write down the cost of property
to estimated fair market value.                         

(2)   Includes net gains (loss) from the following (in thousands):  

                                                                [Download Table]

                                                                  
(A)   Sale of building                                     $1,350 
(B)   Disposition of Russian joint venture interest         1,910 
(C)   Sale of interest in Kabil Electronics                 1,422 
(D)   Disposal of SMS product line                           (346)
                                                           ------ 
                                                           $4,336 
                                                           ------ 
                                                           ------ 

(3) Includes net gain from the sale of InterTerminal joint venture  
interest of $1,370,000.                                     

(4) Includes net gains (loss) from the following (in thousands):    

                                                                [Download Table]

                                                                  
(A)   Loss from investment in APT venture                 $  (623)
(B)   Gain from Russian investment                            100 
(C)   Gain from tax settlement                                250 
(D)   Korean currency valuation adjustment                   (115)
                                                          ------- 
                                                          $  (388)
                                                          ------- 
                                                          ------- 

                                                                            13

10-K
14th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 14th
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS                                                 

This Report contains forward-looking statements within the meaning of     
Section 27A of the Securities Act of 1933 and Section 21E of the Securities     
Exchange Act of 1934.  The forward-looking statements contained herein are      
based on current expectations, and actual results may differ materially.        
Factors that might cause such differences include, but are not limited to,      
those discussed under "Factors that may Affect Future Results," below.          

GENERAL                                                                         

The Company completely phased-out its personal computer product line in   
fiscal year 1993 and focused its resources on the terminal and multimedia       
product lines.  In November 1996, the Company announced its entry into the      
computer monitors market.  Efforts continued to expand in the development of    
new multimedia products and upgrade kits in fiscal 1996.  Results in fiscal     
1997 were additionally impacted by a continued shift in product mix, with the   
Company's multimedia and terminal products contributing approximately 72% of    
the total sales.                                                                

The Company has reduced its marketing and sales force from 21 employees at
October 31, 1996 to 15 employees at October 31, 1997, primarily the result of   
its continuing effort to reduce operating costs and to improve operating        
efficiency.  In order to lower the production costs, the Company has            
continued to negotiate with its suppliers and has also shifted its production   
process from in-house to overseas manufacturing.                                

RESULTS OF OPERATIONS                                                           

FISCAL 1997 COMPARED TO FISCAL 1996                                       

Net sales for fiscal year 1997 were approximately $19.88 million, a       
decrease of approximately 7.8% from approximately $21.58 million in net sales   
reported in fiscal 1996.  The decrease in net sales in fiscal 1997 was mainly   
due to the decrease in the sale of multimedia products from approximately       
$10.35 million in 1996 to approximately $6.5 million in 1997, a decrease of     
$3.85 million or 37.2%.  However, the launching of computer monitor products    
starting in November 1996 offset the decrease in multimedia sales.  Computer    
monitor sales for fiscal 1997 were approximately $3.55 million or 17.9% of      
net sales.                                                                      

Cost of sales decreased from approximately $20.63 million in fiscal 1996  
to approximately $17.79 million in fiscal 1997, resulting in a decrease in      
the percentage of sales from approximately 95.6% to 89.4% during the same       
period. The percentage decrease in cost of sales and the corresponding          
increase in gross margin in fiscal 1997 (an increase from approximately 4.4%    
to 10.6%) were primarily the results of lower multimedia sales which            
historically has a lower profit margin.                                         

Inventory reserves were decreased by approximately $140,000 for fiscal    
1997. The Company reduced the reserve during the year by $519,000 reflecting    
reductions in ending reserved inventory and increased the reserve by $379,000   
reflecting additional charges to cost of goods sold for obsolete and slow       
moving inventory.                                                               

Manufacturing expenses increased from $1,150,000 in fiscal 1996 to        
$1,263,000 in fiscal 1997, an increase of $113,000 or 9.8%.  The increase was   
mainly due to the increase in depreciation of production equipment and          
outside consulting.                                                             

Marketing expenses increased as a percentage of sales in fiscal 1997 from 
approximately 11.3% in fiscal 1996 to 15.1% in fiscal 1997, while actual        
expenses also increased from $2.4 million in fiscal 1996 to $3.0 million in     
1997, a 23.3% increase.  The increase in marketing expenses was due primarily   
to the increase in advertising expenses incurred in connection with the         
launching of high-end PC and Mac compatible monitor introduced in fiscal 1997   
and an increase in outside consulting.  These increases were offset by          
reductions in other expense categories.                                         

                                                                          14

10-K
15th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 15th
Research and development expenses decreased as a percentage of sales from 
approximately 5.1% in fiscal 1996 to 3.8% in fiscal 1997, while actual          
research and development expenses also decreased from $1.1 million in fiscal    
1996 to $0.8 million in fiscal 1997, a 30.5% decrease.  The decrease in         
actual expenses was due mainly to the further reduction in employee headcount   
from 7 in fiscal 1996 to 5 in fiscal 1997.                                      

General and administrative expenses decreased as a percentage of sales    
from approximately 9.6% in fiscal 1996 to approximately 7.8% in fiscal 1997,    
while actual expenses also decreased from $2.1 million in fiscal 1996           
compared to $1.55 million in fiscal 1997, a 26% decrease.  The decrease was     
due primarily to the reduction in the provision for doubtful accounts from      
$760,000 in 1996 to $292,500 in 1997.                                           

The loss from operations reported in fiscal 1997 decreased approximately  
$1.4 million or approximately 30.7%, from $4.6 million in fiscal 1996 to $3.2   
million in fiscal 1997.  The decrease was due primarily to the decrease in      
cost of sales and to the decrease in operating expenses in research and         
development and general and administration, partially offset by the increase    
in sales and marketing due to the increase in advertising expense.              

The Company recognized a net gain from the sale of TeleVideo-RUS in the   
amount of $100,000 in fiscal 1997.  A loss of $390,000 is also recognized       
representing 30% equity interest in Advanced Photonics Technology, Inc. and     
$115,000 due to currency devaluation of the Korean won in the Company           
investment with Koram.                                                          

Interest income earned in fiscal 1997 decreased from $697,000 in fiscal   
1996 to $410,000 in fiscal 1996, a 41.2% decrease compared to prior year.       
The decrease was primarily due to lower cash level in 1997 than in 1996.        

Net loss for fiscal year 1997 was approximately $3.3 million, compared    
with $2.9 million net loss for fiscal 1996.  The loss in fiscal 1997 was a      
result of the various factors noted above.                                      

Net loss per share in fiscal 1997 was $0.07 based on 45,420,308 weighted  
average shares outstanding, compared to a net loss per share in fiscal 1996     
of $0.06 based on 45,328,368 weighted average shares outstanding.               

No income tax expense or credit was provided for in fiscal 1997.  The     
Company has approximately $89.9 million in federal net operating loss and       
credit carryovers and approximately $27.4 million in state net operating loss   
carryovers to offset future federal and state corporate income tax              
liabilities. No net deferred tax asset has been recognized by the Company for   
any future tax benefit to be provided from the loss carry forwards since        
realization of any such benefit is not assured.                                 

FISCAL 1996 COMPARED TO FISCAL 1995                                       

Net sales for fiscal 1996 were approximately $21.58 million, or an        
increase of approximately 27.6% from the approximately $16.91 million in net    
sales reported in fiscal 1995.   The increase in net sales in fiscal 1996 was   
principally generated from the sale of the multimedia products (approximately   
$10.35 million) which accounted for approximately 48% of the total sales        
revenue in fiscal 1996, compared to approximately 23% and 0.2% of total sales   
revenue in fiscal 1995 and 1994, respectively.                                  

Cost of sales increased from approximately $14.77 million in fiscal 1995  
to approximately $20.63 million in fiscal 1996, and increased as a percentage   
of sales from approximately 87.3% to approximately 95.6% during the same        
period. The percentage increase in cost of sales and the corresponding          
decrease in gross margins in fiscal 1996 (a decrease from approximately 12.7%   
to 4.4%) were primarily the results of the lower profit margin and intensive    
price competition on multimedia products, a trend that the Company expects to   
continue, coupled with the increase in the inventory reserve on multimedia      
inventory noted below.                                                          

                                                                          15

10-K
16th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 16th
Inventory reserves were increased in the aggregate by $50,000 for fiscal  
1996.  The increase resulted from the Company scrapping approximately           
$868,000 of fully reserved inventory during the year (which reduced the         
inventory reserve on a dollar for dollar basis, resulting in no net impact on   
cost of sales), and at the same time, recording an additional reserve of        
$918,000 in the fourth quarter of fiscal 1996 to cover existing inventory on    
hand at year end.  The additional reserve increased cost of goods sold by a     
like amount.                                                                    

Manufacturing expenses increased from $1,098,000 in fiscal 1995 to        
$1,151,000 in fiscal 1996, an increase of $53,000 (approximately 4.8%) from     
the prior year. The increase was primarily due to the increase in the actual    
compensation expense from $667,000 in fiscal 1995 to $789,000 in fiscal 1996,   
an increase of $122,000 (approximately 18.3%) from the prior year while the     
workforce for manufacturing, assembling and inspecting remained at the same     
level of 18 employees for both years.  This increase was offset by              
miscellaneous reductions in other expense categories.                           

Marketing expenses decreased as a percentage of sales in fiscal 1996 from 
approximately 18.8% in fiscal 1995 to 11.3% in fiscal 1996, while actual        
marketing expenses decreased from $3.2 million in fiscal 1995 to $2.4 million   
in fiscal 1996, a decrease of 23.8% from the prior year.  The decrease in       
marketing expenses was due primarily to decreased expenditures resulting from   
the decrease in employee staffing levels and purchased services and             
advertising expenses. The number of sales and marketing employees decreased     
from 27 in fiscal 1995 to 21 in fiscal 1996, while actual compensation          
expense decreased from $1.84 million in fiscal 1995 to $1.44 million in         
fiscal 1996.  Total advertising expense decreased from $0.79 million in         
fiscal 1995 to $0.52 million in fiscal 1996.                                    

Research and development expenses decreased as a percentage of sales from 
approximately 10.8% in fiscal 1995 to 5.1% in fiscal 1996, while actual         
research and development expenses decreased from $1.8 million in fiscal 1995    
to $1.1 million in fiscal 1996, a decrease of 39.8% from the fiscal 1995        
levels.  The decrease in actual research and development expenses in fiscal     
1996 compared to the same period in the prior year was primarily a result of    
the decrease in employee staffing levels from 14 in fiscal 1995 to 7 in         
fiscal 1996 while actual compensation expense decreased from $1.2 million in    
fiscal 1995 to $0.8 million in fiscal 1996.                                     

General and administrative expenses decreased as a percentage of sales    
from approximately 11.1% in fiscal 1995 to 9.6% in fiscal 1996, while actual    
expenses increased from $1.9 million in fiscal 1995 to $2.1 million in fiscal   
1996, an increase of 9.9% from fiscal 1995 levels.  The higher expense level    
in fiscal 1996 was primarily due to the increase in the reserve for accounts    
and notes receivable of approximately $760,000 in the fourth quarter of         
fiscal 1996.                                                                    

The loss from operations reported in fiscal 1996 decreased approximately  
2.2%, from $4.7 million in fiscal 1995 to $4.6 million in fiscal 1996.  This    
decrease was primarily due to the decrease in operating expenses but was        
partially offset by the increase in cost of sales of multimedia products and    
the decrease in the net sales of the terminal and other computer enhancement    
products which historically provide higher profit margins.                      

The Company recognized a net gain from the sale of InterTerminal joint    
venture interest of $1,370,000 in fiscal 1996 which offset the loss from        
operations.                                                                     

Interest income earned in fiscal 1996 decreased from $810,000 in fiscal   
1995 to $697,000 in fiscal 1996, a 14.0% decrease from the prior year.  Such    
decrease was primarily due to the lower cash levels and the retirement of       
various notes receivable principally with respect to joint venture activities   
in the Commonwealth of Independent States.                                      

Net loss for the fiscal year of 1996 was approximately $2.9 million,      
compared with a net gain of $0.4 million in fiscal 1995.  The loss in fiscal    
1996 was a result of the various factors noted above.                           

                                                                          16

10-K
17th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 17th
As a result of the foregoing, net loss per share in fiscal 1996 was $0.06,
based on 45,328,368 weighted average shares outstanding, compared to a net      
income per share in fiscal 1995 of $0.01, based on 44,878,339 weighted          
average shares outstanding.                                                     

No income tax expense or credit was provided for in fiscal 1996.  The     
Company has approximately $86 million in federal net operating loss and         
credit carryovers and approximately $26 million in state net operating loss     
carryovers to offset future federal and state corporate income tax              
liabilities.  No net deferred tax asset has been recognized by the Company      
for any future tax benefit to be provided from the loss carry forwards since    
realization of any such benefit is not assured.                                 

Inflation had no significant impact on the Company's business or results  
of operations.                                                                  

LIQUIDITY AND CAPITAL RESOURCES                                                 

Cash and cash equivalents totaled approximately $3.6 million at October   
31, 1997, down $892,000 (approximately 19.8%) from fiscal 1996 year-end         
levels of $4.5 million.  The decrease in the cash and cash equivalents          
resulted primarily from the net cash used in operating activities of            
$1,750,000 while partially offset by the net cash provided by investing         
activities of $820,000.                                                         

Approximately $3.0 million in certificates of deposit were pledged as     
collateral for comparable amounts of stand-by and sight letters of credit       
under the letter of credit agreements as of the end of fiscal 1997.  At         
October 31, 1997, the Company had approximately $1.1 million in outstanding     
letters of credit which were secured by the pledged deposits under this         
agreement.                                                                      

Net accounts receivable of $4.2 million at the end of fiscal 1997 were    
down approximately 4.6% from the 1996 year-end level of $4.39 million.  Days    
sales outstanding in accounts receivable decreased from 89 days in fiscal       
1996 to 72 days in fiscal 1997.                                                 

Net inventories of approximately $2.92 million at the end of fiscal 1997  
were down approximately 50% from the 1996 year-end level of $5.83 million.      

Working capital at the end of fiscal 1997 was approximately $9.2 million, 
down approximately 39.6% from the fiscal 1996 year-end level of approximately   
$15.2 million.                                                                  

At the current consumption rate, the Company's cash balance of            
approximately $3.6 million at October 31, 1997 (which includes $3.0 million     
pledged as security for stand-by and sight letters of credit) was anticipated   
to be adequate to fund the Company's fiscal 1998 operations at projected        
levels.                                                                         

FACTORS THAT MAY AFFECT FUTURE RESULTS                                          

The terminal, monitor and multimedia product markets are intensely        
competitive.  The principal elements of competition are pricing, product        
quality and reliability, price/performance characteristics, compatibility,      
marketing and distribution capability, service and support, and reputation of   
the manufacturer.  TeleVideo competes with a large number of manufacturers,     
most of which have significantly greater financial, marketing and               
technological resources than TeleVideo.  There can be no assurance that the     
Company will be able to continue to compete effectively.                        

                                                                          17

10-K
18th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 18th
The Company markets its products worldwide.  In addition, a large portion 
of the Company's part and component manufacturing, along with key suppliers,    
are located outside the United States.  Accordingly, the Company's future       
results could be adversely affected by a variety of factors, including          
without limitation, fluctuation in foreign currency exchange rates, changes     
in a specific country's or region's political or economic conditions, trade     
protection measures, import or export licensing requirements, unexpected        
changes in regulatory requirements and natural disasters.                       

The computer market, particularly the multimedia product market, is       
characterized by rapid technological change and product obsolescence, often     
resulting in short product life cycles and rapid price declines.  The           
Company's success will continue to depend primarily on its ability to           
continue to reduce costs through manufacturing efficiencies and price           
negotiation with suppliers, the continued market acceptance of its existing     
products and its ability to develop and introduce new products.  There can be   
no assurance that TeleVideo will successfully develop new products or that      
the new products it develops will be introduced in a timely manner and          
receive substantial market acceptance. There can also be no assurance that      
product transitions will be managed in such a way to minimize inventory         
levels and product obsolescence of discontinued products.  The Company's        
operating results could be adversely affected if TeleVideo is unable to         
manage all aspects of product transitions successfully.                         

The Company generally utilizes standard parts and components available    
from multiple suppliers.  However, certain parts and components used in the     
Company's products are available from a single source.  If, contrary to its     
expectations, the Company is unable to obtain sufficient quantities of any      
single-sourced components, the Company will experience delays in product        
shipments.                                                                      

The Company offers its products through various channels of distribution. 
Changes in the financial condition of, or in the Company's relationship with,   
its distributors could cause actual operating results to vary from those        
expected. Also, the Company's customers generally order products on an          
as-needed basis. Therefore, virtually all product shipments in a given fiscal   
quarter result from orders received in that quarter. The Company anticipates    
that the rate of new orders will vary significantly from month to month. The    
Company's manufacturing plans and expenditure levels are based primarily on     
sales forecasts. Consequently, if anticipated sales and shipments in any        
quarter do not occur when expected, expenditure and inventory levels could be   
disproportionately high and the Company's operating results for that quarter,   
and potentially future quarters, would be adversely affected.                   

The market price of TeleVideo's common stock could be subject to          
fluctuations in response to quarter to quarter variations in operating          
results, changes in analysts' earnings estimates, market conditions in the      
computer technology industry, as well as general economic conditions and        
other factors external to the Company.                                          

SUBSEQUENT EVENTS                                                               

None.                                                                     

                                                                          18

10-K
19th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 19th
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.                           

                                                                [Download Table]


                                                                      PAGE NO.
                                                                      IN 10-K 
                                                                      --------
                                                                              
Report of Independent Certified Public Accountants...................    20   

Consolidated Balance Sheets - October 31, 1997 and 1996..............    21   

Consolidated Statements of Operations for the Years Ended                     
October 31, 1997, 1996 and 1995......................................    22   

Consolidated Statement of Stockholders' Equity for the Years                  
Ended October 31, 1997, 1996 and 1995................................    23   

Consolidated Statements of Cash Flows for the Years Ended                     
October 31, 1997, 1996 and 1995......................................    24   

Notes to Consolidated Financial Statements...........................    25   

(Remainder of page left blank intentionally)  

                                                                          19

10-K
20th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 20th
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS    

Board of Directors                                                              
TeleVideo, Inc.                                                                 

We have audited the accompanying consolidated balance sheets of TeleVideo,      
Inc. and Subsidiaries as of October 31, 1997 and 1996, and the related          
consolidated statements of operations, stockholders' equity, and cash flows     
for each of the three years in the period ended October 31, 1997.  These        
financial statements are the responsibility of the Company's management.  Our   
responsibility is to express an opinion on these financial statements based     
on our audits.                                                                  

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit to       
obtain reasonable assurance about whether the financial statements are free     
of material misstatement.  An audit includes examining, on a test basis,        
evidence supporting the amounts and disclosures in the financial statements.    
An audit also includes assessing the accounting principles used and             
significant estimates made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the consolidated financial position of TeleVideo, Inc.   
and Subsidiaries as of October 31, 1997 and 1996, and the consolidated          
results of their operations and their consolidated cash flows for each of the   
three years in the period ended October 31, 1997, in conformity with            
generally accepted accounting principles.                                       

/s/ GRANT THORNTON LLP                                                          
-------------------------                                                       
Grant Thornton LLP                                                      

San Jose, California                                                            
February 3, 1998                                                                

                                                                          20

10-K
21st Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 21st
   TELEVIDEO, INC.

   CONSOLIDATED BALANCE SHEETS
    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]


                                                                         October 31,      
                                                                    ----------------------
                                                                      1997          1996  
                                                                    --------      --------
                                                                                          
                                ASSETS                                                    
CURRENT ASSETS:                                                                           
   Cash and cash equivalents (including restricted cash of                                
      $3,000 in 1997 and $2,500 in 1996)                           $ 3,604        $ 4,496 
   Accounts receivable, less allowance of $438 in                                         
      1997 and $891 in 1996                                          4,191          4,394 
   Inventories                                                       2,923          5,834 
   Prepayments and other                                               220             62 
   Loan receivable from major customer                                 900             -- 
   Note receivable from sale of building                                --          5,000 
                                                                    ------         ------ 
      Total current assets                                          11,838         19,786 
                                                                    ------         ------ 

PROPERTY, PLANT AND EQUIPMENT:                                                            
   Land                                                                890            890 
   Building                                                          1,035          1,035 
   Production equipment                                                524          1,263 
   Office furniture and equipment                                    1,140          1,753 
   Building improvements                                             1,105          1,105 
                                                                    ------         ------ 
                                                                     4,694          6,046 
   Less accumulated depreciation and amortization                    1,934          2,968 
                                                                    ------         ------ 
            Property, plant and equipment, net                       2,760          3,078 

Long term receivable from major customer                               608             -- 

INVESTMENTS IN AFFILIATES                                            2,712            226 
                                                                    ------         ------ 

            Total assets                                           $17,918        $23,090 
                                                                    ------         ------ 
                                                                    ------         ------ 

                             LIABILITIES AND STOCKHOLDERS' EQUITY                         
CURRENT LIABILITIES:                                                                      
   Accounts payable                                                $ 1,539        $ 3,080 
   Accrued liabilities                                                 730            855 
   Income taxes                                                        361            611 
                                                                    ------         ------ 
            Total current liabilities                                2,630          4,546 
                                                                    ------         ------ 

STOCKHOLDERS' EQUITY:                                                                     
   Common stock, $.01 par value;                                                          
      Authorized--75,000,000 shares                                                       
      Outstanding--45,500,370 shares in 1997 and 45,402,245                               
         shares in 1996                                                455            454 
   Additional paid-in capital                                       95,671         95,634 
      Accumulated deficit                                          (80,838)       (77,544)
                                                                    ------         ------ 
            Total stockholders' equity                              15,288         18,544 
                                                                    ------         ------ 
            Total liabilities and stockholders' equity             $17,918        $23,090 
                                                                    ------         ------ 
                                                                    ------         ------ 

    The accompanying notes are an integral part of these financial statements.

                                                                              21

10-K
22nd Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 22nd
   TELEVIDEO, INC.

   CONSOLIDATED STATEMENTS OF OPERATIONS
    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                                [Download Table]


                                               Year Ended October 31,       
                                      --------------------------------------
                                         1997          1996           1995  
                                      ---------      --------       --------
                                                                            
NET SALES                             $19,884        $21,576        $16,914 

COST OF SALES                          17,785         20,627         14,773 
                                      -------        -------        ------- 

GROSS PROFIT                            2,099            949          2,141 

OPERATING EXPENSES:                                                         
   Marketing                            2,995          2,428          3,185 
   Research and development               762          1,097          1,821 
   General and administration           1,557          2,062          1,876 
                                      -------        -------        ------- 

            Total operating expenses    5,314          5,587          6,882 
                                      -------        -------        ------- 

            Loss from operations       (3,215)        (4,638)        (4,741)

GAIN ON SALE OF BUILDING                   --             --          1,350 

GAIN ON SALES OF INVESTMENTS IN                                             
   UNCONSOLIDATED AFFILIATES               --          1,369          3,329 

LOSS FROM SALE OF SMS PRODUCT LINE         --             --           (346)

EQUITY IN LOSS OF AFFILIATE              (638)           (33)            -- 

INTEREST AND OTHER INCOME, net            559            385            823 
                                      -------        -------        ------- 

            Net income (loss)         $(3,294)       $(2,917)       $   415 
                                      -------        -------        ------- 
                                      -------        -------        ------- 

Net income (loss) per share           $ (0.07)       $ (0.06)       $  0.01 
                                      -------        -------        ------- 
                                      -------        -------        ------- 

Weighted average shares outstanding    45,420         45,328         44,878 
                                      -------        -------        ------- 
                                      -------        -------        ------- 


    The accompanying notes are an integral part of these financial statements.

                                                                          22

10-K
23rd Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 23rd
   TELEVIDEO, INC.

    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
    (IN THOUSANDS)

                                                        [Enlarge/Download Table]


                                  THREE YEARS ENDED                                                                   
                                   OCTOBER 31, 1997                                                                   

                                                  Common Stock     Additional                                 Total   
                                              -------------------   Paid in      Other     (Accumulated  Stockholders'
                                               Shares     Amount    Capital    Adjustment    Deficit)        Equity   
                                              --------   --------  ----------  ----------  ------------  -------------
                                                                                                                      
Balance - October 31, 1994                     44,641     $ 446     $ 95,428     $  --      $ (75,042)      $ 20,832  

  Unrealized loss from marketable securities       --        --           --       (39)            --            (39) 

  Exercise of employee stock options              507         5          132        --             --            137  

  Net income                                       --        --           --        --            415            415  
                                               ------     -----     --------     -----      ---------       --------  

Balance - October 31, 1995                     45,148       451       95,560       (39)       (74,627)        21,345  

  Unrealized gain from marketable securities       --        --           --        39             --             39  

  Exercise of employee stock options              254         3           74        --             --             77  

  Net loss                                         --        --           --        --         (2,917)        (2,917) 
                                               ------     -----     --------     -----      ---------       --------  

Balance - October 31, 1996                     45,402       454       95,634        --        (77,544)        18,544  

  Exercise of employee stock options               98         1           37        --             --             38  

  Net loss                                         --        --           --        --         (3,294)        (3,294) 
                                               ------     -----     --------     -----      ---------       --------  

Balance - October 31, 1997                     45,500     $ 455     $ 95,671     $  --      $ (80,838)      $ 15,288  
                                               ------     -----     --------     -----      ---------       --------  
                                               ------     -----     --------     -----      ---------       --------  

    The accompanying notes are an integral part of this financial statement.

                                                                            23

10-K
24th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 24th
   TELEVIDEO, INC.

   CONSOLIDATED STATEMENTS OF CASH FLOWS
    (IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                          Year Ended October 31,         
                                                                   --------------------------------------
                                                                     1997           1996           1995  
                                                                   --------       --------       --------
                                                                                                         
INCREASE (DECREASE) IN CASH:                                                                             
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                    
   Net Income (Loss)                                               $(3,294)       $(2,917)          $415 
      Charges (credits) to operations not affecting cash:                                                
         Provision for bad debts                                      (293)           410            383 
         Provision for excess and obsolete inventories                (379)            50            610 
         Net loss (gain) on sales of property and investment            12             44         (1,350)
         Loss on investment in unconsolidated affiliates               738             --             -- 
         Depreciation and amortization                                 362            275            320 
         Interest income accrued                                        --             --            (77)
         Accrued profit on sale of foreign investment                   --             --           (866)
         Loss on write off of foreign investments and loans             --             95            403 
         Income tax settlement                                        (250)            --             -- 
      Changes in operating assets and liabilities:                                                       
         Accounts receivable                                          (111)        (1,211)        (1,810)
         Inventories                                                 3,290           (149)          (588)
         Prepayment and other                                         (159)           274           (128)
         Accounts payable                                           (1,540)         1,418            299 
         Accrued liabilities                                          (126)          (126)          (257)
                                                                   --------       --------       --------
           Net cash used in operating activities                    (1,750)        (1,837)        (2,646)
                                                                   --------       --------       --------
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                    
   Additions to property, plant and equipment                          (55)           (98)         3,286)
   Reduction (investment) in marketable securities                      --             35            (11)
   Loans to affiliate and other                                     (2,300)            --           (184)
   Reduction (increase) in investments in affiliates                (3,225)          (205)           187 
   Payments received on notes receivable from affiliate and other    6,400            513          3,321 
   Proceeds from sales of property and investment                       --            866          5,496 
                                                                   --------       --------       --------
           Net cash provided by investing activities                   820          1,111          5,523 
                                                                   --------       --------       --------
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                    
   Proceeds from issuance of common stock                               38             77            137 
                                                                   --------       --------       --------
           Net cash provided by financing activities                    38             77            137 
                                                                   --------       --------       --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      (892)          (649)         3,014 

CASH AND CASH EQUIVALENTS AT THE BEGINNING                                                               
   OF THE YEAR                                                       4,496          5,145          2,131 
                                                                   --------       --------       --------
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR                    $3,604         $4,496         $5,145 
                                                                   --------       --------       --------
                                                                   --------       --------       --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                                                        
   Cash paid during the year for:                                                                        
      Income taxes                                                   $  --         $   --         $   -- 

    The accompanying notes are an integral part of these financial statements.

                                                                          24

10-K
25th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 25th
   TELEVIDEO, INC.

    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   OCTOBER 31, 1997, 1996 AND 1995

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:                                

PRINCIPLES OF CONSOLIDATION                                           

The consolidated financial statements include the accounts of the     
   Company and certain of its majority owned subsidiaries, after elimination
   of inter-company accounts and transactions.  The Company's investments in
 joint ventures in the Commonwealth of Independent States, some of which
  represent a majority interest in the joint venture, are not consolidated
  due to the lack of reliable financial information from the entity.  Such
investments are carried at cost.  (See "Joint Ventures.")             

REVENUE RECOGNITION                                                   

The Company recognizes revenue when products are shipped.  The Company
 performs periodic evaluations of its customers' financial condition and
   generally, no collateral is required under normal sales terms.  TeleVideo
 maintains a reserve for potential credit losses and adjusts the reserve
   periodically to reflect both actual and potential credit losses.  Product
    warranties are based on the ongoing assessment of actual warranty expenses
incurred.  Reserves for product warranties were $169,000, $169,000 and
$169,000 as of October 31, 1997, 1996 and 1995, respectively.         

NET INCOME (LOSS) PER SHARE                                           

Net income (loss) per share is based on the weighted average number of
     common shares and dilutive common share equivalents outstanding during each
period.                                                               

CASH AND CASH EQUIVALENTS                                             

The Company considers all highly liquid investments with original     
maturities of three months or less to be cash equivalents.            

USE OF ESTIMATES                                                      

In preparing financial statements in conformity with generally        
  accepted accounting principles, management is required to make estimates
    and assumptions that affect the reported amounts of assets and liabilities
    and the disclosure of contingent assets and liabilities at the date of the
     financial statements, as well as revenues and expenses during the reporting
period.  Actual results could differ from those estimates.            

                                                                            25

10-K
26th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 26th
INVENTORIES                                                           

Inventories are stated at the lower of cost or market.  Cost is       
     computed on a currently adjusted standard basis (which approximates average
  cost) for both finished goods and work-in-process and includes material,
 labor and manufacturing overhead costs.  The cost of purchased parts is
determined on a first-in, first-out basis.  Amounts shown are net of  
reserves for obsolescence of $523,000 and $663,000 in 1997 and 1996,  
respectively:                                                         

                                                                [Download Table]
                                          OCTOBER 31,   
                                    --------------------
                                       1997       1996  
                                    ---------   --------
                                                        
Purchased parts and subassemblies   $ 1,075     $ 4,040 
Work-in-process                         459         422 
Finished goods                        1,389       1,372 
                                    ---------   --------
                                    $ 2,923     $ 5,834 
                                    ---------   --------
                                    ---------   --------

PROPERTY, PLANT AND EQUIPMENT                                         

Depreciation and amortization are provided over the estimated useful  
lives of the assets using both straight-line and accelerated methods. 

                                                                [Download Table]

                                        
Building                      40 years  
Production equipment          1-10 years
Office furniture              1-10 years

2.   ACQUISITIONS AND DIVESTITURES:                                             

KABIL ELECTRONICS COMPANY, LTD.                                       

The Company owned a 35% interest in Kabil Electronics Company, Ltd. of
South Korea and the total investments were approximately $3.3 million.
    Since Kabil continued to sustain losses from operations, the Company wrote
    off its investments in fiscal 1990 and fiscal 1993.  In December 1994, the
     Company accepted an offer to sell its 35% interest in Kabil to the majority
     owners for $1.5 million, less expenses, which was paid in installments over
 the 1995 and 1996 fiscal years.  Approximately $555,000 was received in
  fiscal 1995.  An additional $866,652 was received in January of 1996 and
had been accrued as income for the year ended October 31, 1995.       

ADMOS TECHNOLOGIES INC.                                               

During fiscal 1991, the Company acquired through its wholly owned     
subsidiary, Silicon Logic, Inc., a 20% equity interest in a chip      
   engineering firm (AdMOS Technologies Inc.) in exchange for certain assets
 and a nominal cash payment, the total value of which was $145,000.  The
 acquisition of this interest had been accounted for on the cost method.
This investment was written off in fiscal 1992 due to the continued   
economic difficulties experienced by AdMOS.                           

In fiscal 1991 and 1992, the Company loaned AdMOS a total of $470,000,
  which has been partially repaid.  The outstanding balance at October 31,
   1996 was $104,000.  The repayment of a portion of this loan is personally
    guaranteed by the President and controlling shareholders of AdMOS.  Due to
  the economic difficulties AdMOS is currently experiencing, the principal
and interest balances due on this note have been fully reserved.      

In February 1995, the Company further loaned AdMOS $384,000 at an     
   interest rate of 10% per annum.  Approximately $104,000 was repaid to the
 Company in August 1995.  In November 1995, the Company received another
    $100,000 from AdMOS.  The Company has fully reserved the unpaid balance of
$184,000 plus accrued interest as of October 31, 1997.                

                                                                          26

10-K
27th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 27th
TLK, INC.                                                             

On November, 1996, the Company invested $150,000 in exchange for a 20%
 ownership in TLK, Inc. for the China Power Plant projects in Lin Zhang,
Quin Yuan and Henan Provinces in China.  The Company expects to have a
return on investment within the next twelve months.  The investment is
accounted for using the cost method.                                  

KORAM, INC.                                                           

On March 3, 1997, the Company deposited $224,820 in escrow in Korea   
which amount is to be used to purchase a 50% ownership in a restaurant
 venture in Seoul, Korea.  The amount deposited has been written down to
$109,820 due to the devaluation of the Korean won.                    

APPLIED PHOTONICS TECHNOLOGY, INC.                                    

On April 16, 1997, the Company entered into a Common Stock Purchase   
agreement with Applied Photonics Technology, Inc. (APT), a California 
    corporation, whereby the Company purchased a 30 % interest in APT for $3.0
million.                                                              

Founded in October 1996, APT is a developmental stage enterprise      
 specializing in the development of electronics display technology.  The
    anticipated market for APT's outdoor media display system include the high
    end of billboard and illuminated sign markets, sports stadiums and arenas,
 transportation terminals, volume retailers and malls, and safety/public
information displays.  APT has not recorded any sales to date.  APT   
estimates its first sales to commence towards the end of fiscal 1998. 

The Company accounts for its investment in APT using the equity method
 of accounting.  The excess of the cost of the  investment over the book
value of the 30% interest acquired totaled $2,054,366 and is being    
   amortized to operations over a 5 year period.  For the year ended October
   31, 1997, the Company recorded a loss from this investment of $623,097 of
    which $233,079 represented amortization of the excess investment cost over
book value.  Condensed audited financial information of APT follows:  

Balance Sheet:                                                        

                                                                [Download Table]


                                                          October 31, 1997
                                                          ----------------
                                                                          
     Current assets                                           $ 1,632     
     Other assets                                                 669     
                                                              -------     
                                                              $ 2,301     
                                                              -------     
                                                              -------     

     Liabilities                                              $   321     
     Common stock                                               3,626     
     Accumulated deficit                                       (1,646)    
                                                              -------     
                                                              $ 2,301     
                                                              -------     
                                                              -------     

Statement of operations                                                   

     Operating expenses                                       ($1,515)    
     Interest income                                               37     
                                                              -------     
     Net loss                                                 ($1,478)    
                                                              -------     
                                                              -------     

                                                                          27

10-K
28th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 28th
RUSSIAN JOINT VENTURES                                                

In fiscal 1994, 1995 and 1996, the Company acquired interests in      
various joint ventures, primarily in the Commonwealth of Independent  
States.  These investments are accounted for on the cost method.      

THREE H                                                               

Three H Partners (owned equally by TeleVideo and a Russian entity) was
formed in fiscal 1991 and the initial investment was $16,000.  In July
1996, the Company further invested $60,000 in the joint venture.      

In February 1993, the Company loaned the Three H joint venture $1.0   
million as working capital for the purpose of conducting short term   
   commodities trading.  The loan was unsecured and bore interest at 20% per
annum.  In fiscal 1994, a total amount of $800,000 was repaid to the  
  Company.  The remaining balance of $200,000 was received in fiscal 1996.

INTERTERMINAL                                                         

In April 1994, the Company acquired a 51% ownership of the            
    "InterTerminal" joint venture in exchange for a $5,100 cash investment and
     a commitment to fund a $3.65 million loan, 20% interest rate, interest free
     for one year, to the venture. The main purpose of the joint venture was the
construction of a truck terminal (approximately 100,000 square feet)  
approximately 25 miles outside of Moscow, and the construction was    
 completed in early 1995.  TeleVideo sold its 51% ownership in May 1995.
The $3.65 million loan was repaid to the Company in fiscal 1995.  An  
     additional $1,369,500 was received and recognized as a gain in fiscal 1996.

TELEVIDEO-RUS                                                         

In January 1996, TeleVideo set up a company called "TeleVideo-RUS" in 
the Commonwealth of Independent States with an initial investment of  
    $150,000.  The main purpose of this company is to act as a liaison between
TeleVideo and the authorities in the CIS.                             

In October 1997, the Company received $250,000 from the sale of       
Televideo-RUS.  The Company recognized a $100,000 profit during fiscal
1997.                                                                 

3.   LETTER OF CREDIT AGREEMENT:                                                

The Company has two letter of credit agreements with the banks whereby
 the banks will issue up to a total of $3.0 million of standby and sight
letters of credit.  These agreements are contingent upon the Company  
   maintaining cash deposits at the banks as collateral in a total amount no
     less than the outstanding borrowings.  At October 31, 1997, the Company had
letters of credit outstanding of approximately $1.1 million which were
    secured by cash deposits of $3.0 million.  These deposits earn interest at
the rate of approximately 5.25% per annum.                            

                                                                          28

10-K
29th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 29th
4.   RELATED PARTY TRANSACTIONS:                                                

During 1997, 1996, and 1995 the Company has had transactions with its 
affiliates as follows (in thousands):                                 

                                                                [Download Table]

                                      1997    1996    1995
                                      ----    ----    ----
                                                          
Note receivable at October 31:                            
      AdMOS (1)                       $  4    $104    $104
      AdMOS (1)                        180     180     280
      Kabil                             --      --     866
      Three H Joint Venture             --      --     200
      InterTerminal                     --      --     213

Interest receivable at October 31:                        
      AdMOS (1)                         68      65      55
      AdMOS (1)                         60      42      24
      Three H Joint Venture             --      --      62

 (1) Amounts are fully reserved.                          

5.   TRANSACTIONS WITH MAJOR CUSTOMER                                           

The Company has entered into the following transactions with one of   
  its major customers, Applied Computer Technology, Inc., (ACT).  Sales to
     ACT for the year ended October 31, 1997 aggregated approximately $3,308,000
or 16.6% of net sales.                                                

 1)   In June, 1997, the Company loaned ACT $2,300,000.  Interest on the
          loan accrues at 2% per month.  All interest income accrued on the loan
        is being deferred by the Company until the amounts are received.  As
      of October 31, 1997, the loan principal balance was $900,000.  The
       loan has since been paid down to $500,000.  Management expects full
repayment of principal and accrued interest in March, 1998. 

   2)   At October 31, 1997, ACT owed the Company approximately $2.1 million
          in trade receivables, which represented approximately 41% of net trade
        receivables.  Subsequent to year end, the Company agreed to exchange
      $900,000 of outstanding trade receivables for $900,000 of Series A
 convertible preferred stock of ACT.  The preferred shares are
       convertible into common stock at the option of the holder, based on
    the 5 day average closing bid price of ACT common stock prior to
      conversion, subject to a floor of $2.50 per share and a ceiling of
      $4.25 per share.  ACT has the obligation to register the shares by
    filing a registration statement with the Securities and Exchange
       Commission and the preferred shares will be automatically converted
once the registration statement becomes effective.          

The preferred shares were issued in December, 1997.  As of October 31,
    1997, the Company has reflected the $900,000 as a long term receivable and
    has further provided a reserve of $292,500 against the $900,000 to reflect
the fair value of the preferred shares ultimately issued, taking into 
consideration the lack of liquidity of the securities.                

   In summary, at October 31, 1997, the Company's balance sheet reflects net
     assets of $2,704,000 from ACT, $1,196,000 in trade receivables, $900,000 in
current loans receivable and $608,000 in a net long term receivable   
subsequently converted into preferred stock.                          

                                                                          29

10-K
30th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 30th
6.   CAPITAL STOCK:                                                             

PREFERRED STOCK                                                       

The Company has authorized 3,000,000 shares of preferred stock.  No   
preferred stock has been issued to date.                              

STOCK OPTION PLANS                                                    

The Company has three stock option plans, the 1991 ISO Plan ("1991 ISO
Plan"), the 1981 ISO Plan ("1981 ISO Plan") and the 1981 Supplemental 
 Plan (the Supplemental Plan) accounted for under the APB Opinion 25 and
  related interpretations.  The 1991 ISO Plan provides for the granting of
 incentive and non-statutory options to employees including officers and
directors who are employees for up to 4,000,000 shares.  The options, 
 which have a term of ten years when issued,  vest over five years.  The
exercise price of each option equals to market price of the Company's 
  stock on the date of grant.  Both the 1981 ISO Plan and the Supplemental
 Plan expired in October 1991 and the exercise price for options granted
  under those plans was re-priced at $0.22 per share in November 1991, the
market price of the Company's common stock at that date.  Accordingly,
no compensation cost has been recognized for any of the plans.  Had   
 compensation cost for the plans been determined based on the fair value
of the options at the grant dates consistent with the method of       
Statement of Financial Accounting Standards 123, Accounting for       
Stock-Based Compensation ("SFAS 123"), the Company's net loss and loss
per share would have been changed to the pro forma amounts indicated  
  below.  Pro forma results for 1997 and 1996 may not be indicative of the
pro forma results in the future periods because the pro forma  amounts
 do not include pro forma compensation cost for options granted prior to
November 1, 1995.                                                     

                                                                [Download Table]


                                                October 31,     
                                                -----------     
                                              1997       1996   
                                              ----       ----   
                                                                
Net loss (in thousands)                                         
  As reported                                 ($3,294)  ($2,917)
  Pro forma                                   ($3,394)  ($2,979)

Loss per share                                                  
  As reported                                 ($0.07)   ($0.06) 
  Pro forma                                   ($0.07)   ($0.06) 


     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes options-pricing model with the following weighted-average
assumptions used for grants in 1997 and 1996 respectively: no expected
     dividends; weighted average risk-free interest rate of 6.69% and 6.05%; and
expected lives of 10 years.                                           

   A summary of the status of the Company's stock option plans as of October
 31, 1997, and changes during the three years ending October 31, 1997 is
presented below:                                                      

                                                                          30

10-K
31st Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 31st
   Options Outstanding
    October 31, 1997
    ----------------

                                                                [Download Table]


                               Outstanding                  Excercisable      
                  -----------------------------------   ----------------------
                                Wtd Avg.                Wtd Avg.      Wtd Avg.
Range of          Number        Remaining    Exercise   Number        Exercise
Exercise Prices   Outstanding   Cont. Life   Price      Exercisable   Price   
---------------   -----------   ----------   --------   -----------   --------
                                                                              
1991 ISO PLAN                                                                 

$0.22 - $0.33     256,000         7.02        $ 0.25      165,125      $0.25  
$0.38 - $0.50     296,250         7.73        $ 0.42      105,125      $0.42  
$0.56 - $0.72     155,500         8.20        $ 0.58       23,375      $0.68  
$0.88 - $1.03     137,000         7.47        $ 0.99       76,000      $0.98  

Totals            844,750         7.56        $ 0.49      369,625      $0.48  
                  -------         ----        ------      -------      -----  
                  -------         ----        ------      -------      -----  

                                                                [Download Table]
                                                                            
1981 SUPPLEMENTAL PLAN                                                      

$0.22             150,000         4.06        $ 0.22      150,000      $0.22

1981 ISO PLAN                                                               

$0.22               5,000         4.06        $ 0.22        5,000      $0.22

Summary of Changes:                                                             

1981 ISO PLAN                                                                   

                                                                [Download Table]


                                                            Weighted    
                                                             Average    
                                   Outstanding            Exercise Price
                                   -----------            --------------
                                                                        

Balance, October 31, 1994            420,000                 $  0.22    
  Granted                                 --                      --    
  Exercised                         (379,125)                $  0.22    
  Canceled                           (19,250)                $  0.22    
                                    --------                            
Balance at October 31, 1995           21,625                 $  0.22    
  Granted                                 --                      --    
  Exercised                           (9,000)                $  0.22    
  Canceled                                --                      --    
                                    --------                            
Balance at October 31, 1996           12,625                 $  0.22    
  Granted                                 --                      --    
  Exercised                           (3,375)                $  0.22    
  Canceled                            (4,250)                $  0.22    
                                    --------                            
Balance at October 31, 1997         $  5,000                 $  0.22    
                                    --------                            

                                                                          31

10-K
32nd Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 32nd
1981 SUPPLEMENTAL PLAN                                                          

                                                                [Download Table]

                                                            Weighted      
                                                            Average       
                                   Outstanding              Exercise Price
                                   -----------              --------------
                                                                          
Balance, October 31, 1994            205,000                 $  0.21      
  Exercised                           (5,000)                $  0.19      
  Canceled                           (50,000)                $  0.22      
                                    --------                              
Balance at October 31, 1995          150,000                 $  0.22      
  Exercised                               --                      --      
  Canceled                                --                      --      
                                    --------                              
Balance at October 31, 1996          150,000                 $  0.22      
  Exercised                               --                      --      
  Canceled                                --                      --      
                                    --------                              
Balance at October 31, 1997          150,000                 $  0.22      
                                    --------                              

1991 ISO PLAN                                                                   

                                                                [Download Table]

                                                       Weighted      
                                                       Average       
                              Available   Outstanding  Exercise Price
                             ----------   -----------  --------------
                                                                     
Balance, October 31, 1994     2,903,500    1,096,500   $  0.38       
  Granted                    (1,823,500)   1,823,500   $  0.65       
  Exercised                          --     (123,000)  $  0.44       
  Terminated/Canceled           133,875     (133,875)  $  0.41       
                             ----------   -----------                
Balance at October 31, 1995   1,213,875    2,663,125   $  0.56       
  Granted                      (829,000)     829,000   $  0.62       
  Exercised                          --     (245,125)  $  0.31       
  Terminated/Canceled         1,916,000   (1,916,000)  $  0.65       
                             ----------   -----------                
Balance at October 31, 1996   2,300,875    1,331,000   $  0.52       
  Granted                       (49,000)      49,000   $  0.31       
  Exercised                          --      (94,750)  $  0.39       
  Terminated/Canceled           440,500     (440,500)  $  0.55       
                             ----------   -----------                
Balance at October 31, 1997   2,692,375      844,750   $  0.49       
                             ----------   -----------                
                             ----------   -----------                


7.   INCOME TAXES:                                                              

At October 31, 1997, the Company had tax loss carry forwards of       
approximately $89 million for federal income tax and approximately $27
 million for state income tax reporting purposes, respectively.  The net
   operating loss carry forwards expire through fiscal 2011.  The Tax Reform
Act of 1986 contains provisions which may limit the net operating loss
carry forwards to be used in any given year upon occurrence of certain
events, including significant changes in ownership interests.         

The Company adopted, effective November 1, 1993, Statement of         
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income 
   Taxes," issued in February 1992.  Under the liability method specified by
   SFAS 109, deferred tax assets and liabilities are determined based on the
difference between the financial statement and tax bases of assets and
  liabilities as measured by the enacted tax rates which will be in effect
when these differences reverse.  Deferred tax expense is the result of
changes in deferred tax assets and liabilities.                       

                                                                          32

10-K
33rd Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 33rd
No deferred tax asset or benefit was recorded at October 31, 1997, as 
    all amounts have been fully reserved.  The components are as follows:  (in
     thousands).  The valuation allowance decreased by $2,977 in fiscal 1997 and
increased by $6,780 in  fiscal 1996.                                  

                                                                [Download Table]

                               1997           1996   
                             -------         ------- 
                                                     
Net operating loss          $ 31,844        $ 34,500 
Other                            829           1,150 
                            --------        -------- 
                              32,673          35,650 
Less valuation allowance     (32,673)        (35,650)
                            --------        -------- 

     Net benefit            $     --        $    --  
                            --------        -------- 
                            --------        -------- 

The following is a reconciliation of expected tax expense (benefit) to
actual for each of the three years ended October 31 (in thousands):   

                                                                [Download Table]


                                                          1997      1996    1995 
                                                        -------   -------   ---- 
                                                                                 
Book income (loss)                                      $(3,294)  $(2,917)  $415 
                                                        -------   -------   ---- 

Expected tax expense (benefit)                           (1,120)   (1,160)   167 

Adjustments to reconcile expected to actual                                      
    expense (benefit):                                                           
         Effect of change in valuation allowance (net)    1,120     1,160   (167)
                                                        -------   -------   ---- 

    Actual tax expense (benefit)                        $    --   $    --   $ -- 
                                                        -------   -------   ---- 
                                                        -------   -------   ---- 

The Company has been in various stages of federal and state income and
    sales tax audits for the past several years.  The federal income tax audit
   for the taxable years of 1982 through 1985 were finalized in fiscal 1994.
The total tax liability, plus interest and penalty, aggregated $1.53  
  million, and the total payment was made by the Company in November 1993.
     The California Sales and Use Tax audit for the period of April 1990 through
June 1994 was also finalized.  In fiscal 1995, tax payments including 
    penalty and interest of approximately $270,000 were made, all of which had
been accrued by the Company in prior years.                           

As of October 31, 1997, the only issue pending is California Franchise
  Tax exposure resulting from the previous Federal Income Tax audits.  The
     Company believes that a resolution of this audit could occur in fiscal 1998
     and its maximum exposure will not exceed $350,000.  The Company has accrued
this full amount at October 31, 1997.                                 

8.   LITIGATION AND OTHER:                                                      

The Company has been named, along with dozens of other manufacturers, 
designers, and distributors of computer equipment, as a defendant in  
     several lawsuits regarding product liability in connection with the alleged
defective design of computer terminal keyboards and the size of the   
computer monitor screens.  The first issue alleges that the various   
   plaintiffs have suffered some form of severe wrist injury from the use of
    said keyboards.  The second issue alleges that there was false advertising
which claimed that the video screens were 17 inches in size, when in  
    reality they were only 15 inches.  The Company's attorneys have prepared a
   defense for these cases and the Company's insurance carriers are informed
of the plaintiff's claims.  The Company intends to vigorously defend  
against the allegations of these suits.  Management believes that the 
    ultimate outcome of these lawsuits will not have a material adverse effect
on the Company's financial position.                                  

                                                                              33

10-K
34th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 34th
9.   SEGMENT INFORMATION:                                                       

The Company, which operates in a single industry segment, designs,    
produces and markets video display terminals, computer monitors and   
multimedia products designed for office and home automation both      
   domestically and internationally.  The Company had export sales primarily
to Europe, Asia and Latin America of approximately $2.7 million, $3.4 
    million and $4.1 million during fiscal 1997, 1996, and 1995, respectively.
For the fiscal year ended October 31, 1997, one customer accounted for
16.6% and another customer accounted for 16.1% of net sales.  For the 
  fiscal year ended October 31, 1996, one customer accounted for 10.2% and
another customer accounted for 8.8% of net sales.  For the fiscal year
ended October 31, 1995, one customer accounted for 6.6% and another   
customer accounted for 6.0% of net sales.                             

10.  SIGNIFICANT FOURTH QUARTER ADJUSTMENTS:                                    

The Company recorded the following significant adjustments in the     
fourth quarter of fiscal 1997: (in thousands)                         

                                                                [Download Table]


                                         Effect on Net Income
                                          Increase (Decrease)
                                         --------------------
                                                             
Reserve for obsolete inventory                $    (260)     
Loss from investment in subsidiary                 (623)     
                                              ---------      
                                              $    (883)     
                                              ---------      
                                              ---------      

The above adjustments affected the fourth quarter results of          
 operations as follows:  increased cost of goods sold by $260, increased
 loss in investments on unconsolidated subsidiaries by $623, for a total
increase in net loss from operations of $883.                         

11.  NOTE RECEIVABLE:                                                           

The $5.0 million note receivable from the sale of the Company's former
   headquarters was collateralized by a first deed of trust on the building.
  The interest was payable monthly at 9.5% per annum and the principal was
paid in full on December 12, 1996.                                    

12.  ACCRUED LIABILITIES:                                                       

Accrued liabilities consist of the following at October 31:  (In      
thousands)                                                            

                                                                [Download Table]


                                             1997            1996
                                            -----           -----
                                                                 
Employee compensation and benefits          $ 212           $ 288
Warranty                                      169             169
Legal reserve                                 200             200
Accrued sales and use tax                       0              11
Professional fees                              57              81
Other                                          92             106
                                            -----           -----
                                            $ 730           $ 855
                                            -----           -----
                                            -----           -----

                                                                          34

10-K
35th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 35th
13.  VALUATION AND QUALIFYING ACCOUNTS:                                         

 The Company's reserves for doubtful accounts and inventory obsolescence
consist of the following:                                             
(In thousands)                                                        

                                                                [Download Table]


                                                   Charged                          
                                      Balance at  (Credited)              Balance at
                                      Beginning   to Costs &                End of  
                                      of Period     Expense   Deductions    Period  
                                      ----------  ----------  ----------  ----------
                                                                                    
YEAR ENDED OCTOBER 31, 1995                                                         
  Reserve for doubtful accounts        $  530       $ 383      $ (72)(1)    $  841  
  Reserve for inventory obsolescence   $  762       $ 610      $(759)(2)    $  613  

YEAR ENDED OCTOBER 31, 1996:                                                        
  Reserve for doubtful accounts        $  841       $ 760      $(321)(1)    $1,280  
  Reserve for inventory obsolescence   $  613       $ 918      $(868)(2)    $  663  

YEAR ENDED OCTOBER 31, 1997:                                                        
  Reserve for doubtful accounts        $1,280       $ 292      $(529)(1)    $1,043  
  Reserve for inventory obsolescence   $  663       $ 379      $(519)(2)    $  523  

(1)  Deductions represent write-offs of fully reserved receivable.
(2)  Reductions due to sales or scrap of fully reserved inventory.

14.  CHANGES IN ACCOUNTING POLICIES                                             

 In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,  
   "Earnings Per Share" ("SFAS 128").  SFAS 128 simplifies the standards for
    computing earnings per share and is effective for financial statements for
  both interim and annual periods ending after December 15, 1997.  Earlier
    application is not permitted.  The adoption of SFAS 128 is not expected to
     have a material impact on the Company's previously reported loss per share.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive  
    Income" ("SFAS No. 130"). SFAS No. 130 establishes standards for reporting
  and display of comprehensive income and its  components in the financial
 statements.  SFAS No. 130 is effective for fiscal years beginning after
 December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. The adoption of
   SFAS No. 130 will have no impact on the Company's consolidated results of
operations, financial position or cash flows.                         

    In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS No. 131").  SFAS No. 131
   establishes standards for the way that public business enterprises report
 information about operating segments in annual financial statements and
     requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders.  It also
    establishes standards for related disclosures about products and services,
geographic areas, and major customers.  SFAS No. 131 is effective for 
  financial statements for fiscal years beginning after December 15, 1997.
Financial statement disclosures for prior periods are required to be  
     restated. The adoption of SFAS No. 131 will have no impact on the Company's
consolidated results of operations, financial position or cash flows. 

                                                                          35

10-K
36th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 36th
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.                   

DIRECTORS AND EXECUTIVE OFFICERS                                                

     The Directors and executive officers of the Company as of January 26, 1997,
are as follows:                                                                 

                                                                [Download Table]


     Name          Age                    Title                        
---------------   ----  -----------------------------------------------
                                                                       
K. Philip Hwang    61   Chairman of the Board and Chief Executive      
                        Officer                                        
Ken Ho Chong       56   Vice President and Chief Financial Officer     
Kristine Kim       33   Vice President of Sales                        
Anthony Thia       31   Vice President of Marketing                    
Robert E. Larson   59   Director                                       
Stephen S. Kahng   48   Director                                       

 Dr. K. Philip Hwang is the founder of the Company and has been Chairman
of the Board and Chief Executive Officer since October 1976.  From August 8,    
1990 to April 6, 1991, he served as the Acting Chief Financial Officer.         
Since 1992, Dr. Hwang has also served as Chairman of AdMOS (Advanced MOS        
Systems), an engineering firm specializing in ASIC chip design.  ADMOS is a     
private corporation in which TeleVideo holds a 20% interest.                    

  Mr. Ken Ho Chong has more than 12 years of executive level experience at
companies in a variety of industries.  He was most recently president of        
Enviroflex, Inc., an engineering and manufacturing company in Anaheim, CA.      
He previously was vice president and CFO of Binggrae Company Ltd., a publicly   
held $500 million food processing company based in Korea, and past president    
of Union Foods of Costa Mesa, CA.                                               

Ms. Kristine Kim has been serving TeleVideo since January 1988 and has
successfully managed various Sales and Marketing Departments.  She was          
promoted to Vice President of Sales and was elected as a member of the Board    
in February 1996.  In May 1992, she achieved her MBA degree in International    
Corporate Management and Professional Export Management at Golden Gate          
University of California.  Ms. Kim also has a BA degree in Economics and        
International Relations from UC Davis.                                          

                                                                          36

10-K
37th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 37th
Mr. Anthony Thia joined TeleVideo as VP of Marketing in August 1996.  
Prior to coming to TeleVideo, Mr. Thia was the Director of Marketing at ASI     
(Asia Source Inc.), a national PC distributor headquartered in California,      
from 1994 to 1996.  From 1990 to 1994, Mr. Thia was the Sales and Marketing     
Manager at ASI.  Mr. Thia holds a B.S. in Computer Science from Iowa State      
University.                                                                     

Dr. Robert E. Larson joined the Company as a member of the Board of   
Directors effective December 1, 1989. Since September 1983, he has served as    
General Partner of Woodside Fund, a venture capital fund, and since September   
1985, he has been a member of the Board of Directors of Skye Investment         
Advisers, a registered investment advisor firm.  Since 1973, Dr. Larson has     
been a Consulting Professor in the Engineering-Economic Systems Department at   
Stanford University.                                                            

Mr. Stephen S. Kahng joined the Company as a member of the Board of   
Directors effective November 28, 1994.  Since November 1993, Mr. Kahng has      
been the President and Chief Executive Officer of Power Computing Corporation   
which manufactures Power PC-based workstations.  From December 1991 to          
November 1993, he served as the President of Up To Date Technology, Inc.        
which is a system design consulting company to the personal computer            
industry.  Prior thereto, from September 1987 until December 1991, Mr. Kahng    
was the Senior Vice President and General Manager of Chips and Technologies,    
Inc. which was a supplier of ASICs to the personal computer industry.           

There are no family relationships among any of the Company's officers 
and directors.                                                                  

  The following items included in the Company's Definitive Proxy Statement
dated February 17, 1997 to be used in connection with the Company's Annual      
Meeting of Stockholders to be held on March 24, 1997 are incorporated herein    
by reference:                                                                   

                                                                [Download Table]
                                                                    Pages in    
                                                                 Proxy Statement
                                                                 ---------------
                                                                                
ITEM 11.  EXECUTIVE COMPENSATION                                           8    

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                  5    
          AND MANAGEMENT                                                        

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                  10    

    (The remainder of this page was left blank intentionally.)

                                                                          37

10-K
38th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 38th
   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.   FINANCIAL STATEMENTS.                                            

The Consolidated Financial Statements, Notes thereto and the Report of
Grant Thornton LLP, Independent Public Accountants, thereon are included in Part
II of this Report on Form 10-K.                                                 

2.   FINANCIAL STATEMENT SCHEDULES.                                   

All schedules have been omitted since the required information is not 
present in amounts sufficient to require submission of the schedule, or because 
the information required is included in the accompanying Consolidated Financial 
Statements.                                                                     

3.   EXHIBITS.  See Exhibit Index, below.                             

(b)  Reports on Form 8-K.     NONE                                              

    (The remainder of this page was left blank intentionally.)

                                                                          38

10-K
39th Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 39th
EXHIBIT INDEX 

EXHIBIT                                                                         
NUMBER                                                                 FOOTNOTE 

 3.1  Restated Certificate of Incorporation of the Company...........(1)

 3.2  Bylaws of the Company..........................................(1)

10.1  TeleVideo, Inc. 1991 Incentive Stock Option Plan...............(2)

10.2  Form of Stock Option Agreement for TeleVideo, Inc.                
      1991 Incentive Stock Option Plan...............................(2)

10.3  Televideo, Inc. 1992 Outside Directors' Stock Option Plan......(2)

10.4  Management Bonus Plan effective fiscal 1984....................(3)

10.5  Form Distributor and Licensing Agreement.......................(2)

10.6  Form Original Equipment Manufacturer Agreement.................(2)

10.8  Three H Promissory Notes.......................................(4)

10.9  InterTerminal Agreements and Promissory Notes..................(5)

21.0  Subsidiaries                                                      

23.1  Consent of Grant Thornton LLP, Independent Certified Public       
Accountants                                                 

27.0  Financial Data Schedule                                           
______________________________________                                          

FOOTNOTES TO EXHIBIT INDEX                                                      

(1)  Incorporated by reference from the corresponding exhibit description       
in the Company's annual report on Form 10-K for the fiscal year ended 
October 31, 1987, filed January 29, 1988.                             

(2)  Incorporated by reference from the corresponding exhibit description       
in the Company's annual report on Form 10-K for the fiscal year ended 
October 31, 1991, filed January 27, 1992.                             

(3)  Incorporated by reference from the corresponding exhibit description       
in the Company's annual reports on Form 10-K, filed January 29, 1985  
and January 28, 1986, respectively.                                   

(4)  Incorporated by reference from the corresponding exhibit description       
in the Company's annual report on Form 10-K for the fiscal year ended 
October 31, 1993, filed February 10, 1994.                            

(5)  Incorporated by reference from the corresponding exhibit description       
in the Company's annual report on Form 10-K for the fiscal year ended 
October 31, 1994, filed February 10, 1995.                            

                                                                          39

10-K
Last Page of 40
TOC
1st
Previous
Next
↓Bottom
Just 40th
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.                    

                                 TELEVIDEO, INC.
                               -------------------------------
                                (REGISTRANT)

DATE:  FEBRUARY 9, 1998            BY:       /s/ KEN HO CHONG                   
                               -------------------------------
                            KEN HO CHONG
                            VICE PRESIDENT & CFO

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 on the dates indicated.                        

SIGNATURE                   TITLE                     DATE    
------------------------    ---------------------     --------------------    

/s/  K. PHILIP HWANG     CHAIRMAN OF THE BOARD          FEBRUARY 9, 1998        
----------------------   AND CHIEF EXECUTIVE                                    
K. Philip Hwang     OFFICER                                           

/s/  KEN HO CHONG        VICE PRESIDENT AND CHIEF       FEBRUARY 9, 1998        
----------------------   FINANCIAL OFFICER                                      
K. David Kim                                                          

/s/  KRISTINE KIM        VICE PRESIDENT OF SALES        FEBRUARY 9, 1998        
----------------------                                                          
Kristine Kim                                                          

/s/  ROBERT E. LARSON    DIRECTOR                       FEBRUARY 9, 1998        
----------------------                                                          
Robert E. Larson                                                      

/s/  STEPHEN S. KAHNG    DIRECTOR                       FEBRUARY 9, 1998        
----------------------                                                          
Stephen S. Kahng                                                      

                                                                          40

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		4/7/98		2		3
Filed on:		2/13/98
		2/9/98		2		40
		2/3/98		20
		1/26/98		10
		1/21/98		6
		12/15/97		35
For Period End:		10/31/97		1		35			10-K/A,  DEF 14C,  NT 10-K,  PRE 14C
		4/16/97		27					8-K
		3/24/97		37					DEF 14A,  PRE 14A
		3/3/97		8		27			DEF 14A
		2/17/97		37
		1/26/97		36
		12/12/96		34
		10/31/96		6		35			10-K405
		11/1/95		30
		10/31/95		6		35			10-K
		2/10/95		39
		11/28/94		37
		10/31/94		39
		2/10/94		39
		11/1/93		32
		10/31/93		39
		1/27/92		39
									List all Filings