UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 DECEMBER 31, 1997
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 (IRS Employer identification No.)
incorporation or organization)
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 FEBRUARY 2, 1998 WAS 12,019,319.
- --------------------------------------------------------------------------------
ASYST TECHNOLOGIES, INC.
------------------------
INDEX
Part I. Financial Information Page No.
----------------------------------------------------------------- --------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets --
December 31, 1997 and March 31, 1997 2
Condensed Consolidated Statements of Operations --
Three Months Ended December 31, 1997 and
December 31, 1996 and Nine Months Ended
December 31, 1997 and December 31, 1996 3
Condensed Consolidated Statements of Cash Flows --
Nine Months Ended December 31, 1997 and
December 31, 1996 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk 10
Part II. Other Information
----------------------------------------------------------
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signature 12
---------
Exhibit Index 13
-------------
1
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
December 31, March 31,
1997 1997
-------------- ----------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 43,149 $11,021
Short-term investments 32,869 1,000
Accounts receivable, net 28,559 35,259
Inventories, net 21,899 18,609
Prepaid expenses and other current assets 14,070 12,626
Net assets of discontinued operations - 2,749
-------------- ----------------
Total current assets 140,546 81,264
Property and equipment, net 10,764 10,363
Other assets, net 2,087 2,452
-------------- ----------------
$153,397 $94,079
============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,996 $13,392
Accrued liabilities 14,838 10,205
Customer deposits 2,083 2,968
Income taxes payable 3,847 2,510
Net liabilities of discontinued operations 743 -
-------------- ----------------
Total current liabilities 30,507 29,075
-------------- ----------------
Shareholders' equity:
Common stock 113,782 66,945
Retained earnings (deficit) 9,108 (1,941)
-------------- ----------------
Total shareholders' equity 122,890 65,004
-------------- ----------------
$153,397 $94,079
============== ================
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED: IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Nine Months Ended
December 31, December 31,
1997 1996 1997 1996
--------- --------- ----------- ---------
Net sales $ 42,310 $ 36,432 $ 120,308 $ 102,665
Cost of sales 23,374 22,396 67,276 60,863
--------- --------- ----------- ---------
Gross margin 18,936 14,036 53,032 41,802
Operating expenses:
Research and development 3,350 2,307 9,388 6,176
Selling, general and administrative 8,541 7,215 25,595 20,650
In-process research and development of
acquired business - 1,335 - 1,335
--------- --------- ----------- ---------
Total operating expenses 11,891 10,857 34,983 28,161
Operating income 7,045 3,179 18,049 13,641
Other income, net 1,095 194 2,090 505
--------- --------- ----------- ---------
Income from continuing operations
before income taxes 8,140 3,373 20,139 14,146
Provision for income taxes 2,930 1,680 7,250 5,573
--------- --------- ----------- ---------
Income from continuing operations 5,210 1,693 12,889 8,573
Discontinued Operations:
Loss from operations of Asyst Automation,
Inc., net of applicable income tax benefit - (4,763) - (6,092)
Loss from closure of Asyst Automation,
Inc., net of applicable income tax benefit (1,840) (8,573) (1,840) (8,573)
--------- --------- ----------- ---------
Net income (loss) $ 3,370 $(11,643) $ 11,049 $ (6,092)
========= ========= =========== =========
Weighted average common and common share
equivalents used in the calculation of:
Basic earnings per share 11,925 10,368 11,129 10,189
Diluted earning per share 12,853 10,519 11,882 10,414
Basic Earnings Per Share:
Income per share from continuing operations $ 0.44 $ 0.16 $ 1.16 $ .84
========= ========= =========== =========
Net income (loss) per share $ 0.28 $ (1.12) $ .99 $ (.60)
========= ========= =========== =========
Diluted Earnings Per Share: 10,189
Income per share from continuing operations $ 0.41 $ 0.16 $ 1.08 $ .82
========= ========= =========== =========
Net income (loss) per share $ 0.26 $ (1.11) $ .93 $ (.58)
========= ========= =========== =========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: In thousands)
Nine Months Ended
December 31,
1997 1996
------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 11,049 $ (6,092)
Adjustments to reconcile net income (loss)
to net cash provided by (used by)
operating activities:
Depreciation and amortization expense 3,282 1,972
Loss from discontinued operations - 4,763
Loss on disposal of discontinued operations 1,840 8,573
Change in net assets or liabilities of
discontinued operations 1,652 (3,331)
Decrease in provision for doubtful accounts (1,611) -
Tax benefit associated with employee stock
option plan 860 -
Write-off of in-process research and development
of acquired business - 1,335
Changes in current assets and liabilities:
Accounts receivable 8,311 (2,787)
Inventories, net (3,290) (94)
Prepaid expenses and other current assets (1,444) (2,105)
Accounts payable (4,396) (1,457)
Accrued liabilities 4,633 4,484
Customer deposits (885) (5,136)
Income taxes payable 1,337 (1,784)
------------- -------------
Net cash provided by (used by)
operating activities 21,338 (1,659)
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (3,290) (3,307)
Purchase of short-term investments, net (31,869) -
Decrease in other assets (28) (907)
------------- -------------
Net cash used by investing
activities (35,187) (4,214)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 45,977 1,110
------------- -------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 32,128 (4,763)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 11,021 14,019
------------- -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 43,149 $ 9,256
============= =============
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
ASYST TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited: In thousands)
BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of Asyst
Technologies, Inc. (the Company) a California corporation and its wholly-owned
subsidiaries. Significant inter-company accounts and transactions have been
eliminated.
While the financial information furnished is unaudited, the condensed
consolidated financial statements included in this report reflect all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for the fair presentation of the results of operation for
the interim periods covered and of the financial condition of the Company at the
date of the interim balance sheet. The Company closes its books on the last
Saturday of each quarter and thus the actual date of the quarter-end is usually
different from the month-end dates used throughout this 10-Q report. 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 Asyst Technologies, Inc. consolidated financial statements
for the year ended March 31, 1997 included in its Form 10-K.
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid debt investments purchased with a maturity of three months or
less to be cash and cash equivalents. The carrying value of cash equivalents
approximates their current fair market value.
SHORT-TERM INVESTMENTS
Short-term investments consist of liquid debt investments with maturities, at
the time of purchase, greater than three months and less than one year. Under
the guidelines of SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities", all such investments have been classified as
"available-for-sale" and are carried at fair market value, with unrealized
holding gains and losses, net of taxes reported as a separate component of
shareholders' equity. The cost of the debt security is adjusted for
amortization of premiums and accretion of discounts to maturity. Such
amortization, interest income, realized gains and losses and declines in value
that are considered to be other than temporary, are included in other income,
net, on the accompanying condensed consolidated statement of operations. The
cost of investments sold is based on specific identification.
INVENTORIES
Inventories are stated at the lower of cost or market and include materials,
labor and manufacturing overhead costs. Inventories of continuing operations
consist of:
December 31, 1997 March 31, 1997
----------------- --------------
Raw material $17,132 $16,302
Work-in-process and finished goods 4,767 2,307
------- -------
$21,899 $18,609
======= =======
5
COMMON STOCK SPLIT
On July 21, 1997, the Board of Directors declared a two-for-one stock split of
the Company's Common Stock in the form of a stock dividend. The stock dividend
was paid on August 22, 1997 to the holders of record on August 1, 1997. All
share and per share data, including common stock equivalents, have been adjusted
to give effect to the split.
EARNINGS PER SHARE
Earnings per share has been reported based upon Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share", which requires presentation of basic and
diluted earnings per share. Basic earnings per share has been computed using the
weighted average number of actual common shares outstanding, while diluted
earnings per share has been computed using the weighted average number of common
and common equivalent shares outstanding. Common equivalent shares used in
the computation of diluted earnings per share result from the assumed exercise
of stock options, using the treasury stock method.
PROVISION FOR INCOME TAXES
Income tax expense for the three month and nine month periods ended December 31,
1997 and December 31, 1996, includes a provision for federal, state and
foreign taxes based upon the annual estimated effective tax rates applicable to
the Company and its subsidiaries for the year.
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income," which establishes standards for reporting and
presentation of comprehensive income and its components. SFAS No. 130 will
become effective for the Company's year ending March 31, 1999. SFAS No. 130 will
not have a material impact on the Company's financial statement.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information," which
establishes standards for disclosure of segment information. SFAS No. 131 will
become effective for the Company's year ending March 31, 1999. SFAS No. 131 will
not have a material impact on the Company's financial statement disclosure.
DISCONTINUED OPERATIONS
In January 1997, the Company adopted a formal plan to cease operations of its
subsidiary, Asyst Automation, Inc., (AAI) by the end of September 1997. The
operations of AAI ceased on September 30, 1997. The decision was based upon the
subsidiary's lack of ability to profitably manufacture and sell the automation
products that were acquired as part of the purchase of Proconics International,
Inc. in October 1994. Accordingly, AAI has been accounted for as a discontinued
operation in the accompanying financial statements. The losses reported from
discontinued operations for the three and nine month period ended December 31,
1996 were $4,763 and $6,092, respectively, net of an income tax benefit of
$2,175 and $3,247, respectively. The loss reported from the closure of the
subsidiary for both the three and nine month periods ended December 31, 1997 was
$1,840 net of an income tax benefit of $1,035. The loss reported from the
closure of the subsidiary for both the three and nine month periods ended
December 31, 1996 was $8,573 (net of an income tax benefit of $4,822) including
anticipated operating loss of $1,095 (net of income tax benefit of $616) during
the closure period. Net assets of the subsidiary at March 31, 1997 consisted
primarily of trade receivables, inventory and property, plant and equipment. Net
liabilities of the subsidiary at December 31, 1997 consisted primarily of the
ongoing warranty reserves, net of the realizable value of trade receivables,
inventory and property, plant and equipment assumed by Asyst Technologies, Inc.,
following the closure of AAI on September 30, 1997.
6
ACQUISITION OF RADIANCE SYSTEMS INCORPORATED
On November 15, 1996 the Company purchased Radiance Systems Incorporated (RSI),
a developer and supplier of software products to be used in the semiconductor
manufacturing industry, by acquiring all of the outstanding stock of RSI in
exchange for 259,480 shares of common stock (adjusted for the August 1997 two-
for-one stock dividend) of the Company. The total purchase price was
approximately $2.4 million and was accounted for using purchase accounting in
the quarter ended December 31, 1996.
In connection with the acquisition, the Company received an appraisal of the
intangible assets which indicated that approximately $1.3 million of the
acquired intangible assets consisted of in process research and development.
Because there can be no assurance that the Company will be able to successfully
complete the development of RSI products or that the acquired technology has any
alternative future use, the acquired in process research and development was
charged to expense in the quarter ended December 28, 1996. As a result of the
purchase price allocation, approximately $1.8 million (including $.6 million of
deferred tax liability) was assigned to intangible assets related to existing
product technology, the assembled workforce and excess of the purchase price
over net assets acquired. These intangible assets will be amortized over a
period up to three years. Management believes that the unamortized balance of
these assets is recoverable.
Comparative pro forma information reflecting the acquisition of RSI has not been
presented because the operations of RSI are not material to the Company's
consolidated financial statements.
PRIVATE PLACEMENT
On September 30, 1997, the Company completed a private placement of one million
unregistered shares of its common stock at $42.92 per share to a group of mutual
funds managed by a single, large institutional management firm, generating net
proceeds to the Company of $42.9 million. The Company filed a registration
statement with the Securities Exchange Commission on Form S-3, which became
effective on December 1, 1997, for the resale of the securities. The proceeds
from such private placement augmented the Company's working capital.
RELATED PARTY TRANSACTION
On September 30, 1997, the Company entered into an asset purchase agreement with
Palo Alto Technologies, Inc. ("PAT") pursuant to which the Company sold to PAT
certain intellectual property rights and office equipment which were owned or
licensed by Asyst Automation, Inc. (a discontinued operation) in consideration
for quarterly "Earn-Out Payments" up to an aggregate of $2.0 million. The "Earn-
Out Payments" are equal to 4.0 percent of PAT gross revenue. The Company may
convert the right to receive such "Earn-Out Payments" into shares of PAT
securities at the closing of certain issuances of securities by PAT. In
addition, PAT granted the Company the non-exclusive, worldwide right to
distribute and sell any of PAT's products on PAT's most favorable distributor
terms and conditions; except PAT may grant exclusive distribution rights to
particular markets so long as such rights are first offered to the Company and
the Company does not accept the offer. Such distribution rights shall terminate
on the earlier of (i) the fifth anniversary of such agreement or (ii) if the
Company begins selling its own products which are directly competitive with
PAT's products. The Chairman and Chief Executive Officer of the Company is the
Chairman and principal shareholder of PAT. The parties have agreed that the
Chairman and Chief Executive Officer of the Company and one other officer of the
Company may be advisors or directors of PAT while employed full time by the
Company.
7
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 Company's
Registration Statement on Form S-3 filed with the Securities Exchange
Commission on November 17, 1997, as amended.
RESULTS OF OPERATIONS
- ---------------------
Net sales. Net sales increased from $36.4 million for the three months ended
December 31, 1996, to $42.3 million for the three months ended December 31,
1997. Net sales for the nine months ended December 31, 1997 were $120.3 million
which represents a 17.1 percent increase over the same period in the prior
year. The increases are due primarily to increased sales of Load Port Products
(LPP), which represent 43.9 percent of sales, for the nine months ended
December 31, 1997, compared to 16.6 percent of sales for the same period last
year and an increase in sales across various other product lines of the
Company. International sales for the Company increased from $19.4 million, or
53.2 percent of net sales during the three months ended December 31, 1996, to
$26.5 million, or 62.6 percent of net sales during the three months ended
December 31, 1997. For the nine month periods ended December 31, 1996 and
1997, respectively, international sales increased from $58.0 million, or 56.5
percent of net sales, to $77.8 million, or 64.7 percent of net sales.
International sales by region for the nine month period ended December 31,
1997 are summarized as follows:
Geographic Net Sales Percentage of
Region (in millions) Net Sales
------------ ----------------- -----------------------
Taiwan $ 57.4 47.7%
Japan $ 9.1 7.6%
Singapore $ 7.7 6.4%
Europe $ 3.5 2.9%
Korea $ 0.1 0.1%
----------------- -----------------------
$ 77.8 64.7%
================= =======================
The increase in international sales is being driven largely by repeat sales to
customers in Taiwan for both new capacity and retrofit projects. 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. However, there can be no assurance that the
Company's results of operations will not be adversely affected by such
fluctuations in the future. A substantial portion of the Company's international
sales are to customers in the Asia Pacific region. The economies of those
countries have been in turmoil during the last several months. While the Company
has not experienced any significant cancellations or delays in orders from that
region, there can be no assurance that the economic problems of the region and
its related impact on the economies of the areas served by the Company will not
result in future cancellations or delays in orders.
Gross Margin. Gross margin increased from 38.5 percent for the three months
ended December 31, 1996, to 44.8 percent for the three months ended December
31, 1997. Gross margin during the nine months ended December 31, 1997
increased to 44.1 percent from 40.7 percent during the nine months ended
December 31, 1996. The increase in gross margin resulted from improved
production scheduling and cost reduction efforts, particularly in its Load Port
Product (LPP) line. The Company expects that its gross margin will continue to
fluctuate in the future as product mix varies and new 300mm products are
introduced. 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 costs
and other inefficiencies in the Company's distribution system, 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 those
contained in the Company's Annual Report on Form 10-K for the fiscal year end
March 31, 1997.
8
RESULTS OF OPERATIONS (CONTINUED)
- ---------------------------------
Research and development. Research and development expenses increased from $2.3
million, or 6.3 percent of net sales, during the three months ended December 31,
1996, to $3.4 million, or 7.9 percent of net sales, during the three months
ended December 31, 1997. Research and development expenses increased from $6.2
million, or 6.0 percent of net sales, during the nine months ended December
31, 1996, to $9.4 million or 7.8 percent of net sales for the same period
ended December 31, 1997. The increase is due primarily to increases in staffing
and personnel related expenses and other costs driven by the Company's
continuing development of new products and product enhancements. The Company
expects that its research and development costs will increase in future
periods, but will fluctuate as a percentage of net sales.
Selling, general and administrative. Selling, general and administrative
expenses increased from $7.2 million, or 19.8 percent of net sales, during the
three months ended December 31, 1996, to $8.5 million, or 20.2 percent of net
sales, during the three months ended December 31, 1997. This increase is
primarily due to an increase in staffing and personnel related expense for the
Company's newly created sales and service operation in Japan. Selling, general,
and administrative expenses increased from $20.7 million, or 20.1 percent of net
sales, during the nine months ended December 31, 1996, to $25.6 million, or
21.3 percent of net sales, during the nine months ended December 31, 1997. Most
of the increases resulted from the Company's continued expansion of its sales,
general and administrative efforts, including the hiring of additional
personnel, in order to support and promote the growth of the Company. The
increase in selling, general and administrative expenses as a percentage of net
sales for the nine month period ended December 31, 1997 over the same period in
the prior fiscal year is related to the timing of the ramp up of Asyst Software,
Inc. during the second, third and fourth quarters of the prior fiscal year and
the newly created sales and service operation in Japan. The Company expects that
selling, general and administrative spending will increase in future
periods, although the spending may vary as a percentage of net sales.
Other income, net. Other income, net, increased from $0.2 million during the
three months ended December 31, 1996 to $1.1 million during the three months
ended December 31, 1997. Other income, net, increased from $0.5 million during
the nine months ended December 31, 1996 to $2.1 million during the nine months
ended December 31, 1997. The increases in other income, net, resulted from
higher average cash and cash investments available during the periods and an
increase in royalty income under a manufacturing license agreement. The Company
expects royalty income to decrease in the future as current license agreements
expire.
Provision for income taxes. The Company's effective income tax rate decreased
from 49.8 percent for the three month period ended December 31, 1996 to 36.0
percent during the three month period ended December 31, 1997. The effective
tax rate was decreased from 39.4 percent for the nine month periods ended
December 31, 1996 to 36.0 percent for the nine month period ended December 31,
1997. The decrease in the effective tax rate for the three and nine month
periods then ended is due entirely to the nondeductible effects of write-off of
in-process research and development costs related to the acquisition of Radiance
Systems, Inc. in the third quarter of fiscal year 1997.
Discontinued operations. In the third quarter of fiscal year 1997, the Company
adopted a formal plan to close Asyst Automation, Inc., by September 30, 1997.
The losses reported from discontinued operations for the three and nine month
periods ended December 31, 1996 were $4.8 million and $6.1 million,
respectively, net of an income tax benefit of $2.2 million and $3.2 million,
respectively. The loss reported from the closure of the subsidiary for both the
three and nine month periods ended December 31, 1996 was $8.6 (net of an income
tax benefit of $4.8 million) including anticipated operating loss of $1.1
million (net of income tax benefit of $1.0 million) during the closure period.
In the third quarter of fiscal year 1998, management determined that an
additional loss of $1.8 million, net of $1.0 million income tax benefit, was
required to be recognized in conjunction with the closure of Asyst Automation,
Inc. This resulted because of higher cost related to ongoing warranty activities
and contractual obligations for periods longer than originally estimated. These
amounts have been reported as losses from the closure of the subsidiary for both
the three and nine month periods ended December 31, 1997.
9
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of December 31, 1997, the Company had approximately $43.1 million in cash
and cash equivalents and approximately $110.0 million of working capital. In
addition, under a working capital line of credit agreement with a bank, the
Company can borrow up to $20.0 million conditioned upon meeting certain
financial covenants, including maintaining specific levels of quarterly and
annual earnings, working capital, tangible net worth and liquidity. As of
December 31, 1997, there were no outstanding borrowings against the line of
credit and the Company was in compliance with all the covenants required by the
bank. Interest is at the bank's prime rate.
Although the Company cannot anticipate with certainty 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 functional currency of the Company is
the US dollar. To date, the impact of currency translation gains or losses has
not been material to the Company's 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 its existing
cash and cash equivalents, cash generated from operations and existing sources
of working capital will be adequate to finance its operations for the foreseen
future.
YEAR 2000 SOFTWARE EXPOSURE
- ---------------------------
The Company is in the process of identifying anticipated costs, problems and
uncertainties associated with making the Company's internal-use software
applications Year 2000 compliant. In general, the Company expects to resolve the
Year 2000 issues through planned replacement upgrades of its software
applications. Although management does not expect Year 2000 issues to have a
material impact on its business of future results of operations, there can be no
assurance that there will not be interruptions of operations or other
limitations of system functionality or that the Company will not incur
significant costs to avoid such interruptions or limitations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In October 1996, the Company filed a lawsuit in the United States District Court
for the Northern District of California against Jenoptik A.G. ("Jenoptik"),
Jenoptik-Infab, Inc. ("Infab"), Emtrak, Inc. ("Emtrak") and Empak, Inc.
("Empak"), alleging infringement of two patents related to the Company's SMART -
Traveler System. The Company has amended its Complaint to allege cause of action
for breach of fiduciary duty against Jenoptik and Meissner & Wurst, GmbH and
misappropriation of trade secrets and unfair business practices against all
defendants. The Company's Complaint seeks damages and injunctive relief against
further infringement. All defendants have counter-sued, seeking a judgment
declaring the patents invalid, unenforceable and not infringed. Jenoptik, Infab,
and Emtrak have also alleged that the Company has violated federal antitrust
laws. The Company has denied these allegations. The Company has settled its
dispute as to Empak only, which has been dismissed from the suit. The remaining
defendants have brought an action for summary determination that they do not
infringe the patents. While it is not possible to predict accurately or to
determine the eventual outcome of these matters, the Company believes that the
outcome of these legal proceedings will not have a material adverse effect on
the financial position of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
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
27.1 Financial Data Schedule
b) Form 8-K
On October 10, 1997, the Company filed a Form 8-K relating to the private
placement of 1,000,000 shares of common stock on September 30, 1997.
11
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.
ASYST TECHNOLOGIES, INC.
Date: February 9, 1998 By: /s/ Douglas J. McCutcheon
----------------------- ----------------------------
Douglas J. McCutcheon
Senior Vice President
Chief Financial Officer
Signing on behalf of the registrant
and as the principal accounting and
financial officer
12
EXHIBIT INDEX
Sequential
Page
Exhibit Number Description of Exhibit Number
- -------------- ---------------------- ------
27.1 Financial Data Schedule 15
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