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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED].
For fiscal year ended, SEPTEMBER 30, 1995 Commission file number 1-9965
------------------ ------
KEITHLEY INSTRUMENTS, INC.
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(Exact name of registrant as specified in its charter)
OHIO 34-0794417
- ----------------------------------------- -------------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
28775 AURORA ROAD, SOLON, OHIO 44139
- ----------------------------------------- -------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 248-0400
--------------
Securities registered pursuant to Section 12(b) of the Act:
COMMON SHARES, WITHOUT PAR VALUE NEW YORK STOCK EXCHANGE
- ----------------------------------------- -------------------------------------------
(Title of each class) (Name of exchange on which registered)
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
-------- --------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of December 12, 1995 there were outstanding 4,364,802 Common Shares, without
par value, and 2,893,796 Class B Common Shares, without par value. At that
date, the aggregate market value of the Common Shares of the Registrant held by
non-affiliates was $65,792,752 and the aggregate market value of the Class B
Common Shares of the Registrant held by non-affiliates was $3,339,943 for a
total aggregate market value of all classes of Common Shares held by
non-affiliates of $69,112,947. While the Class B Common Shares are not listed
for public trading on any exchange or market system, shares of that class are
convertible into Common Shares at any time on a share-for-share basis. The
market values indicated were calculated based upon the last sale price of the
Common Shares as reported by the New York Stock Exchange on December 12, 1995,
which was $16.375. For purposes of this information, the 346,924 Common Shares
and 2,689,830 Class B Common Shares which were held by the officers and
Directors of the Company were deemed to be voting stock held by affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT Part of 10-K
- -------- ------------
1. Annual report to shareholders for the fiscal year ended Parts I and II
September 30, 1995 (only the portions listed in this report).
2. Proxy statement for the annual meeting of shareholders to be Part III
held on February 10, 1996 (only the portions listed in this
report).
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KEITHLEY INSTRUMENTS, INC.
10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I: PAGE
----
Item 1. Business................................................. 1
Item 2. Properties............................................... 9
Item 3. Legal Proceedings........................................ 10
Item 4. Submission of Matters to a Vote of Security Holders...... 10
PART II:
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.................................. 13
Item 6. Selected Financial Data.................................. 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................. 13
Item 8. Financial Statements and Supplementary Data.............. 13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................. 13
PART III.
Item 10. Directors and Executive Officers of the Registrant....... 14
Item 11. Executive Compensation................................... 14
Item 12. Security Ownership of Certain Beneficial Owners and
Management........................................... 14
Item 13. Certain Relationships and Related Transactions........... 14
PART IV:
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K............................................. 15
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PART I.
ITEM 1 - BUSINESS.
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General
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Keithley Instruments, Inc. is a corporation which was founded in 1946
and organized under the laws of the State of Ohio on October 1, 1955. Its
principal executive offices are located at 28775 Aurora Road, Solon, Ohio
44139; telephone (216) 248-0400. References herein to the "Company" or
"Keithley" are to Keithley Instruments, Inc. and its subsidiaries unless the
context indicates otherwise.
Products
- --------
Keithley Instruments, Inc. provides instrumentation to semiconductor
manufacturers, medical equipment manufacturers, and growth segments of the
electronics industry. Scientists and engineers around the world use Keithley's
advanced hardware and software for measurement, test, data acquisition, and
control. Although the Company's products vary in capability, sophistication,
use, size and price, they basically test, measure, and analyze electrical and
physical properties. As such, the Company considers its business to be in a
single industry segment. For each of the last three fiscal years, more than
90% of the Company's revenue was derived from the sale of electronic test and
measurement instrumentation and data acquisition and analysis hardware and
software, which represents one class of similar products.
The operating units and product groups of the Company are described
below:
TEST INSTRUMENTATION GROUP. The Test Instrumentation Group supplies
instruments for benchtop and systems applications and automatic parametric test
systems (APT). The Company's largest division, it is an internationally
recognized leader in sensitive instruments for measuring a wide range of
electrical properties such as voltage, resistance, current, capacitance and
charge. APT products can be found in semiconductor fabrication facilities
throughout the world. The Test Instrumentation Group is comprised of the
following major product lines whose models, except for APT products, generally
range in price from $1,000 to $10,000:
SENSITIVE INSTRUMENTS. This product group includes electrometers,
picoammeters, sensitive digital voltmeters, micro-ohmmeters, and
certain other instruments which are distinguished by their extreme
sensitivity, resolution and accuracy as compared to the
capabilities of conventional meters. Sensitive instruments are
used by scientists, engineers, and researchers for the study of
materials, semiconductors, and superconductors. Typical customers
are industrial and government research laboratories, educational
institutions, and electronics manufacturers.
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DIGITAL MULTIMETERS. These instruments are used in the measurement
of voltage, current and resistance, and other electrical parameters
in applications not requiring the extreme sensitivity of scientific
products. The digital multimeter product line includes several
models of general purpose and specialized multimeters which differ
by their resolution, accuracy, sensitivity, physical size and
ability to be integrated into a personal computer-based test
system. General purpose multimeters are used by engineers and
technicians for manual measurements in research and design testing.
Specialized multimeters can be used in automated tests requiring
rapid or repetitive measurements for design and quality control.
SWITCHES AND SOURCES. Switching instruments are used to route
electrical signals in test systems to measurement and source
instrumentation. This allows many devices or test points to be
measured with a minimum number of instruments. Switch products
together with Sensitive, Digital Multimeter, Source, I-V and C-V
instruments can be integrated into computer-based systems to
provide flexible, automated testing and measurement. Switch
products are sold to scientists and engineers in research,
semiconductor and electronic manufacturing markets.
Sources generate the precise voltage and currents needed to test
electronic devices and investigate properties of materials. Source
products are sold to scientists and engineers in research,
semiconductor and electronic manufacturing markets, especially
where stable signals of low level current and voltage are needed.
These sources can be interfaced with computers as part of an
automated test system, or used manually on the laboratory bench.
SOURCE MEASURE UNITS. These are programmable instruments capable
of sourcing and measuring voltage and current, thus replacing the
functionality of four instruments with one reliable, compact unit.
These versatile instruments cover a wide dynamic range of voltage
and current and their combination of high speed and sensitivity
have made these units ideal for engineers and scientists in the
research, semiconductor, and electronics manufacturing customer
groups.
C-V (CAPACITANCE VERSUS VOLTAGE). C-V products include
high-frequency and quasistatic C-V meters, measurement and analysis
software, and computer-based test systems. C-V products are used
by scientists and engineers in semiconductor manufacturing
facilities, industrial and governmental research laboratories, and
educational institutions to research, develop, and characterize
semiconductor devices, materials and manufacturing processes.
APT PRODUCTS are computer-based analog parametric testing systems
that measure various electrical characteristics of semiconductor
materials. The Company is one of the leading suppliers of these
systems for semiconductor production applications. In production,
the systems allow manufacturers to monitor quality control
parameters
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during fabrication of integrated circuits to improve manufacturing
yields. In research, the systems are used to analyze the
characteristics of semiconductor materials in the development of
integrated circuit devices. The systems can also be used to
develop integrated circuit manufacturing processes. A typical
system incorporates instrumentation and software developed by the
Test Instrumentation Group and computer hardware manufactured by
others. The APT Group integrates the system's major components
and, in most cases, customizes the system to specification,
installs and services the equipment and software, and provides
customer training. Selling prices for these products generally
range from $50,000 to $250,000.
PROCESS MONITORING GROUP. The Process Monitoring Group designs,
develops, manufactures and markets products based on the direct wafer
measurement or non-contact technology purchased from International Business
Machines in May, 1994. During fiscal 1995, the division incurred costs to
develop and market the Quantox product, the first product in a planned family
of products to be developed by Keithley based on the non-contact technology.
Revenues from Quantox are expected to begin in the second half of fiscal 1996.
RADIATION MEASUREMENTS DIVISION. The Radiation Measurements Division
designs, develops, manufactures and markets products and systems that
accurately measure the radiation emission levels of x-ray machines and nuclear
radiation sources and are used to calibrate radiation therapy and x-ray
equipment in hospitals and manufacturing processes. Customers include
hospitals, diagnostic x-ray equipment manufacturers, radiation researchers and
physicists and field service organizations. Selling prices for standard
products range from $500 to $10,500 per instrument, and products designed and
manufactured for specific customer applications sell for up to $100,000.
KEITHLEY METRABYTE DIVISION. The Keithley MetraByte Division designs,
develops, manufactures and markets a wide range of data acquisition and
analysis hardware and software products designed for use with personal
computers. These products are used in thousands of applications worldwide
wherever a number of variables must be monitored and analyzed quickly.
Automotive engineering, rocket engine testing, laser labeling systems,
high-speed package handling systems, oil drilling and standby power generating
systems are among the examples of the applications of the Company's data
acquisition products. Selling prices for Keithley MetraByte products generally
range from $100 to $3,000.
The Division markets its products under the brand names Keithley MetraByte,
Keithley Asyst and Acculex and is composed of the following product groups:
PLUG-IN DATA ACQUISITION BOARDS provide data acquisition
capabilities in the form of a board that is installed into a slot
of the computer. The Company offers a wide range of plug-in data
acquisition boards in terms of the number of channels, input ranges
and sampling rates. They are marketed worldwide to researchers and
scientists engaged in laboratory automation and experimentation, as
well as to engineers
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involved with process control and data collection applications.
These products are marketed primarily through direct marketing and
catalog mailings.
SOFTWARE products are specialized personal computer-based
scientific data acquisition, analysis and graphics software
products. Scientists and engineers often combine Keithley software
together with data acquisition hardware or test and measurement
instrumentation of other manufacturers. The software products are
used with IBM and most compatible computers and can run in
Microsoft Windows.
ACCULEX products include digital panel meters and panel printers.
These products display machine parameters, capture results for
permanent storage and enunciate alarms. These products are
marketed primarily through direct marketing and catalog mailings.
DISTRIBUTED I/O products include Keithley's WORKHORSE and MetraBus
product offerings. These products are primarily used in industrial
monitoring and control applications.
COMMUNICATION products include IEEE-488 bus interfaces and software
for interfacing computers with programmable measurement
instrumentation. These products are marketed through direct
marketing and catalog mailings.
DATA ACQUISITION INSTRUMENTS include personal computer-based
workstations that collect data from, and provide control over, a
variety of test and measurement modules. A typical workstation
consists of a standard software package and hardware external to
the personal computer that utilizes various plug-in module cards
that allow a user to customize the workstation for a specific
application, including research, product test and pilot plant
process monitoring.
PERSONAL COMPUTER INSTRUMENT PRODUCTS (PCIP) are instruments
contained entirely on boards that fit into an expansion slot of
almost any personal computer. Included in the PCIP offering are a
digital multimeter, scanner, oscilloscope, function generator and a
counter. Applications include bench top engineering and automatic
production testing. These products are marketed primarily through
direct marketing and catalog mailings.
AGENCY PRODUCTS. The Company markets and distributes certain products
manufactured by approximately nine test and measurement companies. These
products are marketed and distributed primarily by the Company's European
operations and are complementary to, but not competitive with, products
manufactured by the Company.
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New Products During Fiscal Year 1995
- ------------------------------------
Several new products were introduced during fiscal 1995 including the
following:
THE TEST INSTRUMENTATION GROUP introduced several new products
including the Model 2000 6 1/2-digit digital multimeter (DMM). Ten times
faster than any other DMM in its class, the Model 2000 includes multipoint
scanning capability not found in any other DMM in its price range of under
$1,000. Also introduced was the Model 6517 electrometer/high-resistance meter.
The 6517 is used in production test of electrical insulating materials and
other products such as polymer coatings and latex gloves where product
consistency and quality are critical.
THE PROCESS MONITORING GROUP introduced the Quantox oxide
characterization system, the first product incorporating the non-contact direct
wafer measurement technology purchased from International Business Machines in
May, 1994. While Quantox will not contribute to revenues until the second half
of fiscal 1996, it has generated a significant amount of customer interest
since its introduction at the Semicon-West trade show in July, 1995.
THE RADIATION MEASUREMENTS DIVISION introduced the TRIAD Quality
Assurance (QA) for Windows software. The TRIAD QA for windows software works
with the TRIAD Kit and a personal computer to perform quality assurance testing
on diagnostic x-ray generators for all modalities.
THE KEITHLEY METRABYTE DIVISIONintroduced several new products
including VTX (Visual Test Extension) software. VTX adds significant data
acquisition and analysis functions to Visual Basic for Windows allowing greater
flexibility and programming speed than the proprietary software currently
available. Several new boards were introduced including the DAS-1800AO (Analog
Outputs) board. Like all members of the DAS-1800 series, the DAS-1800AO
supports continuous, high-speed data acquisition under the familiar Windows
environment or DOS. Also introduced during fiscal 1995 was the DASCard-1000
series of PCMCIA data acquisition cards for notebook computers. Providing a
cost-effective solution for field applications, the DASCard-1000 can be
installed in seconds and permits a wide variety of low to mid-level data
acquisition applications, bringing data acquisition and analysis in the field
or on the factory floor.
Geographic Markets and Distribution
- -----------------------------------
Substantially all of the Company's products are manufactured in Ohio
and Massachusetts and are sold throughout the world in many developed
countries. The Company's principal markets are the United States, Europe and
the Pacific Basin.
In the United States, the Company's products are sold by the Company's
sales personnel, independent sales representatives and through direct marketing
and catalog mailings. United States sales offices are located in Solon, Ohio;
Santa Clara, California and Taunton, Massachusetts. The Company markets its
products directly in European countries in which it has a wholly owned sales
subsidiary and through distributors in other countries. European
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subsidiaries have sales and service offices located in or near London, Munich,
Paris, Amsterdam, Zurich and Milan. The Company also has a sales office in
Beijing, China. Sales in markets outside the United States, Europe and China
are made through independent sales representatives and distributors. The
Company's Japanese subsidiary supports independent sales representatives and
distributors in the Pacific Basin.
Sources and Availability of Raw Materials
- -----------------------------------------
The Company's products require a wide variety of electronic and
mechanical components, most of which are purchased. The Company has multiple
sources for the vast majority of the components and materials it uses; however,
there are some instances where the components are obtained from a sole-source
supplier. If a sole-source supplier ceased to deliver, the Company could
experience a temporary adverse impact on its operations; however, management
believes alternative sources could be developed quickly. Although shortages of
purchased materials and components have been experienced from time to time,
these items have generally been available to the Company as needed.
Patents
- -------
Electronic instruments of the nature the Company designs, develops and
manufactures are generally not patentable in their entirety. Although the
Company holds patents with respect to certain of its products, it does not
believe that its business is dependent to any material extent upon any single
patent or group of patents, because of the rapid rate of technological change
in the industry.
Seasonal Trends and Working Capital Requirements
- ------------------------------------------------
Although the Company is not subject to significant seasonal trends,
its business is cyclical and is somewhat dependent upon the semiconductor
industry in particular. The Company does not have any unusual working capital
requirements.
Customers
- ---------
The Company's customers generally are involved in engineering,
research and development, product testing, electronic service or repair, and
educational and governmental research. During the fiscal year ended September
30, 1995 no one customer accounted for more than 10% of the Company's sales.
Management believes that the loss of any one of its customers would not
materially affect the sales or net income of the Company.
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Backlog
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The Company's backlog of unfilled orders amounted to approximately
$11,284,000 as of September 30, 1995 and approximately $7,742,000 as of
September 30, 1994. It is expected that the majority of the orders included in
the 1995 backlog will be delivered during fiscal 1996; however, the Company's
past experience indicates that a small portion of orders included in the
backlog may be canceled.
Competitive Conditions
- ----------------------
The Company competes on the basis of quality, performance, service,
warranty and price, with quality and performance frequently being dominant.
There are many firms in the world engaged in the manufacture of electronic test
and measurement instruments, some of which are larger and have greater
financial resources than the Company. The Company's competitors vary between
product lines and certain manufacturers compete with the Company in multiple
product lines. The Company's principal competitors are Hewlett-Packard
Company, Fluke Corporation, National Instruments, Inc., Data Translation, Inc.
and Advantest Corporation.
Research and Development
- ------------------------
The Company's engineering development activities are directed toward
the development of new products that will complement, replace or add to the
products currently included in the Company's product line. The Company does
not perform basic research, but on an ongoing basis utilizes new component and
software technologies in the development of its products. The highly technical
nature of the Company's products and the rapid rate of technological change in
the industry require a large and continuing commitment to engineering
development efforts. Product development expenses were $15,385,000 in 1995,
$11,551,000 in 1994 and $10,304,000 in 1993, or approximately 14%, 13% and 11%
of net sales, respectively, for each of the last three fiscal years. Research
contracts are not obtained from customers, nor does the Company conduct any
research work under government development contracts. During fiscal 1994, the
Company expensed $3,300,000 to acquire the right to develop and commercialize
direct wafer measurement technology from International Business Machines.
Government Regulations
- ----------------------
The Company believes that its current operations and its current uses
of property, plant and equipment conform in all material respects to applicable
laws and regulations. The Company has not experienced, nor does it anticipate,
any material claim or material capital expenditure in connection with
environmental laws and other regulations.
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Employees
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As of September 30, 1995, the Company employed 659 persons, 98 of whom
were located outside the United States. None of the Company's employees are
covered under the terms of a collective bargaining agreement and the Company
believes that relations with its employees are good.
Foreign Operations and Export Sales
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Information related to foreign and domestic operations and export
sales is incorporated by reference to Note J of the Notes to the Consolidated
Financial Statements on page 31 of the Company's 1995 Annual Report to
Shareholders, a copy of which is filed as Exhibit 13 to this report.
The Company has significant revenues from outside the United States
which increase the complexity and risk to the Company. These risks include
increased exposure to the risk of foreign currency fluctuations and the
potential economic and political impacts from conducting business in foreign
countries. With the exception of changes in the value of foreign currencies
which is not possible to predict, the Company believes that its foreign
subsidiaries and other larger international markets are in countries where the
economic and political climate is generally stable.
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ITEM 2 - PROPERTIES.
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The Company believes that the facilities owned and leased by it are
well maintained, adequately insured and suitable for their present and intended
uses. Pertinent information concerning the principal properties of the Company
and its subsidiaries is as follows:
Type of Acreage (Land)
Owned Properties Facility Square Footage (Building)
- ---------------- -------- -------------------------
Location
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Solon, Ohio Executive offices,
Engineering, Manufacturing, 26.1 Acres
Marketing and Sales 125,000 square feet
Solon, Ohio Engineering, Manufacturing,
Marketing, Sales, Service and 7.0 Acres
Administration 32,000 square feet
Lease
Type of Square Expiration
Leased Properties Facility Footage Date
- ----------------- -------- ------- ----
Location
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Taunton, Manufacturing, Marketing,
Massachusetts Service and Administration 41,000 June 30, 1997
Taunton, Engineering, Sales
Massachusetts and Administration 31,000 June 30, 1997
Solon, Ohio Engineering, Manufacturing, 21,600 March 31, 1997
Marketing, Sales, Service
and Administration
Solon, Ohio Administration 2,700 March 31, 1997
Santa Clara, Sales and Service 4,355 October 15, 1997
California
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Lease
Type of Square Expiration
Location Facility Footage Date
- -------- -------- ------- ----
Munich, Sales, Service and 27,750 March 31, 2001;
Germany Administration renewable
London, England Sales and Service 8,000 July 24, 2009
Paris, France Sales and Service 3,456 June 30, 1996
Zurich, Sales and Service 3,229 September 30, 1997
Switzerland renewable
Amsterdam, Sales and Service 2,906 March 31, 1997
Netherlands
Milan, Sales and Service 2,691 August 31, 1995,
Italy cancelable with
6 months notice
ITEM 3 - LEGAL PROCEEDINGS.
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The Company is not a party to any material litigation.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
---------------------------------------------------
Not applicable.
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EXECUTIVE OFFICERS OF THE REGISTRANT:
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The description of executive officers is included pursuant to
Instruction 3 to Section (b) of Item 401 of Regulation S-K under the Securities
and Exchange Act of 1934.
The following table sets forth the names of all executive officers of
the Company and certain other information relating to their position held with
the Company and other business experience.
Executive Officer Age Recent Business Experience
----------------- --- --------------------------
Joseph P. Keithley 47 Chairman of the Board of Directors since 1991, Chief
Executive officer since November 1993 and President
since May 1994. Vice Chairman of the Board of
Directors from 1988 to 1991. Executive Vice President
from 1989 to 1991.
Joseph F. Keithley 80 Founder of the Company in 1946; President to 1973,
Chairman of the Board of Directors from 1955 to 1991.
Philip R. Etsler 45 Vice President Human Resources of the Company since
1990. Director of Personnel from 1986 to 1990.
James B. Griswold 49 Secretary and a Director of the Company since 1988;
partner in the law firm of Baker & Hostetler from 1982
to present.
Hermann Hamm 56 Vice President of European Operations of the Company
since 1986.
Frederick R. Hume 52 Senior Vice President Test Instrumentation Group since
February 1993. Vice President Test Instrumentation
Group from August 1992 to February 1993. Vice
President Instrument Division of the Company from May
1988 to August 1992.
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Executive Officer Age Recent Business Experience
----------------- --- --------------------------
Mark J. Plush 46 Controller since 1982 and Officer of the Company since
1989.
Ronald M. Rebner 51 Vice President and Chief Financial Officer of the
Company since 1981.
Terrence E. Sheridan 55 Vice President Radiation Measurements Division since
1978.
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PART II.
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
-----------------------------------------------------
STOCKHOLDER MATTERS.
--------------------
The information required by this Item is incorporated herein by
reference under the caption Stock Market Price and Cash Dividends appearing on
page 33 of the Keithley Instruments, Inc. 1995 Annual Report to Shareholders, a
copy of which is filed as Exhibit 13 to this Report.
The approximate number of shareholders of record of Common Shares and
Class B Common Shares, including those shareholders participating in the
Dividend Reinvestment Plan, as of December 12, 1995 was 1,463.
ITEM 6 - SELECTED FINANCIAL DATA.
------------------------
The information required by this Item is incorporated herein by
reference to the eleven year summary, appearing on pages 34 and 35 of the
Keithley Instruments, Inc. 1995 Annual Report to Shareholders, a copy of which
is filed as Exhibit 13 to this Report.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS.
-----------------------------------
The information required by this Item is incorporated herein by
reference to pages 23 and 24 of the Keithley Instruments, Inc. 1995 Annual
Report to Shareholders, a copy of which is filed as Exhibit 13 to this Report.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------
The Consolidated Financial Statements, appearing on pages 20 through
22 and pages 25 through 31, the Unaudited Quarterly Results of Operations
appearing on page 33 of the Keithley Instruments, Inc. 1995 Annual Report to
Shareholders, together with the report thereon of Price Waterhouse LLP dated
November 9, 1995, appearing on page 32 of the Keithley Instruments, Inc. Annual
Report to Shareholders is filed as Exhibit 13 to this Report.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
------------------------------------------------
ACCOUNTING AND FINANCIAL DISCLOSURE.
-----------------------------------
None.
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PART III.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
--------------------------------------------------
The information required by this item relating to the Directors is
incorporated herein by reference to the information set forth under the caption
Election of Directors in the Company's Proxy Statement to be used in
conjunction with the February 10, 1996 Annual Meeting of Shareholders and filed
with the Securities and Exchange Commission pursuant to Section 14(a) of the
Securities Exchange Act of 1934. The information required for an
identification of executive officers is included on pages 11 and 12 of this
Form 10-K Annual Report.
ITEM 11 - EXECUTIVE COMPENSATION.
-----------------------
The information required by this item relating to executive
compensation is incorporated herein by reference to the information set forth
under the caption Executive Compensation and Benefits in the Company's Proxy
Statement to be used in conjunction with the February 10, 1996 Annual Meeting
of Shareholders and filed with the Securities and Exchange Commission pursuant
to Section 14(a) of the Securities Exchange Act of 1934.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------------------------------------
The information required by this item relating to security ownership
of certain beneficial owners and management is incorporated herein by reference
to the information set forth under the caption Principal Shareholders in the
Company's Proxy Statement to be used in conjunction with the February 10, 1996
Annual Meeting of Shareholders and filed with the Securities and Exchange
Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
-----------------------------------------------
James B. Griswold, a Director and nominee for Director, is a partner
in the law firm of Baker & Hostetler. Baker & Hostetler served as general
legal counsel to the Company during the fiscal year ended September 30, 1995
and is expected to render services in such capacity to the Company in the
future.
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PART IV.
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
---------------------------------------------------------------
(a)(1) FINANCIAL STATEMENTS OF THE COMPANY
The following documents are filed as part of this report:
1. Consolidated Balance Sheets as of September 30, 1995 and 1994.
2. Consolidated Statements of Income for each of the three years ended
September 30, 1995.
3. Consolidated Statements of Cash Flows for each of the three years
ended September 30, 1995.
4. Consolidated Statements of Earnings Reinvested in the Business for
each of the three years ended September 30, 1995.
5. Notes to Consolidated Financial Statements.
6. Report of Independent Accountants dated November 9, 1995.
(a)(2) FINANCIAL STATEMENT SCHEDULES
The following additional information should be read in conjunction with the
Consolidated Financial Statements of the Company described in Item 14(a)(1):
Schedule II Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because they are not
required or not applicable, or because the information is furnished elsewhere
in the consolidated financial statements or the notes thereto.
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(a)(3) INDEX TO EXHIBITS
Page Number
Sequential
Exhibit Numbering
Number Exhibit System
------ ------- ------
3(a) Amended Articles of Incorporation, as amended on February 11, 1985.
(Reference is made to Exhibit 3(a) of the Company's Form 10 Registration
Statement (File No. 0-13648) as declared effective on July 31, 1985, which
Exhibit is incorporated herein by reference.)
--
3(b) Code of Regulations, as amended on February 11, 1985. (Reference is made to
Exhibit 3(b) of the Company's Form 10 Registration Statement (File No.
0-13648) as declared effective on July 31, 1985, which Exhibit is incorporated
herein by reference.) --
4(a) Specimen Share Certificate for the Common Shares, without par value.
(Reference is made to Exhibit 4(a) of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1988 (File No. 1-9965), which
Exhibit is incorporated herein by reference.)
--
4(b) Specimen Share Certificate for the Class B Common Shares, without par value.
(Reference is made to Exhibit 4(b) of the Company's Form 10 Registration
Statement (File No. 0-13648) as declared effective on July 31, 1985, which
Exhibit is incorporated herein by reference.)
--
*10(a) 1984 Stock Option Plan, adopted in February 1984. --
*10(b) 1984 Performance Award Plan, adopted in February 1984. --
*10(c) 1984 Deferred Compensation Plan, adopted in February 1984. --
*10(g) Lease for the property located at Solon Place I, 31300 Bainbridge Road,
Solon, Ohio 44139. --
10(k) Employment Agreement with Joseph F. Keithley dated September 26, 1988.
(Reference is made to Exhibit 10(k) of the Company's Annual Report on Form
10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
is incorporated herein by reference.)
--
16
19
Page Number
Sequential
Exhibit Numbering
Number Exhibit System
------ ------- ------
10(l) Employment Agreement with Joseph P. Keithley dated September 26, 1988.
(Reference is made to Exhibit 10(l) of the Company's Annual Report on Form
10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
is incorporated herein by reference.)
--
10(m) Employment Agreement with Thomas G. Brick dated May 27, 1988. (Reference is
made to Exhibit 28(b) of the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended June 30, 1988 (File No. 1-9965), which Exhibit is
incorporated herein by reference.)
--
10(o) Form of Supplemental Executive Retirement Plan, adopted in January 1988.
(Reference is made to Exhibit 10(o) of the Company's Annual Report on Form
10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
is incorporated herein by reference.)
10(q) 1992 Stock Incentive Plan, adopted in December 1991. (Reference is made to
Exhibit 10(q) of the Company's Annual Report on Form 10-K for the year ended
September 30, 1991 (File No. 1-9965) which Exhibit is incorporated herein by
reference.) --
10(r) 1992 Directors' Stock Option Plan, adopted in December 1991. (Reference is
made to Exhibit 10(r) of the Company's Annual Report on Form 10-K for the
year ended September 30, 1991 (File No. 1-9965) which Exhibit is
incorporated herein by reference.) --
10(u) Credit Agreement dated as of May 31, 1994 by and among Keithley Instruments,
Inc. and certain borrowing subsidiaries and the Banks named herein, and NBD
Bank, N.A., as Agent. (Reference is made to Exhibit 10(u) of the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1994 (File No.
1-9965) which Exhibit is incorporated herein by reference.)
--
10(v) Contactless Testing Technology Licensing Agreement between International
Business Machines Corporation and Keithley Instruments, Inc., effective as
of May 26, 1994. (Reference is made to exhibit 10(v) of the Company's
Annual Report on Form 10-K for the year ended September 30, 1994 (File
No. 1-9965) which Exhibit is incorporated herein by reference.) --
17
20
Page Number
Sequential
Exhibit Numbering
Number Exhibit System
------ ------- ------
10(w) Amendment and Modification of both the Employment Agreement with Thomas G.
Brick dated May 27, 1988, and the Form of Supplemental Executive Retirement
Plan, adopted in January 1988. (Reference is made to Exhibit 10(w) of the
Company's Annual Report on Form 10-K for the year ended September 30, 1994
(File No. 1-9965) which Exhibit is incorporated herein by reference.) --
11 Statement Re Computation of Per Share Earnings. 24
13 Annual Report to Shareholders for the Fiscal Year Ended September 30, 1995.
25-53
21 Subsidiaries of the Company 54
23 Consent of Experts 55
27 Financial Data Schedule
*Reference is made to the appropriate exhibits of the Company's Form 10 Registration Statement (File No. 0-13648)
as declared effective on July 31, 1995, which exhibits are incorporated herein by reference.
ITEM 14(B) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the last quarter of the Company's
fiscal year ended September 30, 1995.
ITEM 14(C) EXHIBITS: See "Index to Exhibits" at Item 14(a)(3) above.
ITEM 14(D) FINANCIAL STATEMENT SCHEDULES: Schedules required to be filed in
response to this portion of Item 14 are listed above in Item 14(a)(2).
18
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Keithley Instruments, Inc.
(Registrant)
By: /s/ Joseph P. Keithley
--------------------------------------
Joseph P. Keithley, (Chairman, President and Chief Executive Officer)
Date: December 9, 1995
--------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities on the date indicated.
Signature Title Date
--------- ----- ----
/s/ Joseph P. Keithley Chairman of the Board of Directors, President and 12/9/95
- ------------------------------- Chief Executive Officer
Joseph P. Keithley (Principal Executive Officer)
/s/ Joseph F. Keithley Founder and Director 12/9/95
- -------------------------------
Joseph F. Keithley
/s/ Ronald M. Rebner Vice President and Chief Financial Officer 12/9/95
- ------------------------------- (Principal Financial and Accounting Officer) and
Ronald M. Rebner a Director
/s/ Director
- -------------------------------
Dr. Theodore M. Alfred
/s/ James T. Bartlett Director 12/9/95
- -------------------------------
James T. Bartlett
/s/ Arden L. Bement, Jr. Director 12/9/95
- -------------------------------
Dr. Arden L. Bement, Jr.
/s/ James B. Griswold Director 12/9/95
- -------------------------------
James B. Griswold
/s/ Director
- -------------------------------
Leon J. Hendrix, Jr.
/s/ Gabriel A. Rosica Director 12/9/95
- -------------------------------
Gabriel A. Rosica
/s/ R. Elton White Director 12/9/95
- -------------------------------
R. Elton White
19
22
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors of
Keithley Instruments, Inc.
Our audits of the consolidated financial statements referred to in our report
dated November 9, 1995 appearing on page 32 of the 1995 Annual Report to
Shareholders of Keithley Instruments, Inc., (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed in
Item 14(a)(2) of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
As discussed in Notes A and G of the consolidated financial statements
appearing in the 1995 Annual Report to Shareholders of Keithley Instruments,
Inc., in 1993 the Company adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes," effective as of October 1, 1992.
PRICE WATERHOUSE LLP
Cleveland, Ohio
November 9, 1995
20
23
SCHEDULE II
KEITHLEY INSTRUMENTS, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In Thousands of Dollars)
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Balance at Charged to
Beginning of Costs and Balance at End
Description Period Expenses Deductions of Period
----------- ------ --------- ---------- ---------
For the Year Ended
September 30, 1995:
Valuation allowance for
deferred tax assets $3,330 $ 80 $ 804 (1) $2,606
For the Year Ended
September 30, 1994:
Valuation allowance for
deferred tax assets $3,314 $ 548 $ 532 (1) $3,330
For the Year Ended
September 30, 1993:
Valuation allowance for
deferred tax assets $ -- $3,314 (2) $ -- $3,314
(1) Represents utilization of foreign tax credits.
(2) In connection with the adoption of Statement of Financial Accounting
Standards No. 109, "Accounting for Income taxes" (FAS 109), a
valuation allowance was recorded for that portion of foreign tax
credit carryforwards and other tax credit carryforwards recorded as
deferred tax assets, where it is more likely than not these credits
will not be utilized. $3,316 was recorded as of October 1, 1992 and
represented the cumulative effect of adoption of FAS 109, while $2 was
recorded in the 1993 income tax provision as a reversal of
previously recorded valuation allowance.
21