-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UwffOiwB/fAS70Odu5RgFjkYG0iXw3NZqWRmXnfpNNJv6MUyE+gghzsNbVK9Fx1q NSpzuXHg/1VX/8UMxu9puA== 0000950135-04-002719.txt : 20040519 0000950135-04-002719.hdr.sgml : 20040519 20040519143652 ACCESSION NUMBER: 0000950135-04-002719 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20040404 FILED AS OF DATE: 20040519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BTU INTERNATIONAL INC CENTRAL INDEX KEY: 0000840883 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] IRS NUMBER: 042781248 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-17297 FILM NUMBER: 04818395 BUSINESS ADDRESS: STREET 1: 23 ESQUIRE ROAD CITY: NORTH BILLERICA STATE: MA ZIP: 01862 BUSINESS PHONE: 5086674111 MAIL ADDRESS: STREET 1: 23 ESQUIRE ROAD CITY: NORTH BILLERICA STATE: MA ZIP: 01862 FORMER COMPANY: FORMER CONFORMED NAME: BTU CORP DATE OF NAME CHANGE: 19881109 10-Q 1 b50370bte10vq.txt BTU INTERNATIONAL, INC. FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 4, 2004 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 0-17297 BTU INTERNATIONAL, INC. (Exact name of Registrant as specified in its charter) DELAWARE 04-2781248 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 23 Esquire Road, North Billerica, Massachusetts 01862-2596 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (978) 667-4111 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] Indicate the number of shares outstanding of the Registrant's Common Stock, par value $.01 per share, as of the latest practicable date: As of May 17, 2004: 7,188,627 shares. BTU INTERNATIONAL, INC. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets 1-2 Condensed Consolidated Statements of Operations 3 Condensed Consolidated Statement of Stockholders' Equity and Consolidated Statements of Comprehensive Loss 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6-8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9-11 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Item 4. CONTROLS AND PROCEDURES PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K 12 SIGNATURES 13
BTU INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) ASSETS
(Unaudited) April 4, December 31, 2004 2003 ---- ---- Current assets Cash and cash equivalents $ 3,538 $ 6,659 Accounts receivable, less reserves of $172 8,776 6,073 Inventories (Note 2) 9,591 7,795 Other current assets 1,003 469 ------- ------- Total current assets 22,908 20,996 ------- ------- Property, plant and equipment, at cost Land 210 210 Buildings and improvements 7,983 7,983 Machinery and equipment 7,657 7,597 Furniture and fixtures 877 866 ------- ------- 16,727 16,656 Less-Accumulated depreciation 13,557 13,366 ------- ------- Net property, plant and equipment 3,170 3,290 Other assets, net of accumulated amortization of $285 at April 4, 2004 and $250 at December 31, 2003 1,364 1,368 ------- ------- $27,442 $25,654 ======= =======
The accompanying notes are an integral part of these condensed consolidated financial statements. 1 BTU INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) LIABILITIES AND STOCKHOLDERS' EQUITY
(Unaudited) April 4, December 31, 2004 2003 ---- ---- Current liabilities Current maturities of long-term debt and capital lease obligations (Note 3) $ 164 $ 160 Current portion of long-term deferred compensation 200 200 Accounts payable 4,964 2,560 Accrued expenses 2,387 2,016 -------- -------- Total current liabilities 7,715 4,936 -------- -------- Long-term debt and capital lease obligations, less current maturities (Note 3) 5,423 5,440 Long-term deferred compensation 412 458 -------- -------- 13,550 10,834 -------- -------- Stockholders' Equity (Note 4) Series preferred stock, $1.00 par value- Authorized - 5,000,000 shares- Issued and outstanding - none - - Authorized - 25,000,000 shares; Issued - 8,328,162, outstanding 7,179,152 at April 4, 2004 and Issued - 8,293,958, outstanding 7,144,948 December 31, 2003 83 83 Additional paid-in capital 22,451 22,349 Deferred compensation (9) (18) Accumulated earnings (4,774) (3,794) Treasury stock- at cost, 1,149,010 shares at April 4, 2004 and December 31, 2003 (4,177) (4,177) Accumulated other comprehensive income 318 377 -------- -------- Total stockholders' equity 13,892 14,820 -------- -------- $ 27,442 $ 25,654 ======== ========
The accompanying notes are an integral part of these condensed consolidated financial statements. 2 BTU INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 4, 2004 AND MARCH 30, 2003 (in thousands, except share and per share data) (Unaudited)
Three Months Ended ------------------ April 4, March 30, 2004 2003 ---- ---- Net sales $ 11,293 $ 6,836 Cost of goods sold 8,643 4,983 ----------- ----------- Gross profit 2,650 1,853 Operating expenses: Selling, general and administrative 2,640 2,750 Research, development and engineering 917 822 ----------- ----------- Loss from operations (907) (1,719) ----------- ----------- Interest income 5 32 Interest expense (77) (87) Other income (loss), net (1) 1 ----------- ----------- Loss before income tax benefit (980) (1,773) Income tax benefit - - ----------- ----------- Net loss $ (980) $ (1,773) =========== =========== Loss Per Share: Basic $ (0.14) $ (0.25) Diluted $ (0.14) $ (0.25) =========== =========== Weighted average number of Shares Outstanding: Basic Shares 7,162,126 7,002,578 Effect of Dilutive Options - - ----------- ----------- Diluted Shares 7,162,126 7,002,578 =========== ===========
The accompanying notes are an integral part of these condensed consolidated financial statements. 3 BTU INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED APRIL 4, 2004 (in thousands) (Unaudited)
ACCUMULATED ADDITIONAL OTHER TOTAL COMMON PAID-IN DEFERRED ACCUMULATED TREASURY COMPREHENSIVE STOCKHOLDERS' STOCK CAPITAL COMP. EARNINGS STOCK INCOME EQUITY ----- ------- ----- -------- ----- ------ ------ Balance at Dec. 31, 2003 $ 83 $ 22,349 $ (18) $ (3,794) $ (4,177) $ 377 $ 14,820 Net loss - - - (980) - - (980) Exercise of Stock options - 102 - - - - 102 Translation Adjustment - - - - - (59) (59) Deferred Compensation - - 9 - - - 9 -------- -------- -------- -------- -------- -------- -------- Balance at April 4, 2004 $ 83 $ 22,451 $ (9) $ (4,774) $ (4,177) $ 318 $ 13,892 ======== ======== ======== ======== ======== ======== ========
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS FOR THE THREE MONTHS ENDED APRIL 4, 2004 AND MARCH 30, 2003 (in thousands) (Unaudited)
Three Months Ended ------------------ April 4, March 30, 2004 2003 ---- ---- Net loss $ (980) $(1,773) Other comprehensive loss: Foreign currency translation adjustment (59) (74) ------- ------- Comprehensive loss $(1,039) $(1,847) ======= =======
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 BTU INTERNATIONAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED APRIL 4, 2004 AND MARCH 30, 2003 (in thousands) (Unaudited)
April 4, March 30, 2004 2003 ---- ---- Cash flows from operating activities: Net loss $ (980) $ (1,773) Adjustments to reconcile net loss to net cash used in by operating activities - Depreciation and amortization 294 294 Stock based compensation 9 25 Net changes in operating assets and liabilities- Accounts receivable (2,703) (801) Inventories (1,796) (341) Other current assets (534) 81 Other assets (30) (3) Accounts payable 2,404 199 Accrued expenses 371 (111) Deferred compensation (46) (100) -------- -------- Net cash used in operating activities (3,011) (2530) -------- -------- Cash flows from investing activities: Purchases of property, plant and equipment, net (140) (135) -------- -------- Net cash used in investing activities (140) (135) -------- -------- Cash flows from financing activities: Principal payments under long-term debt and capital lease obligations (13) (81) Exercise of stock options 102 - -------- -------- Net cash provided by (used in) financing activities 89 (81) -------- -------- Effect of exchange rates on cash (59) (74) -------- -------- Net decrease in cash and cash equivalents (3,121) (2,820) Cash and cash equivalents, at beginning of the period 6,659 13,847 -------- -------- Cash and cash equivalents, at end of the period $ 3,538 $ 11,027 ======== ======== Supplemental disclosures of cash flow information Cash paid during the periods for - Interest $ 77 $ 87 Income taxes 22 17
The accompanying notes are an integral part of these condensed consolidated financial statements. 5 BTU INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Basis for presentation The condensed consolidated balance sheets as of April 4, 2004 and December 31, 2003, the related condensed consolidated statements of operations for the three months ended April 4, 2004 and March 30, 2003, the condensed consolidated statement of stockholders' equity for the three months ended April 4, 2004, the condensed consolidated statements of cash flows for the three months ended April 4, 2004 and March 30, 2003, the consolidated statements of comprehensive loss for the three months ended April 4, 2004 and March 30, 2003 are unaudited. In the opinion of management, all adjustments necessary for the fair presentation of such financial statements have been included. Such adjustments consisted only of normal recurring items. Interim results are not necessarily indicative of results for the full year. These financial statements do not include all disclosures associated with annual financial statements, and accordingly, should be read in conjunction with the footnotes contained in the Company's consolidated financial statements as of, and for the period ended December 31, 2003, together with the auditors' report, included in the Company's Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. (2) Inventories Inventories at April 4, 2004 and December 31, 2003 consisted of:
(in thousands) -------------- April 4, December 31, 2004 2003 ---- ---- Raw materials and manufactured components $4,627 $3,881 Work-in-process 3,245 2,358 Finished goods 1,719 1,556 ------ ------ $9,591 $7,795 ====== ======
(3) Debt Debt at April 4, 2004 and December 31, 2003 consisted of:
(in thousands) -------------- April 4, December 31, 2004 2003 ---- ---- Mortgage note payable $5,562 $5,600 Capital lease obligations, interest rate of 6.75% 25 - ------ ------ 5,587 5,600 Less-current maturities 164 160 ------ ------ $5,423 $5,440 ====== ======
The mortgage note payable is secured by the Company's land and building in Billerica, MA and requires monthly payments of $38,269, including interest at 5.42%. This mortgage note payable has a balloon payment of $5,100,000 due and payable at maturity on December 26, 2006. 6 BTU INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) The Company has a secured revolving line of credit with a US bank that allows for aggregate borrowings, including letters of credit, up to a maximum of $14 million against a borrowing base of secured accounts receivable and inventory. The Company may elect to borrow at interest rates pegged to either the bank's base rate or the LIBOR rate in effect from time to time. This loan agreement extends to May 31, 2007 and is subject to maintaining certain financial covenants with which the Company is in compliance at April 4, 2004. No borrowings were outstanding under this agreement at April 4, 2004; at which time the available funds on the borrowing base formula was approximately $9.2 million. (4) Earnings Per Share Basic EPS is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed using the weighted average number of common and dilutive potential common shares outstanding during the period, using the treasury stock method. Options outstanding, which were not included in the determination of diluted EPS for the three months ended April 4, 2004 and March 30, 2003 because they were antidilutive, were 1,140,666 and 1,258,398 respectively. The Company applies Accounting Principles Board Opinion No. 25 and related Interpretations in accounting for its stock option and purchase plans. Accordingly, no compensation cost has been recognized related to the plans. Had compensation cost for the plans been determined based on the fair value at the grant dates for the awards under these plans consistent with SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's net loss and net loss per share would be the pro forma amounts indicated below:
Three Months Ended ------------------ April 4, March 30, 2004 2003 ---- ---- Net Income (loss): As reported $ (980) $ (1,773) Pro forma (1,078) (1,806) Income per basic share: As reported $ (0.14) $ (0.25) Pro forma (0.15) (0.25) Income per diluted share: As reported $ (0.14) $ (0.25) Pro forma (0.15) (0.25)
(5) Segment Reporting Segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing performance. The Company operates as a single business segment called thermal processing capital equipment. The thermal processing capital equipment segment consists of the designing, manufacturing, selling and servicing of thermal processing equipment and related process controls for use in the electronics, power generation, automotive and other industries. This business segment includes the supply of solder reflow systems used for surface mount applications in printed circuit board assembly. Thermal processing equipment is used in: low temperature curing/encapsulation; hybrid integrated circuit manufacturing; integrated circuit packaging and sealing; and processing multi-chip modules. In addition, the thermal process equipment is used for sintering nuclear fuel for commercial power generation, as well as brazing and the sintering of ceramics and powdered metals, and the deposition of precise thin film coatings. The business segment's customers are multinational original equipment manufacturers and electronic manufacturing service providers. 7 BTU INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) (6) Revenue Recognition The Company recognizes revenue in accordance with the Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements" as updated by SEC Staff Accounting Bulletin No. 104, "Revenue Recognition". Under these guidelines, when the terms of sale include customer acceptance provisions, and compliance with those provisions can not be demonstrated until customer use, revenues are recognized upon acceptance. Furthermore, revenues for products that require installation for which the installation is essential to functionality or is not deemed inconsequential or perfunctory are recognized upon completion of installation. Revenues for products sold where installation is not essential to functionality and is deemed inconsequential or perfunctory are recognized upon shipment with estimated installation and warranty costs accrued. The Company also has certain sales transactions for projects that are not completed within the normal operating cycle of the business. These contracts are accounted for on a percentage completion basis. Under the percentage completion method, revenues are recognized based upon the ratio of costs incurred to the total estimated costs. Revisions in costs and profit estimates are reflected in the period in which the facts causing the revision become known. Provisions for total estimated losses on uncompleted contracts, if any, are made in the period in which such losses are determined. For the three months ended April 4, 2004 there was $572,296 of revenue was recognized using the percentage of completion method. For the three months ended March 30, 2003, there was no revenue recognized using the percentage of completion method. The Company accounts for shipping and handling costs billed to customers in accordance with the Emerging Issues Task Force (EITF) Issue 00-10 "Accounting for Shipping and Handling Fees and Cost". Amounts billed to customers for shipping and handling costs are recorded as revenues with the associated costs reported as cost of goods sold. (7) Product Warranty Costs The Company provides standard warranty coverage for parts and labor for 12 months and special extended material only coverage on certain other products. The Company sets aside a reserve, charged to cost of sales, based on anticipated warranty claims at the time product revenue is recognized. The reserve for warranty covers the estimated costs of material, labor and travel. Actual warranty claims incurred are charged against the accrual. Factors that affect the Company's product warranty liability include the number of installed units, the anticipated cost of warranty repairs and historical and anticipated rates of warranty claims. The following table reflects changes in the Company's accrued warranty account during the first quarter ended April 4, 2004:
2004 ---- (in thousands) Beginning Balance, December 31, 2003 $ 635 Plus accruals related to new sales 165 Less: warranty claims incurred (108) Less: amortization of prior period accruals (57) ----- Ending Balance, April 4, 2004 $ 635 =====
8 BTU INTERNATIONAL, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) (8) Recent Accounting Pronouncements In January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities, which addressed accounting for special-purposes and variable interest entities. This interpretation was effective for financial statements issued after December 31, 2002. In September 2003, the FASB issued a Staff Position to allow a deferment of the effective date to the end of the first interim or annual period ending after December 15, 2003 if certain conditions were met. In December 2003, the FASB issued Interpretation No. 46R, Consolidation of Variable Interest Entities, which addresses accounting for special-purpose and variable interest entities and which superseded Interpretation 46. The effective date of this interpretation is the end of the first reporting period that ends after March 15, 2004, unless the entity is considered to be a special-purpose entity in which case, the effective date is the end of the first reporting period that ends after December 15, 2003. Companies that have adopted Interpretation No. 46 prior to the effective date of Interpretation No. 46R will either continue to apply Interpretation No. 46 until the effective date of Interpretation No. 46R or apply the provision of Interpretation No. 46R at an earlier date. The Company's adoption of Interpretations No. 46 and No. 46R, did not have a material impact on the Company's consolidated financial position or results of operations. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Net Sales. Net sales increased 65.2% from $6.8 million in the first quarter of 2003 to $11.3 million in the first quarter of 2004. The primary increase represents the expanding demand for our surface mount technology products. In addition, the first quarter sales for 2004 were favorably impacted, by approximately three percent, through a settlement of certain pricing adjustments in previously recorded sales. When comparing the first quarter of 2003 to the first quarter of 2004 the percentage of net sales attributable to our customers in the United States decreased from 43.5% to 19.2%, net sales attributable to our customers in Europe decreased from 19.3% to 19.1%, net sales attributable to our Asia Pacific customers increased from 37.2% to 58.7%, and net sales attributable to our customers in the Other Americas increased from 0.0% to 3.0%. Gross Profit. Gross profit increased 43.0% from $1.9 million in the first quarter of 2003 to $2.7 million in the first quarter of 2004, and as a percentage of net sales, decreased from 27.1% to 23.5%. The decrease in the gross profit percentage for the first quarter 2004 was principally the result of a change in product mix that reflected a larger percent of the Company's revenue for the SMT products, where price pressure continues. Selling, General and Administrative. Selling, general and administrative expenses decreased 4.0% from $ 2.8 million in the first quarter of 2003 to $ 2.6 million in the first quarter of 2004. As a percentage of net sales, selling, general and administrative expenses decreased from 40.2% in the first quarter 2003 to 23.4% in the first quarter of 2004. The decrease in the percentage of net sales in the first quarter of 2004 was the result of higher revenues. The decrease in costs in sales, service, marketing and administrative expense was primarily due to a reduced workforce. 9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued) Research, Development and Engineering. Research, development and engineering increased 11.6% from $822,000 in the first quarter of 2003 to $917,000 in the first quarter of 2004, and as a percentage of net sales, decreased from 12.0% to 8.1% for the same period. In the first quarter of 2004 we continued our support of product development. Operating Loss. Operating loss decreased 47.2% from $1.7 million in the first quarter of 2003 to $907,000 in the first quarter of 2004, and as a percentage of net sales, decreased from 25.1% to 8.0%. The decrease in operating loss was primarily the result of increased revenues. Income Taxes. The Company has recorded a full valuation allowance to offset the deferred tax asset arising as a result of the Company's net operating loss carryforward due to the uncertainty surrounding realization. Accordingly, no income tax benefit is reflected in the statement of operations at April 4, 2004. Our statutory federal income tax rate is 34.0%. LIQUIDITY AND CAPITAL RESOURCES As of April 4, 2004, we had $3.5 million in cash and cash equivalents. The Company has a secured revolving line of credit with a US bank that allows for aggregate borrowings, including letters of credit, up to a maximum of $14 million against a borrowing base of secured accounts receivable and inventory. The Company may elect to borrow at interest rates pegged to either the bank's base rate or the LIBOR rate in effect from time to time. This loan agreement extends to May 31, 2007 and is subject to maintaining certain financial covenants with which the Company is in compliance at April 4, 2004. No borrowings were outstanding under this agreement at April 4, 2004; at which time the available funds on the borrowing base formula was approximately $9.2 million. We have a mortgage note that is secured by our real property in Billerica, MA. The mortgage note had an outstanding balance at April 4, 2004 of approximately $5.6 million. The mortgage requires monthly payments of $38,269, which includes interest calculated at the rate of 5.42% per annum. A final balloon payment of approximately $5.1 million is due on December 26, 2006 upon maturity of the mortgage note. During the three months ended April 4, 2004, the Company used cash resources of $3.1 million. This use of cash was primarily the result of net losses of $980,000, an increase in accounts receivable of $2.7 million and an increase in inventory of $1.8 million offset by an increase in accounts payable of $2.4 million. We expect that our current cash position and ability to borrow necessary funds will be sufficient to meet our corporate, operating and capital requirements through 2004. Given the expected growth in the Company's markets, beginning in the second quarter of 2004, we expect to be utilizing our line of credit to fund the increases in working capital needs. OTHER MATTERS The impact of inflation and the effect of foreign exchange rate changes during 2004 have had no material impact on our business and financial results. RECENT ACCOUNTING DEVELOPMENTS See 2003 Annual Report on Form 10-K, on file with the SEC. 10 FORWARD LOOKING STATEMENTS This Report, other than historical financial information, includes forward-looking statements that involve known and unknown risks and uncertainties, including quarterly fluctuations in results. Such statements are made pursuant to the "safe harbor" provisions under the securities laws, and are based on the assumptions and expectations of the Company's management at the time such statements are made. Important factors that could cause actual results to differ include the timely availability and acceptance of new products, general market conditions governing supply and demand, the impact of competitive products and pricing and other risks detailed in the Company's filings with the Securities and Exchange Commission. Actual results may vary materially. Accordingly, you should not place undue reliance on any forward-looking statements. Unless otherwise required by law, the Company disclaims any obligation to revise or update such forward-looking statements in order to reflect future events or developments. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We do not believe that we have any material market risk exposure with respect to derivative or other financial instruments. Item 4. CONTROLS AND PROCEDURES Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation as of the end of the period covered by this Report, of the effectiveness of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report. Our management, including our Chief Executive Officer and Chief Financial Officer, also conducted an evaluation of our internal control over financial reporting to determine whether any changes occurred during the quarter covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there has been no such change during the period covered by this Report. 11 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 31.1 - Section 302 Certification Exhibit 31.2 - Section 302 Certification Exhibit 32.1 - Section 906 Certification Exhibit 32.2 - Section 906 Certification (b) Reports on Form 8-K On January 20, 2004, the Company furnished a Current Report on Form 8-K to notify shareholders of the Company's release to affirm its fourth quarter guidance. On February 26, 2004, the Company furnished a Current Report on Form 8-K to notify shareholders of the Company's release of its financial results for the quarter ended December 31, 2003. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BTU INTERNATIONAL, INC. DATE: May 19, 2004 BY: /s/ Mark R. Rosenzweig ---------------------- Mark R. Rosenzweig President, Chief Executive Officer (principal executive officer) and Director DATE: May 19, 2004 BY: /s/ Thomas P. Kealy ------------------- Thomas P. Kealy Vice President, Corporate Controller and Chief Accounting Officer (principal financial and accounting officer) 13 EX-31.1 2 b50370btexv31w1.txt CEO SECTION 302 CERTIFICATION EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Mark R. Rosenzweig, certify that: 1. I have reviewed this quarterly report on Form 10-Q of BTU International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and we have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 19, 2004 /s/ Mark R. Rosenzweig ---------------------- Mark R. Rosenzweig President, Chief Executive Officer and Director EX-31.2 3 b50370btexv31w2.txt CFO SECTION 302 CERTIFICATION EXHIBIT 31.2 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas P. Kealy, certify that: 1. I have reviewed this quarterly report on Form 10-Q of BTU International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; and c) disclosed in this quarterly report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: May 19, 2004 /S/ Thomas P. Kealy ------------------- Thomas P. Kealy Vice President, Corporate Controller and Chief Accounting Officer EX-32.1 4 b50370btexv32w1.txt CEO SECTION 906 CERTIFICATION EXHIBIT 32.1 CERTIFICATION PURSUANT TO SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as President and Chief Executive Officer of BTU International, Inc. (the "Company"), does hereby certify that to his knowledge: 1) the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods covered by the Report. /s/ Mark R. Rosenzweig ---------------------- Mark R. Rosenzweig President and Chief Executive Officer Dated: May 19, 2004 EX-32.2 5 b50370btexv32w2.txt CFO SECTION 906 CERTIFICATION EXHIBIT 32.2 CERTIFICATION PURSUANT TO SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Pursuant to Section 1350, Chapter 63 of Title 18, United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, as Vice President, Corporate Controller and Chief Accounting Officer of BTU International, Inc. (the "Company"), does hereby certify that to his knowledge: 1. the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 4, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods covered by the Report. /S/ Thomas P. Kealy ------------------- Thomas P. Kealy Vice President, Corporate Controller and Chief Accounting Officer (principal financial and accounting officer) Dated: May 19, 2004 -----END PRIVACY-ENHANCED MESSAGE-----