-----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, LScAr6AXZsVSFLPd2vTBeHFkK2T0szWkcxeCxZnQwGUZQanN1AMnvSMhhm/mBea0 Yz37DFY0vPE8pZ2ILIXrOA== 0000896645-98-000002.txt : 19980212 0000896645-98-000002.hdr.sgml : 19980212 ACCESSION NUMBER: 0000896645-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971228 FILED AS OF DATE: 19980211 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: SEC FILE NUMBER: 000-21294 FILM NUMBER: 98532161 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 (12/28/97) 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 December 28, 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 December 28, 1997. Common Stock, $.01 par value 3,714,419 (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 December 28, 1997 and March 30, 1997 3 Condensed Consolidated Statements of Operations (unaudited)for the three and nine months ended December 28, 1997 and December 29, 1996 4 Condensed Consolidated Statements of Cash Flows (unaudited)for the nine months ended December 28, 1997 and December 29, 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 and per share data) December 28, March 30, 1997 1997 ASSETS Current assets Cash and cash equivalents $ 2,185 $ 14,082 Accounts receivable, less allowance for doubtful accounts of $918,000 at December 28, 1997 and $407,000 at March 30, 1997 14,059 9,153 Inventories, net 12,847 9,238 Prepaid expenses and other current assets 1,768 1,414 ------ ------ Total current assets 30,859 33,887 Plant and equipment, at cost 8,225 5,179 Less accumulated depreciation and amortization 4,527 2,952 ------ ------ 3,698 2,227 Other assets, net 3,408 526 ------- ------- $ 37,965 $ 36,640 ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Line of credit $ 250 $-- Accounts payable 4,682 2,091 Accrued expenses 4,317 2,608 Income taxes payable 436 321 Current portion of capital lease obligations 13 13 ------- ------ Total current liabilities 9,698 5,033 Deferred taxes payable 465 465 Long-term capital lease obligations 28 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 3,714,419 and 3,664,519 shares at December 28, 1997 and March 30, 1997, respectively 37 37 Additional paid in capital 18,089 17,642 Retained earnings 9,600 13,434 Foreign currency translation adjustment 48 -- ------ ------ Total stockholders' equity 27,774 31,113 ------ ------ $ 37,965 $ 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 Nine months ended December 28, December 29, December 28, December 29, 1997 1996 1997 1996 Net sales $ 13,551 $ 6,722 $ 33,974 $ 26,712 Cost of sales 7,438 3,595 18,511 14,013 -------- -------- -------- -------- Gross profit 6,113 3,127 15,463 12,699 Research and development costs 1,945 1,287 4,866 3,798 Selling, general and administrative expense 3,288 1,713 8,746 6,381 Acquired in-process research and development --- --- 4,900 --- ------- ------- ------- ------- Income (loss) from operations 880 127 (3,049) 2,520 Other income (expense): Interest income 42 166 295 489 Interest expense (64) (1) (103) (5) Other expense, net (33) -- (44) -- ------- ------- ------- ------- (55) 165 148 484 ------- ------- ------- ------- Income (loss) before income taxes 825 292 (2,901) 3,004 Income tax expense 337 58 933 959 ------- ------- ------- ------- Net income (loss) $ 488 $ 234 $ (3,834) $ 2,045 ======= ======= ======= ======= Earnings (loss) per share, basic $.13 $.06 $(1.04) $.56 Shares used to compute earnings (loss) per share, basic 3,714,000 3,645,000 3,688,000 3,632,000 Earnings (loss) per share, diluted $.13 $.06 $(1.04) $.55 Shares used in computing earnings (loss) per share, diluted 3,876,000 3,711,000 3,688,000 3,708,000
See notes to condensed consolidated financial statements ASECO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands) Nine months ended December 28, December 29, 1997 1996 Operating activities: Net income (loss) $ (3,834) $ 2,045 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 1,003 679 Deferred income taxes -- (162) Acquired in-process research and development 4,900 -- Changes in assets and liabilities: Accounts receivable (1,639) 3,872 Inventories, net (3,309) (1,940) Prepaid expenses and other current assets (865) (400) Accounts payable and accrued expenses (815) (3,097) Income taxes payable 227 (137) ------- ------- Total adjustments (498) (1,185) ------- ------- Cash provided by (used in) operating activities (4,332) 860 Investing activities: Acquisitions net of cash acquired (6,079) -- Acquisition of plant and equipment (1,296) (638) Increase in other assets (295) (207) ------- ------- Cash used in investing activities (7,670) (845) Financing activities: Net proceeds from issuance of common stock 337 157 Net decrease in borrowings on working capital lines of credit (225) -- Payments of long-term capital lease obligations (11) (10) ------- ------- Cash provided by financing activities 101 147 ------- ------- Net increase(decrease) in cash and cash equivalents (11,901) 162 Effect of exchange rate changes on cash 4 -- Cash and cash equivalents at the beginning of period 14,082 14,083 ------- ------- Cash and cash equivalents at the end of period $ 2,185 $ 14,245 ======= ========
See notes to condensed consolidated financial statements ASECO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED DECEMBER 28, 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 and nine month periods ended December 28, 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. In 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share". Statement 128 replaced the previously reported primary and fully diluted earnings per share with basic and diluted earnings per share. Unlike primary earnings per share, basic earnings per share excludes any dilutive effects of options, warrants, and convertible securities. Diluted earnings per share is very similar to the previously reported fully diluted earnings per share. All earnings per share amounts for all periods have been presented, and where necessary, restated to conform to the Statement 128 requirements. The difference between the shares used to compute basic and diluted earnings (loss) per share is comprised wholly of the effect of employee stock options. 3. Inventories consisted of:
(in thousands) December 28, 1997 March 30, 1997 Raw Material $ 6,621 $ 4,996 Work in Process 3,886 1,612 Finished Goods 2,340 2,630 ------- ------- $ 12,847 $ 9,238 ======== ========
4. On May 23, 1997, the Company acquired 100% of the outstanding stock of Western Equipment Developments (Holdings) Ltd. ("WED"), located in Plymouth, England, 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:
Nine months ended December 28, 1997 December 29, 1996 Net sales $ 35,002 $ 30,596 Net loss (5,223) (3,647) Loss per share $ (1.43) $ (1.01)
5. In July 1997, the Financial Accounting Standards Board (FASB) issued Statement No. 130 "Reporting Comprehensive Income" which is required to be adopted in the first quarter of fiscal 1999. 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 in the first quarter of fiscal 1999. 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 and nine months ended December 28, 1997 Results of Operations Net sales for the third quarter of fiscal 1998 increased 102% to $13.6 million versus $6.7 million for the same quarter last year. Net sales for the first nine months of fiscal 1998 increased 27% to $34.0 million compared to $26.7 million for the first nine months of fiscal 1997. The increase in third quarter net sales resulted primarily from an increase in unit shipments during the third quarter of fiscal 1998 compared to the third quarter of fiscal 1997. International sales represented approximately 34% of net sales for the third quarter of fiscal 1998 versus 41% in the third quarter of fiscal 1997. Approximately 88% of all international sales were to customers located in the Pacific Rim region with the largest proportion of these sales shipped to Taiwan. Gross margin in the third quarter of fiscal 1998 was 45% compared to 47% in the same quarter last year. Gross margin for the first nine months of fiscal 1998 was 46% compared to 48% in the same period last year. The decline in gross margin resulted from increased shipments of newer product models which generally have lower gross margin percentages and to a lesser extent volume discounts associated with several large quantity orders shipped during fiscal 1998. Research and development expenses increased 51% in the third quarter of fiscal 1998 to $1.9 million from $1.3 million in the third quarter of fiscal 1997. Research and development expenses decreased as a percentage of sales to 14% in the third quarter of fiscal 1998 compared with 19% in the third quarter of fiscal 1997. Research and development expenses increased 28% to $4.9 million in the first nine months of fiscal 1998 from $3.8 million in the first nine months of fiscal 1997. The increase in research and development in fiscal 1998 was primarily the result of increased spending on the development of the Company's newest test handler model, the VT8000. Selling, general, and administrative expenses for the third quarter of fiscal 1998 were $3.3 million, or 24% of sales, versus $1.7 million, or 26% of sales, in the third quarter of fiscal 1997. Selling, general and administrative expenses for the first nine months of fiscal 1998 were $8.7 million, or 26% of sales, versus $6.4 million, or 24% of sales for the first nine months of fiscal 1997. The increase in selling, general and administrative expenses was due to the inclusion of the expenses of WED in third quarter fiscal 1998 results, costs associated with the establishment of a new sales and service office in Singapore, increased spending on trade shows and marketing related to the introduction of the Company's newest test handler and WED's new high speed wafer sorter, and an increase in coverage for potential exposure in accounts receivable on shipments to Far East countries with higher than tolerable financial risk. Operating income in the third quarter of fiscal 1998 was $880,000 versus operating income of $127,000 in the third quarter of fiscal 1997. Operating loss in the first nine months of fiscal 1998 was $3.0 million versus operating income of $2.5 million in the first nine months of fiscal 1997. The year to date operating loss of $3.0 million is attributable to the one-time charge to earnings of $4.9 million recorded in the first quarter of fiscal 1998 relating to the acquired in-process research and development associated with the acquisition of WED (See Note 4 to the Condensed Consolidated Financial Statements included herein). The effective tax rate for the third quarter of fiscal 1998 was 41% versus 20% for the same quarter last year. The increase was due to the Company's inability to offset losses incurred by WED against income earned by the Company in the United States and to the fact that the third quarter fiscal 1997 tax rate reflected a lower than usual tax provision, the intended effect of which was to bring the year-to-date fiscal 1997 rate in line with the projected annual rate of 31%. The Company recorded a tax provision of $933,000 for the first nine months of fiscal 1998 on a pretax loss of $2.9 million. The tax provision was recorded as a result of the combination of the first quarter one-time write-off of in-process research and development which is not deductible for tax purposes and operating losses of WED for which no tax benefit was recorded. As a result of the foregoing, net income for the third quarter of fiscal 1998 was $488,000, or $.13 per share, as compared to net income of $234,000, or $.06 per share, for the third quarter of fiscal 1997. Net loss for the first nine months of fiscal 1998 was $3.8 million, or $1.04 per share, as compared to net income of $2.0 million, or $.55 per share, for the first nine months of fiscal 1997 Liquidity and Capital Resources The Company ended the third quarter of fiscal 1998 with a cash position of approximately $2.2 million. The Company has an unsecured line of credit with a bank in the amount of $5.0 million against which there were borrowings of $250,000 at the end of the third quarter of fiscal 1998. The Company used approximately $4.3 million of cash from operations during the first nine months of fiscal 1998. Accounts receivable increased approximately $4.9 million during the first nine months of fiscal 1998 as a result of both the increase in sales and the inclusion of WED's accounts receivable balance as a result of the acquisition. Inventory increased approximately $3.6 million during the first nine months of fiscal 1998 as the result of the Company purchasing inventory for the production of the first units of its newly introduced test handler and high speed wafer sorter coupled with the inclusion of WED's inventory as a result of the acquisition. Accounts payable and accrued expenses increased approximately $4.3 million as a result of both increases in material receipts and the inclusion of WED's current liabilities in the fiscal 1998 balance sheet. The Company used approximately $7.7 million in cash for investing activities during the first nine months of fiscal 1998, most of which was used to fund the Company's acquisition of WED. Additionally, the Company spent approximately $1.3 million on capital equipment purchases and $295,000 to fund internal software development costs. The Company generated cash from financing activities in the first nine months of fiscal 1998 of approximately $101,000, primarily as the result of proceeds from issuances of common stock. 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: None. Item 5. Other Information: None. Item 6. Exhibits and reports on Form 8-K: a. Exhibits - None b. There were no reports on Form 8-K filed for the three months ended December 28, 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 February 11, 1998 - ------------------------ Officer (principal executive Carl S. Archer, Jr. officer) /s/ Sebastian J. Sicari Vice President, Finance and February 11, 1998 - ------------------------ Administration, Chief Financial Sebastian J. Sicari Officer, Treasurer (principal financial officer) /s/ Mary R. Barletta Vice President, Corporate February 11, 1998 - ----------------------- Controller Mary R. Barletta (principal 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 DECEMBER 28, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS MAR-29-1998 SEP-29-1997 DEC-28-1997 2,815 0 14,059 918 12,847 30,859 3,698 4,527 37,965 9,698 0 0 0 37 27,737 37,965 13,551 13,551 7,438 7,438 0 0 (64) 825 337 488 0 0 0 488 .13 .13
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