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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
--- SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 29, 1996
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 0-22114
ASYST TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 94-2942251
State or other jurisdiction of incorporation or organization) (I.R.S. Employer identification No.)
48761 KATO ROAD, FREMONT, CALIFORNIA 94538
(Address of principal executive offices)
(510) 661 5000
(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
--- ---
THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, NO PAR VALUE,
OUTSTANDING AS OF AUGUST 1, 1996 WAS 5,070,523.
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ASYST TECHNOLOGIES, INC.
INDEX
Part I. Financial Information Page No.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -- 1
June 30, 1996 and March 31, 1996
Condensed Consolidated Statements of Income -- 2
Three Months Ended June 30, 1996 and
June 30, 1995
Condensed Consolidated Statements of Cash Flows -- 3
Three Months Ended June 30, 1996 and
June 30, 1995
Notes to Condensed Consolidated Financial 4
Statements
Item 2. Management's Discussion and Analysis of Financial 5-6
Condition and Results of Operations
Part II. Other Information 7
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature 8
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PART 1. - FINANCIAL INFORMATION
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, March 31,
1996 1996
----------- --------
(unaudited)
ASSETS
Current assets:
Cash and cash investments $ 10,735 $ 12,421
Short-term investments 1,010 2,005
Accounts receivable, net 38,795 33,591
Inventories 32,302 27,124
Prepaid expenses and other current assets 7,210 8,030
-------- --------
Total current assets 90,052 83,171
Property and equipment, net 12,646 12,206
Licenses and patents, net 1,175 986
Other assets 161 125
-------- --------
$104,034 $ 96,488
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 17,094 $ 13,484
Accrued liabilities 9,941 5,743
Customer deposits 8,944 11,387
Income taxes payable 793 1,784
-------- --------
Total current liabilities 36,772 32,398
-------- --------
Shareholders' equity:
Common stock 62,808 62,774
Retained earnings 4,454 1,316
-------- --------
Total shareholders' equity 67,262 64,090
-------- --------
$104,034 $ 96,488
======== ========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED; IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended
June 30,
--------------------
1996 1995
------- -------
Net sales $42,292 $19,331
Cost of sales 25,886 9,081
------- -------
Gross margin 16,406 10,250
Operating expenses
Research and development 3,865 1,716
Selling, general and administrative 7,643 5,431
------- -------
Total operating expenses 11,508 7,147
------- -------
Operating income 4,898 3,103
Other income, net 142 416
------- -------
Income before income taxes 5,040 3,519
Provision for income taxes 1,902 1,409
------- -------
Net income $ 3,138 $ 2,110
======= =======
Net income per common share $ 0.60 $ 0.40
======= =======
Weighted average common and
equivalent shares $ 5,196 $ 5,267
======= =======
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED; IN THOUSANDS)
Three Months Ended
June 30,
-------------------
1996 1995
-------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,138 $ 2,110
Adjustments to reconcile net income to net cash used for
operating activities
Depreciation and amortization expense 917 330
Provision for sales returns and doubtful accounts -- 300
Changes in assets -
Accounts receivable (5,204) (3,708)
Inventories (5,178) (9,979)
Prepaid expenses and other current assets 820 (1,209)
Changes in liabilities -
Accounts payable 3,610 (845)
Accrued liabilities 4,198 1,081
Income taxes payable (991) 1,347
Customer deposits (2,443) 6,590
-------- --------
Net cash used for operating activities (1,133) (3,983)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale (purchase) of short-term investments 995 (1,643)
Purchase of property, plant and equipment (1,357) (3,121)
(Increase) decrease in other assets (225) 117
-------- --------
Net cash used for investing activities (587) (4,647)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 34 370
-------- --------
Net cash provided by financing activities 34 370
-------- --------
DECREASE IN CASH AND CASH INVESTMENTS (1,686) (8,260)
CASH AND CASH INVESTMENTS AT BEGINNING OF PERIOD 12,421 34,439
-------- --------
CASH AND CASH INVESTMENTS AT END OF PERIOD $ 10,735 $ 26,179
======== ========
The accompanying notes are an integral part of these condensed
consolidated financial statements.
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ASYST TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of Asyst
Technologies, Inc. (the Company) and its wholly-owned subsidiaries.
Inter-company accounts and transactions have been eliminated.
While the financial information furnished is unaudited, the financial statements
included in this report reflect all adjustments (consisting only of normal
recurring adjustments) which the Company considers necessary for fair
presentation of the results of operation for the interim periods covered and of
the financial condition of the Company as of the date of the interim balance
sheet. The results for interim periods are not necessarily indicative of the
results for the entire year. The condensed consolidated financial statements
should be read in connection with the Company's financial statements for the
year ended March 31, 1996 included in its Form 10-K.
For interim reporting purposes, the Company closes its fiscal quarters on the
Saturday nearest the end of the last month of the quarter. However, for
financial statement purposes, the Company indicates the last month-end date as
being the quarter end.
CASH AND INVESTMENTS
For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid debt instruments purchased with a maturity of three months or
less to be cash investments.
INVENTORIES
Inventories are stated at the lower of cost or market and include materials,
labor and manufacturing overhead costs. Inventories consist of (in thousands):
June 30, 1996 March 31, 1996
------------- --------------
Raw material $17,886 $15,283
Work-in-process and finished goods 14,416 11,841
------- -------
$32,302 $27,124
======= =======
NET INCOME PER SHARE
Net income per share is computed using the weighted average number of shares of
common stock and dilutive common share equivalents outstanding. Shares issuable
upon the exercise of stock options are included in the calculation (using the
treasury stock method) to the extent they are dilutive. Fully diluted earnings
per share data have not been presented as amounts would not differ materially
from primary earnings per share data.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except for the historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed in this section and those contained in the Form
10-K for the year ended March 31, 1996.
RESULTS OF OPERATIONS
Net sales. Net sales increased $23 million or 119 percent between the three
months ended June 30, 1996 ($42.3 million) and the three months ended June 30,
1995 ($19.3 million) due to increased sales of the 200 SMIF-Arm and Pod product
lines, stocker product line, enclosure designs, wafer management systems,
conveyor systems, and indexing systems. The Company's international sales
increased as a percent of total net sales from 42 percent ($8.0 million) for the
three months ended June 30, 1995 to 63 percent ($26.8 million) of net sales for
the three months ended June 30, 1996. Although to date the Company's results
of operations have not been adversely affected by currency exchange rates
because the Company has invoiced substantially all of its international sales
in United States dollars, there can be no assurance that the Company's results
of operations will not be adversely affected by such fluctuations in the
future.
Gross Margin. Gross margin decreased to 38.8 percent for the three months ended
June 30, 1996 from 53.0 percent for the same period in 1995. The decrease was
primarily due to manufacturing inefficiencies associated with the Company's high
growth rate and due to changes in the Company's product mix with a higher
percentage of the Company's revenues consisting of lower margin sales of
automation systems. The Company expects that its gross margin percentage may
fluctuate over the next few quarters as product mix varies. While it is the goal
of the Company to improve gross margins as a percentage of net sales in the
future through reduction of manufacturing and other inefficiencies in the
Company's distribution system and product cost reduction through redesign, there
can be no assurance that such improved margins can be realized through such
efforts or that margins may not be negatively affected by other factors such as
pricing.
Research and development. Research and development expenses increased to $3.9
million or 9.1 percent of sales during the three months ended June 30, 1996 from
$1.7 million or 8.9 percent during the three months ended June 30, 1995. The
increase was due primarily to increases in staffing and personnel related
expenditures and other costs driven by the Company's commitment to develop new
products and product enhancements.
Selling, general and administrative. Selling, general and administrative
expenses increased from $5.4 million during the three months ended June 30, 1995
to $7.6 million for three months ended June 30, 1996, but decreased as
percentage of net sales from 28.1 percent to 18.1 percent respectively. The
increase was due primarily to an increase in staffing and personnel related
costs. The decrease as a percentage of net sales was due to the faster growth in
net sales as compared to the increase in expenses. The Company expects that
selling, general and administrative spending will increase in future periods as
its sales, marketing and administrative efforts expand to support future growth
of the Company, although that spending may vary as a percentage of sales.
Other income, net. Other income, net decreased from $0.4 million for the three
months ended June 30, 1995 to $0.1 million for the three months ended June 30,
1996. Interest income decreased primarily because of the decrease in the amount
of excess cash available to invest.
Provision for income taxes. The Company's effective income tax rate decreased
from 40.0 percent for the three month period ended June 30, 1995 to 37.7 percent
for the three month period ended June 30, 1996 because the Company estimates its
effective rate for the year will be slightly higher than the 37.0 percent
effective rate for the fiscal year ended March 31, 1996.
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LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, the Company had approximately $11.7 million in cash, cash
investments and short-term investments and approximately $53.3 million of
working capital. In addition, under a working capital line of credit agreement
with a bank, which expires on September 1, 1996, the Company can borrow
up to $15.0 million conditioned upon meeting certain financial covenants,
including maintaining specific levels of quarterly and annual earnings, working
capital, tangible net worth and liquidity. Interest is at the bank's prime rate.
As of June 30, 1996, the Company had no outstanding balance under this credit
facility. However, the Company had outstanding letters of credit totaling $4.4
million. At June 30, 1996, the Company was in technical violation of a loan
covenant. The bank has waived such technical violation. The Company is currently
negotiating and expects to execute a new line of credit agreement to replace the
one expiring on September 1, 1996.
Although the Company cannot accurately anticipate the effect of inflation on its
operations, to date inflation has not had a material impact on the Company's net
sales or results of operations.
The nature of the semiconductor industry, combined with the current economic
environment, make it very difficult for the Company to predict future liquidity
requirements with certainty. However, the Company believes that existing cash
and short-term investments will be adequate to finance continuing operations,
investments in property and equipment, inventories and expenditures for the
development of new products, at least through fiscal 1997.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not party to any legal proceedings which would have a
material impact on the Company, it's operations or financial results.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission 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 - 27B Financial Data Schedule
(b) Reports on form 8-K - None
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SIGNATURE
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.
ASYST TECHNOLOGIES, INC.
Date: August 12, 1996 By: /s/ Douglas J. McCutcheon
-------------------- -------------------------
Douglas J. McCutcheon
Senior Vice President
Chief Financial Officer
Signing on behalf of the
registrant as principal
financial and accounting
officer
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