<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[ X ] QUARTERLY report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the quarterly period ended
September 30, 1996
OR
[ ] TRANSITION report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the transition period from _____________ to ____________
COMMISSION FILE NUMBER 0-20007
TENCOR INSTRUMENTS
(exact name of registrant as specified in its charter)
CALIFORNIA 94-2464767
(State of Incorporation) (I.R.S. Employer Identification No.)
2400 CHARLESTON ROAD
MOUNTAIN VIEW, CALIFORNIA 94043
(Address of principal executive offices, zip code)
Registrant's telephone number: (415) 969-6784
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 ___
Indicate number of shares outstanding of each of the issuer's classes of stock,
as of the latest practical date:
Common Shares outstanding as of October 31, 1996: 31,003,328
This report, including all exhibits and attachments, contains 13 pages.
page 1 of 13
<PAGE>
INDEX
TENCOR INSTRUMENTS
<TABLE>
<CAPTION>
Page
PART I - FINANCIAL INFORMATION Number
------
<S> <C>
Item 1: Consolidated Interim Financial Statements:
Consolidated Interim Balance Sheets -
September 30, 1996 and December 31, 1995
Consolidated Interim Statements of Income -
Three months and nine months ended
September 30, 1996 and 1995 4
Consolidated Interim Statements of Shareholders'
Equity - Year ended December 31, 1995 and nine
months ended September 30, 1996 5
Consolidated Interim Statements of Cash Flows -
Nine months ended September 30, 1996 and 1995 6
Notes to Consolidated Interim Financial Statements 7-8
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II - OTHER INFORMATION 13
SIGNATURES 13
</TABLE>
page 2 of 13
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TENCOR INSTRUMENTS
CONSOLIDATED INTERIM BALANCE SHEETS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $114,330 $ 86,944
Short-term investments 99,844 76,889
Accounts receivable, net 89,306 122,859
Inventories 62,329 46,725
Deferred income taxes 8,869 8,869
Prepaid expenses and other assets 4,465 2,664
-------- --------
Total current assets 379,143 344,950
Property and equipment, net 33,821 22,447
Other assets 37,421 27,643
-------- --------
Total assets $450,385 $395,040
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank borrowings $ 37,328 $ 34,123
Accounts payable 9,971 16,858
Accrued compensation 22,229 16,526
Other accrued expenses 31,010 22,816
Income taxes payable 151 13,545
-------- --------
Total current liabilities 100,689 103,868
-------- --------
Long-term obligations 1,471 3,027
-------- --------
Shareholders' equity:
Common stock 150,759 151,675
Retained earnings 187,136 138,736
Accumulated unrealized gain on investments, net 12,504 --
Cumulative translation adjustment (2,174) (2,266)
-------- --------
Total shareholders' equity 348,225 288,145
-------- --------
Total liabilities and shareholders' equity $450,385 $395,040
-------- --------
-------- --------
</TABLE>
See accompanying notes to consolidated interim financial statements.
page 3 of 13
<PAGE>
TENCOR INSTRUMENTS
CONSOLIDATED INTERIM STATEMENTS OF INCOME
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $96,986 $ 88,003 $312,687 $234,275
Cost of goods sold 41,212 32,501 126,283 85,986
------- ------- -------- --------
Gross profit 55,774 55,502 186,404 148,289
------- ------- -------- --------
Operating expenses:
Research and development 11,001 8,663 33,621 23,406
Marketing and selling 15,745 13,202 48,998 37,347
General and administrative 7,314 4,487 22,308 12,990
Restructuring charges 8,500 - 8,500 -
------- ------- -------- --------
Total operating expenses 42,560 26,352 113,427 73,743
------- ------- -------- --------
Income from operations 13,214 29,150 72,977 74,546
Other income, net 2,279 1,653 5,091 4,344
------- ------- -------- --------
Income before income taxes 15,493 30,803 78,068 78,890
Provision for income taxes 5,890 12,629 29,668 32,345
------- ------- -------- --------
Net income $ 9,603 $18,174 $ 48,400 $ 46,545
------- ------- -------- --------
------- ------- -------- --------
Net income per share $0.30 $0.57 $1.53 $1.50
Weighted average common shares
and equivalents 31,571 32,060 31,687 30,929
</TABLE>
See accompanying notes to consolidated interim financial statements.
page 4 of 13
<PAGE>
TENCOR INSTRUMENTS
CONSOLIDATED INTERIM STATEMENTS OF SHAREHOLDERS' EQUITY
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Common Stock Cumulative
------------------ Retained Translation
Shares Amount Earnings Adjustment Totals
------ ------ -------- ---------- ------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 27,456 71,377 73,412 (60) 144,729
Net issuance under employee stock plans 965 5,630 -- -- 5,630
Equity offering, net of offering costs 2,330 65,865 -- -- 65,865
Tax benefits of stock option transactions -- 8,803 -- -- 8,803
Cumulative translation adjustment -- -- -- (2,206) (2,206)
Net income -- -- 65,324 -- 65,324
------ -------- -------- ------- --------
Balance at December 31, 1995 30,751 151,675 138,736 (2,266) 288,145
Net issuance under employee stock plans 399 3,888 -- -- 3,888
Repurchase of Common Stock (250) (5,456) -- -- (5,456)
Tax benefits of stock option transactions -- 652 -- -- 652
Cumulative translation adjustment -- -- -- 92 92
Accum. unrealized gain on investments, net -- -- 12,504 -- 12,504
Net income -- -- 48,400 -- 48,400
------ -------- -------- ------- --------
Balance at September 30, 1996 30,900 $150,759 $199,640 $(2,174) $348,225
------ -------- -------- ------- --------
------ -------- -------- ------- --------
</TABLE>
See accompanying notes to consolidated interim financial statements.
page 5 of 13
<PAGE>
TENCOR INSTRUMENTS
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
---------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 48,400 $46,545
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 11,646 5,371
Changes in assets and liabilities:
Accounts receivable 30,453 (41,637)
Inventories (16,657) (19,110)
Prepaid expenses and other assets (2,863) (2,874)
Accounts payable (6,809) 3,276
Accrued compensation 5,878 5,417
Other accrued expenses 6,409 8,739
Income taxes payable (11,541) 7,087
-------- -------
Net cash provided by operating activities 64,916 12,814
-------- -------
Cash flows from investing activities:
Purchase of property and equipment (20,807) (9,270)
Purchases of short-term investments (84,587) (77,591)
Proceeds from sale of short-term investments 61,632 25,142
-------- -------
Net cash used in investing activities (43,762) (61,719)
-------- -------
Cash flows from financing activities:
Issuance of common stock, net 3,888 4,360
Proceeds from equity offering, net - 65,865
Repurchase of common stock (5,456) -
Proceeds from bank borrowings 31,398 27,892
Payments under bank borrowings (26,038) (2,070)
-------- -------
Net cash provided by financing activities 3,792 96,047
-------- -------
Effect of exchange rate changes on cash 2,440 (913)
-------- -------
Net increase in cash and cash equivalents 27,386 46,229
Cash and cash equivalents at beginning of period 86,944 37,121
-------- -------
Cash and cash equivalents at end of period $114,330 $83,350
-------- -------
-------- -------
Supplemental cash flow disclosures:
Income taxes paid $ 42,197 $26,754
Interest paid $ 863 $ 262
Supplemental non-cash investing cash flow disclosures:
Tax benefits from exercise of stock options $ 652 $ 7,452
</TABLE>
See accompanying notes to consolidated interim financial statements.
page 6 of 13
<PAGE>
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The consolidated interim financial statements included herein have been
prepared by Tencor Instruments (the Company), without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting
principles, have been condensed or omitted as permitted by such rules and
regulations. The Company believes the disclosures included herein are
adequate; however, these consolidated interim financial statements should be
read in conjunction with the financial statements and the notes thereto for
the year ended December 31, 1995, included in the Company's 1995 Annual
Report to Shareholders.
In the opinion of management, these unaudited consolidated financial
statements of the Company and it's subsidiaries contain all of the
adjustments necessary to present fairly the financial position of the Company
at September 30, 1996, the results of their operations, changes in
shareholders' equity and cash flows for the periods presented. The results
of operations for the periods presented may not be indicative of those which
may be expected for the full year.
NOTE 2. RESTRUCTURING COSTS
During the quarter ended September 30, 1996, the Company recorded a charge
for restructuring costs of $8.5M. This charge consists of $2.0M in employee
severance and related costs as a result of downsizing its worldwide
operations through a reduction in force of approximately 10% of the Company's
regular employees. The restructuring charge also included costs aggregating
$6.5M associated with the relocation from the Company's current leased
facilities. The Company will begin to occupy its new facility in Milpitas,
California, during late December 1996, and expects complete occupation in the
early part of 1997. The Company currently occupies facilities with leases
that expire on various dates through September 1998, which will become
unoccupied during the first quarter of 1997. Due to the relatively short
terms remaining on certain of these leases, the Company may be unable to
sublease all of its unoccupied facilities. Accordingly, the Company
has included in its restructuring charge an amount equal to the remaining
costs (including rent) due under those leases which are unlikely to be
subleased. The Company has also included in its lease exit cost amounts for
the decline in net book value of certain of the Company's furniture and
fixtures, estimated leasehold refurbishment costs (net of existing reserves)
to return the facilities to their original condition as required by the lease
agreements, and various other costs associated with the exit from its current
facilities. Of the $8.5M total restructuring costs, approximately $1M was
used as of September 30, 1996 with the majority of the remaining balance to
be utilized during the next twelve months.
page 7 of 13
<PAGE>
A summary of charges for restructuring costs along with the respective
remaining reserves which are included in accrued liabilities, follows (in
thousands):
<TABLE>
<CAPTION>
Charge Remaining Reserves
Sept. 30, 1996 Payments Sept. 30, 1996
----------------------------------------------
<S> <C> <C> <C>
Downsizing $1,983 $(963) $1,020
Lease exit costs 6,517 -- 6,517
------ ----- ------
Total $8,500 $(963) $7,537
------ ----- ------
------ ----- ------
</TABLE>
NOTE 3. CASH EQUIVALENTS AND INVESTMENTS
At September 30, 1996, the Company's cash equivalents and short-term
investments consisted primarily of U.S. Government Treasury bills and notes,
municipal bonds and money market instruments. Cash equivalents and
short-term investments held at September 30, 1996, are recorded at fair
market value.
At September 30, 1996, the Company marked to market long-term investments
(included in other assets) at their then fair market value resulting in an
unrealized gain of $12.5M, net of tax (included as a component of
shareholders equity).
NOTE 4. INVENTORIES
Inventories are stated at the lower of standard cost, which approximates
actual cost (on a first in, first out basis) or market value and consists of
the following (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
Raw materials $30,881 $24,829
Work-in-process 17,627 12,948
Finished goods 13,821 8,948
------- -------
$62,329 $46,725
------- -------
------- -------
</TABLE>
page 8 of 13
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
To the extent that this Quarterly Report discusses financial projections,
facilities planning information or expectations about products or markets of
Tencor Instruments (the Company), or otherwise makes statements about future
events, such statements are forward-looking and are subject to a number of
risks and uncertainties that could cause actual results to differ materially
from the statements made. These factors include the cyclical nature of the
semiconductor industry, the risk that factors which allowed the Company to
experience relatively good performance in prior industry downturns may not
protect the company in future downturns, risk associated with leasing unused
space, or with the timing of new facility occupation, that development
activities required to meet anticipated new product introduction and shipment
dates may not be completed in the expected timeframes, risks associated with
the acceptance of new products by individual customers and by the
marketplace, costs associated with the new product introductions, as well as
other factors described herein. The following discussion should be read in
conjunction with the unaudited consolidated interim financial statements and
notes thereto included in Part I - Item 1 of this Quarterly Report, the
audited financial statements and notes thereto and Management's Discussion
and Analysis of Financial Condition and Results of Operations contained in
the Company's Annual Report to Shareholders for the year ended December 31,
1995, and the discussion under the heading "Factors Affecting Current and
Future Results", as well as the matters identified in the description of the
Company's business in Item 1 of the Company's Annual Report on Form 10-K for
the year ended December 31, 1995.
Revenues for the three months and nine months ended September 30, 1996, were
$97.0M and $312.7M, respectively. Compared to the corresponding periods of
1995, revenues increased $8.9M, or 10.2%, and $78.4M, or 33.5%, respectively,
due to both increased unit sales and a change in mix to products with higher
average selling prices.
International revenues comprised 68.4% and 65.4% of worldwide revenues for
the three months and nine months ended September 30, 1996, respectively,
compared to 56.6% and 62.3%, respectively, of total revenues in the
corresponding periods of the prior year. Geographically, revenues from Asia
for the three-month and nine-month periods ended September 30, 1996, were
$48.9M, or 50.5%, and $161.6M, or 51.7%, of worldwide revenues, respectively,
compared to revenues of $36.6M, or 41.7%, and $103.5M, or 44.2%, of worldwide
revenues, respectively, for the same periods in the prior year. The
Company's revenues in Europe were $14.2M and $38.3M for the three-month and
nine-month periods ended September 30, 1996, respectively, a 7.9% and 2.7%
increase over the same periods in the prior year.
Gross profit margins for the three months and nine months ended September 30,
1996, were 57.5% and 59.6%, respectively, compared to 63.1% and 63.3% for the
same periods of 1995, respectively. The decrease in gross margins is due in
part to an increase in costs related to new product introductions and in part
to an increase in support related costs as the Company continues to add
infrastructure to its worldwide customer satisfaction organization to support
its growth. The Company anticipates a modest percentage decline in gross
margins for the remainder of 1996 due, in part, to increased competition in
the market place.
Research and development expenses were $11.0M and $33.6M for the three-month
and nine-month periods ended September 30, 1996, respectively, compared to
$8.6M and $23.4M, respectively, for the same periods of the prior year. As a
percentage of revenue, research and development expenses increased to 11.3%
and 10.8% for the three-month and nine-month periods ended September 30,
1996, respectively, compared to 9.8% and 10.0% for the same respective
periods in the prior year.
page 9 of 13
<PAGE>
Research and development expenses consist primarily of employee
compensation-related costs, project material and other costs associated with
the Company's ongoing efforts of product development and enhancements. The
increase in absolute dollars is attributable to increases in salaries and
benefits expenses resulting from a net increase in headcount during the
periods and increases in new product development spending, particularly
related to the Company's Surfscan AIT (Advanced Inspection Technology);
Surfscan SP1, the industry's first unpatterned wafer inspection system
designed for 300mm and device technologies of 0.25 micron; and HRP-200 High
Resolution Profiler, which extends the Company's metrology capabilities for
CMP (Chemical Mechanical Planarization). The Company expects the total
dollars spent on research and development in the fourth quarter to be
consistent with expenses reported in the three-month period ended September
30, 1996.
Marketing and selling, general and administrative expenses increased to
$23.1M and $71.3M for the three-month and nine-month periods ended September
30, 1996, respectively, compared to $17.7M and $50.3M, respectively, for the
same periods in 1995. The increase in absolute dollars can be attributed in
part to greater product marketing efforts tied to new product introductions
and higher employee compensation-related costs as a result of a net increase
in worldwide headcount, and higher commission expense as a result of the
increase in revenues, as well as higher contract labor costs to support a
worldwide upgrade of the Company's information system infrastructure. As a
percentage of revenues, marketing, selling and general and administrative
expenses increased to 23.7% and 22.8% for the three-month and nine-month
periods ended September 30, 1996, respectively, from 20.1% and 21.4%,
respectively, in the same periods of 1995. The Company established new sales
and service organizations in Singapore and Taiwan in January and April of
1996, respectively, and expects to continue to increase its presence in Asia
by adding infrastructure related to both new and existing sales and support
operations. The Company expects total dollars spent in marketing and selling,
general and administrative expenses in the fourth quarter to be consistent
with expenses reported in the three-month period ended September 30, 1996.
During the quarter ended September 30, 1996, the Company recorded a charge
for restructuring costs of $8.5M. This charge consists of $2.0M in employee
severance and related costs as a result of downsizing its worldwide
operations through a reduction in force of approximately 10% of the Company's
regular employees. The restructuring charge also included costs aggregating
$6.5M associated with the relocation from the Company's current leased
facilities. The Company will begin to occupy its new facility in Milpitas,
California, during late December 1996, and expects complete occupation in the
early part of 1997. The Company currently occupies facilities with leases
that expire on various dates through September 1998, which will become
unoccupied during the first quarter of 1997. Due to the relatively short
terms remaining on certain of these leases, the Company may be unable to
sublease all of its unoccupied facilities. Accordingly, the Company has
included in its restructuring charge an amount equal to the remaining costs
(including rent) due under those leases which are unlikely to be subleased.
The Company has also included in its lease exit cost amounts for the decline
in net book value of certain of the Company's furniture and fixtures,
estimated leasehold refurbishment costs (net of existing reserves) to return
the facilities to their original condition as required by the lease
agreements, and various other costs associated with the exit from its current
facilities. Of the $8.5M total restructuring costs, approximately $1M was
used as of September 30, 1996 with the majority of the remaining balance to
be utilized during the next twelve months.
page 10 of 13
<PAGE>
Other income, net, increased to $2.2M and $5.1M for the three-month and
nine-month periods ended September 30, 1996, respectively, compared to $1.7M
and $2.7M, respectively, for the same periods in 1995. The net increase is
comprised of interest income as a result of an increase in cash, cash
equivalents and short-term investments.
Income tax as a percentage of income before income taxes decreased to 38%
during the nine month period ended September 30, 1996, compared to 41% during
the same period in the prior year. The decrease is primarily due to an
estimated decrease in profits in jurisdictions with higher relative tax rates.
Net income was $9.6M and $48.4M, or $0.30 and $1.53 per share, for the
three-month and nine-month periods ended September 30, 1996, respectively,
compared to $18.1M and $46.5M, or $0.57 and $1.50 per share, respectively,
for the same periods last year.
Management does not believe inflation had a significant effect on the
operating results.
LIQUIDITY AND CAPITAL RESOURCES
Total assets as of September 30, 1996, were $450.4M compared to $395.0M at
December 31, 1995. Working capital increased to $278.4M at September 30,
1996, from $241.1M at December 31, 1995. During the nine-month period ended
September 30, 1996, cash, cash equivalents and short-term investments
increased $50.3M to $214.2M from $163.8M, due primarily to cash generated
from operations of $64.9M and offset in part by fixed asset purchases of
$20.8M. The increase in cash generated from operations includes cash which
was generated from factoring accounts receivable related to the Company's
Japanese subsidiary. At September 30, 1996, accounts receivable, yen
equivalent of $11.9M was factored.
The Company currently has a revolving line of credit with a bank for which up
to $20M may be borrowed based upon meeting certain covenants. As of
September 30, 1996, the Company had approximately $14.5M available for
borrowing under the line of credit. In addition, at September 30, 1996, the
Company's Japanese subsidiary had loans outstanding with local banks in the
yen equivalent of $32.5M.
The Company anticipates that cash and cash equivalents, funds generated from
operations, and funds available under its bank lines of credit will be
sufficient to satisfy working capital and capital equipment requirements for
the next twelve months. The Company plans to move the majority of its
California-based employees into a new facility in Milpitas, California. The
move is planned to begin in late December of 1996. As described in the
Company's 1995 Annual Report, the Company has entered into significant
material commitments in connection with this new facility.
The Company believes that success in its industry requires substantial
capital in order to maintain the flexibility to take advantage of
opportunities as they may arise. Accordingly, the Company may, from time to
time, as market and business conditions warrant, invest in or acquire
businesses, products or technologies which it believes complement its overall
business strategy. Borrowings under the Company's credit facilities, or
public offerings of equity or debt securities, are available if the need
arises. The sale of additional equity or convertible debt securities could
result in additional dilution to the Company's shareholders.
page 11 of 13
<PAGE>
FACTORS AFFECTING CURRENT AND FUTURE RESULTS
The Company experienced significant improvement in operating results,
revenues, bookings and profitability during 1995, which continued into the
first quarter of 1996. However, results have been adversely affected in the
last six months with the Company experiencing declines in revenues
and margins during this period. In addition, the Company has experienced
reductions in orders and delays in shipments which adversely affect sales and
margins in current and future periods. The Company expects adverse effects on
orders, sales and margins to persist at least through the remainder of the
calendar year and into 1997 and possibly beyond. The Company's expense
levels are based, in part, on expectations of future revenues. If revenue
levels in a particular period do not meet expectations of increased revenues,
operating results will be adversely affected. The Company's future results
are subject to a variety of uncertainties, including those identified herein
and in "Results of Operations" above.
The results of operations of the Company depend in large part upon the
manufacturing capacity of semiconductor manufacturers worldwide, which in
turn depend on the current and anticipated market demand for integrated
circuits and products utilizing integrated circuits. The semiconductor
industry has been highly cyclical and historically has experienced periodic
downturns, which often have had an adverse effect on the semiconductor
industry's level of capital expenditures, which in turn have adversely
affected the Company's operating results.
The worldwide semiconductor industry currently is experiencing such a
downturn, and it is having an effect on the level of capital expenditures.
The Company believes that it is relatively well positioned for this downturn
because of its array of new products, its focus on yield improvement and
process development rather than pure capacity, its sales of metrology
products to non-semiconductor industries, including flat panel displays and
data storage devices, its relatively high gross margins and its strong
balance sheet. Nevertheless, the downturn is having an adverse affect on the
Company's results and there can be no assurance that the Company's identified
strengths will be able to offset the effects of the industry downturn. In
addition, if new products have reliability or quality problems then reduced
orders, higher manufacturing costs, delays in collecting accounts receivable
and additional service and warranty expense may result. There can be no
assurance that the Company will successfully and timely develop and
manufacture new hardware and software products or that new hardware and
software products introduced by the Company will be accepted in the
marketplace. If the Company does not continue to successfully introduce new
products, its results of operations will be adversely affected.
During the downturn, the Company, while focused on controlling expenses, is
constrained to a degree in its ability to reduce expenses by the need to
invest in product enhancements and the need to properly position its customer
support infrastructure to support its customers. Accordingly, the Company
expects to continue to increase its spending on research and development and
customer support in fiscal year 1997 to meet current customer requirements
and effectively position the Company for growth when the business cycle turns
favorable.
Page 12 of 13
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings None
Item 2. Changes in Securities None
Item 3. Defaults Upon Senior Securities None
Item 4 Submission of Matters to a Vote of Security Holders None
Item 5. Other Information None
Item 6 Exhibits and Reports on Form 8-K None
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.
TENCOR INSTRUMENTS
November 8, 1996 /s/ Bruce R. Wright
________________________________
Bruce R. Wright
Senior Vice President and
Chief Financial Officer
(as Registrant and as
Principal Financial Officer)
page 13 of 13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 3 AND 4 OF THE COMPANYS FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 114,330
<SECURITIES> 99,844
<RECEIVABLES> 89,306
<ALLOWANCES> 0
<INVENTORY> 62,329
<CURRENT-ASSETS> 379,143
<PP&E> 33,821
<DEPRECIATION> 0
<TOTAL-ASSETS> 450,385
<CURRENT-LIABILITIES> 100,689
<BONDS> 0
0
0
<COMMON> 100,759
<OTHER-SE> 197,466
<TOTAL-LIABILITY-AND-EQUITY> 450,385
<SALES> 312,687
<TOTAL-REVENUES> 312,687
<CGS> 126,283
<TOTAL-COSTS> 126,283
<OTHER-EXPENSES> 113,427
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 78,068
<INCOME-TAX> 29,668
<INCOME-CONTINUING> 48,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48,400
<EPS-PRIMARY> 1.53
<EPS-DILUTED> 1.53
</TABLE>
