<PAGE>
FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NO. 333-93495
The information in this prospectus is not complete and may be changed. The
selling stockholders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
ACUSON CORPORATION
1,272,559 Shares
Common Stock
The Selling Stockholders: The selling stockholders identified in this
prospectus are selling 1,272,559 shares of our
common stock. We are not selling any shares of our
common stock under this prospectus and will not
receive any of the proceeds from the sale of
shares by the selling stockholders.
Offering Price: The selling stockholders may sell the shares of
common stock described in this prospectus in a
number of different ways and at varying prices. We
provide more information about how they may sell
their shares in the section titled "Plan of
Distribution" on page 17.
Trading Market: Our common stock is listed on the New York Stock
Exchange under the symbol "ACN." On February 9,
2000, the closing sale price of our common stock,
as reported on the New York Stock Exchange, was
$14 7/8.
Risks: Investing in our common stock involves a high
degree of risk. See "Risk Factors" beginning on
page 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense.
The date of this prospectus is February 10, 2000
Acuson, Sequoia and 128XP are registered trademarks and AcuNav, Aspen,
Cypress, Freestyle, KinetDx, Imagegate and Native are trademarks of Acuson
Corporation.
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We have not authorized any dealer, sales person or
other person to give any information or to make any
representations other than those contained in this
prospectus or any prospectus supplement. You must not
rely on any unauthorized information. This prospectus
is not an offer of these securities in any state
where an offer is not permitted. The information in
this prospectus is current as of February 10, 2000.
You should not assume that this prospectus is
accurate as of any other date.
TABLE OF CONTENTS
<TABLE>
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PAGE
<S> <C>
Prospectus Summary......................... 3
Risk Factors............................... 5
Use of Proceeds............................ 13
Where You Can Get More Information......... 13
Incorporation by Reference................. 13
Selling Stockholders....................... 14
Plan of Distribution....................... 17
Legal Matters.............................. 18
Experts.................................... 18
</TABLE>
1,272,559 SHARES
COMMON STOCK
PROSPECTUS
Acuson Corporation
February 10, 2000
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PROSPECTUS SUMMARY
The following is a summary of our business. You should carefully read the
section entitled "Risk Factors" in this prospectus, our Annual Report on
Form 10-K for the year ended December 31, 1998, and our Quarterly Reports on
Form 10-Q for the quarterly periods ended April 3, 1999 (as amended on July 6,
1999), July 3, 1999 and October 2, 1999, respectively, for more information on
our business and the risks involved in investing in our stock.
In addition to the historical information contained in this prospectus,
this prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of
1934. These statements may be identified by the use of words such as "expects,"
"anticipates," "intends," "plans" and similar expressions. The outcome of the
events described in these forward-looking statements is subject to risks and
actual results could differ materially. The sections entitled "Risk Factors"
beginning on page 5 of this prospectus, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business" in our
Annual Report and Quarterly Reports contain a discussion of some of the factors
that could contribute to those differences.
Acuson Corporation
Overview
We are a manufacturer, worldwide marketer and service provider of high-
performance systems that generate, display, archive and retrieve medical
diagnostic ultrasound images. Hospitals, clinics and healthcare delivery systems
throughout the world use our products for a broad range of clinical applications
including radiology, cardiology, obstetrical/gynecological and peripheral
vascular. We strive continuously to develop leading-edge, upgradeable ultrasound
and image management technology. In 1998, we had sales of $455.1 million.
Currently, we design, manufacture, market, sell and service the Sequoia(R),
Aspen(TM), and 128XP(R) ultrasound platforms, as well as the KinetDx(TM) PACS
(Picture Archive Communications Systems) solution.
Our ultrasound platforms - the Sequoia ultrasound platform, the Aspen
ultrasound platform and the 128XP ultrasound platform - are designed to bring
cost-effective solutions to clinical applications such as radiology, cardiology,
obstetrical/gynecological and peripheral vascular. We believe that this family
of ultrasound systems provides significant benefits when compared with other
ultrasound technologies, including superior image quality, versatility,
reliability, ease-of-use and upgradeability. Recent upgrades to these systems
have further improved their clinical utility. For example, in 1998, we
introduced Native(TM) Tissue Harmonic Imaging. This technological advance is now
available on all three of our ultrasound platforms and greatly improves image
optimization, penetration and detail and contrast resolution. It is especially
effective with hard-to-image patients, such as the obese and elderly and those
people undergoing chemotherapy or radiation treatment. In the second half of
1999, a significant new upgrade, the Imagegate(TM) release, was introduced for
both the Aspen and Sequoia platforms. This release provides an advancement in
imaging performance and ease-of-use for both the platforms. It also gives the
option of 3-D fetal surface rendering and Freestyle(TM) Extended Field of View.
A brief description of our current product line is as follows:
. 128XP Ultrasound System: In 1983, we revolutionized the ultrasound
industry with the introduction of the 128 system, integrating
ultrasound with computer technology for the first time. Upgraded to
the 128XP system in the early 1990s, there are more than 14,000 of
this platform installed around the world today.
. Sequoia Ultrasound System: In 1996, we introduced our next major
technological advance in ultrasound with the Sequoia system, bringing
Coherent Image Formation and the first dedicated Digital Lab
Architecture to ultrasound. The Sequoia system is our highest price
ultrasound system.
. Aspen Ultrasound System: Also introduced in 1996, the Aspen system
represents a convergence of popular 128XP features and some advances
developed for the Sequoia system, including a Digital Lab
Architecture. The Aspen platform is sold at a lower price than
Sequoia, but at a higher price than the 128XP platform.
3.
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. KinetDx PACS Solution: The KinetDx PACS solution is the first
hospital-wide, integrated ultrasound PACS which can connect to all
ultrasound systems. It provides a review, report and archive system,
which should increase productivity, manage costs and improve patient
care. With full integration to a hospital's HIS/RIS/CIS systems, the
KinetDx solution provides dynamic digital review capabilities allowing
clinicians to make diagnoses based on dynamic images - whether during
or after the exam. The KinetDx solution began shipping to radiology
customers in December 1999. It is anticipated that shipment to
cardiology customers will begin in the first quarter of 2000.
. AcuNav(TM) Diagnostic Ultrasound Catheter. We recently announced the
development of a new tool for capturing high quality diagnostic images
from inside the heart. This product integrates a high performance,
digital ultrasound system with a catheter the size of a strand of
spaghetti. We expect to begin selling the AcuNav catheter in the first
quarter of 2000.
We sell our products primarily to hospitals, clinics, private and
governmental institutions and healthcare agencies and doctor's offices. We and
our subsidiaries employ our own full time sales, service and applications staff
in North America, certain European countries, Australia and Japan. We sell
through independent distributors in other European countries, Asia, Latin
America and the Middle East.
We were incorporated as a California corporation in 1981 and changed our
state of incorporation to Delaware in 1986. Our principal executive offices are
located at 1220 Charleston Road, Mountain View, California 94043. Our telephone
number is (650) 969-9112 and our Website is located at www.acuson.com.
Information contained on our Website is not a part of this prospectus.
Acquisition of Ecton, Inc.
On December 23, 1999, we acquired Ecton, Inc. ("Ecton"), a Pennsylvania
corporation. The aggregate consideration exchanged in connection with the
acquisition of Ecton by Acuson was 1,413,954 shares of our common stock, and $4
million in cash. In addition, the merger agreement provides that up to $17
million, in either shares of our common stock and/or cash, may be payable to
Ecton shareholders depending on the gross profits attributable to the sale or
license of Ecton's products through each of the four twelve month periods
beginning on July 1, 2000 and ending on June 30, 2004. The merger is intended to
be a tax-free reorganization under the Internal Revenue Code of 1986, as
amended, and has been accounted for as a purchase.
The Ecton echocardiography system, which will be marketed as the
Cypress(TM) Echocardiography system, is being developed as a comprehensive
cardiovascular ultrasound system that will be simple to use and highly portable.
Weighing less than 20 pounds, it will include performance elements and
functionality presently found in top-of-the-line ultrasound systems. Like our
Sequoia and Aspen ultrasound platforms, the Cypress system is being designed
with the DICOM communications standard embedded in the system as well as a
Digital Lab Architecture.
4.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing us. Additional risks and uncertainties not presently known to
us or that we currently deem immaterial may also impair our business operations.
If any of the following risks actually occur, our business could be harmed. In
such case, the trading price of our common stock could decline, and you may lose
all or part of your investment.
Effect of Acquisitions
We recently completed the acquisition of Ecton described earlier in this
prospectus. The process of integrating any acquired company may create
unforeseen operating difficulties and expenditures and is itself risky. The
areas where we may face difficulties include:
. diversion of management time (both Acuson's and at the acquired
companies) during the period of negotiation through closing and
further diversion of such time after closing from focus on operating
the businesses to issues of integration and future products;
. decline in employee morale and retention issues resulting from changes
in compensation, reporting relationships, future prospects, or the
direction of the business;
. the need to integrate each company's accounting, management
information, human resource and other administrative systems to permit
effective management and the lack of control if such integration is
delayed or not implemented;
. difficulty in predicting the revenue and expenses attributable to an
acquired business; and
. the need to implement controls, procedures and policies appropriate
for a larger public company at companies that prior to acquisition had
been smaller, private companies.
We have relatively limited experience in managing this integration process.
Moreover, the anticipated benefits of the Ecton acquisition or any future
acquisitions may not be realized. Future acquisitions could result in
potentially dilutive issuances of equity securities, the incurrence of debt,
contingent liabilities or amortization expenses related to goodwill and other
intangible assets, any of which could harm our business.
Quarterly Results may Fluctuate
Our results have varied on a quarterly basis during our operating history.
Our operating results may fluctuate significantly as a result of a variety of
factors, many of which are outside our control. Factors that may affect our
quarterly operating results include the following: the introduction of new
services and products by us or our competitors; the costs of developing these
new products and services; consummating an acquisition including the Ecton
acquisition; costs of integrating acquired operations including Ecton; the
amount and timing of operating costs and capital expenditures relating to
expansion of our business, operations and infrastructure; and general economic
conditions and economic conditions specific to the ultrasound technology and
imaging industries. Our operating history and the dynamic nature of the markets
in which we compete make it difficult for us to forecast our revenues or
earnings accurately. A significant portion of our quarterly orders and shipments
occur towards the end of each quarter, compounding the difficulty of accurately
forecasting our revenues and earnings. We believe that period-to-period
comparisons of our operating results may not be meaningful and should not be
relied upon as an indication of future performance. Our operating results in one
or more future quarters may fall below the expectations of securities analysts
and investors. In that event, the trading price of our common stock would almost
certainly decline.
Product Expansion
The acquisition of Ecton expands our product line into the low-to-mid range
cardiology market segment with what we believe to be a high performance system
with `best in its class' technology. We believe that expanding our product line
into the low to mid-end cost range will benefit us substantially in the long-
term.
5.
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However, the acquisition of Ecton will require us to increase spending to
complete the development of a low cost miniaturized echocardiography system and
shipments of such product is not expected to begin until the second half of year
2000. Further, this development may take longer and cost substantially more than
anticipated and may not ultimately be successful.
In addition to the risks associated with the development and marketing of
new products, there is no guarantee that sales of any of our products will
increase or continue at their current rate. As more Aspen and Sequoia systems
enter the clinical environment, continued market acceptance will depend in part
on the actual and perceived performance and quality of these products in that
clinical environment. In addition, we believe that the continued success of
these products will also depend on the timely and successful completion of
future product enhancements and capabilities. We have a number of these new
product enhancements and capabilities as well as additional new products under
development at any time. There is no guarantee, however, as to when, if ever,
the development of such products and product enhancements and capabilities will
be completed.
Increased product option sales depend upon, among other things, timely
completion of a number of product capabilities currently under development and
market acceptance of upgrades currently offered by us, including Native Tissue
Harmonic Imaging for the 128XP system, the Imagegate release for the Aspen and
Sequoia platforms and those under development for introduction in 2000. In
addition, in general, the success of our products in the market and our
financial results depend upon us continuing to develop and introduce products
and software updates in a timely manner; upon the success of product cost
reduction designs and initiatives; upon the actual and perceived levels of
product performance and quality in a clinical environment compared to other
imaging modalities and competitive products; upon continued market acceptance of
our products and upgrades and their respective pricing; and upon competitor
responses, including the introduction of competitive products and upgrades,
pricing, intellectual property allegations and product positioning counter-
strategies.
Competition
Diagnostic ultrasound is a well-established field in which there are a
number of competitors. We compete with several companies and their affiliates
such as ATL Ultrasound, Inc., a division of Philips Medical Systems, Agilent
Technologies Inc. (the recent spin-off from Hewlett-Packard Company), Aloka Co.,
Ltd., General Electric Company, Hitachi Corporation, Siemens Medical Systems,
Inc., and Toshiba Medical Systems, Inc., all of which have significantly greater
financial and other resources. In addition, most of these companies compete in
more medical imaging and other market segments and countries than we do. While
we believe that our Sequoia and Aspen systems provide superior and advanced
capabilities and features, the products offered to date by these competitors in
some cases include features and capabilities not currently offered by us and in
most cases are substantially less expensive than our products.
Market success in diagnostic ultrasound is heavily dependent on the
purchaser's evaluation of the system's diagnostic value, cost, ease of use and
safety. Any established or new ultrasound company may introduce a system or
upgrades to an existing system that is equal to or superior to our products in
quality or performance and no assurance can be given that our products will
remain competitive with existing or future products. If a competitor introduces
a new product, customers may delay submitting new orders to us and may cancel
orders in the backlog.
Ultrasound Market Changes
Diagnostic ultrasound is generally less expensive than other competing
imaging modalities such as computed tomography and magnetic resonance imaging,
and, in certain applications, offers capabilities that make it the modality of
choice regardless of cost. However, these price and/or performance advantages
may not continue in comparison to other current or future imaging modalities. In
addition, ultrasound systems compete with other imaging modalities for limited
hospital funding.
The trends of health care provider consolidation, medical cost containment
and intense competitive pressures are continuing in the market. These factors
have placed increased pressures on ultrasound system pricing and along with
start-up and other manufacturing costs of our new product lines, have
contributed to the decline in our gross margins over the last several years. For
example, our gross margins have declined from 61.3% in 1990 to 47.3% in 1998.
Further, the U.S. government is continuing to consider Medicare reforms. We
believe that future revenues and profitability will continue to be impacted by
these uncertainties, especially in our domestic markets.
6.
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Although some portions of the international ultrasound markets are experiencing
some economic growth, it is uncertain whether this is a temporary or permanent
trend.
As health care provider consolidation and medical cost containment continue
in the market, customers are relying to an increased degree on national sales
contracts. In 1999, we were awarded a number of national contracts. If we are
unsuccessful at obtaining future national contracts, we may be precluded from
selling to certain large customers or buying groups. In addition, the contracts
may be canceled during their term by the customer or may not be renewed.
Patents and Proprietary Technology
We attempt to protect our intellectual property through a combination of
trade secrets and, where appropriate, copyrights, trademarks and patents. We own
or have rights to greater than 100 U.S. patents (plus many international
counterparts), covering certain aspects of our systems, and we have over 150
U.S. patent applications pending (plus many international counterparts). No
assurances can be given as to the breadth or degree of protection patents,
copyrights, trademarks or trade secrets will afford us.
Our competitors also rely on patents to protect their technology, and
numerous physicians, universities and other individuals or entities in the
ultrasound field are patenting many ultrasound inventions. We have from time to
time received notices from such competitors and other entities or individuals
that we may need a license to one or more of their patents in order to continue
to sell our products. Such a competitor, individual or entity may have, or may
be granted, a patent to which we must obtain a license if we wish to market and
sell any one or more of our products. To date, patent disputes involving us have
ultimately been resolved through licensing arrangements, sometimes involving the
payment of royalties by us. There can be no assurance that we will be able to
obtain a license to any patent (if so required) or that such a license will be
available on reasonable financial or other terms.
We also rely heavily on our unpatented proprietary know-how. No assurance
can be given that others will not be able to develop substantially equivalent
proprietary information to Acuson's, or otherwise obtain access to our know-how.
Regulation by Government Agencies
As a manufacturer of medical devices, we are subject to extensive
regulation by federal, state and local governmental authorities, such as the FDA
and the California Department of Health Services. Obtaining FDA market
clearances or approvals can be time consuming, lengthy and expensive and there
can be no assurance that the necessary clearance or approval will be granted to
us or that FDA review will not involve delays adversely affecting us. For
example, we believe that the time it takes to obtain clearance for new products
has increased and the FDA has been more rigorous in its 510(k) clearance
process.
Manufacturers of medical devices marketed in the United States are required
to adhere to numerous regulations, including Quality Systems Regulations
("QSR"), which address testing, design, control and documentation requirements.
Manufacturers also must comply with Medical Device Reporting ("MDR")
requirements that a firm report to the FDA certain adverse events associated
with our devices. We are subject to routine inspection by the FDA and certain
state agencies for compliance with QSR requirements, MDR requirements and other
applicable regulations. We believe the FDA is using its statutory authority more
vigorously during inspections of companies and in other enforcement matters. The
FDA finalized changes to the QSR regulations and promulgated new MDR
regulations, both of which may increase the cost of compliance with QSR
requirements. Congress also recently passed the FDA Modernization Act of 1997,
which enacts significant changes in how the FDA regulates medical devices. We
are also subject to numerous federal, state and local laws relating to such
matters as health care "fraud and abuse," safe working conditions, manufacturing
practices, environmental protection, fire hazard control and disposal of
hazardous or potentially hazardous substances. Changes in existing requirements
and implementation and adoption of new requirements could have a material
adverse effect on our business, financial condition and results of operations.
Although we believe that we are in compliance with all applicable regulations of
the FDA, the State of California and other federal, state and local governmental
authorities, current regulations depend heavily on administrative
interpretation, and there can be no assurance that we will not incur significant
costs to comply with laws and regulations in the future or that laws and
regulations will not have a material adverse effect upon our business, financial
condition or results of operations. In addition, the potential effects on our
heightened enforcement of federal, state and local regulations cannot be
predicted.
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Federal and state regulations also govern or influence the reimbursement to
health care providers of fees and capital equipment costs in connection with
medical examinations of certain patients. Changes in current policies, including
implementation of a new hospital outpatient reimbursement system, could impact
reimbursement for the purchase and/or operation of our equipment by such
providers and thereby adversely affect future sales of our products. In
particular, the Clinton Administration and the Congress continue to debate and
consider various Medicare and other health care reform proposals that could
significantly affect both private and public reimbursement for health care
services. Some of these proposals, if enacted into law, could reduce
reimbursement for or the incentive to use diagnostic devices and procedures and
thus could adversely affect the demand for diagnostic devices, including our
products.
Acuson and our customers are subject to various federal and state laws
pertaining to physician self-referral prohibitions, antikickback laws and false
claims laws. We seek to structure our sales, marketing and other activities to
comply with these and other laws. However, given the broad reach of these laws,
there can be no assurance that our activities will not be subject to scrutiny
and/or challenged some time in the future.
Since June 1998, medical device companies wishing to sell products into
those European countries that are members of the European Union have been
required to place the CE mark on their products. To be able to place that mark
on our products, we must comply with the standards of the MDD, and be subject to
annual surveillance audits by a certified organization to assure conformity to
the MDD. We are currently certified as compliant to the relevant requirements of
the MDD and we will undertake activities designed to assure continued
compliance; however, no assurance can be given that we will continue to be able
to place the CE mark on our products. If we lose our ability to place the CE
mark on our products, we will not be able to sell our products into the European
Union. In 1998, sales into the European Union accounted for approximately 19.0%
of our revenues.
Employees
We believe that our continued success and future growth will depend on,
among other factors, our ability to continue to attract and retain skilled
employees. The loss of a significant number of employees could adversely affect
our business, most significantly by delaying the development of new products and
product enhancements. The job market in the Silicon Valley area is very
competitive, especially for skilled electrical and software engineers. There can
be no assurance that we will be able to retain or hire key employees.
Manufacturing
Component parts and microprocessors for our products and some specialty
transducers are purchased from outside vendors. A number of such items currently
have limited or single sources of supply, and disruption or termination of those
sources could have a temporary adverse effect on shipments and our financial
results. We believe that we could ultimately develop alternate sources for all
such items, but that sales could be lost or deferred as a result of doing so.
Service
Approximately 19.8% of our 1998 revenues were derived from our service
activities, including the sales of service contracts and time and material
services. Increasing cost containment pressures in the market have adversely
impacted the number of customers purchasing service contracts and the prices of
those contracts, but this impact has been somewhat offset by our increased
installed base and an increase in time and material services. We believe that
the trend away from service contracts will continue and there can be no
assurance that we will be able to continue to maintain our current levels of
service contract revenue. Further, introduction of the Sequoia and Aspen
products will continue to reduce sales of new service contracts and options to
the 128XP system installed base. In addition, we have made significant
expenditures in establishing remote diagnostic and other service programs unique
to the Sequoia and Aspen systems. There can be no assurance that this investment
will be profitable, as the success of the Aspen and Sequoia service program will
depend in part on the number of Aspen and Sequoia systems sold. Finally, we have
seen an increasing trend for hospitals to purchase asset management contracts,
in which all of the hospital's medical equipment and in some cases, other
assets, are managed and serviced by third parties. As we do not sell asset
management services and only service our ultrasound systems, this increased
trend toward asset management contracts could have an adverse impact on our
sales of service contracts and our time and materials service business.
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International Operations and International Receivables
Our business is subject to risks from potential negative political or
geographic events in certain markets in Asia, Latin America and Europe and by
adverse economic effect from currency fluctuations in our worldwide operations.
Political instability or other issues may negatively affect the ability of us to
collect receivables in foreign countries. The following table, in thousands,
summarizes our foreign accounts and leases receivable in excess of $3.0 million
at October 2, 1999.
In millions
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Italy $15,092
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Brazil 11,739
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France 7,583
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Germany 3,436
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Spain 3,300
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Japan 3,240
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Derivative Financial Instruments
We operate internationally and are therefore subject to market risk due to
fluctuations in foreign currency exchange rates. We manage this risk through
established policies and procedures that include the use of derivative financial
instruments. We routinely enter into forward foreign currency exchange contracts
to hedge amounts due from selected subsidiaries denominated in foreign
currencies against fluctuations in exchange rates. Forward currency contract
terms are typically not more than three months and the counterparties to the
exchange contracts are major domestic and international financial institutions.
The purpose of the hedging activities is to minimize the effect of foreign
exchange rate movements on our operating results and on the cash flows we
receive from our foreign subsidiaries.
Currently, we neither engage in foreign currency speculation nor hold or
issue financial instruments for trading purposes. Because we only enter into
forward currency exchange contracts as hedges, any change in currency rates
would not result in a material gain or loss, as any gain or loss on the
underlying transaction being hedged would be offset by the gain or loss on the
forward currency contract. For this reason, we believe that neither our exposure
to foreign currency exchange rate risk nor any potential near-term losses in
future earnings, fair values or cash flows from reasonably possible near-term
changes in market rates or prices would be material. Please refer to our 1998
Form 10-K, filed with the Securities and Exchange Commission for further
discussion of our market risk due to fluctuations in foreign currency exchange
rates.
Euro Conversion
On January 1, 1999, eleven of the fifteen member countries of the European
Union adopted the Euro as their common legal currency. Following the
introduction of the Euro, the local currencies of the participating countries
are scheduled to remain legal tender until June 30, 2002. During this transition
period goods and services may be paid for in either Euros or the participating
country's local currency. Thereafter, only the Euro will be legal tender in the
participating countries. Acuson's foreign subsidiaries that are part of the
European Union have not yet converted to the Euro and continue to use their
respective local currencies as their functional currency. However, the
conversion will be completed prior to the June 30, 2002 deadline. We believe our
current accounting systems are capable of accommodating the Euro conversion with
minimal intervention and that the conversion will not have a material impact on
the competitiveness of our products in Europe. We also believe any costs of
addressing the Euro conversion will not have a material impact on our financial
statements.
Computing Environment
During 1997, we initiated a two-phase project to replace our outdated
computing environment with an enterprise-wide, integrated business information
system to control many of our operating systems including order administration,
service, financial and manufacturing processes. The first phase of this project
has been completed and the second phase is currently scheduled to be
substantially completed during the latter half of 2000. We have retained an
experienced consulting organization to assist in the conversion, however, our
future shipments and
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results could be adversely impacted if, during and following the conversion,
there are significant problems with the system.
Year 2000 Readiness
We have taken steps to ensure our products and services will continue to
operate on and after January 1, 2000. In addition to our new business
information system, which is year 2000 ready and will be replacing a significant
portion of our critical systems, we engaged in a three-phase project to evaluate
and remedy those systems not being replaced. The first phase, completed in May
1998, included a comprehensive inventory of our systems by an experienced
consulting firm and an analysis and determination of the criticality of each
system. This phase included the evaluation of both information technology ("IT")
and non-IT systems. Non-IT systems included systems or hardware containing
embedded technology such as microcontrollers. The second phase was completed in
March 1999, and focused on confirming the year 2000 readiness of those systems
identified in phase one. The third and final phase, which was completed in
December 1999, involved taking any needed corrective action to make all
remaining critical systems and components year 2000 ready and to develop a
contingency plan in the event any non-compliant critical systems were not
remedied by January 1, 2000.
We established a year 2000 project team, comprised of representatives from
each of our functional areas, which reported to senior management. The costs
incurred by us with respect to this project were not material and future
anticipated costs are not expected to be material. The costs of this project
have been charged against the budgets of our various functional areas and no
material IT projects have been deferred in managing our year 2000 readiness
efforts.
Our products being shipped today are year 2000 ready and we believe our
products previously shipped are either year 2000 ready or can be made year 2000
ready by customer purchase of an upgrade. We have also been communicating with
suppliers and others we do business with to coordinate year 2000 readiness. We
believe that our most reasonably likely worst case scenario relating to year
2000 readiness would be if a critical supplier of ours became unable to supply
parts to us based on the supplier's failure to be year 2000 ready, and that as a
result, our production of systems would be seriously affected. We contacted all
of what we consider to be our key technology suppliers and approximately 100 of
our largest general suppliers. All responses were received. The responses were
individually assessed during the third quarter of 1999 to determine the
potential impact to us should one or more of our suppliers not be year 2000
ready. All supplier responses stated that their systems and software are or
would be year 2000 ready by the end of fourth quarter 1999. We identified and
assessed a subset of responses that are considered high risk. We purchased
additional inventory as safety stock in case these suppliers are unable to
supply material as a result of the year 2000 issue. The amount of the additional
inventory purchased was immaterial. Since January 1, 2000, we have contacted
many of our critical suppliers and they have confirmed that thus far, they have
not experienced any year 2000 problems.
Based upon the steps we have taken to address this issue and the progress
to date, we do not expect the financial impact of the year 2000 date conversion
to be material to our financial position or results of operations. However, if
preventative and/or corrective actions by us or those suppliers with whom we do
business are not made in a timely manner, it is still possible that we may not
be able to provide our products to customers until successful preventative
and/or corrective actions have been taken, and as a result, the year 2000 issue
could have a material adverse effect on our financial statements.
We primarily sell our products to hospitals, clinics, and other customers
within the healthcare industry. Although no one customer is material to our
business, should the year 2000 issue impact the ability and willingness of these
customers generally to purchase capital equipment, including our products, the
year 2000 issue could have a material adverse impact on our consolidated
financial statements.
Industry Consolidation
During 1998, Philips Medical Systems completed its acquisition of ATL
Ultrasound, Inc. We believe that consolidations such as this may provide our
competitors with significantly greater financial and other resources with which
to compete in the marketplace. As companies attempt to strengthen or hold their
market positions, future consolidation within the industry could lead to
increased variability in our operating results and could have a material adverse
impact on our financial statements.
10.
<PAGE>
Earthquake
Our research and development and manufacturing activities, our corporate
headquarters and other critical business operations are located near major
earthquake faults. In the event of a major earthquake, the ultimate impact on
us, our significant suppliers and the general infrastructure is unknown, but
operating results could be materially affected. We are not insured for losses
and interruptions caused by earthquakes.
Volatility of stock price
The trading price of our common stock has been and is likely to be somewhat
volatile. Our stock price could be subject to fluctuations in response to a
variety of factors, including the following:
. actual or anticipated variations in our quarterly operating results
and the difficulty of predicting those variations;
. additions or departures of key personnel;
. announcements of technological innovations or new services by us or
our competitors;
. changes in financial estimates by securities analysts;
. conditions or trends in the ultrasound technology and imaging
industries;
. changes in the market valuations of other ultrasound technology and
imaging companies;
. developments in QSR, MDR and other applicable government regulations;
. announcements by us or our competitors of significant acquisitions,
including Ecton, strategic partnerships, joint ventures or capital
commitments;
. sales of our common stock or other securities in the open market; and
. other events or factors that may be beyond our control.
In addition, the trading price of stocks of technology-based companies in
general, have experienced extreme price and volume fluctuations in recent
months. These fluctuations often have been unrelated or disproportionate to the
operating performance of these companies. The valuations of many technology-
based stocks are extraordinarily high based on conventional valuation standards
such as price to earnings and price to sales ratios. Any negative change in the
public's perception of the prospects of ultrasound technology companies could
depress our stock price regardless of our results. Other broad market and
industry factors may decrease the market price of our common stock, regardless
of our operating performance. Market fluctuations, as well as general political
and economic conditions such as recession or interest rate or currency rate
fluctuations, also may decrease the market price of our common stock.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue up to 50,000,000 shares of common stock, $0.0001
par value and 10,000,000 shares of preferred stock without par value.
Common Stock
As of December 31, 1999, there were 27,385,358 shares of common stock
outstanding. The holders of common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. The
holders of common stock are not entitled to cumulative voting rights with
respect to the election of directors and as a consequence, minority stockholders
will not be able to elect directors on the basis of their votes alone. Subject
to preferences that may be applicable to any then outstanding shares of
preferred stock, holders of common stock are
11.
<PAGE>
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available therefor. In the event of our
liquidation, dissolution or winding up, holders of the common stock are entitled
to share ratably in all assets remaining after payment of liabilities and the
liquidation preference of any then outstanding preferred stock. Holders of
common stock have no preemptive rights and no right to convert their common
stock into any other securities. There are no redemption or sinking fund
provisions applicable to the common stock.
Preferred Stock
Pursuant to our Certificate of Incorporation, the Board of Directors has
the authority, without further action by the stockholders, to issue up to
10,000,000 shares of preferred stock in one or more series and to fix the
rights, preferences, privileges and restrictions thereof, including dividend
rights, conversion rights, voting rights, terms of redemption, liquidation
preferences, sinking fund terms and the number of shares constituting any series
or the designation of such series, without any further vote or action by
stockholders. The issuance of preferred stock could adversely affect the voting
power of holders of common stock and the likelihood that such holders will
receive dividend payments and payments upon liquidation and could have the
effect of delaying, deferring or preventing a change in control. Currently there
are no outstanding shares of preferred stock and we have no present plan to
issue any shares of preferred stock.
Preferred Stock Purchase Rights.
During 1998, we authorized and declared a dividend distribution of one
preferred stock purchase right for each outstanding share of common stock to
stockholders of record at the close of business on June 8, 1998, and authorized
the issuance of one preferred stock purchase right (a "Right") with each future
share of common stock issued by us before the Rights become exercisable, or
before the Rights are redeemed by us, or before the Rights expire on June 8,
2008. The Rights will attach to all certificates representing shares of our
outstanding common stock and will not be exercisable or transferable apart from
the common stock until ten days after another person or group of persons
acquires 15 percent (or in certain circumstances, 20 percent) or more of our
common stock or commences a tender or exchange offer for at least 15 percent (or
in certain circumstances, 20 percent) of our common stock. Each Right entitles
the holder to purchase from us one one-hundredth of a share of Series A
Preferred Stock (a "Unit") at $120 per Unit, subject to adjustments for dilutive
events. If, after the Rights have been distributed, either the acquiring party
holds 15 percent (or in certain circumstances, 20 percent) or more of our common
stock or we are a party to a merger or other acquisition transaction (other than
a merger or other acquisition transaction pursuant to a merger or other
acquisition agreement approved by our Board of Directors), then each Right
(other than those held by the acquiring party) will entitle the holder to
receive, upon exercise, that number of Units or shares of common stock of the
surviving company with a value equal to two times the exercise price of the
Right. The Board of Directors may redeem the Rights, at any time until the tenth
day following an announcement of the acquisition of 15 percent (or in certain
circumstances, 20 percent) or more of our common stock, at $0.01 per Right,
payable in cash, common shares or other consideration. In addition, the Board
may also, without consent of the holders of the Rights, amend the terms of the
Rights to lower the threshold for exercisability of the Rights.
12.
<PAGE>
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
common stock offered by the selling stockholders.
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the SEC. You may read and copy these
reports, proxy statements and other information at the SEC's public reference
rooms at Room 1024, 450 Fifth Street, N.W., Washington, D.C., as well as at the
SEC's regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661 and 7 World Trade Center, Suite 1300, New York, NY 10048. You can request
copies of these documents by writing to the SEC and paying a fee for the copying
cost. Please call the SEC at 1-800-SEC-0330 for more information about the
operation of the public reference rooms. Our SEC filings are also available at
the SEC's web site at "http://www.sec.gov." In addition, you can read and copy
our SEC filings at the office of the New York Stock Exchange, 11 Wall Street,
New York, NY 10005.
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" information that we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we will make with
the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934:
. Our Annual Report on Form 10-K for the year ended December 31, 1998,
including all material incorporated by reference therein;
. Our Definitive Proxy Statement on Schedule 14A, filed on April 28,
1999, including all material incorporated by reference therein;
. Our Quarterly Reports on Form 10-Q for quarters ended April 3, 1999
(as amended on July 6, 1999), July 3, 1999 and October 2, 1999,
including all material incorporated by reference therein;
. Our Form 8-K, as filed on December 6, 1999, including all material
incorporated by reference therein;
. All other reports filed by us pursuant to Section 13(a) or 15(d) of
the Exchange Act since December 31, 1998, including all material
incorporated by reference therein; and
. The description of the common stock contained in our Registration
Statement on Form 8-A.
You may request a copy of these filings at no cost, by writing or telephoning us
at the following address:
Acuson Corporation
1220 Charleston Road
Mountain View, CA 94043
(650) 969-9112
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information incorporated by reference or provided in
this prospectus and the Registration Statement. We have authorized no one to
provide you with different information. You should not assume that the
information in this prospectus is accurate as of any date other than the date on
the front of the document.
13.
<PAGE>
SELLING STOCKHOLDERS
In connection with the acquisition of Ecton in December 1999, we issued to
the selling stockholders shares of our common stock, and we agreed to register a
number of shares for resale. We also agreed to use commercially reasonable
efforts to keep the registration statement effective until the earliest of the
date the shares of common stock offered under this prospectus have been sold to
the public, the date one year from the date of effectiveness of this prospectus
(subject to adjustment in certain cases for delays in filing) and, in some
cases, the date when all shares of common stock offered under this prospectus
may be sold in any three month period under Rule 144. Our registration of the
shares of common stock does not necessarily mean that the selling stockholders
will sell all or any of the shares.
The table below sets forth certain information regarding the beneficial
ownership of the common stock, as of January 19, 2000, of each of the selling
stockholders.
The information provided in the table below with respect to each selling
stockholder has been obtained from that selling stockholder. Except as otherwise
disclosed below, none of the selling stockholders has, or within the past three
years has had, any position, office or other material relationship with us.
Because the selling stockholders may sell all or some portion of the shares of
common stock beneficially owned by them, we cannot estimate the number of shares
of common stock that will be beneficially owned by the selling stockholders
after this offering. In addition, the selling stockholders may have sold,
transferred or otherwise disposed of, or may sell, transfer or otherwise dispose
of, at any time or from time to time since the date on which they provided the
information regarding the shares of common stock beneficially owned by them, all
or a portion of the shares of common stock beneficially owned by them in
transactions exempt from the registration requirements of the Securities Act of
1933.
Beneficial ownership is determined in accordance with Rule 13d-3(d)
promulgated by the Commission under the Securities Exchange Act of 1934. Unless
otherwise noted, each person or group identified possesses sole voting and
investment power with respect to shares, subject to community property laws
where applicable. None of the share amounts set forth below represents more than
1% of our outstanding stock as of January 19, 2000, adjusted as required by
rules promulgated by the SEC.
<TABLE>
<CAPTION>
Selling Stockholder Number Of Shares Shares Being
- ------------------- ---------------- ------------
Beneficially Owned Offered
------------------ -------
<S> <C> <C>
Dorothy K. Acker 6,316 5,684
David D. Allen or Eleanor M. Allen 8,210 7,389
Dean Witter Reynolds Custodian for Vincent Canonaco IRA
Rollover Dtd. 9/6/96 3,421 3,079
John Brown 187 168
Michael G. Cannon 141,315 127,183
Ralph T. Canonaco 821 739
Vince Canonaco 3,831 3,448
John Conklin 1,368 1,231
The Cook Organization Ltd. 16,842 15,158
Howard A. Davis Profit Sharing Plan & Trust 1,684 1,516
Lowell B. Davis, DDS MS Profit Share Plan & Trust 3,831 3,448
Lowell B. Davis, DDS, Trustee Profit Sharing Plan and 1,915 1,723
Trust for the benefit of Lowell B. Davis, DDS
Allen Dutton 821 739
Lawrence Engle 1,094 985
Steven Fallows 561 505
Philip Fine or Barbara L. Fine 2,613 2,352
Robert Fine 5,473 4,926
Steven Fine 16,421 14,779
Garry Flower 3,831 3,448
Golden Eagle Partners 104,308 93,877
</TABLE>
14.
<PAGE>
<TABLE>
<CAPTION>
Selling Stockholder Number Of Shares Shares Being
- ------------------- ---------------- ------------
Beneficially Owned Offered
------------------ -------
<S> <C> <C>
Martin Goldman, MD 5,473 4,926
Lennart Hagegard 25,309 22,778
Scott M. Jenkins 6,220 5,598
Edwin T. Johnson 3,421 3,079
Richard T. Kanter 18,852 16,967
Michael B. Keehan 14,191 12,772
Bernard F. Knell 4,473 4,026
Christopher B. Knell 124,696 112,226
Marlene T. Knell 16,054 14,448
M. Elizabeth Knell 2,937 2,643
Max H. Kraus and Lois B. Kraus 1,368 1,231
Kraus Family Limited Partnership 6,568 5,911
George C. Ku 9,647 8,682
Anthony P. Lannutti 17,557 15,801
Donald Libengood 273 246
Raymond G. Lindquist & Helen G. Lindquist 2,052 1,847
Ralph L. MacDonald Jr. 20,842 18,758
George J. Magovern, MD 50,482 45,434
George J. Magovern, MD & Margaret Ann Magovern 30,751 27,676
James A. Magovern, MD 10,424 9,382
Randolph P. Martin, MD & Anne P. Martin 15,375 13,837
Randolph P. Martin 32,319 29,087
Donald R. McDevitt 24,929 22,436
John F. McGlinn II 821 739
Michael J. Mirro, MD 11,527 10,374
Susan L. Mullen 4,612 4,151
Patrick G. Murray 5,698 5,128
Susan Ng 821 739
Northern Indiana Family Physicians, P.C. 401(k) Profit
Sharing Plan for the benefit of:
. Herbert Acker, MD 3,110 2,799
. David Paris, MD 3,687 3,318
. Daniel Tritch, MD 20,806 18,725
David J. Paris, MD 3,109 2,798
Carol Pendergrass 6,220 5,598
Carol M. Pendergrass u/w/o Henry M. Minster DTD 12/4/85 6,220 5,598
Kevin S. Randall 88,361 79,525
Edward Ray & Lonnetta Ray 15,960 14,364
L. Ray Family Partnership for the account of: -
. Philip Dunston 1,231 1,108
. Walter Dunston 1,231 1,108
. Dena & Ken Gold 1,231 1,108
. David F. & Margaret Ray 1,231 1,108
. Jean E. Ray 1,231 1,108
. Judith L. & Paul Trapido 1,231 1,108
Peter A. Ringer & Brenda A. Ringer 2,736 2,462
Peter A. Ringer 1,915 1,723
Richard J. Rodeheffer and Jane K. Rodeheffer 5,904 5,314
Edward H. Rosen & Evelyn B. Rosen, as joint tenants with
right of survivorship 6,568 5,911
</TABLE>
15.
<PAGE>
<TABLE>
<CAPTION>
Selling Stockholder Number Of Shares Shares Being
- ------------------- ---------------- ------------
Beneficially Owned Offered
------------------ -------
<S> <C> <C>
Edward H. Rosen 684 616
John Ross 6,568 5,911
David P. Schleuter, MD 4,210 3,789
Robert P. Schloss or Meshell L. Schloss 3,284 2,956
Jodi Schwartz 936 842
Mary Siegfried 273 246
Frank P. Slattery, Jr. 11,084 9,976
J. Alex Smith & Nan P. Smith 7,687 6,918
Nan P. Smith 821 739
Diana E. Snyder 2,052 1,847
South Quad Partners 49,761 44,785
Milton S. Stearns, Jr. 9,852 8,867
Milton S. Stearns Jr., Trustee UDT DTD 12-20-88 4,105 3,694
Bernard D. Steinberg 9,766 8,789
Bernard D. Steinberg, Trustee for the benefit of
Bernard D. Steinberg 758 682
Geoffrey Steinberg, Trustee for the benefit of: -
. Jason Steinberg 1,094 985
. Julia Steinberg 1,094 985
. David Steinberg 1,094 985
Harris Steinberg, Trustee for the benefit of: -
. Issac Steinberg 1,094 985
. Henry Steinberg 1,094 985
Lowell S. Steinberg, Trustee for the benefit of: -
. Sarah Steinberg 1,094 985
. Daniel Steinberg 1,094 985
S. Ty Steinberg 6,568 5,911
Sutton Partners, L.P. 43,540 39,186
Wilma M. Thrush 3,790 3,411
Jay H. Tolson 6,568 5,911
Daniel L. Tritch, MD 29,809 26,828
Joseph A. Urbano 92,351 83,116
Flordeliza Villanueva, MD 4,105 3,694
Linda Wadsworth 547 492
Walnut Street Partners 43,541 39,187
Michael Wert 6,842 6,158
Richard A. Willis & Susan A. Willis 3,075 2,767
Andrew J. Wood 89,182 80,264
TOTAL 1,413,954 1,272,559
</TABLE>
16.
<PAGE>
PLAN OF DISTRIBUTION
The shares of common stock may be sold from time to time by the selling
stockholders in one or more transactions at fixed prices, at market prices at
the time of sale, at varying prices determined at the time of sale or at
negotiated prices. As used in this prospectus, "selling stockholders" includes
donees, pledgees, transferees and other successors in interest selling shares
received from a selling stockholder after the date of this prospectus as a gift,
pledge, partnership distribution or other non-sale transfer. The selling
stockholders may offer their shares of common stock in one or more of the
following transactions:
. on any national securities exchange or quotation service on which the
common stock may be listed or quoted at the time of sale, including
the New York Stock Exchange,
. in the over-the-counter market,
. in private transactions,
. through options,
. by pledge to secure debts and other obligations or
. a combination of any of the above transactions.
If required, we will distribute a supplement to this prospectus to describe
material changes in the terms of the offering.
The selling stockholders may sell the shares of common stock described in
this prospectus from time to time directly. Alternatively, the selling
stockholders may from time to time offer shares of common stock to or through
underwriters, broker/dealers or agents. The selling stockholders and any
underwriters, broker/dealers or agents that participate in the distribution of
the shares of common stock may be deemed to be "underwriters" within the meaning
of the Securities Act of 1933. Any profits on the resale of shares of common
stock and any compensation received by any underwriter, broker/dealer or agent
may be deemed to be underwriting discounts and commissions under the Securities
Act of 1933. We have agreed to indemnify each selling stockholder against
certain liabilities, including liabilities arising under the Securities Act of
1933. The selling stockholders may agree to indemnify any agent, dealer or
broker-dealer that participates in the sale of shares of common stock described
in this prospectus against certain liabilities, including liabilities arising
under the Securities Act of 1933.
Any shares covered by this prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act of 1933 may be sold under Rule 144 rather than
pursuant to this prospectus. The selling stockholders may not sell all of the
shares they hold. The selling stockholders may transfer, devise or gift such
shares by other means not described in this prospectus.
To comply with the securities laws of certain jurisdictions, the common
stock must be offered or sold only through registered or licensed brokers or
dealers. In addition, in certain jurisdictions, the shares of common stock may
not be offered or sold unless they have been registered or qualified for sale or
an exemption is available and complied with.
Under the Securities Exchange Act of 1934, any person engaged in a
distribution of the common stock may not simultaneously engage in market-making
activities with respect to the common stock for five business days prior to the
start of the distribution. In addition, each selling stockholder and any other
person participating in a distribution will be subject to the Securities
Exchange Act of 1934, which may limit the timing of purchases and sales of
common stock by the selling stockholders or any such other person. These factors
may affect the marketability of the common stock and the ability of brokers or
dealers to engage in market-making activities.
Substantially all of the expenses related to this registration will be paid
by us. These expenses include the SEC's filing fees and fees under state
securities or "blue sky" laws.
17.
<PAGE>
LEGAL MATTERS
For the purpose of this offering, Cooley Godward LLP, Palo Alto,
California, is giving an opinion as to the validity of the common stock offered
by this prospectus.
EXPERTS
The financial statements for the years ended December 31, 1998 and
December 31, 1997 incorporated by reference in this prospectus and elsewhere in
the registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said report.
18.
