1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2000
Commission file number 1-5560
ALPHA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 04-2302115
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 SYLVAN ROAD, WOBURN, MASSACHUSETTS 01801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 935-5150
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. [X] Yes [_] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JANUARY 28, 2001
----- -------------------------------
COMMON STOCK, PAR VALUE $.25 PER SHARE 43,426,263
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
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PAGE
PART 1 FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets - December 31, 2000 and April 2, 2000..................... 3
Consolidated Statements of Income - Quarters and Nine Month Periods Ended
December 31, 2000 and December 26, 1999............................................... 4
Consolidated Statements of Cash Flows - Nine Month Periods Ended
December 31, 2000 and December 26, 1999............................................... 5
Notes to Consolidated Financial Statements............................................ 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................................. 10
PART 2 OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K................................................. 14
- --------------------------------------------------------------------------------
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands except share and per share amounts)
DECEMBER 31, APRIL 2,
2000 2000
- --------------------------------------------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents .......................................... $ 30,004 $ 23,219
Short-term investments (Note 3) .................................... 113,028 123,391
Accounts receivable, trade, less allowance for doubtful
accounts of $1,027 and $796 .................................. 52,563 33,844
Inventories (Note 4) ............................................... 16,492 11,916
Prepayments and other current assets ............................... 5,075 2,583
Prepaid income taxes ............................................... 4,213 1,191
Deferred income taxes .............................................. 7,261 7,261
--------- ---------
Total current assets ...................................... 228,636 203,405
--------- ---------
Property, plant and equipment, less accumulated depreciation and
amortization of $78,534 and $67,042 ................................ 102,168 75,520
Other assets ............................................................. 2,033 2,099
--------- ---------
$ 332,837 $ 281,024
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt ............................... $ 111 $ 3,011
Accounts payable ................................................... 18,294 20,537
Accrued liabilities:
Payroll, commissions and related expenses ........................ 9,145 6,975
Other ............................................................ 3,458 2,525
--------- ---------
Total current liabilities ................................. 31,008 33,048
--------- ---------
Long-term debt ........................................................... 285 345
--------- ---------
Other long-term liabilities .............................................. 2,204 2,237
--------- ---------
Deferred income taxes .................................................... 3,301 3,301
--------- ---------
Commitments and contingencies (Note 7)
Stockholders' equity
Common stock par value $0.25 per share: authorized
100,000,000 shares; issued 43,453,890 and 42,576,518 shares....... 10,863 10,644
Additional paid-in capital ......................................... 221,426 197,711
Retained earnings .................................................. 63,794 33,806
Treasury shares 41,899 and 64,786 at cost .......................... (44) (68)
--------- ---------
Total stockholders' equity ....................................... 296,039 242,093
--------- ---------
$ 332,837 $ 281,024
========= =========
- --------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except per share data)
THIRD NINE MONTH
QUARTERS ENDED PERIODS ENDED
DEC. 31, DEC. 26, DEC. 31, DEC. 26,
2000 1999 2000 1999
- --------------------------------------------------------------------------------------------------------------------
Net sales ................................ $ 78,684 $ 48,043 $ 217,573 $ 128,617
Cost of sales .......................... 42,326 27,088 117,930 72,630
Research and development expenses ...... 9,534 6,490 26,243 17,685
Selling and administrative expenses..... 11,405 7,792 33,932 21,663
--------- --------- --------- ---------
Operating income ......................... 15,419 6,673 39,468 16,639
Interest expense ......................... (16) (72) (54) (146)
Interest income and other, net ........... 2,143 1,916 6,022 3,951
--------- --------- --------- ---------
Income before income taxes ............... 17,546 8,517 45,436 20,444
Provision for income taxes ............... 5,966 3,066 15,448 7,361
--------- --------- --------- ---------
Net income ............................... $ 11,580 $ 5,451 $ 29,988 $ 13,083
========= ========= ========= =========
Basic earnings per share ................. $ 0.27 $ 0.13 $ 0.70 $ 0.33
========= ========= ========= =========
Diluted earnings per share ............... $ 0.26 $ 0.12 $ 0.67 $ 0.31
========= ========= ========= =========
Shares used in computing:
Basic earnings per share ................. 43,147 41,985 42,882 40,009
========= ========= ========= =========
Diluted earnings per share ............... 44,784 44,034 44,760 42,153
========= ========= ========= =========
- --------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
NINE MONTH PERIODS ENDED
DEC. 31, DEC. 26,
2000 1999
- -------------------------------------------------------------------------------------------------------------------
CASH PROVIDED BY OPERATIONS:
Net income ............................................................ $ 29,988 $ 13,083
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization of property, plant and equipment ...... 11,492 7,700
Gain on sale of property, plant and equipment ....................... (28) --
Loss on disposal of property, plant and equipment ................... -- 303
Deferred income taxes ............................................... -- 2,538
Issuance of treasury stock to 401(k) plan ........................... 1,077 850
Amortization of unearned compensation - restricted stock ............ -- 4
(Decrease) increase in other liabilities and long-term benefits ..... (33) 230
Decrease (increase) in other assets ................................. 66 (266)
Changes in operating assets and liabilities:
Accounts receivable ................................................ (18,719) (5,039)
Inventories ........................................................ (4,576) (910)
Prepayments and other current assets ............................... (5,514) (1,753)
Accounts payable ................................................... (2,243) 3,172
Other accrued liabilities and expenses ............................. 19,390 2,490
--------- ---------
Net cash provided by operations .................................. 30,900 22,402
--------- ---------
CASH USED IN INVESTING:
Additions to property, plant and equipment .......................... (38,140) (26,961)
Proceeds from sale of property, plant and equipment ................. 28 60
Purchases of short-term investments ................................. (94,257) (148,719)
Maturities of short-term investments ................................ 104,620 50,010
--------- ---------
Net cash used in investing ....................................... (27,749) (125,610)
--------- ---------
CASH PROVIDED BY FINANCING:
Payments on long-term debt .......................................... (2,960) (1,110)
Proceeds from long-term debt ........................................ -- 2,900
Deferred charges related to long-term debt .......................... -- 30
Proceeds from sale of stock ......................................... 238 116,036
Exercise of stock options and warrants .............................. 6,356 2,106
--------- ---------
Net cash provided by financing activities ........................ 3,634 119,962
--------- ---------
Net increase in cash and cash equivalents ............................... 6,785 16,754
Cash and cash equivalents, beginning of period .......................... 23,219 15,162
--------- ---------
Cash and cash equivalents, end of period ................................ $ 30,004 $ 31,916
========= =========
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Supplemental cash flow disclosures:
Cash paid for income taxes ..................................... $ 1,854 $ 3,078
========= =========
Cash paid for interest ......................................... $ 51 $ 156
========= =========
Supplemental disclosure of non-cash operating activities:
Tax benefit associated with the exercise of stock options ...... $ 16,150 $ 4,911
========= =========
Compensation expense related to stock options .................. $ 137 $ --
========= =========
The accompanying notes are an integral part of these financial statements.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The interim financial information included herein is unaudited. In addition, the
financial information does not include all disclosures required under generally
accepted accounting principles because certain note information included in the
Company's annual report to shareholders has been omitted. Such information
should be read in conjunction with the prior year's annual report. However, the
financial information reflects all adjustments (consisting solely of normal
recurring adjustments), which are, in the opinion of management, necessary to a
fair statement of the results for the interim periods. The Company considers the
disclosures adequate to make the information presented not misleading.
NOTE 2 ACQUISITION OF NETWORK DEVICE, INC.
On April 24, 2000, the Company completed its acquisition of privately-held
Network Device, Inc. ("NDI") of Sunnyvale, California. Approximately 2.67
million shares of common stock were exchanged for all outstanding shares of NDI.
Approximately 185,000 shares of Company stock were issued for the conversion of
NDI stock options into Company options.
The acquisition has been accounted for as a pooling-of-interests and
accordingly, the prior period consolidated financial statements and related
notes included herein have been restated to include the combined results of
operations, financial position and cash flows of NDI.
Prior to the merger, NDI's fiscal year ended on September 30. In recording the
business combination, NDI's prior period financial statements have been restated
to conform with the Company's year end.
The following information presents certain income statement data of the separate
companies for prior periods reflected:
THIRD NINE MONTH
QUARTER ENDED PERIOD ENDED
DEC. 26, 1999 DEC. 26, 1999
-------------- -------------
(in thousands)
Net sales:
Alpha Industries, Inc. ............................. $ 47,463 $127,837
Network Device, Inc. ............................... 725 1,093
Adjustments/ Eliminations........................... (145) (313)
-------- --------
$ 48,043 $128,617
======== ========
Net income (loss):
Alpha Industries, Inc. ............................. $ 6,297 $ 16,070
Network Device, Inc. ............................... (1,322) (4,667)
Adjustments/Eliminations ........................... 476 1,680
-------- --------
$ 5,451 $ 13,083
======== ========
The effects of conforming NDI's accounting policies to those of the Company were
not material
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
NOTE 3 SHORT-TERM INVESTMENTS
The Company's short-term investments are classified as held-to-maturity. These
investments consist primarily of commercial paper and securities issued by
various federal agencies and corporations with original maturities of more than
90 days. Such short-term investments are carried at amortized cost, which
approximates fair value, due to the short period of time to maturity. Gains and
losses are included in investment income in the period they are realized.
NOTE 4 INVENTORIES
DEC. 31, APRIL 2,
Inventories consist of the following: 2000 2000
- ---------------------------------------------------------------------------------
(in thousands)
Raw materials ........................... $ 5,216 $ 3,473
Work-in-process.......................... 8,469 7,397
Finished goods .......................... 2,807 1,046
------- -------
$16,492 $11,916
======= =======
NOTE 5 SEGMENT INFORMATION
During the second quarter ended October 1, 2000, the Company reorganized into
two reportable segments based on management's methods of evaluating operations
and performance. The new reportable segments are: Semiconductor Products and
Ceramic Products. The Semiconductor Products segment is comprised of two of the
Company's former segments: Wireless Semiconductor Products and Application
Specific Products. A description of the reportable segments follows:
SEMICONDUCTOR PRODUCTS:
The Semiconductor Products segment designs and manufactures gallium arsenide
integrated circuits and other discrete semiconductors primarily for the global
wireless communications and broadband markets.
CERAMIC PRODUCTS:
The Ceramic Products segment designs and manufactures technical ceramic and
magnetic products primarily for the global wireless infrastructure and broadband
markets.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
The table below presents selected financial data by business segment for the
periods indicated. The prior periods presented have been restated to reflect the
reorganization into two reportable segments.
QUARTERS ENDED NINE MONTH PERIODS ENDED
-------------------------- --------------------------
DEC. 31, DEC. 26, DEC. 31, DEC. 26,
2000 1999 2000 1999
-------- -------- -------- --------
(in thousands)
SALES
Semiconductor Products............... $ 65,866 $ 39,891 $179,796 $104,042
Ceramic Products .................... 12,818 8,152 37,777 24,575
-------- -------- -------- --------
$ 78,684 $ 48,043 $217,573 $128,617
======== ======== ======== ========
OPERATING INCOME
Semiconductor Products............... $ 13,179 $ 5,632 $ 33,013 $ 13,657
Ceramic Products .................... 2,240 1,041 6,455 2,982
-------- -------- -------- --------
$ 15,419 $ 6,673 $ 39,468 $ 16,639
======== ======== ======== ========
DEC. 31, APRIL 2,
2000 2000
-------- --------
(in thousands)
NET LONG-LIVED ASSETS
Semiconductor Products....................... $ 86,532 $ 62,459
Ceramic Products ............................ 15,636 13,061
-------- --------
$102,168 $ 75,520
======== ========
TOTAL ASSETS
Semiconductor Products....................... $142,657 $ 95,755
Ceramic Products ............................ 30,105 25,892
Corporate ................................... 160,075 159,377
-------- --------
$332,837 $281,024
======== ========
SIGNIFICANT CUSTOMERS
During the three months ended December 31, 2000, two customers accounted for
approximately 27% and 10%, respectively, of the Company's total sales. During
the three months ended December 26, 1999, one customer accounted for
approximately 35% of the Company's sales. For the nine months ended December 31,
2000, two customers accounted for approximately 28% and 13%, respectively, of
the Company's total sales. For the nine months ended December 26, 1999, one
customer accounted for approximately 34% of the Company's total sales.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
NOTE 6 EARNINGS PER SHARE
A reconciliation of the weighted average number of shares outstanding used in
the computation of basic and diluted earnings per share for the quarters and
nine month periods ended December 31, 2000 and December 26, 1999 is as follows:
QUARTERS ENDED NINE MONTH PERIODS ENDED
------------------------ ------------------------
DEC. 31, DEC. 26, DEC. 31, DEC. 26,
2000 1999 2000 1999
-------- -------- -------- --------
(in thousands)
Weighted average shares (basic) ............................... 43,147 41,985 42,882 40,009
Effect of dilutive stock options .............................. 1,637 2,049 1,878 2,144
------ ------ ------ ------
Weighted average shares (diluted).............................. 44,784 44,034 44,760 42,153
====== ====== ====== ======
For the quarters ended December 31, 2000 and December 26, 1999, options to
purchase approximately 1.2 million and 41,000 shares, respectively, were
outstanding but not included in the computation of diluted earnings per share
because the exercise prices of the options were greater than the average market
prices of the Company's common stock during those periods.
NOTE 7 COMMITMENTS AND CONTINGENCIES
The Company is party to suits and claims arising in the normal course of
business. Management believes these are adequately provided for or will result
in no significant additional liability to the Company.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
The following table shows our statement of operations data as a percentage of
sales for the periods indicated. All data represented in the table has been
restated to reflect the Company's April 24, 2000 acquisition of Network Device,
Inc., which was accounted for as a pooling-of-interests:
Quarters Ended Nine Month Periods Ended
----------------------- ------------------------
Dec. 31, Dec. 26, Dec. 31, Dec. 26,
2000 1999 2000 1999
-------- -------- -------- --------
Sales ..................................... 100.0% 100.0% 100.0% 100.0%
Cost of sales ............................. 53.8 56.4 54.2 56.5
----- ----- ----- -----
Gross margin .............................. 46.2 43.6 45.8 43.5
Research and development expenses ......... 12.1 13.5 12.1 13.8
Selling and administrative expenses........ 14.5 16.2 15.6 16.8
----- ----- ----- -----
Operating income .......................... 19.6 13.9 18.1 12.9
Other income, net ......................... 2.7 3.8 2.7 3.0
----- ----- ----- -----
Income before income taxes ................ 22.3 17.7 20.9 15.9
Provision for income taxes ................ 7.6 6.4 7.1 5.7
----- ----- ----- -----
Net income ................................ 14.7% 11.3% 13.8% 10.2%
===== ===== ===== =====
SALES. Sales increased 63.8% to $78.7 million for the third quarter of fiscal
2001 from $48.0 million for the third quarter of fiscal 2000. For the first nine
months of fiscal 2001, sales increased 69.2% to $217.6 million from $128.6
million for the first nine months of fiscal 2000. Orders increased 41.5% to
$76.4 million for the third quarter of fiscal 2001, compared with $54.0 million
for the same period last year. The increase in sales and orders continues to be
the result of high growth experienced by both our Semiconductor and Ceramic
Products Groups as a result of increased demand for wireless products, as well
as the increasing diversification of our customer base. In addition, our
continued ability to penetrate the emerging broadband market has contributed to
the overall increase in sales and orders. Deliveries to two customers
represented approximately 27% and 10%, respectively, of our total sales for the
third quarter of fiscal 2001, compared with one customer which represented 35%
of our sales for the same period last year. Deliveries to two customers
represented approximately 28% and 13% of our total sales for the first nine
months of fiscal 2001, compared with one customer which represented 34% for the
comparable period last year.
GROSS PROFIT. Gross profit increased 73.5% to $36.4 million or 46.2% of sales
for the third quarter of fiscal 2001 from $21.0 million or 43.6% of sales for
the comparable period last year. For the first nine months of fiscal 2001, gross
profit increased 78.0% to $99.6 million or 45.8% of sales compared with $56.0
million or 43.5% of sales for the same period last year. The increase in gross
margin for the quarter and year to date was primarily attributable to our
continued ability to leverage capacity and improve operating efficiencies in
both the Semiconductor and Ceramic Products Groups.
RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
46.9% to $9.5 million or 12.1% of sales for the third quarter of fiscal 2001
from $6.5 million or 13.5% of sales for the comparable period last year. For the
first nine months of fiscal 2001, research and development expenses increased
48.4% to $26.2 million or 12.1% of sales from $17.7 million or 13.8% of sales
for the comparable period last year. The increase in research and development
expenses is primarily due to our ongoing development of processes and
applications within our Semiconductor Products Group. For the third quarter and
first nine months of fiscal 2001, over 90% of our total research and development
expenses were focused on the Semiconductor Products Group.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses totaled
$11.4 million or 14.5% of sales for the third quarter of fiscal 2001, compared
with $7.8 million or 16.2% of sales for the same period last year. For the first
nine months of fiscal 2001, selling and administrative expenses totaled $33.9
million or 15.6% of sales. Included in the $33.9 million is approximately $1.8
million in one-time closing costs associated with the acquisition of Network
Device, Inc. (NDI), which was completed on April 24, 2000. Excluding these one
time costs, selling and administrative expenses for the nine months ended
December 31, 2000 would have totaled $32.1 million or 14.8% of sales compared
with $21.7 million or 16.8% of sales for the comparable period last year. The
increase in selling and administrative expenses was primarily attributable to
increased direct selling costs resulting from higher sales volumes as well as
increased costs related to training and recruiting employees. Due to our
continued ability to support our sales growth without incurring substantial
additional costs, selling and administrative expenses as a percentage of sales
declined for the quarter and nine months ended December 31, 2000 when compared
to the same periods last year.
OTHER INCOME, NET. Other income, net, for the third quarter and first nine
months of fiscal 2001 increased $283,000 and $2.2 million, respectively, over
the comparable periods last year. These increases were primarily attributable to
an increase in interest income as a result of higher average levels of cash,
cash equivalents and short-term investments.
PROVISION FOR INCOME TAXES. Our effective tax rates for the first nine months of
fiscal 2001 and 2000 were 34% and 36%, respectively.
BUSINESS SEGMENTS
The table below displays sales and operating income by business segment for the
periods indicated. All data represented in the table has been restated to
reflect the Company's acquisition of Network Device, Inc. on April 24, 2000:
Quarters Ended Nine Month Periods Ended
-------------------------- --------------------------
Dec. 31, Dec. 26, Dec. 31, Dec. 26,
2000 1999 2000 1999
-------- -------- -------- --------
(in thousands)
Sales
-----
Semiconductor Products......... $ 65,866 $ 39,891 $179,796 $104,042
Ceramic Products .............. 12,818 8,152 37,777 24,575
-------- -------- -------- --------
$ 78,684 $ 48,043 $217,573 $128,617
======== ======== ======== ========
Operating Income
----------------
Semiconductor Products......... $ 13,179 $ 5,632 $ 33,013 $ 13,657
Ceramic Products .............. 2,240 1,041 6,455 2,982
-------- -------- -------- --------
$ 15,419 $ 6,673 $ 39,468 $ 16,639
======== ======== ======== ========
SEMICONDUCTOR PRODUCTS. Sales for the Semiconductor Products Group increased
65.1% to $65.9 million for the third quarter of fiscal 2001 from $39.9 million
for the same quarter last year. For the first nine months of fiscal 2001, sales
for the Semiconductor Products Group increased 72.8% to $179.8 million from
$104.0 million for the same period last year. The increase was primarily
attributable to increased demand and penetration into our two targeted markets -
wireless and broadband.
Operating income for the Semiconductor Products Group more than doubled to $13.2
million for the third quarter of fiscal 2001 from $5.6 million for the
comparable quarter last year. For the nine months ended December 31, 2000,
operating income increased to $33.0 million from $13.7 million for the
comparable period last year. Included in the $33.0 million is approximately $1.8
million in one-time closing costs associated with the acquisition of NDI.
Excluding these one-time costs, operating income for the nine months ended
December 31, 2000 would have totaled $34.8 million, an increase of 154.8% when
compared to the same period last year. The increase was primarily attributable
to increased sales and improved operating efficiencies as this group continued
to leverage capacity and improve yields. In addition, this group continued its
focus on the development of processes and products for the wireless and
broadband markets, while continuing to control administrative costs.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
CERAMIC PRODUCTS. Sales for the Ceramic Products Group for the third quarter
increased 57.2% to $12.8 million from $8.2 million for the same quarter last
year. For the first nine months of fiscal 2001, sales for the Ceramic Products
Group increased 53.7% to $37.8 million from $24.6 million for the same period
last year. The increase was primarily due to growth in demand and increased
penetration in the wireless infrastructure and broadband markets.
Operating income for the Ceramic Products Group more than doubled to $2.2
million for the third quarter from $1.0 million for the third quarter a year
ago, and also more than doubled to $6.5 million from $3.0 million for the first
nine months of fiscal 2001 compared with the same period last year. The increase
in operating income was primarily the result of increased sales and improved
operating efficiencies, including the leveraging of existing capacity and
increased manufacturing automation.
FINANCIAL CONDITION
At December 31, 2000, working capital totaled $197.6 million and included $143.0
million in cash, cash equivalents and short-term investments. Average days sales
outstanding for the nine months ended December 31, 2000 was 54, consistent with
the comparable period last year. Additionally, annualized inventory turns for
the nine months ended December 31, 2000 increased to 11.1 from 10.5 for the
comparable period last year.
Capital expenditures for the nine months ended December 31, 2000 totaled $38.1
million. Of the $38.1 million, approximately $8.8 million related to the
purchase of a 125,000 square foot manufacturing and office facility on a
forty-one acre site in Haverhill, Massachusetts. Initial operations at this site
commenced in January 2001 and include design engineering as well as automated
gallium arsenide integrated circuit (GaAs IC), silicon semiconductor and
multi-chip module assembly and testing. The relocation of these operations to
the Haverhill facility has provided space for the expansion of fabrication
operations at our facility in Woburn, Massachusetts.
In September 1999, we announced the completion of the first phase of a major
expansion program to enhance and expand the available clean room space in our
GaAs IC facility in Woburn, Massachusetts. The new clean room space is complete
and in use, and additional manufacturing equipment has been installed and
brought to full operation. The second phase, which involved the installation of
additional production equipment within the existing facility, has been
completed. The third phase of this project involves the creation of a GaAs IC
line that would allow the manufacture of product on six-inch wafers. We are in
the initial phases of development of this six-inch wafer production line, which
we estimate will cost approximately $30 million dollars. We expect to complete
this phase within twelve to fifteen months. Once this new six-inch wafer
production line is in operation, we plan to convert our existing four-inch wafer
production areas to six-inch, as future demand requires.
We believe that anticipated cash from operations, available funds and borrowings
under our revolving credit agreement will be adequate to fund our currently
planned working capital and capital expenditure requirements, at least through
fiscal 2001.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities" establishes accounting and
reporting standards for derivatives and hedging activities. In June 2000, the
Financial Accounting Standards Board issued SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities," an amendment to
SFAS No. 133. These statements require that an entity recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
instruments at fair value. These statements will be effective for our fiscal
2002. We are currently evaluating SFAS No.133 and SFAS No. 138. We do not expect
these new statements to have a material effect on our consolidated financial
position, results of operations or cash flow.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
OTHER MATTERS
Safe Harbor Statement - Except for the historical information contained herein,
this report contains forward-looking statements that reflect the Company's
current intentions, expectations and predictions of future results,
accomplishments and other matters, all of which are inherently subject to risks
and uncertainties. The Company's actual results may differ materially from those
anticipated in the Company's forward-looking statements, based on various
factors. Such factors include, but are not limited to: cancellation or
postponement of customer orders, inability to predict customer orders, the
disproportionate impact of the Company's business relationships with its larger
customers, variations in the timing of new product development and market
acceptance, difficulty manufacturing products in sufficient quantity and
quality, difficulty completing the Company's planned capital investments and
process improvements, erosion of selling prices or margins, modification of the
Company's plans or intentions, and market developments, competitive pressures
and changes in economic conditions that vary from the Company's expectations.
Additional information on these and other factors that may cause actual results
and the Company's performance to differ materially is included in the Company's
periodic reports filed with the Securities and Exchange Commission, including
but not limited to the Company's Annual Report on Form 10-K for the year ended
April 2, 2000, and subsequent Quarterly Reports on Form 10-Q. The Company
cautions readers not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made. The Company expressly
disclaims any obligations or undertaking to release publicly any updates or
revisions to any such statements to reflect any change in the Company's
expectations or any change in events, conditions or circumstances on which any
such statement is based.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(4) Instruments defining rights of security holders, including
indentures.
(c) Revolving Credit Agreement dated November 16, 2000 between
Alpha Industries, Inc., Trans-Tech Inc., Fleet National Bank
and Silicon Valley Bank.
(11) Statement regarding computation of per share earnings.**
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and
Exchange Commission during the fiscal quarter ended December 31,
2000.
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** Reference made to Note 6 of the notes to Consolidated Financial Statements on
Page 9 of this Quarterly Report on Form 10-Q, which Note 6 is hereby
incorporated by reference herein.
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ALPHA INDUSTRIES, INC. AND SUBSIDIARIES
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.
Date: February 9, 2001
----------------
Alpha Industries, Inc. and Subsidiaries
--------------------------------------------
Registrant
/s/ David J. Aldrich
--------------------------------------------
David J. Aldrich
Chief Executive Officer
President
Director
/s/ Paul E. Vincent
--------------------------------------------
Paul E. Vincent
Chief Financial Officer
Principal Financial Officer
Principal Accounting Officer
Secretary
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