Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 28, 2014 | Oct. 30, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 28-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'BTU INTERNATIONAL INC | ' |
Entity Central Index Key | '0000840883 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 9,574,343 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (unaudited) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets | ' | ' |
Cash and cash equivalents | $10,428 | $13,991 |
Accounts receivable, less allowance of $1,245 and $1,280 at September 28, 2014 and December 31, 2013 | 12,578 | 11,370 |
Inventories | 10,696 | 9,831 |
Other current assets | 764 | 1,126 |
Total current assets | 34,466 | 36,318 |
Property, plant and equipment, net | 2,624 | 3,386 |
Other assets, net | 2,165 | 626 |
Total assets | 39,255 | 40,330 |
Current liabilities | ' | ' |
Current portion of long-term debt | 380 | 367 |
Accounts payable | 7,418 | 5,408 |
Deferred revenue | 680 | 2,052 |
Accrued expenses | 5,710 | 6,361 |
Total current liabilities | 14,188 | 14,188 |
Long-term debt, less current portion | 6,935 | 7,219 |
Other long-term liabilities | 0 | 14 |
Total liabilities | 21,123 | 21,421 |
Commitments and contingencies | ' | ' |
Stockholders' equity | ' | ' |
Preferred stock, $1.00 par value - 5,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.01 par value - 25,000,000 shares authorized; 10,942,310 shares issued and 9,574,343 shares outstanding at September 28, 2014 and 10,924,856 shares issued and 9,556,889 shares outstanding at December 31, 2013 | 109 | 109 |
Additional paid in capital | 52,666 | 52,204 |
Accumulated deficit | -32,045 | -30,853 |
Treasury stock, at cost, 1,367,967 shares at September 28, 2014 and December 31, 2013 | -4,990 | -4,990 |
Accumulated other comprehensive income | 2,392 | 2,439 |
Total stockholders' equity | 18,132 | 18,909 |
Total liabilities and stockholders' equity | $39,255 | $40,330 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Accounts receivable, allowance | $1,245 | $1,280 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 10,942,310 | 10,924,856 |
Common stock, shares outstanding | 9,574,343 | 9,556,889 |
Treasury stock, shares | 1,367,967 | 1,367,967 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Income Statement [Abstract] | ' | ' | ' | ' |
Net sales | $15,917 | $12,014 | $44,037 | $36,761 |
Costs of goods sold | 9,840 | 8,480 | 26,925 | 25,103 |
Gross profit | 6,077 | 3,534 | 17,112 | 11,658 |
Operating expenses: | ' | ' | ' | ' |
Selling, general and administrative | 4,921 | 6,228 | 14,622 | 15,237 |
Research, development and engineering | 939 | 1,276 | 3,179 | 3,427 |
Operating income (loss) | 217 | -3,970 | -689 | -7,006 |
Interest income | 8 | 13 | 26 | 36 |
Interest expense | -84 | -103 | -253 | -323 |
Foreign exchange income (loss) | -34 | -33 | 22 | -147 |
Other income | 3 | 17 | 10 | 63 |
Income (loss) before provision for income taxes | 110 | -4,076 | -884 | -7,377 |
Provision for income taxes | 110 | 998 | 308 | 1,083 |
Net loss | $0 | ($5,074) | ($1,192) | ($8,460) |
Loss per share: | ' | ' | ' | ' |
Basic | $0 | ($0.53) | ($0.12) | ($0.89) |
Diluted | $0 | ($0.53) | ($0.12) | ($0.89) |
Weighted average number of shares outstanding: | ' | ' | ' | ' |
Basic shares | 9,574,343 | 9,544,864 | 9,563,934 | 9,536,010 |
Effect of dilutive options | 0 | 0 | 0 | 0 |
Diluted shares | 9,574,343 | 9,544,864 | 9,563,934 | 9,536,010 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statement of Comprehensive Loss (unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 |
Comprehensive loss is calculated as follows: | ' | ' | ' | ' |
Net loss | $0 | ($5,074) | ($1,192) | ($8,460) |
Other comprehensive income (loss): | ' | ' | ' | ' |
Foreign currency translation adjustment | -17 | 23 | -47 | 88 |
Comprehensive loss | ($17) | ($5,051) | ($1,239) | ($8,372) |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Stockholders' Equity (unaudited) (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income [Member] |
In Thousands, except Share data | ||||||
Beginning Balance at Dec. 31, 2013 | $18,909 | $109 | $52,204 | ($30,853) | ($4,990) | $2,439 |
Beginning Balance, shares at Dec. 31, 2013 | ' | 10,925,000 | ' | ' | 1,368,000 | ' |
Net loss | -1,192 | ' | ' | -1,192 | ' | ' |
Exercise of stock options | 1 | ' | 1 | ' | ' | ' |
Exercise of stock options, shares | 700 | 1,000 | ' | ' | ' | ' |
Issuance of common stock | 8 | ' | 8 | ' | ' | ' |
Issuance of common stock, shares | ' | 16,000 | ' | ' | ' | ' |
Stock-based compensation | 453 | ' | 453 | ' | ' | ' |
Translation adjustment | -47 | ' | ' | ' | ' | -47 |
Ending Balance at Sep. 28, 2014 | $18,132 | $109 | $52,666 | ($32,045) | ($4,990) | $2,392 |
Ending Balance, shares at Sep. 28, 2014 | ' | 10,942,000 | ' | ' | 1,368,000 | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 28, 2014 | Sep. 29, 2013 |
Cash flows from operating activities: | ' | ' |
Net loss | ($1,192) | ($8,460) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 889 | 1,307 |
Provision (recovery) for bad debts | 115 | -181 |
Provision for inventory obsolescence | 321 | 1,706 |
Gain on sale of property, plant and equipment | 0 | -51 |
Stock-based compensation | 453 | 477 |
Deferred taxes | 0 | 825 |
Net change in operating assets and liabilities: | ' | ' |
Accounts receivable | -1,375 | 692 |
Inventories | -1,288 | -2,327 |
Other current assets | 358 | 1,409 |
Deferred revenue | -1,371 | -629 |
Other assets | -1,551 | -154 |
Other long-term liabilities | -14 | 620 |
Accounts payable | 2,042 | 1,142 |
Accrued expenses | -614 | 486 |
Net cash used in operating activities | -3,227 | -3,138 |
Cash flows from investing activities: | ' | ' |
Proceeds from sale of property, plant and equipment | 0 | 57 |
Purchases of property, plant and equipment | -57 | -208 |
Net cash used in investing activities | -57 | -151 |
Cash flows from financing activities: | ' | ' |
Principal payments under loan and capital lease agreements | -271 | -294 |
Issuance of common stock | 8 | 17 |
Proceeds from the exercise of stock options | 1 | 0 |
Net cash used in financing activities | -262 | -277 |
Effects of exchange rates on cash | -17 | 20 |
Net decrease in cash and cash equivalents | -3,563 | -3,546 |
Cash and cash equivalents, beginning of period | 13,991 | 20,218 |
Cash and cash equivalents, end of period | 10,428 | 16,672 |
Cash paid during the periods for: | ' | ' |
Interest | 228 | 293 |
Income taxes | $332 | $484 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 28, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
(1) Basis of Presentation | |
The condensed consolidated balance sheet, financial information and related disclosures as of December 31, 2013 have been derived from the Company’s consolidated financial statements, which have been audited as of that date. The condensed consolidated balance sheet as of September 28, 2014 and the related condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 28, 2014 and September 29, 2013 are unaudited. The condensed consolidated statement of stockholders’ equity and consolidated statements of cash flows for the nine months ended September 28, 2014 and September 29, 2013 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 any other period or 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 year ended December 31, 2013, together with the auditors’ report, included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (SEC). | |
Pending Merger | |
On October 21, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Amtech Systems, Inc., an Arizona corporation (“Amtech”), and BTU Merger Sub, Inc., a Delaware corporation (“Merger Sub”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of Amtech. The Merger Agreement has been approved by the Boards of Directors of both the Company and Amtech and is subject to approval of the Company’s and Amtech’s stockholders. | |
Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $0.01 per share, of the Company (“Company Shares”), issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive and become exchangeable for 0.3291 shares (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Amtech (“Amtech Shares”). Any outstanding Company stock option shall be assumed by Amtech and shall be converted into an option to purchase shares of Amtech common stock on substantially the same terms and conditions as were applicable to such Company stock option, with appropriate adjustments based upon the Exchange Ratio to the exercise price and the number of shares of Amtech common stock subject to such stock option. Each Company restricted stock unit that remains unvested immediately prior to the effective time of the Merger will become a fully vested and unrestricted share of Company common stock. | |
The Company and Amtech have each made customary representations, warranties and covenants and the merger is subject to various closing conditions. The foregoing is not a complete description of all of the terms and conditions of the Merger Agreement and reference is made to the full text of the Merger Agreement, which is filed as an exhibit to our Current Report on Form 8-K filed with the SEC on October 22, 2014, for more information. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 28, 2014 | |
Accounting Policies [Abstract] | ' |
Summary of Significant Accounting Policies | ' |
(2) Summary of Significant Accounting Policies | |
The accounting policies underlying the accompanying unaudited condensed consolidated financial statements are those set forth in Note 1 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, as filed with the SEC. |
Inventories
Inventories | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Inventories | ' | ||||||||
(3) Inventories | |||||||||
The components of inventories are as follows: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
Raw materials and manufactured components | $ | 5,835 | $ | 6,010 | |||||
Work-in-process | 2,940 | 2,459 | |||||||
Finished goods | 1,921 | 1,362 | |||||||
Total inventory | $ | 10,696 | $ | 9,831 | |||||
Accrued_Expenses
Accrued Expenses | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Other Liabilities Disclosure [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
(4) Accrued Expenses | |||||||||
The components of accrued expenses are as follows: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
Accrued commissions | $ | 861 | $ | 1,086 | |||||
Accrued warranty | 488 | 379 | |||||||
Accrued taxes | 1,912 | 1,858 | |||||||
Accrued audit | 436 | 419 | |||||||
Accrued legal | 872 | 1,430 | |||||||
Accrued bonus | 88 | 85 | |||||||
Payroll and payroll taxes | 501 | 688 | |||||||
Accrued cost of sales | 162 | 142 | |||||||
Other | 390 | 274 | |||||||
Total Accrued expenses | $ | 5,710 | $ | 6,361 | |||||
Warranty | |||||||||
The Company provides standard warranty coverage for labor for 12 months and special extended material-only coverage on certain products. The Company estimates and records an accrual for anticipated warranty claims based on sales. The accrual for warranty claims covers the estimated cost of materials. Actual warranty claims incurred are charged to the accrual. Factors that affect the Company’s product warranty accrual 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 nine months ended September 28, 2014 (in thousands): | |||||||||
Nine Months Ended | |||||||||
September 28, 2014 | |||||||||
Beginning balance, December 31, 2013 | $ | 379 | |||||||
Plus: accruals related to new sales | 426 | ||||||||
Less: warranty claims incurred and reserve adjustment | (317 | ) | |||||||
Ending balance, September 28, 2014 | $ | 488 | |||||||
Debt
Debt | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
(5) Debt | |||||||||
Long-term debt at September 28, 2014 and December 31, 2013 consisted of: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
Mortgage note payable, interest rate of 4.43% | $ | 7,315 | $ | 7,586 | |||||
Less - current portion of long-term debt | 380 | 367 | |||||||
Long-Term debt, less current portion | $ | 6,935 | $ | 7,219 | |||||
Mortgage Note | |||||||||
On March 30, 2006, the Company entered into a $10 million mortgage note secured by its real property in Billerica, Massachusetts, which had an initial maturity date of December 23, 2015. On September 9, 2010, the Company signed a First Loan Modification Agreement relating to the mortgage note, which reduced the annual interest rate from 6.84% to 5.50% and the monthly payment from $76,280 to $69,000. | |||||||||
On September 26, 2013, the Company signed a Second Loan Modification Agreement relating to the mortgage note, which extended the maturity date from December 23, 2015 to September 26, 2023. The modification also reduced the annual interest rate from 5.50% to 4.43% through September 26, 2018, at which time the interest rate will be adjusted to a per annum fixed rate equal to the aggregate of the Federal Home Loan Board (FHLB) Five Year Classic Advance Rate plus two hundred forty basis points. The current monthly payment was reduced from $69,000 to $57,997. The mortgage note had an outstanding balance on September 28, 2014 of approximately $7.3 million. All outstanding principal and accrued and unpaid interest will be due and payable on the maturity date. | |||||||||
Letters of Credit | |||||||||
On August 31, 2009, the Company entered into a pledge and assignment agreement with a bank, pursuant to which the bank agreed to issue letters of credit which the Company will cash collateralize via restricted cash deposits at the bank. As of September 28, 2014, the value of the outstanding letters of credit issued by the bank for the Company was $249,221. This restricted cash value is included in the Company’s balance sheet in other current assets. |
Net_Loss_Per_Share
Net Loss Per Share | 9 Months Ended |
Sep. 28, 2014 | |
Earnings Per Share [Abstract] | ' |
Net Loss Per Share | ' |
(6) Net Loss Per Share | |
Basic earnings per share (EPS) is computed by dividing net income (loss) 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 shares and potentially dilutive securities outstanding during the period, using the treasury stock method. Potentially dilutive securities include outstanding stock options and unvested restricted stock units (RSUs). Due to their anti-dilutive effect, approximately 1,394,720 and 1,315,670 securities to purchase common stock were excluded from the calculation of diluted loss per share for the three and nine months ended September 28, 2014 and September 29, 2013, respectively. However, these potentially dilutive securities could become dilutive in future periods. |
Accounting_for_StockBased_Comp
Accounting for Stock-Based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Accounting for Stock-Based Compensation | ' | ||||||||||||||||
(7) Accounting for Stock-Based Compensation | |||||||||||||||||
Stock Options | |||||||||||||||||
The Company accounts for share-based compensation in accordance with the provisions of SFAS No. 123R, Share-Based Payment (now codified as FASB ASC Topic 718, Compensation-Stock Compensation (“ASC 718”)). This statement establishes standards for accounting for transactions in which an entity exchanges its equity instruments for goods or services. The Company’s stock option compensation expense was $94,339 and $340,329 for the three and nine months ended September 28, 2014, respectively and $140,027 and $436,984 for the three and nine months ended September 29, 2013, respectively. These amounts do not include expense related to restricted stock awards or the employee stock purchase plan. | |||||||||||||||||
The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life and expected volatility in the market value of the underlying common stock. The Company is also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. Historical data is used to estimate pre-vesting forfeitures and record stock-based compensation expense only for those awards that are expected to vest. Accordingly, awards ultimately expected to vest have been reduced by an annualized estimated forfeiture rate of 4%. | |||||||||||||||||
Calculation of Fair Value - Assumptions Used: | |||||||||||||||||
Nine months ended | |||||||||||||||||
September 28, 2014 | September 29, 2013 | ||||||||||||||||
Expected Volatility | 64.88 | % | 66.84 | % | |||||||||||||
Expected Life (in years) | 4.1 | 4.21 | |||||||||||||||
Risk-Free Interest Rate | 1.26 | % | 0.79 | % | |||||||||||||
Expected Dividend Yield | — | — | |||||||||||||||
Expected volatilities are based on the weighted average historical volatility of the Company’s common stock for the expected life of the option. The Company has significant historical data to help evaluate the expected lives of options in developing its assumption. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term approximating the expected life of the options. The expected dividend yield is based upon the Company’s history of not issuing dividends and management’s current expectation of the same. | |||||||||||||||||
The following table summarizes the stock option activity during the nine months ended September 28, 2014: | |||||||||||||||||
Shares | Weighted- | Average | Aggregate | ||||||||||||||
Average | Remaining | Intrinsic | |||||||||||||||
Exercise | Contractual | Value | |||||||||||||||
Price | Term | ||||||||||||||||
Options | |||||||||||||||||
Outstanding at December 31, 2013 | 1,408,692 | $ | 5.3 | ||||||||||||||
Granted | 19,032 | $ | 2.91 | ||||||||||||||
Exercised | (700 | ) | $ | 2 | |||||||||||||
Forfeited/Cancelled | (128,604 | ) | $ | 9.21 | |||||||||||||
Outstanding at September 28, 2014 | 1,298,420 | $ | 4.88 | 3.09 | $ | 277,074 | |||||||||||
Exercisable at September 28, 2014 | 1,008,086 | $ | 5.27 | 2.48 | $ | 153,916 | |||||||||||
The weighted-average grant date fair value of options granted during the nine-month periods ended September 28, 2014 and September 29, 2013 were $1.44 and $1.21, respectively. The aggregate fair value of options exercised during the nine-month periods ended September 28, 2014 and September 29, 2013 was $720 and $0, respectively. | |||||||||||||||||
As of September 28, 2014, there was $278,231 of total unrecognized compensation cost related to non-vested options granted under the Company’s option plans. That cost is expected to be recognized over a weighted-average period of 1.09 years. The total fair value of options vested during the nine-month period ended September 28, 2014 was $282,460. | |||||||||||||||||
Restricted Stock Units | |||||||||||||||||
In April and September 2014, the Company granted a total of 69,725 restricted stock units to various employees. The weighted-average grant date fair value of the restricted stock units during the nine-month periods ended September 28, 2014 was $2.99. The Company recorded compensation expense of $104,667 and $27,913 during the nine-month period ended September 28, 2014 and September 29, 2013, respectively, related to restricted stock units. As of September 28, 2014, there was $185,391 of unrecognized compensation costs related to grants of restricted stock units and these grants have a remaining life of 1.09 years. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |||
Sep. 28, 2014 | ||||
Fair Value Disclosures [Abstract] | ' | |||
Fair Value of Financial Instruments | ' | |||
(8) Fair Value of Financial Instruments | ||||
In accordance with the requirements of FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), the Company groups its financial assets and liabilities measured at fair value on a recurring basis in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: | ||||
• | Level 1 - Valuation is based upon quoted market price for identical instruments traded in active markets. | |||
• | Level 2 - Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. | |||
• | Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of discounted cash flow models and similar techniques. | |||
In accordance with the requirements of ASC 820, it is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. When available, the Company uses quoted market prices to measure fair value. If market prices are not available, the fair value measurement is based on models that use primarily market based parameters including interest rate yield curves, option volatilities and currency rates. In certain cases, where market rate assumptions are not available, the Company is required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. | ||||
The carrying amounts of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short-term nature. Long-term debt is also reported at carrying value and approximates fair value as the interest rate on the mortgage note payable of 4.43% approximates the current market interest rate. |
Segment_Reporting
Segment Reporting | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Segment Reporting | ' | ||||||||
(9) 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 designing, manufacturing, selling and servicing thermal processing equipment and related process controls for use in the electronics, alternative energy, 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, thermal processing equipment is used for solar cell processing, sintering nuclear fuel for commercial power generation, brazing and sintering of ceramics and powdered metals, and depositing precise thin film coatings. The business segment’s customers are multinational original equipment manufacturers and contract manufacturing companies. | |||||||||
Tangible long-lived assets by geographic location are as follows: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
United States | $ | 2,237 | $ | 2,889 | |||||
Asia Pacific | 387 | 497 | |||||||
$ | 2,624 | $ | 3,386 |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 28, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
(10) Subsequent Events | |
The Company evaluated subsequent events through the time of issuance of these condensed consolidated financial statements. Other than as set forth below, the Company is not aware of any significant events that occurred subsequent to the balance sheet date, but prior to the filing of this report that would have a material impact on its condensed consolidated financial statements. | |
On October 21, 2014, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Amtech Systems, Inc., an Arizona corporation (“Amtech”), and BTU Merger Sub, Inc., a Delaware corporation (“Merger Sub”), pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of Amtech. The Merger Agreement has been approved by the Boards of Directors of both the Company and Amtech and is subject to the Company Stockholder Approval (as defined below) and the Amtech Stockholder Approval (as defined below). | |
Subject to the terms and conditions set forth in the Merger Agreement, at the effective time of the Merger, each share of common stock, par value $0.01 per share, of the Company (“Company Shares”), issued and outstanding immediately prior to the effective time of the Merger will be converted into the right to receive and become exchangeable for 0.3291 shares (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Amtech (“Amtech Shares”). Any outstanding Company stock option shall be assumed by Amtech and shall be converted into an option to purchase shares of Amtech common stock on substantially the same terms and conditions as were applicable to such Company stock option, with appropriate adjustments based upon the Exchange Ratio to the exercise price and the number of shares of Amtech common stock subject to such stock option. Each Company restricted stock unit that remains unvested immediately prior to the effective time of the Merger will become a fully vested and unrestricted share of Company common stock. | |
The Merger Agreement contains customary representations and warranties of the Company and Amtech relating to their respective businesses and public filings. Additionally, the Merger Agreement provides for customary pre-closing covenants of the Company and Amtech, including, with regard to the Company, covenants (i) to conduct its business in the ordinary course consistent with past practice and to refrain from taking certain actions without Amtech’s consent, (ii) not to solicit proposals relating to alternative transactions or, subject to certain exceptions, enter into discussions concerning or provide information in connection with alternative transactions, and (iii) subject to certain exceptions, to recommend that the Company’s stockholders adopt the Merger Agreement. | |
Consummation of the Merger is subject to various conditions, including, among others, customary conditions relating to the adoption of the Merger Agreement by the requisite vote of the Company’s stockholders (the “Company Stockholder Approval”) and the approval of the issuance of Amtech Shares in connection with the Merger by the requisite vote of Amtech’s stockholders (the “Amtech Stockholder Approval”). | |
The Merger Agreement provides certain termination rights for both the Company and Amtech and further provides that upon termination of the Merger Agreement under certain circumstances (i) (including the Company entering into an alternative transaction), the Company will be obligated to pay Amtech a termination fee of $1,320,000 or an expense reimbursement amount of $1,000,000 or (ii) Amtech will be obligated to pay the Company a termination fee of $1,320,000 or an expense reimbursement amount of $1,000,000. In addition, either the Company or Amtech can terminate the Merger Agreement if the Merger has not been consummated on or before 120 days following the date the joint registration statement on Form S-4 and proxy statement is filed with the SEC, if the failure to close is not caused by the breach of the Merger Agreement by the party electing to terminate. | |
The foregoing description of the Merger Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by the full text of the Merger Agreement and related documents, copies of which have been filed with the SEC on a Current Report on Form 8-K filed on October 22, 2014 and the terms of which are incorporated by reference herein. | |
Shortly after the Company entered into the Merger Agreement with Amtech, the Company learned that a putative stockholder class action complaint was filed, purportedly on behalf of BTU’s public stockholders, in the Court of Chancery of the State of Delaware against the members of the BTU Board, Amtech and Merger Sub. To the best of the Company’s knowledge, the complaint has not yet been served. The complaint generally alleges, among other things, that the members of the BTU Board breached their fiduciary duties owed to BTU’s public stockholders by causing BTU to enter into the Merger Agreement and approving the merger, and that Amtech and Merger Sub aided and abetted such breaches of fiduciary duties. In addition, the complaint alleges that the Merger Agreement improperly favors Amtech and unduly restricts BTU’s ability to negotiate with other potential bidders. The complaint generally seeks, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches, injunctive relief prohibiting defendants from consummating the Merger, other forms of equitable relief, and compensatory damages. The Company believes that the claims are without merit and, if the complaint is served, it intends to defend against the litigation vigorously on behalf of the BTU Board. |
Inventories_Tables
Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Inventory Disclosure [Abstract] | ' | ||||||||
Schedule of Components of Inventories | ' | ||||||||
The components of inventories are as follows: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
Raw materials and manufactured components | $ | 5,835 | $ | 6,010 | |||||
Work-in-process | 2,940 | 2,459 | |||||||
Finished goods | 1,921 | 1,362 | |||||||
Total inventory | $ | 10,696 | $ | 9,831 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Other Liabilities Disclosure [Abstract] | ' | ||||||||
Schedule of Components of Accrued Expenses | ' | ||||||||
The components of accrued expenses are as follows: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
Accrued commissions | $ | 861 | $ | 1,086 | |||||
Accrued warranty | 488 | 379 | |||||||
Accrued taxes | 1,912 | 1,858 | |||||||
Accrued audit | 436 | 419 | |||||||
Accrued legal | 872 | 1,430 | |||||||
Accrued bonus | 88 | 85 | |||||||
Payroll and payroll taxes | 501 | 688 | |||||||
Accrued cost of sales | 162 | 142 | |||||||
Other | 390 | 274 | |||||||
Total Accrued expenses | $ | 5,710 | $ | 6,361 | |||||
Schedule of Changes in Company's Accrued Warranty Account | ' | ||||||||
The following table reflects changes in the Company’s accrued warranty account during the nine months ended September 28, 2014 (in thousands): | |||||||||
Nine Months Ended | |||||||||
September 28, 2014 | |||||||||
Beginning balance, December 31, 2013 | $ | 379 | |||||||
Plus: accruals related to new sales | 426 | ||||||||
Less: warranty claims incurred and reserve adjustment | (317 | ) | |||||||
Ending balance, September 28, 2014 | $ | 488 | |||||||
Debt_Tables
Debt (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Long-Term Debt | ' | ||||||||
Long-term debt at September 28, 2014 and December 31, 2013 consisted of: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
Mortgage note payable, interest rate of 4.43% | $ | 7,315 | $ | 7,586 | |||||
Less - current portion of long-term debt | 380 | 367 | |||||||
Long-Term debt, less current portion | $ | 6,935 | $ | 7,219 | |||||
Accounting_for_StockBased_Comp1
Accounting for Stock-Based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 28, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||||||||||||
Calculation of Fair Value - Assumptions Used | ' | ||||||||||||||||
Calculation of Fair Value - Assumptions Used: | |||||||||||||||||
Nine months ended | |||||||||||||||||
September 28, 2014 | September 29, 2013 | ||||||||||||||||
Expected Volatility | 64.88 | % | 66.84 | % | |||||||||||||
Expected Life (in years) | 4.1 | 4.21 | |||||||||||||||
Risk-Free Interest Rate | 1.26 | % | 0.79 | % | |||||||||||||
Expected Dividend Yield | — | — | |||||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
The following table summarizes the stock option activity during the nine months ended September 28, 2014: | |||||||||||||||||
Shares | Weighted- | Average | Aggregate | ||||||||||||||
Average | Remaining | Intrinsic | |||||||||||||||
Exercise | Contractual | Value | |||||||||||||||
Price | Term | ||||||||||||||||
Options | |||||||||||||||||
Outstanding at December 31, 2013 | 1,408,692 | $ | 5.3 | ||||||||||||||
Granted | 19,032 | $ | 2.91 | ||||||||||||||
Exercised | (700 | ) | $ | 2 | |||||||||||||
Forfeited/Cancelled | (128,604 | ) | $ | 9.21 | |||||||||||||
Outstanding at September 28, 2014 | 1,298,420 | $ | 4.88 | 3.09 | $ | 277,074 | |||||||||||
Exercisable at September 28, 2014 | 1,008,086 | $ | 5.27 | 2.48 | $ | 153,916 |
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | ||||||||
Sep. 28, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Schedule of Tangible Long-Lived Assets by Geographic Location | ' | ||||||||
Tangible long-lived assets by geographic location are as follows: | |||||||||
September 28, | December 31, | ||||||||
2014 | 2013 | ||||||||
($ in thousands) | |||||||||
United States | $ | 2,237 | $ | 2,889 | |||||
Asia Pacific | 387 | 497 | |||||||
$ | 2,624 | $ | 3,386 | ||||||
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 | Oct. 21, 2014 | Oct. 21, 2014 |
Merger Agreement [Member] | Merger Agreement [Member] | |||
Subsequent Event [Member] | Subsequent Event [Member] | |||
Amtech Systems, Inc. [Member] | ||||
Basis Of Presentation [Line Items] | ' | ' | ' | ' |
Common stock, par value | $0.01 | $0.01 | $0.01 | $0.01 |
Common stock exchange ratio | ' | ' | ' | 0.3291 |
Inventories_Schedule_of_Compon
Inventories - Schedule of Components of Inventories (Detail) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory, Net [Abstract] | ' | ' |
Raw materials and manufactured components | $5,835 | $6,010 |
Work-in-process | 2,940 | 2,459 |
Finished goods | 1,921 | 1,362 |
Total inventory | $10,696 | $9,831 |
Accrued_Expenses_Schedule_of_C
Accrued Expenses - Schedule of Components of Accrued Expenses (Detail) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Liabilities Disclosure [Abstract] | ' | ' |
Accrued commissions | $861 | $1,086 |
Accrued warranty | 488 | 379 |
Accrued taxes | 1,912 | 1,858 |
Accrued audit | 436 | 419 |
Accrued legal | 872 | 1,430 |
Accrued bonus | 88 | 85 |
Payroll and payroll taxes | 501 | 688 |
Accrued cost of sales | 162 | 142 |
Other | 390 | 274 |
Total Accrued expenses | $5,710 | $6,361 |
Accrued_Expenses_Additional_In
Accrued Expenses - Additional Information (Detail) | 9 Months Ended |
Sep. 28, 2014 | |
Other Liabilities Disclosure [Abstract] | ' |
Term of standard warranty coverage for labor | 'The Company provides standard warranty coverage for labor for 12 months |
Standard product warranty for parts and labor period | '12 months |
Accrued_Expenses_Schedule_of_C1
Accrued Expenses - Schedule of Changes in Company's Accrued Warranty Account (Detail) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 28, 2014 |
Other Liabilities Disclosure [Abstract] | ' |
Beginning balance | $379 |
Plus: accruals related to new sales | 426 |
Less: warranty claims incurred and reserve adjustment | -317 |
Ending balance | $488 |
Debt_Schedule_of_LongTerm_Debt
Debt - Schedule of Long-Term Debt (Detail) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ' | ' |
Mortgage note payable, interest rate of 4.43% | $7,315 | $7,586 |
Less - current portion of long-term debt | 380 | 367 |
Long-term debt, less current portion | $6,935 | $7,219 |
Debt_Schedule_of_LongTerm_Debt1
Debt - Schedule of Long-Term Debt (Parenthetical) (Detail) | 9 Months Ended |
Sep. 28, 2014 | |
Debt Disclosure [Abstract] | ' |
Interest rate on the mortgage note payable | 4.43% |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 28, 2014 | Mar. 30, 2006 | |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Mortgage note amount | ' | $10,000,000 |
Mortgage note payable maturity date | 23-Dec-15 | ' |
Loan modification agreement date | 9-Sep-10 | ' |
Interest rate on the mortgage note payable | 4.43% | ' |
Amount of mortgage loan outstanding | 7,300,000 | ' |
Letters of credit outstanding | 249,221 | ' |
Mortgage Note Payable [Member] | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Mortgage note payable maturity date | 26-Sep-23 | ' |
Interest rate on the mortgage note payable | 4.43% | ' |
FHLB Basis points | 2.40% | ' |
Pre Loan Modification Agreement [Member] | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Interest rate on the mortgage note payable | 6.84% | ' |
Monthly installment payment | 76,280 | ' |
Post Loan Modification Agreement [Member] | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Interest rate on the mortgage note payable | 5.50% | ' |
Monthly installment payment | 69,000 | ' |
Post Loan Modification Agreement [Member] | Mortgage Note Payable [Member] | ' | ' |
Mortgage Loans on Real Estate [Line Items] | ' | ' |
Interest rate on the mortgage note payable | 4.43% | ' |
Monthly installment payment | $57,997 | ' |
Net_Loss_Per_Share_Additional_
Net Loss Per Share - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Potentially dilutive securities excluded from diluted income (loss) per share | 1,394,720 | 1,315,670 | 1,394,720 | 1,315,670 |
Accounting_for_StockBased_Comp2
Accounting for Stock-Based Compensation - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | ||||
Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Sep. 29, 2013 | Sep. 28, 2014 | Apr. 30, 2014 | Sep. 28, 2014 | Sep. 29, 2013 | |
Stock Options [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option compensation expense | $94,339 | $140,027 | $340,329 | $436,984 | ' | ' | $104,667 | $27,913 |
Annualized estimated forfeiture rate | ' | ' | 4.00% | ' | ' | ' | ' | ' |
Weighted-average grant date fair value of options granted | ' | ' | $1.44 | $1.21 | ' | ' | ' | ' |
Aggregate fair value of options exercised | ' | ' | 720 | 0 | ' | ' | ' | ' |
Unrecognized compensation cost related to non-vested options granted | ' | ' | ' | ' | 278,231 | ' | ' | ' |
Weighted average period during which cost is expected to be recognized | ' | ' | '1 year 1 month 2 days | ' | ' | ' | ' | ' |
Total fair value of options vested | ' | ' | 282,460 | ' | ' | ' | ' | ' |
Restricted stock granted to employees | ' | ' | ' | ' | ' | 69,725 | 69,725 | ' |
Weighted-average grant date fair value of grant | ' | ' | ' | ' | ' | ' | $2.99 | ' |
Unrecognized compensation grants | ' | ' | ' | ' | ' | ' | $185,391 | ' |
Weighted average remaining contractual life | ' | ' | ' | ' | ' | ' | '1 year 1 month 2 days | ' |
Accounting_for_StockBased_Comp3
Accounting for Stock-Based Compensation - Calculation of Fair Value - Assumptions Used (Detail) | 9 Months Ended | |
Sep. 28, 2014 | Sep. 29, 2013 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' |
Expected Volatility | 64.88% | 66.84% |
Expected Life (in years) | '4 years 1 month 6 days | '4 years 2 months 16 days |
Risk-Free Interest Rate | 1.26% | 0.79% |
Accounting_for_StockBased_Comp4
Accounting for Stock-Based Compensation - Summary of Stock Option Activity (Detail) (USD $) | 9 Months Ended |
Sep. 28, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Shares, Outstanding at December 31, 2013 | 1,408,692 |
Shares, Granted | 19,032 |
Shares, Exercised | -700 |
Shares, Forfeited/Cancelled | -128,604 |
Shares, Outstanding at September 28, 2014 | 1,298,420 |
Shares, Exercisable at September 28, 2014 | 1,008,086 |
Weighted-Average Exercise Price, Outstanding at December 31, 2013 | $5.30 |
Weighted-Average Exercise Price, Granted | $2.91 |
Weighted-Average Exercise Price, Exercised | $2 |
Weighted-Average Exercise Price, Forfeited/Cancelled | $9.21 |
Weighted-Average Exercise Price, Outstanding at September 28, 2014 | $4.88 |
Weighted-Average Exercise Price, Exercisable at September 28, 2014 | $5.27 |
Average Remaining Contractual Term, Outstanding at September 28, 2014 | '3 years 1 month 2 days |
Average Remaining Contractual Term, Exercisable at September 28, 2014 | '2 years 5 months 23 days |
Aggregate Intrinsic Value, Outstanding at September 28, 2014 | $277,074 |
Aggregate Intrinsic Value, Exercisable at September 28, 2014 | $153,916 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments - Additional Information (Detail) | 9 Months Ended |
Sep. 28, 2014 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Interest rate on the mortgage note payable | 4.43% |
Mortgage Note Payable [Member] | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' |
Interest rate on the mortgage note payable | 4.43% |
Segment_Reporting_Schedule_of_
Segment Reporting - Schedule of Tangible Long-Lived Assets by Geographic Location (Detail) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Tangible long-lived assets, Net | $2,624 | $3,386 |
United States [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Tangible long-lived assets, Net | 2,237 | 2,889 |
Asia Pacific [Member] | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' |
Tangible long-lived assets, Net | $387 | $497 |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | Sep. 28, 2014 | Dec. 31, 2013 | Sep. 28, 2014 | Sep. 28, 2014 | Oct. 21, 2014 | Oct. 21, 2014 |
Merger Agreement [Member] | Merger Agreement [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||
Scenario, Plan [Member] | Amtech Systems, Inc. [Member] | Merger Agreement [Member] | Merger Agreement [Member] | |||
Scenario, Plan [Member] | Amtech Systems, Inc. [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' |
Common Stock Par Value | $0.01 | $0.01 | ' | ' | $0.01 | $0.01 |
Exchange ratio | ' | ' | ' | ' | ' | 0.3291 |
Termination fee | ' | ' | $1,320,000 | $1,320,000 | ' | ' |
Expense reimbursement | ' | ' | $1,000,000 | $1,000,000 | ' | ' |
Merger agreement termination term | ' | ' | '(i)B (including the Company entering into an alternative transaction), the Company will be obligated to pay Amtech a termination fee of $1,320,000 or an expense reimbursement amount of $1,000,000 or (ii)B Amtech will be obligated to pay the Company a termination fee of $1,320,000 or an expense reimbursement amount of $1,000,000. In addition, either the Company or Amtech can terminate the Merger Agreement if the Merger has not been consummated on or before 120 days following the date the joint registration statement on Form S-4 and proxy statement is filed with the SEC, if the failure to close is not caused by the breach of the Merger Agreement by the party electing to terminate. | ' | ' | ' |