-----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, IbI/pBgg64mIZMDPoiSukd7dqWw1Igia7vU2HAvls9evIhXfkcz9MlS/DeY9w0ot beev1fKzr5/F5s62VtZ8Zg== 0000896645-97-000005.txt : 19970814 0000896645-97-000005.hdr.sgml : 19970814 ACCESSION NUMBER: 0000896645-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970629 FILED AS OF DATE: 19970813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASECO CORP CENTRAL INDEX KEY: 0000896645 STANDARD INDUSTRIAL CLASSIFICATION: INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS [3825] IRS NUMBER: 042816806 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21294 FILM NUMBER: 97658820 BUSINESS ADDRESS: STREET 1: 500 DONALD LYNCH BLVD CITY: MARLBORO STATE: MA ZIP: 01752 BUSINESS PHONE: 5084818896 MAIL ADDRESS: STREET 1: 500 DONALD LYNCH BOULEVARD CITY: MARLBORO STATE: MA ZIP: 01752 10-Q 1 FORM 10Q (06/29/97) SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 29, 1997 Commission file number 0-21294 Aseco Corporation (Exact name of registrant as specified in its charter) Delaware 04-2816806 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 500 Donald Lynch Boulevard, Marlboro, Massachusetts 01752 (Address of principal executive offices) (508)481-8896 (Registrant's telephone number, including area code) 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 the number of shares outstanding of each of the issuer's classes of common stock,as of June 29, 1997. Common Stock, $.01 par value 3,672,017 (Title of each class) (Number of shares) ASECO CORPORATION TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets (unaudited) at June 29, 1997 and March 30, 1997 3 Condensed Consolidated Statements of Operations (unaudited) for the three months ended June 29, 1997 and June 30, 1996 4 Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended June 29, 1997 and June 30, 1996 5 Notes to Condensed Consolidated Financial Statements 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-9 PART II. OTHER INFORMATION Item 1. Legal Proceedings 10 Item 2. Changes in Securities 10 Item 3. Defaults upon Senior Securities 10 Item 4. Submission of Matters to a Vote of Security Holders 10 Item 5. Other Information 10 Item 6. Exhibits and Reports on Form 8-K 10 Signatures PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements ASECO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(IN THOUSANDS, EXCEPT SHARE DATA) June 29, 1997 March 30, 1997 ASSETS Current Assets Cash and cash equivalents $7,532 $14,082 Accounts receivable, less allowance For doubtful accounts of $526,000 at June 29, 1997 and $407,000 at March 30, 1997 9,847 9,153 Inventories, net 12,002 9,238 Prepaid expenses and other current assets 1,953 1,414 ------- ------- Total current assets 31,334 33,887 Plant and equipment, at cost 6,092 5,179 Less accumulated depreciation and amortization 3,156 2,952 ------- ------- 2,936 2,227 Other assets, net 2,566 526 ------- ------- $36,836 $36,640 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Line of credit $81 $-- Accounts payable 5,494 2,091 Accrued expenses 3,907 2,608 Income taxes payable 453 321 Current portion of capital lease obligations 13 13 ------- ------- Total current liabilities 9,948 5,033 Deferred taxes payable 465 465 Long-term capital lease obligations 35 29 Stockholders' equity Preferred stock, $.01 par value, 1,000,000 Shares authorized, none issued and outstanding --- --- Common stock, $.01 par value: Authorized 15,000,000 Shares, issued and outstanding 3,672,017 and 3,664,519 shares at June 29, 1997 and March 30, 1997, respectively 37 37 Translation adjustment 12 Additional paid in capital 17,645 17,642 Retained earnings 8,694 13,434 ------- ------- Total stockholders' equity 26,388 31,113 ------- ------- $36,836 $36,640 ======= =======
See notes to condensed consolidated financial statements ASECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) Three months ended June 29,1997 June 30, 1996 Net sales $8,865 $11,001 Cost of sales 4,820 5,614 ------- ------- Gross profit 4,045 5,387 Research and development 1,356 1,235 Selling, general and administrative expense 2,473 2,406 Acquired in-process research and development 4,900 --- ------- ------- Income (loss) from operations (4,684) 1,746 Other income (expense): Interest income 169 158 Interest expense (6) (1) ------- ------- 163 157 ------- ------- Income (loss) before income taxes (4,521) 1,903 Income tax expense 219 628 ------- ------- Net income (loss) $(4,740) $1,275 ======== ======= Earnings (loss) per share ($1.29) $.34 ======== ======= Shares used in computing earnings (loss) per share 3,665,000 3,708,000
See notes to condensed consolidated financial statements ASECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands) Three months ended June 29,1997 June 30, 1996 Operating activities: Net income (loss) $(4,740) $1,275 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 269 222 Acquired in-process research and development 4,900 Changes in assets and liabilities: Accounts receivable 64 572 Inventories, net (1,990) (1,215) Prepaid expenses and other current assets (327) (321) Accounts payable and accrued expenses 2,123 (319) Income taxes payable 132 318 ------- ------- Total adjustments 5,171 (743) ------- ------- Cash provided by operating activities 431 532 Investing activities: Acquisitions net of cash acquired (6,079) -- Acquisition of plant and equipment (457) (178) Increase in software development costs and other assets (50) (121) ------- ------- Cash used in investing activities (6,586) (299) Financing activities: Net proceeds from issuance of common stock 3 109 Payments on working capital line of credit (395) Payments of long-term capital lease obligations (4) (3) ------- ------- Cash used/provided by financing activities (396) 106 ------- ------- Net increase (decrease) in cash and cash equivalents (6,551) 339 Effect of exchange rate changes on cash 1 -- Cash and cash equivalents at the beginning of period 14,082 14,083 ------- ------- Cash and cash equivalents at the end of Period $7,532 $14,422 ======= =======
See notes to condensed consolidated financial statements ASECO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED JUNE 29, 1997 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three- month period ended June 29, 1997 are not necessarily indicative of the results that may be expected for the year ended March 29, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended March 30, 1997. 2. The computations of earnings per share are based on the weighted average number of outstanding shares of common stock and common equivalent shares (using the treasury stock method). Fully diluted earnings per share have not been separately presented as the amount does not differ significantly from primary earnings per share. In February 1997, the Financial Accounting Standards Board (FASB) issued Statement No. 128 "Earnings Per Share" which is required to be adopted for the quarter ending December 28, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating primary earnings per share, the dilutive effect of stock options will be excluded. For the comparative first quarters ended June 29, 1997 and June 30, 1996, earnings (loss) per share pursuant to Statement 128 would have been:
June 29, 1997 June 30, 1996 Basic earnings (loss) per share ($ 1.29) $.35 Weighted average shares outstanding 3,665,000 3,619,000 Diluted earnings (loss) per share ($ 1.29) $.34 Weighted average common and common equivalent shares 3,665,000 3,708,000
3. Inventories consisted of: (in thousands) June 29, 1997 March 30, 1997 Raw Material $7,308 $4,996 Work in Process 2,556 1,612 Finished Goods 2,138 2,630 ------- ------- $12,002 $9,238 ======= ======= 4. On May 23, 1997, the Company acquired 100% of the outstanding stock of Western Equipment Developments (Holdings) Ltd. ("WED") for approximately $6,000,000 in cash. WED designs, manufactures and markets integrated circuit wafer handling robot systems used to load, sort and transport wafers during the inspection stage of the semiconductor manufacturing process. The acquisition was accounted for as a purchase and accordingly, the results of operations of the acquired business have been included in the Company's consolidated financial statements commencing May 23, 1997. In connection with the acquisition, the Company allocated a portion of the purchase price to in-process research and development which resulted in a one-time charge to operations of approximately $4.9 million. The following table summarizes the unaudited pro-forma consolidated results of operations as if the acquisition had been made at the beginning of each of the periods presented:
Quarter Ended June 29, 1997 June 30, 1996 Net sales $9,894 $11,970 Net income (6,129) (4,181) Earnings per share $(1.67) $(1.15)
5. In July 1997, the Financial Accounting Standards Board (FASB) issued Statement No. 130 "Reporting Comprehensive Income" which is required to be adopted for the quarter ending June 28, 1998. The adoption of this standard is not expected to have a material impact on the Company's financial position or results of operations. 6. In July 1997, the Financial Accounting Standards Board (FASB) issued Statement No. 131 "Disclosure About Segments of an Enterprise and Related Information" which is required to be adopted for the quarter ending June 28, 1998. The adoption of this standard is not expected to have a material impact on the Company's financial position or results of operations. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Three months ended June 29, 1997 Results of Operations Net sales for the first quarter of fiscal 1998 decreased 19% to $8.9 million compared to $11.0 million for the first quarter of fiscal 1997. The decrease in net sales resulted from fewer unit shipments during the first quarter of fiscal 1998 compared to the first quarter of fiscal 1997 as a result of an industry wide market downturn. International sales represented approximately 35% of net sales for the first quarter of fiscal 1998 versus 62% in the first quarter of fiscal 1997. The decrease in international sales as a percentage of total sales resulted from several domestic customers, who had curtailed ordering activity over the past year as a result of unfavorable market conditions, placing orders in the first quarter of fiscal 1998. International sales for the first quarter of fiscal 1998 were $3.1 million versus $6.9 million for the first quarter of fiscal 1997. Approximately 59% of all international sales were to customers located in the Pacific Rim region. Gross margin for the first quarter of fiscal 1998 was 46% compared to 49% in the same quarter last year. The decline resulted from volume discounts associated with several large orders shipped during the first quarter of fiscal 1998 and from a higher mix of lower margin product sales during such quarter. Research and development expenses increased 10% to $1.4 million in the first quarter of fiscal 1998 from $1.2 million in the first quarter of fiscal 1997. Research and development expenses also increased as a percentage of sales to 15% in the first quarter of fiscal 1998 from 11% in the first quarter of fiscal 1997 due to increased research and development spending and the decline in net sales. The increase in research and development spending resulted from the Company's efforts to complete a new test handler model for introduction in July 1997. Despite the decline in net sales, the Company is committed to maintaining its development spending at planned levels regardless of fluctuations in the market. During the first quarter of fiscal 1998, the Company also recorded a one-time charge to earnings of $4.9 million for acquired in-process research and development related to the Company's acquisition of Western Equipment Developments Holdings ("WED") (See Note 4 to the Condensed Consolidated Financial Statements included herein). Selling, general and administrative expenses for the first quarter of fiscal 1998 were $2.5 million versus $2.4 million for the first quarter of fiscal 1997. Selling, general and administrative expenses also increased as a percentage of sales to 28% in the first quarter of fiscal 1998 from 22% in the first quarter of fiscal 1997. The increase in selling, general and administrative expenses was due primarily to the Company's establishment of an office in Singapore to provide spares and service support and technical assistance and training. Operating loss in the first quarter of fiscal 1998 was $4.7 million versus operating income of $1.7 million in the first quarter of fiscal 1997. The operating loss of $4.7 million was attributable to the one-time charge to earnings of $4.9 million relating to the acquired in-process research and development associated with the acquisition of WED. The effective tax rate increased from 33% in the first quarter of fiscal 1997 to 35% in the first quarter of fiscal 1998 due primarily to the decrease in international sales, which are generally taxed at a lower rate. The one-time charge of $4.9 million incurred by the Company in the first quarter of fiscal 1998 for acquired in-process research and development is not deductible for tax purposes and therefore had no impact on the Company's effective tax rate for the first quarter of fiscal 1998. As a result of the foregoing, net loss for the first quarter of fiscal 1998 was $4.7 million, or $1.29 per share, as compared to net income of $1.3 million, or $.34 per share, for the first quarter of fiscal 1997. Liquidity and Capital Resources The Company ended the first quarter of fiscal 1998 with a cash position of approximately $7.5 million. Additionally, the Company had an unsecured line of credit with a bank in the amount of $5.0 million against which there were no borrowings at the end of the first quarter of fiscal 1998. The Company generated $431,000 of cash from operations during the first quarter of fiscal 1998. Accounts receivable increased approximately $700,000 in the first quarter of fiscal 1998 because of an increase in net sales from the fourth quarter of fiscal 1997. Inventory increased approximately $2.8 million during the first quarter of fiscal 1998 as the result of the Company beginning to purchase inventory for the production of its first units of a newly introduced test handler coupled with the inclusion of WED's inventory as a result of the acquisition. Accounts payable and accrued expense increased approximately $4.9 million as a result of both increases in material receipts and the inclusion of WED's current liabilities in the first quarter fiscal 1998 balance sheet. The Company used approximately $6.6 million in cash during the first quarter of fiscal 1998, most of which was used to fund the Company's acquisition of WED. Additionally, the Company spent approximately $457,000 on capital equipment purchases and $50,000 to fund internal software development costs. The Company used cash from financing activities in the first quarter of fiscal 1998 of $396,000, primarily to pay down WED's outstanding working line of credit. The Company believes that funds generated from operations, existing cash balances and available borrowing capacity will be sufficient to meet the Company's cash requirements for at least the next twelve months. Cautionary Statement for Purposes of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 The Company's future results are difficult to predict and may be affected by a number of important risk factors including, but not limited to, the factors listed in the Company's Annual Report on Form 10K for the fiscal year ended March 30, 1997. The Company wishes to caution readers that those important factors, in some cases, have affected, and in the future could affect, the Company's actual consolidated quarterly or annual operating results and could cause those actual consolidated quarterly or annual operating results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the Company. ASECO CORPORATION PART II - OTHER INFORMATION Item 1. Legal Proceedings: None. Item 2. Changes in Securities: None. Item 3. Defaults upon Senior Securities: None. Item 4. Submissions of Matters to a Vote of Security Holders: Item 5. Other Information: None. Item 6. Exhibits and reports on Form 8-K: a. Exhibits - None b. The Company filed a report on Form 8-K with the Securities and Exchange Commission on May 30, 1997. ASECO CORPORATION 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. Signature Title Date /s/ Carl S. Archer, Jr. President and Chief Executive August 13, 1997 - ------------------------ Officer (principal executive Carl S. Archer, Jr. officer) /s/ Sebastian J. Sicari Vice President, Finance and August 13, 1997 - ------------------------ Administration, Chief Financial Sebastian J. Sicari Officer, Treasurer (principal financial and accounting officer) EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ASECO CORPORATION'S CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED JUNE 29, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS MAR-29-1998 MAR-31-1997 JUN-29-1997 7,532 0 9,847 526 12,002 31,334 2,936 3,156 36,836 9,948 0 0 0 37 26,351 36,836 8,865 8,865 4,820 4,820 0 0 (6) (4,521) 219 (4,740) 0 0 0 (4,740) (1.29) (1.29)
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