<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 14, 1999
------------------------------------------------------------------
MICROSEMI CORPORATION
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 0-8866 95-2110371
-------- ------ ----------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2830 South Fairview Street, Santa Ana, California 92704
------------------------------------------------- -----
(Address of principal executive offices) (Zip code)
(714) 979-8220
--------------------------------------------------
Registrant's telephone number, including area code
Not Applicable
--------------------------------------------------------------
(Former name or former address, if changed, since last report)
1
<PAGE>
AMENDMENT NO. 1
The undersigned Registrant, Microsemi Corporation ("Microsemi"), hereby
amends item 7, financial statements and exhibits, of its Current Report on Form
8-K, originally filed with the Securities Exchange Commission on April 28, 1999,
reporting the acquisition by Registrant from SymmetriCom, Inc. ("SymmetriCom")
of Linfinity Microelectronics, Inc. ("Linfinity"), a Delaware Corporation and a
controlled subsidiary of SymmetriCom, pursuant to the Agreement and Plan of
Reorganization dated February 10, 1999, as set forth herein and in the pages
attached hereto:
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
The financial statements of Linfinity Microelectronics, Inc., required
by this Item 7(a), are set forth below:
Report of Independent Auditors.
Balance sheets as of June 30, 1998 and June 30, 1997.
Statements of Operations for each of the three fiscal years in the
period ended June 30, 1998.
Statements of Stockholders' Equity for each of the three fiscal years
in the period ended June 30, 1998.
Statements of Cash Flows for each of the three fiscal years in the
period ended June 30, 1998.
Notes to the financial statements for each of the three fiscal years
in the period ended June 30, 1998.
Condensed Balance sheets as of March 31, 1999 and June 30, 1998.
Condensed Statements of Operations for nine months ended March 31,
1999 and March 31, 1998.
Condensed Statements of Stockholder's Equity for nine months ended
March 31, 1999.
Condensed Statements of Cash Flows for nine months ended March 31,
1999 and March 31, 1998.
Notes to the financial statements for nine months ended March 31, 1999
and March 31, 1998.
2
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of SymmetriCom, Inc.)
Financial Statements for the Years
Ended June 30, 1996, 1997 and 1998
and Independent Auditors' Report
3
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Linfinity
Microelectronics Inc.:
We have audited the accompanying balance sheets of Linfinity
Microelectronics Inc. (the "Company") (a controlled subsidiary of SymmetriCom,
Inc.) as of June 30, 1997 and 1998, and the related statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended June 30, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the Company as of June 30, 1997 and
1998, and the results of its operations and its cash flows for each of the three
years in the period ended June 30, 1998 in conformity with generally accepted
accounting principles.
As discussed in Note 10 of the financial statements, the Company has
significant transactions with SymmetriCom, Inc. Accordingly, the accompanying
financial statements may not be indicative of the financial condition or results
of operations had the Company operated without such affiliation.
DELOITTE & TOUCHE LLP
San Jose, California
May 21, 1999
4
<PAGE>
LINFINITY MICROELECTRONICS INC
(A Controlled Subsidiary of Symmetricom, Inc.)
BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS
June 30,
--------------------------------
1997 1998
---- ----
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................................ $ 8,586 $ 1,862
Short-term investment................................................................ - 60
Accounts receivable - net of allowance of $150 in 1997 and 1998...................... 10,125 5,806
Inventories.......................................................................... 8,742 5,209
Prepaid expenses and other assets.................................................... 128 49
Income taxes receivable.............................................................. - 1,229
Deferred income taxes................................................................ 1,634 4,369
------- -------
Total current assets........................................................ 29,215 18,584
Property and equipment, net............................................................ 16,218 16,433
Other assets, net...................................................................... 96 8
------- -------
Total assets........................................................................... $45,529 $35,025
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................................... $ 3,648 $ 3,223
Accrued liabilities.................................................................. 4,126 3,224
Due to Parent........................................................................ 11,893 3,145
Income taxes payable................................................................. 378 31
------- -------
Total current liabilities................................................... 20,045 9,623
Deferred income taxes.................................................................. 1,762 2,177
Commitments and contingencies (Notes 3, 4 and 5)
Stockholders' equity
Series A convertible preferred stock, $0.01 par value, 10,000,000 shares
authorized; 6,000,000 shares outstanding (aggregate liquidation preference
Of $12,000......................................................................... 12,936 12,936
Common stock, $0.01 par value, 20,000,000 shares authorized; 2,151,450 and
4,192,305 shares outstanding at June 30, 1997 and 1998, respectively............... 153 6,508
Retained earnings.................................................................... 10,633 3,781
------- -------
Total stockholders' equity.................................................. 23,722 23,225
------- -------
Total liabilities and stockholders' equity............................................. $45,529 $35,025
======= =======
</TABLE>
See notes to financial statements.
5
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
STATEMENTS OF OPERATIONS
(In thousands)
<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------------------
1996 1997 1998
------- ------- --------
<S> <C> <C> <C>
Net sales.............................. $37,795 $54,637 $ 47,270
Cost of sales.......................... 22,847 32,708 39,288
------- ------- --------
Gross profit........................... 14,948 21,929 7,982
------- ------- --------
Operating expenses:
Research and development............. 5,832 5,591 6,423
Selling and marketing................ 3,773 6,106 6,188
General and administrative........... 2,960 4,290 5,318
------- ------- --------
Total operating expenses.... 12,565 15,987 17,929
------- ------- --------
Income (loss) from operations.......... 2,383 5,942 (9,947)
Other expense, net..................... 334 467 124
------- ------- --------
Income (loss) before income taxes...... 2,049 5,475 (10,071)
Provision (benefit) for income taxes... 697 1,645 (3,219)
------- ------- --------
Net income (loss)...................... $ 1,352 $ 3,830 $ (6,852)
======= ======= ========
</TABLE>
See notes to financial statements.
6
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Series A
Preferred Stock Common Stock
-------------------- -------------------- Retained
Shares Amount Shares Amount Earnings Total
--------- ------- --------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balances, July 1, 1996.................. 6,000,000 $12,936 2,001,950 $ 21 $ 5,451 $18,408
Proceeds from exercise of options....... - - 10,500 7 - 7
Net income.............................. - - - - 1,352 1,352
--------- ------- --------- ------ ------- -------
Balances, June 30, 1996................. 6,000,000 12,936 2,012,450 28 6,803 19,767
Proceeds from exercise of options....... - - 139,000 117 - 117
Stock compensation expense.............. - - - 8 - 8
Net income.............................. - - - - 3,830 3,830
--------- ------- --------- ------ ------- -------
Balances, June 30, 1997................. 6,000,000 12,936 2,151,450 153 10,633 23,722
Proceeds from exercise of options....... - - 40,855 45 - 45
Issuance of common stock................ - - 187,619 591 - 591
Conversion of amounts due to Parent..... - - 1,812,381 5,709 - 5,709
Stock compensation expense.............. - - - 10 - 10
Net loss................................ - - - - (6,852) (6,852)
--------- ------- --------- ------ ------- -------
Balances, June 30, 1998................. 6,000,000 $12,936 4,192,305 $6,508 $ 3,781 $23,225
========= ======= ========= ====== ======= =======
</TABLE>
See notes to financial statements.
7
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Years Ended June 30,
------------------------------
1996 1997 1998
------- ------- -------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................ $ 1,352 $ 3,830 $(6,852)
Reconciliation to cash provided by (used for)
operating activities:
Deferred income taxes.................................. (85) (510) (2,320)
Depreciation and amortization.......................... 2,472 2,940 3,313
Inventory write-down (Note 1).......................... - - 8,500
Loss on disposal of property and equipment............. 39 259 21
Stock compensation expense............................. - 8 10
Changes in:
Accounts receivable.................................. 529 (6,234) 4,319
Inventories.......................................... (2,038) (1,425) (4,967)
Prepaid expenses and other assets.................... (281) 244 79
Income taxes receivable.............................. - - (1,229)
Accounts payable..................................... 20 1,555 (425)
Accrued liabilities.................................. (562) 2,517 (902)
Due to Parent........................................ 4 11,859 (3,039)
Income taxes payable................................. (156) 276 (347)
------- ------- -------
Cash provided by (used for) operating activities.. 1,294 15,319 (3,839)
------- ------- -------
Cash flows from investing activities:
Purchases of property and equipment...................... (5,299) (4,071) (3,549)
Purchase of short-term investments....................... - - (60)
Other assets............................................. 91 35 88
------- ------- -------
Cash used for investing activities................ (5,208) (4,036) (3,521)
------- ------- -------
Cash flows from financing activities:
Proceeds from exercise of options........................ 7 117 45
Proceeds from sale of stock.............................. - - 591
Repayments of debt....................................... (52) (5,766) -
------- ------- -------
Cash provided by (used for) financing activities.. (45) (5,649) 636
------- ------- -------
Net increase (decrease) in cash and cash equivalents....... (3,959) 5,634 (6,724)
Cash and cash equivalents:
Beginning of year........................................ 6,911 2,952 8,586
------- ------- -------
End of year.............................................. $ 2,952 $ 8,586 $ 1,862
======= ======= =======
Supplemental disclosures of cash flow information -
cash paid during the year for:
Interest................................................. $ 594 $ 589 $ 230
======= ======= =======
Income taxes............................................. $ 938 $ 1,879 $ 649
======= ======= =======
Noncash investing and financing activities - conversion of
amounts due to Parent.........,........................... $ 5,709
=======
</TABLE>
See notes to financial statements.
8
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of SymmetriCom, Inc.)
NOTES TO FINANCIAL STATEMENTS
Years Ended June 30, 1996, 1997 and 1998
1. Organization and Significant Accounting Policies
Organization - Linfinity Microelectronics Inc. ("Linfinity" or the
"Company") (a controlled subsidiary of SymmetriCom, Inc.) designs,
manufactures, and markets linear and mixed signal integrated circuits
as well as systems-engineered modules primarily for use in power
management and communication applications in the commercial,
industrial, and defense and space markets. The Company was founded in
1968 as Silicon General Semiconductors ("SGS"). In July 1993, SGS
became a controlled subsidiary of SymmetriCom, Inc. (the "Parent") and
changed its name to Linfinity Microelectronics Inc.
Fiscal Period - The Company, for presentation purposes, presents each
fiscal year as if it ended on June 30. However, the Company's fiscal
year ends on the Sunday closest to June 30. All references to years
refer to the Company's fiscal years. Fiscal years 1996, 1997 and 1998
consist of 52 weeks.
Estimates and Certain Significant Risks and Uncertainties - The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.
The Company operates in a rapidly changing environment that involves a
number of risks, some of which are beyond the Company's control, that
could have a material adverse effect on the Company's business,
operating results, and financial condition. These risks include
variability and uncertainty of revenues and operating results; product
concentration, technological change, and new products; competition;
intellectual property/litigation; management of growth; dependence on
key personnel; limited sources of component supply; licenses from
third parties; geographic concentration; acquisitions and investments;
international operations; regulatory requirements; expansion of
distribution channels; and year 2000 compatibility issues.
Concentration of Credit Risk - The Company's cash and cash equivalents
are deposited with a major financial institution. At times such
deposits may be in excess of insured limits. Management believes that
the Company's investments in cash equivalents have minimal credit
risk.
The Company sells products primarily to companies in North America and
Asia-Pacific. The Company maintains reserves for estimated potential
credit losses.
Cash and Cash Equivalents - Cash equivalents are short-term, highly
liquid cash investments with an original maturity of less than 90
days.
9
<PAGE>
Short-Term Investment - Short-term investments are classified as
available-for-sale based on the Company's intended use. Differences,
if any, between amortized cost and fair value representing unrealized
holding gains or losses are recorded as a component of stockholders'
equity as accumulated other comprehensive income/loss. Gains and
losses on sales of investments are determined on a specific
identification basis. At June 30, 1998, the Company's short-term
investment consisted of one certificate of deposit, the cost of which
approximated market. No investments were sold in the periods
presented.
Inventories - Inventories are stated at the lower of cost (first-in,
first-out) or market. As a result of increased price pressure and weak
demand from component manufacturers supplying the personal computer
markets as well as an overall decline in the global semiconductor
market, the Company included in cost of sales in 1998 a charge of
approximately $8,500,000 to reduce inventory to net realizable value.
Property and Equipment - Property and equipment are stated at cost.
Depreciation and amortization are computed using the straight-line
method based on the estimated useful lives of the assets (three to
thirty years) or the lease term, if shorter.
Long-Lived Assets - The Company evaluates long-lived assets for
impairment whenever events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable.
Revenue Recognition - Sales are generally recognized upon shipment.
Provisions are made for warranty costs, sales returns and price
protection.
Major Customers - No one customer accounted for more than 10% of net
sales in fiscal 1996 and 1998, while one customer accounted for 11% of
net sales in fiscal 1997. At June 30, 1997, two customers accounted
for 14% and 15% of accounts receivable. At June 30, 1998, one customer
accounted for 17% of accounts receivable.
Stock-Based Compensation - The Company accounts for stock-based awards
to employees under Statement of Financial Accounting Standards
("SFAS") No. 123, Accounting for Stock-Based Compensation, and as
allowed in that statement, they measure compensation using the
intrinsic value method in accordance with Accounting Principles Board
Opinion ("APB") No. 25, Accounting for Stock Issued to Employees.
Income Taxes - The Company accounts for income taxes under an asset
and liability approach. Deferred tax liabilities are recognized for
future taxable amounts and deferred tax assets are recognized for
future deductible amounts.
Recently Issued Accounting Standards - In June 1998, the Financial
Accounting Standards Board issued SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities. This statement requires
companies to record derivatives on the balance sheet as assets or
liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for
hedge accounting. SFAS No. 133 will be effective for the Company's
fiscal year
10
<PAGE>
ending June 30, 2000. Management believes that this statement will not
have a significant impact on the Company's financial position, results
of operations or cash flows. In June 1997, the Financial Accounting
Standards Board issued SFAS No. 130, Reporting Comprehensive Income
and No. 131, Disclosures About Segments of an Enterprise and Related
Information, which require the Company to report and display certain
information related to comprehensive income and operating segments,
respectively. Both statements are effective for fiscal years beginning
after December 15, 1997. Accordingly, the Company will adopt SFAS No.
130 and SFAS No. 131 starting with its fiscal year ending June 30,
1999. Management believes that these statements will not have a
significant impact on the Company's financial position, results of
operations or cash flows.
2. Balance Sheet Details
Inventories
Inventories consists of (in thousands):
<TABLE>
<CAPTION>
June 30,
------------------
1997 1998
---- ----
<S> <C> <C>
Raw materials.............................. $1,728 $ 645
Work-in process............................ 5,151 4,188
Finished goods............................. 1,863 376
------ ------
Inventories................................ $8,742 $5,209
====== ======
</TABLE>
Property and Equipment
Property and equipment consists of (in thousands):
<TABLE>
<CAPTION>
June 30,
------------------
1997 1998
---- ----
<S> <C> <C>
Land....................................... $ 1,248 $ 1,248
Buildings.................................. 8,390 8,931
Machinery and equipment.................... 28,553 30,881
-------- --------
Total...................................... 38,191 41,060
Accumulated depreciation and amortization.. (21,973) (24,627)
-------- --------
Property and equipment, net................ $ 16,218 $ 16,433
======== ========
</TABLE>
Accrued Liabilities
Accrued liabilities consist of (in thousands):
<TABLE>
<CAPTION>
June 30,
------------------
1997 1998
---- ----
<S> <C> <C>
Employee compensation and benefits......... $2,506 $ 801
Commissions................................ 1,186 1,050
Accrued inventory.......................... - 460
Other...................................... 434 913
------ ------
Accrued liabilities....................... $4,126 $3,224
====== ======
</TABLE>
11
<PAGE>
3. Borrowing Arrangements
In 1997, the Company paid off its note payable of approximately $5.7
million using amounts received from the Parent company. The note bore
interest at 10.25% and was collateralized by land, building, and related
personal property. In 1998, the Company converted the $5.7 million owed to
the Parent to common stock (Note 10).
4. Leases
The Company owns both its corporate headquarters and its wafer fabrication
facilities. Both facilities are in Garden Grove, California. The Company
leases certain other facilities and equipment under operating lease
agreements which expire at various dates through 2001. Rental expense
charged to operations was approximately $424,000, $264,000 and $189,000 in
1996, 1997 and 1998, respectively. Future minimum lease payments at June
30, 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
Year Ending
June 30
<S> <C>
1999........................................ $38
2000........................................ 38
2001........................................ 20
---
Total minimum lease payments.................... $96
===
</TABLE>
5. Contingencies
The Company is a party to certain legal claims in the normal course of its
operations. While the results of such claims cannot be predicted with any
certainty, management, after consultation with legal counsel, believes that
the final outcome of such matters will not have a material adverse effect
on the Company's financial statements.
6. Stockholders' Equity
Preferred Stock
At June 30, 1997 and 1998, all outstanding shares of the Company's Series A
preferred stock were held by the Parent. Significant terms of the
outstanding preferred stock are as follows:
. Each share of preferred stock is convertible into one share of common
stock at any time at the option of the holder (subject to adjustment for
events of dilution). Conversion is mandatory upon the vote of a majority
of the preferred stockholders.
. Each share has voting rights equivalent to the number of shares of common
stock into which it is convertible.
. In the event of merger, liquidation, dissolution or winding up of the
Company, preferred Series A stockholders are entitled to receive $2.00 per
share for Series A prior to any distribution to the common stockholders.
12
<PAGE>
. Holders of preferred stock are entitled to receive, when and if declared,
annual dividends of $0.16 per share, adjusted for any stock dividends,
combinations or splits.
Common Stock
At June 30, 1997 and 1998, the Parent company held 2,000,000 and 4,000,000
shares of the Company's common stock, respectively. Significant terms of
the common stock are as follows:
. Each share entitles the holder to one vote.
. In the event of liquidation, dissolution or winding up of the Company,
common stockholders are entitled to receive $0.50 per share after all
payments have been made to the holders of Series A preferred stock. All
remaining assets will then be distributed ratably among the common and
preferred stockholders.
At June 30, 1998, the Company had reserved shares of common stock as
follows:
<TABLE>
<S> <C>
Conversion of outstanding preferred stock............. 6,000,000
Employee stock option plan............................ 2,307,665
---------
8,307,665
=========
</TABLE>
Employee Stock Option Plan
Under the Company's 1993 amended and restated stock option plan, 2,000,000
shares of common stock have been authorized for the grant of incentive or
nonstatutory stock options. In 1997, the Company increased the number of
authorized shares to 2,500,000. Stock options must be granted at not less
than 110% of fair market value on the date of grant to employees or
consultants who own more than 10% of the voting power of all classes of
stock and not less than 100% of fair market value on the date of grant for
all other employees or consultants. Stock options generally have vesting
periods of four years and are exercisable as they vest and for a period not
to exceed ten years from the date of issuance.
13
<PAGE>
A summary of stock option activity is as follows:
<TABLE>
<CAPTION>
Weighted
Number Average
of Exercise
Shares Price
------ -----
<S> <C> <C>
Outstanding, July 1, 1995 (486,800 exercisable at a
weighted average price of $0.52)................................ 1,783,500 $1.38
Granted (weighted average fair value of $0.40).................... 60,000 2.65
Exercised......................................................... (10,500) 0.66
Canceled.......................................................... (105,500) 1.34
---------
Outstanding, June 30, 1996 (844,025 exercisable at a
weighted average price of $0.93)................................ 1,727,500 1.43
Granted (weighted average fair value of $0.31).................... 538,500 2.98
Exercised......................................................... (139,000) 0.84
Canceled.......................................................... (569,350) 0.72
---------
Outstanding, June 30, 1997 (666,500 exercisable at a
weighted average price of $1.61)................................ 1,557,650 2.27
Granted (weighted average fair value of $0.33).................... 515,500 3.15
Exercised......................................................... (40,885) 1.09
Canceled.......................................................... (268,275) 1.90
---------
Outstanding, June 30, 1998........................................ 1,763,990 $2.61
=========
</TABLE>
At June 30, 1998, 543,675 options were available for future grant. The
following table summarizes information as of June 30, 1998 concerning
options outstanding:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------- ---------------------------
Weighted Average Weighted
Remaining Average
Exercise Number Contractual Life Number Exercise
Prices Outstanding (Years) of Shares Price
------ ------------ ------- --------- -----
<S> <C> <C> <C> <C>
$ 0.50 125,000 5.0 125,000 $0.50
0.80 115,600 5.7 115,600 0.80
2.65 685,390 7.1 409,165 2.65
3.15 838,000 9.1 107,500 3.15
--------- -------
1,763,990 7.9 757,265 $2.08
========= =======
</TABLE>
SFAS No. 123, Accounting for Stock-Based Compensation, requires the
disclosure of pro forma net income (loss) had the Company adopted the fair
value method of accounting for stock options. Under SFAS No. 123, the fair
value of stock-based awards to employees is calculated through the use of
option pricing models, even though such models were developed to estimate
the fair value of freely tradable, fully transferable options without
vesting restrictions, which significantly differ from the Company's stock
option awards. These models also require subjective assumptions, including
expected time to exercise, which greatly affect the calculated values. The
Company's calculations were made using the minimum value method with the
following weighted average assumptions: expected life of three years for
1996 and two years for 1997 and 1998; risk-free interest rates of 5.6% for
1996 and 1997 and 5.4% for 1998; and no
14
<PAGE>
dividends during the expected term. The Company's calculations are based on
a single option valuation approach, and forfeitures are recognized as they
occur. If the computed fair values of the 1996, 1997 and 1998 awards had
been amortized to expense over the vesting period of the awards, pro forma
net income (loss) would have been (in thousands) $1,348, $3,780 and
$(6,986) in 1996, 1997 and 1998, respectively.
Other Option Arrangements
In 1997, the Company issued 54,000 options to a consultant. The Company is
recording a compensation charge of approximately $42,000 over the vesting
period of the options based on the intrinsic value of the options at the
date of grant. Compensation expense of approximately $8,000 and $10,000
was recorded in 1997 and 1998, respectively.
7. Income Taxes
The results of operations of the Company have historically been included in
the Parent company's consolidated tax return. The Company has a tax
sharing agreement with the Parent which generally allocates tax attributes
to the Company. The agreement also provides for the Parent to pay taxes on
behalf of the Company. At June 30, 1997 and 1998, taxes receivable and
taxes payable were with the Parent company. The provision (benefit) for
income taxes, net deferred tax assets and other tax attributes have been
computed as if the Company were a separate corporate taxpayer.
The provision (benefit) for income taxes consist of (in thousands):
<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Current income taxes:
Federal........................... $ 781 $2,126 $ (905)
State............................. 1 29 6
----- ------ -------
782 2,155 (899)
----- ------ -------
Deferred income taxes:
Federal........................... (67) (407) (1,914)
State............................. (18) (103) (406)
----- ------ -------
(85) (510) (2,320)
----- ------ -------
Provision (benefit) for income taxes. $ 697 $1,645 $(3,219)
===== ====== =======
</TABLE>
15
<PAGE>
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities used for financial
reporting and the amounts used for income tax purposes. The items
comprising the Company's net deferred tax assets are as follows (in
thousands):
<TABLE>
<CAPTION>
June 30,
------------------------
1997 1998
---- ----
<S> <C> <C>
Deferred tax assets:
Reserves not currently deductible... $1,634 $4,369
------ ------
Deferred tax liabilities:
Depreciation and amortization....... 1,096 1,029
Other items......................... 666 1,148
------ ------
1,762 2,177
------ ------
Net deferred tax asset (liability).... $ (128) $2,192
====== ======
</TABLE>
8. Other Expense - Net
Other expense - net consists of (in thousands):
<TABLE>
<CAPTION>
Years Ended June 30,
-------------------------------------
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Interest income.................... $(260) $(122) $(106)
Interest expense................... 594 589 108
Interest expense owed to Parent.... - - 122
----- ----- -----
$ 334 $ 467 $ 124
===== ===== =====
</TABLE>
9. Employee Benefit Plan
In 1994, the Company established a 401(k) plan which provides for
retirement and certain other benefits to the Company's employees and their
beneficiaries. The Company, under the plan, makes matching contributions
up to $300 per employee. The 401(k) plan is administered under a written
plan and trust agreement entered into between the Company and the Company's
designated trustee. Company contributions were approximately $45,000,
$52,000 and $42,000 for 1996, 1997 and 1998, respectively.
10. Related Party Transactions
At June 30, 1997 and 1998, the Parent company held six million shares of
the Company's preferred stock and two million and four million shares of
the Company's common stock, respectively. In 1998, the Company converted
$5.7 million of debt owed to the Parent into common stock at a price of
$3.15 per share.
The Company is allocated an overhead charge based on planned revenue at the
beginning of each year from the Parent, which is included in general and
administrative expenses. Management believes this allocation methodology
to be a reasonable basis for the charges. These charges were approximately
$819,000, $1,125,000, and $1,200,000 for the years ended June 30, 1996,
1997 and 1998, respectively.
As described in the preceding paragraphs and Notes 6 and 7, the Company has
significant transactions with the Parent. Accordingly, the accompanying
financial statements may not be
16
<PAGE>
indicative of the financial condition or results of operations had the
Company operated without such affiliations.
11. Subsequent Events
On April 14, 1999, SymmetriCom, Inc. (SymmetriCom), consummated the sale of
Linfinity Microelectronics Inc. to Microsemi Corporation ("Microsemi").
All preferred stock, common stock, and outstanding options of Linfinity
were exchanged for cash on a basis defined by the Agreement and Plan of
Reorganization. The total purchase price was approximately $24 million.
Microsemi was incorporated in Delaware in 1960 and is a multinational
supplier of high-reliability discrete semiconductors, surface mounted
assemblies and high-reliability screening and testing services.
17
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of SymmetriCom, Inc.)
Condensed Financial Statements
as of March 31, 1999 and June 30, 1998 and
for the Nine Month Periods
Ended March 31, 1999 and 1998
18
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
CONDENSED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
ASSETS
March 31,
1999 June 30,
(unaudited) 1998*
----------- --------
<S> <C> <C>
Current assets:
Cash and cash equivalents.................................................... $ 2,807 $ 1,862
Short-term investments....................................................... 62 60
Accounts receivable, net..................................................... 5,509 5,806
Inventories, net............................................................. 5,897 5,209
Other current assets......................................................... 4,509 5,647
------- -------
Total current assets................................................ 18,784 18,584
Property and equipment, net.................................................... 14,596 16,433
Other assets, net.............................................................. 17 8
------- -------
Total assets................................................................... $33,397 $35,025
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................................. $ 3,319 $ 3,223
Accrued liabilities.......................................................... 3,141 3,224
Due to SymmetriCom........................................................... 1,694 3,145
Other current liabilities.................................................... - 31
------- -------
Total current liabilities........................................... 8,154 9,623
Deferred income taxes.......................................................... 2,177 2,177
Stockholders' equity:
Preferred stock, $0.01 par value, 10,000,000 shares authorized;
6,000,000 outstanding...................................................... 12,936 12,936
Common stock, $0.01 par value, 20,000,000 shares authorized;
4,197,794 and 4,192,305 outstanding........................................ 6,519 6,508
Unrealized gain on investment................................................ 2 -
Retained earnings............................................................ 3,609 3,781
------- -------
Total stockholders' equity.......................................... 23,066 23,225
------- -------
Total liabilities and stockholders' equity..................................... $33,397 $35,025
======= =======
</TABLE>
*The balance sheet at June 30, 1998 has been derived from audited financial
statements.
See accompanying notes.
19
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
---------------------------------
1999 1998
------- -------
<S> <C> <C>
Net sales...................................................................... $34,013 $37,552
Cost of sales.................................................................. 24,187 32,141
------- -------
Gross profit................................................................... 9,826 5,411
------- -------
Operating expenses:
Research and development..................................................... 3,705 5,012
Selling and marketing........................................................ 3,640 4,951
General and administrative................................................... 2,703 4,246
------- -------
Total operating loss................................................ (222) (8,798)
Interest income................................................................ 89 101
Interest expense............................................................... (120) (150)
------- -------
Loss before income tax benefit................................................. (253) (8,847)
Income tax benefit............................................................. (81) (2,830)
------- -------
Net loss....................................................................... $ (172) $(6,017)
======= =======
</TABLE>
See accompanying notes.
20
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Series A
Preferred Stock Common Stock Unrealized
-------------------------- ---------------------- Gain on Retained
Shares Amount Shares Amount Investment Earnings Total
-------------------------- ---------------------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Balances, June 30, 1998.............. 6,000,000 $12,936 4,192,305 $6,508 $3,781 $23,225
-
Issuance of common stock............. 5,489 3 3
Stock compensation expense........... 8 8
Unrealized gain on investment........ 2 2
Net loss............................. (172) (172)
--------- ------- --------- ------ -------- ------ -------
Balances, March 31, 1999............. 6,000,000 $12,936 4,197,794 $6,519 $2 $3,609 $23,066
========= ======= ========= ====== ======== ====== =======
</TABLE>
See accompanying notes.
21
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of Symmetricom, Inc.)
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-------------------------------
1999 1998
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss................................................................................ $ (172) $(6,017)
Reconciliation to net cash provided by (used for) operating activities
Depreciation and amortization......................................................... 2,589 2,447
Net deferred income taxes............................................................. 566 (3,538)
Compensation expense.................................................................. 8 8
Loss on disposal of property, plant and equipment..................................... 29 30
Changes in assets and liabilities:
Accounts receivable, net.............................................................. 297 4,568
Inventories........................................................................... (688) 2,455
Accounts payable...................................................................... 96 489
Accrued liabilities................................................................... (83) (437)
Due to SymmetriCom.................................................................... (1,451) (3,145)
Other................................................................................. 541 (1,121)
------- -------
Net cash provided by (used for) operating activities........................... $ 1,732 $(4,261)
------- -------
Cash flows from investing activities:
Purchase of property, plant and equipment, net.......................................... (781) (3,489)
Other................................................................................... (9) 24
------- -------
Net cash used for investing activities......................................... (790) (3,465)
------- -------
Cash flows from financing activities:
Proceeds from exercise of options....................................................... 30
Issuance of common stock................................................................ 3 591
------- -------
Net cash used for financing activities......................................... 3 621
------- -------
Net increase in cash and cash equivalents................................................. 945 (7,105)
Cash and cash equivalents:
Beginning of period..................................................................... 1,862 8,586
------- -------
End of period........................................................................... $ 2,807 $ 1,481
======= =======
Supplemental disclosures of cash flow information -
cash paid during the year for:
Interest................................................................................ 120 150
======= =======
Income taxes............................................................................ (1,150) 1,895
======= =======
Noncash investing and financing activities - conversion of
amounts due to Parent.................................................................... $ 5,709
=======
</TABLE>
See accompanying notes.
22
<PAGE>
LINFINITY MICROELECTRONICS INC.
(A Controlled Subsidiary of SymmetriCom, Inc.)
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended March 31, 1999
(Unaudited)
1. Basis of Presentation
The financial statements included herein have been prepared by Linfinity
Microelectronics Inc. (the "Company"), without audit. Certain information and
footnote disclosures, normally included in the annual financial statements
prepared in accordance with generally accepted accounting principles, have been
condensed or omitted. These financial statements should be read in conjunction
with the financial statements and notes thereto for the year ended June 30,
1998 included in this Form 8-K/A.
In the opinion of the management, these unaudited statements contain all
adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial position of the Company at March 31, 1999, the
results of operations for the nine-month period then ended and its cash flows
for the nine-month period then ended. The results of operations for the period
presented are not necessarily indicative of those that may be expected for the
full year.
The Company has significant transactions with its parent, SymmetriCom, Inc.
Accordingly, the accompanying financial statements may not be indicative of the
financial condition or results of operations had the Company operated without
such affiliations.
2. Inventories
Inventories are stated at the lower of cost (first-in, first-out) or market.
Inventories at March 31, 1999 and 1998 consist of:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Raw materials........................................................ $ 607 $ 645
Work-in-process...................................................... 3,306 4,188
Finished goods....................................................... 1,984 376
------ ------
$5,897 $5,209
====== ======
</TABLE>
3. Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. This
statement requires companies to record derivatives on the balance sheet as
assets or liabilities, measured at fair value. Gains or losses resulting
from changes in the values of those derivatives would be accounted for
depending on the use of the derivative and whether it qualifies for hedge
accounting. SFAS No. 133 will be effective for the Company's fiscal year
ending June 30, 2000. Management believes that this statement will not
have a significant impact on the Company's financial position, results of
operations or cash flows.
23
<PAGE>
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income and No. 131, Disclosures About Segments of
an Enterprise and Related Information, which require the Company to report
and display certain information related to comprehensive income and
operating segments, respectively. Both statements are effective for fiscal
years beginning after December 15, 1997. Accordingly, the Company will
adopt SFAS No. 130 and SFAS No. 131 starting with its fiscal year ending
June 30, 1999. Management believes that these statements will not have a
significant impact on the Company's financial position, results of
operations or cash flows.
4. Contingencies
The Company is a party to certain legal claims in the normal course of its
operations. While the results of such claims cannot be predicted with any
certainty, management, after consultation with legal counsel, believes that the
final outcome of such matters will not have a material adverse effect on the
Company's financial position and results of operations.
5. Subsequent Event
On April 14, 1999, SymmetriCom, Inc. (SymmetriCom), consummated the sale of
Linfinity Microelectronics Inc. to Microsemi Corporation ("Microsemi"). All
preferred stock, common stock, and outstanding options of the Company were
exchanged for cash on a basis defined by the Agreement and Plan of
Reorganization. The total purchase price was approximately $24 million.
Microsemi was incorporated in Delaware in 1960 and is a multinational supplier
of high-reliability discrete semiconductor, surface mounted assemblies and high-
reliability screening and testing services.
24
<PAGE>
(b) Unaudited Pro Forma Condensed Financial Information.
On April 14, 1999, Microsemi Corporation ("Microsemi" or the "Company") acquired
all of the outstanding capital stock of Linfinity Microelectronics, Inc.
("Linfinity") for $24,100,000 in cash. The acquisition has been accounted for
under the purchase method of accounting. Accordingly, the results of operations
will be included with the Company's beginning at the acquisition date. The
purchase price resulted in an excess of the cost of the acquisition over the
fair value of the net assets acquired of $29,000. Such excess is being amortized
on a straight-line basis over 10 years. The preliminary purchase price
allocation is based on an independent appraisal and management's estimates. The
purchase price allocation is subject to further refinement and change over the
next year.
The Unaudited Pro Forma Condensed Balance Sheet at April 4, 1999 combines the
historical balance sheets of the Company and Linfinity as if the acquisition had
occurred on April 4, 1999, after giving effect to certain adjustments described
in the accompanying Notes to Unaudited Pro Forma Condensed Financial
Information.
The Unaudited Pro Forma Condensed Income Statements for the year ended September
27, 1998 and for the six-months ended April 4, 1999 present the combined results
of operations of the Company and Linfinity as if the acquisitions had occurred
on September 29, 1997, after giving effect to certain adjustments described in
the accompanying Notes to Unaudited Pro Forma Condensed Financial Information.
The following Unaudited Pro Forma Condensed Financial Information is presented
for illustrative purposes only. It is not necessarily indicative of the
consolidated financial position or results of operations for future periods or
the results that actually would have been realized had the Company and Linfinity
been a consolidated company during the specified periods. The Unaudited Pro
Forma Condensed Financial Information, including the notes thereto, is qualified
in its entirety by reference to, and should be read in conjunction with the
historical consolidated financial statements and the notes thereto, which were
previously reported in the Company's Annual Report on Form 10-K for the year
ended September 27, 1998 and the Quarterly Report on Form 10-Q for the quarter
ended April 4, 1999.
This report on Form 8-K/A may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Actual results could differ materially from
these forward-looking statements as a result of the risk factors stated in the
Company's periodic reports both previously and hereafter filed with the
Securities Exchange Commission.
The required Unaudited Pro Forma Financial Information is as follows:
Unaudited Pro Forma Condensed Balance Sheet at April 4, 1999
Unaudited Pro Forma Condensed Income Statement for the fiscal year ended
September 27, 1998
25
<PAGE>
Unaudited Pro Forma Condensed Income Statement for the six-months ended
April 4, 1999
Notes to Unaudited Pro Forma Condensed Financial Information
26
<PAGE>
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Condensed Balance Sheet
April 4, 1999
(in thousands)
<TABLE>
<CAPTION>
Microsemi Linfinity Pro Forma Pro Forma
Adjustments
(Note 2)
<S> <C> <C> <C> <C>
Assets
Current assets
Cash $ 5,800 $ 2,867 $ (184) (a) $ 8,483
Accounts receivable (net) 22,087 5,509 - 27,596
Inventories 56,953 5,423 - 62,376
Current deferred tax assets - 4,100 (4,100) (b) -
Other current assets 7,877 11 - 7,888
-------- ------- -------- --------
Total current assets 92,717 17,910 (4,284) 106,343
-------- ------- -------- --------
Fixed assets (net) 35,097 14,596 - 49,693
Other assets 16,198 17 450 (c) 16,665
Intangible assets - - 4,590 (d) 4,590
-------- ------- -------- --------
Total assets $144,012 $32,523 $ 756 $177,291
======== ======= ======== ========
Liabilities & stockholder's equity
Current liabilities
Notes payable to bank and others $ 8,807 $ - $ 5,733 (e) $ 14,540
Current maturity of long-term
debt 3,782 - 2,000 (f) 5,782
Due to SymmetriCom - 1,694 (1,694) (g) -
Accounts payable 6,330 3,292 - 9,622
Accrued liabilities 12,071 2,754 - 14,825
Income taxes payable 7,803 - - 7,803
-------- ------- -------- --------
Total current liabilities 38,793 7,740 6,039 52,572
-------- ------- -------- --------
Long-term debt 17,716 - 19,500 (h) 37,216
-------- ------- -------- --------
Other long-term liabilities 1,956 1,762 (1,762) (i) 1,956
-------- ------- -------- --------
Stockholders' equity 85,547 23,021 (23,021) (j) 85,547
-------- ------- -------- --------
Total liabilities & stockholder's
equity $144,012 $32,523 $ 756 $177,291
======== ======= ======== ========
</TABLE>
27
<PAGE>
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Condensed Income Statement
For the Fiscal Year Ended September 27, 1998
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Microsemi Linfinity Pro Forma Pro Forma
Adjustments
(Note 2)
<S> <C> <C> <C> <C>
Sales $164,710 $ 47,270 $ - $211,980
Cost of sales 118,957 39,288 - 158,245
-------- -------- --------
Gross profit 45,753 7,982 - 53,735
-------- -------- ------- --------
Operating expenses
Selling 10,939 12,611 - 23,550
General and administrative 13,843 5,318 - 19,161
Amortization of goodwill and
intangible assets 512 - 2,326 (k) 2,838
-------- -------- ------- --------
Total operating expenses 25,294 17,929 2,326 45,549
-------- -------- ------- --------
Income (loss) from operations 20,459 (9,947) (2,326) 8,186
-------- -------- ------- --------
Interest and other expenses (2,198) (124) (2,179) (l) (4,501)
-------- -------- ------- --------
Income (loss) before income taxes 18,261 (10,071) (4,505) 3,685
Provision (benefit) for income taxes 6,939 (3,219) (1,712) (m) 2,008
-------- -------- ------- --------
Net income (loss) $ 11,322 $ (6,852) $(2,793) $ 1,677
======== ======== ======= ========
Basic earnings per share $ 1.05 $ 0.16
======== ========
Diluted earnings per share $ 0.98 $ 0.17
======== ========
Weighted-average common shares
outstanding for basic 10,735 10,735
======== ========
Weighted-average common shares
outstanding for diluted 11,956 11,956
======== ========
</TABLE>
28
<PAGE>
MICROSEMI CORPORATION AND SUBSIDIARIES
Unaudited Pro Forma Condensed Income Statement
For the Six Months Ended April 4, 1999
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Microsemi Linfinity Pro Forma Pro Forma
Adjustments
(Note 2)
<S> <C> <C> <C> <C>
Sales $78,908 $23,401 $ - $102,309
Cost of sales 58,457 16,557 - 75,014
------- ------- ------- --------
Gross profit 20,451 6,844 - 27,295
------- ------- ------- --------
Operating expenses
Selling 6,500 4,808 - 11,308
General and administrative 6,254 1,798 - 8,052
Amortization of goodwill and
intangible assets - - 188 (n) 188
------- ------- ------- --------
Total operating expenses 12,754 6,606 188 19,548
------- ------- ------- --------
Income (loss) from operations 7,697 238 (188) 7,747
------- ------- ------- --------
Interest and other expenses (913) (2) (1,090) (o) (2,005)
------- ------- ------- --------
Income (loss) before income taxes 6,784 236 (1,278) 5,742
Provision (benefit) for income taxes 2,510 75 (473) (p) 2,112
------- ------- ------- --------
Net income (loss) $ 4,274 $ 161 $ (805) $ 3,630
======= ======= ======= ========
Basic earnings per share $ 0.38 $ 0.35
======= ========
Diluted earnings per share $ 0.37 $ 0.32
======= ========
Weighted-average common shares
outstanding for basic 10,337 10,337
======= ========
Weighted-average common shares
outstanding for diluted 11,449 11,449
======= ========
</TABLE>
29
<PAGE>
MICROSEMI CORPORATION
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
(in thousands)
Note 1. Basis of Presentation
On April 14, 1999, Microsemi Corporation ("Microsemi") completed the acquisition
of all of the outstanding capital stock of Linfinity Microelectronics, Inc.
("Linfinity") from SymmetriCom, Inc. ("SymmetriCom"). The transaction was
completed pursuant to the Agreement and Plan of Reorganization dated February
10, 1999 by and among Microsemi, Microsemi-Linfinity Acquisition Corporation,
SymmetriCom and Linfinity. Microsemi paid approximately $24,100 in cash. All
preferred stock, common stock, and outstanding options of Linfinity were
exchanged for cash on a basis defined by the Agreement and Plan of
Reorganization. In addition, Linfinity was transferred certain liabilities. Of
the purchase price, approximately $1,100 was deposited into an escrow account to
provide funds for potential claims for indemnification of Microsemi under
certain provisions of the Agreement and Plan of Reorganization.
The unaudited pro forma condensed balance sheet combines Microsemi's unaudited
condensed balance sheet amounts as of April 4, 1999 with Linfinity's unaudited
condensed balance sheet amounts as of March 31, 1999 and gives effect to the
acquisition as if the transaction had taken place on April 4, 1999.
The unaudited pro forma condensed income statement is presented using
Microsemi's unaudited condensed income statement for the six months ended April
4, 1999 combined with Linfinity's unaudited condensed income statement for the
six months ended March 31, 1999 and gives effect to the acquisition as if the
transaction had occurred on September 29, 1997. Additionally, the presentation
includes Microsemi's condensed income statement for the fiscal year ended
September 27, 1998 combined with Linfinity's condensed income statement for the
fiscal year ended June 30, 1998 and gives effect to the acquisition as if the
transaction had taken place on September 29, 1997.
The results of operations for the six months ended April 4, 1999 are not
necessarily indicative of the results to be expected for the full year.
There were no transactions between Microsemi and Linfinity during the period
presented and there are no significant differences between the accounting
policies of Microsemi and Linfinity.
The unaudited pro forma condensed financial information should be read in
conjunction with the consolidated financial statements and notes thereto of
Microsemi, which were previously reported in Microsemi's Annual Report on Form
10-K for the year ended September 27, 1998 and its Quarterly Report on Form 10-Q
for the quarter ended April 4, 1999, and with the financial statements and notes
thereto of Linfinity included elsewhere in this Form 8-K/A. These pro forma
statements are based on such consolidated financial statements after giving
effect to the transaction under the purchase method of accounting and the
assumptions and adjustments described below. The pro forma information does not
purport to be indicative of the results which would have been reported if the
purchase had been in effect for the periods presented or which may result in the
future.
30
<PAGE>
Note 2. Pro Forma Adjustments
The pro forma adjustments are based on a preliminary allocation of the purchase
price to the assets acquired and liabilities assumed. The allocation of the
purchase price is based on an independent appraisal of certain assets as well as
management estimates of fair value.
Pro forma adjustments relating to the acquisition in the unaudited pro forma
financial information are summarized as follows:
<TABLE>
<CAPTION>
As of
Ref Adjustment April 4, 1999
--- ---------- -------------
<S> <C> <C> <C>
Cash (a) To eliminate asset which was not purchased by Microsemi $ (2,868)
To record additional cash proceeds from new bank financing 2,684
--------
(184)
--------
Current deferred tax assets (b) To eliminate tax asset which was not purchased by Microsemi (4,100)
Other assets (c) To record finance fees for loan used in acquisition 450
Intangible assets (d) To record the allocation of the purchase price to certain
intangible assets and goodwill 4,590
--------
Increase in total assets...................................................................................... $ 756
========
Notes payable to bank and (e) To record net proceeds under new loan used to finance the
others purchase of Linfinity 5,733
Current maturity of long-term (f) To record net proceeds under new loan used to finance the
debt purchase of Linfinity 2,000
Due to Symmetricom (g) To eliminate liability which was not assumed by Microsemi (1,694)
Long-term debt (h) To record net proceeds under new loan used to finance the
purchase of Linfinity 19,500
Other long-term liabilities (i) To eliminate liabilities which were not assumed by Microsemi (1,762)
Stockholders' equity (j) To eliminate the net assets of Linfinity (23,021)
--------
Increase in total liabilities
and stockholders' equity..................................................................................... $ 756
========
</TABLE>
<TABLE>
<CAPTION>
Year Ended
September 27,
Ref Adjustment 1998
--- ---------- -------------
<S> <C> <C> <C>
Amortization of goodwill and (k) To record amortization of goodwill and other intangible
intangible assets assets 376
To record write-off of IPR&D 1,950
--------
2,326
--------
Interest and other expenses (l) To record interest expense in connection with new loans 2,179
Provision (benefit) for income (m) To record the tax affects of the above adjustments (1,712)
taxes --------
Decrease in net income (loss)................................................................................. 2,793
========
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Six-Months
Ended
April 4,
Ref Adjustment 1999
--- ---------- ----------
<S> <C> <C> <C>
Amortization of goodwill and (n) To record amortization of goodwill and other intangible assets 188
intangible assets
Interest and other expenses (o) To record interest expense in connection with new loans 1,090
Provision (benefit) for income taxes (p) To record the tax affects of the above adjustments (473)
-------
Decrease in net income (loss)....................................................................................... 805
=======
</TABLE>
This Current Report on Form 8-K/A may contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Actual results could differ materially from
these forward-looking statements as a result of the risk factors set forth in
Microsemi's periodic reports both previously and hereafter filed with the
Securities Exchange commission.
Note 3. Pro Forma Earnings Per Share
Basic pro forma earnings per share was calculated based on equivalent shares of
Microsemi's Common Stock outstanding at April 4, 1999 and September 27, 1998.
Diluted earnings per share included Microsemi's equivalent common shares for the
periods ended April 4, 1999 and September 27, 1998.
32
<PAGE>
(c) Exhibits.
*2.2 Agreement and Plan of Reorganization dated as of February 10, 1999,
among the Registrant, Micro Linfinity Acquisition Corporation, a
Delaware corporation, Linfinity Microelectronics, Inc., a Delaware
corporation, and SymmetriCom, Inc., a California corporation, and
the following exhibit:
Exhibit A Escrow Agreement
The following exhibits and schedules are omitted from
this filing, and the Registrant agrees to furnish
supplementally a copy of any thereof to the Securities
and Exchange Commission upon request:
Exhibit B Opinion of Wilson Sonsini Goodrich & Rosati
Exhibit C Phase II Environmental Workplan
Exhibit D Opinion of Purchaser's Counsel
Disclosure Schedule of SymmetriCom and Linfinity
Disclosure Schedule of Purchaser
23.1 Consent of Independent Accountants
*99.1 News Release dated April 15, 1999 relating to the merger of
Linfinity Microelectronics, Inc. and Micro Linfinity Acquisition
Corporation, the Registrant's wholly-owned subsidiary
* Incorporated herein by reference to the like-numbered Exhibit filed with the
Registrant's Form 8-K Current Report filed with the Securities and Exchange
Commission on April 28, 1999.
33
<PAGE>
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 hereunto duly authorized.
MICROSEMI CORPORATION
(Registrant)
By: /s/ DAVID R. SONKSEN
-------------------------------------
David R. Sonksen,
Vice President - Finance and
Chief Financial Officer
(Principal Financial Officer and
Chief Accounting Officer and duly
authorized to sign on behalf of the
Registrant)
Date: June 28, 1999
34
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements No.
333-24045, 033-63395, 033-62563, 33-16711, 33-2607, 2-77708 on Form S-8 and
Registration Statement No. 033-62561 on Form S-3 of Microsemi Corporation of our
report dated May 21, 1999 of Linfinity Microelectronics Inc. appearing in this
Current Report on Form 8-K/A.
DELOITTE & TOUCHE LLP
San Jose, California
June 25, 1999
