SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
(Amendment No. 1 to Form 8-K
Current Report Filed July 9, 1997)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 9, 1997
-------------------------------
AMTECH SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Arizona 0-11412 86-0411215
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
131 South Clark Drive, Tempe, Arizona 85281
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 967-5146
-----------------------------
Not applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
The undersigned Registrant hereby amends the following items,
financial statements, exhibits or other portions of its Current Report on Form
8-K filed with the Securities and Exchange Commission on July 9, 1997, as set
forth below:
Item 2. Acquisition or Disposition of Assets
Item 2. Acquisition or Disposition is hereby amended to include a
discussion regarding the impact of the earnout formula in the P.R. Hoffman
acquistion on future earnings:
Effective July 1, 1997, Amtech Systems, Inc. ("Amtech") acquired substantially
all of the assets and the related operating liabilities of P. R. Hoffman Machine
Products Corporation ("P. R. Hoffman" or "Seller") (the "Acquisition"). The
Acquisition was consummated in accordance with the terms of an Asset Purchase
Agreement between Amtech, P. R. Hoffman, and John R. Krieger dated July 1, 1997.
The aggregate consideration paid by Amtech to the seller in connection with the
Acquisition was approximately $2.9 million, comprised of $2.4 million cash,
32,338 unregistered shares of Amtech $.01 par value Common Stock, and the
assumption of liabilities (approximately $.4 million). The cash portion of the
purchase price includes $200,000 as the estimated post-closing adjustment to be
made based on P. R. Hoffman's June 30, 1997 balance sheet. The Acquisition also
provides for an earnout formula which , in the aggregate, could result in
additional payment(s) to the Seller, with the cumulative maximum of such
payment(s) being $2 million. Under the terms of the earnout formula, the Seller
is entitled to fifty percent (50%) of P. R. Hoffman's pre-tax profits in excess
of $800,000 per year for a period of five (5) years or a cumulative cap of $2
million, whichever occurs first. Transaction costs involved in the Acquisition
are described below.
This additional contingent purchase price of up to $2 million is payable in a
combination of cash and unregistered and registered common stock of Amtech as
defined in the Asset Purchase Agreement. This additional consideration will be
treated as part of the purchase price to the extent earned and will be amortized
over the remaining years in the fifteen year period that began on the July 1,
1997 acquisition date.
The aggregate consideration paid in the Acquisition was determined through arm's
length negotiations between representatives of Amtech and P. R. Hoffman. Neither
Amtech nor, to the knowledge of Amtech, any affiliate, director or officer of
Amtech had any material relationship with P. R. Hoffman prior to the
Acquisition.
In connection with the Acquisition, the parties entered into certain ancillary
agreements, including, but not limited to, a four-year Employment Agreement with
Mr. Krieger, a
2
<PAGE>
Registration Rights Agreement with P. R. Hoffman, and a Sublease Agreement with
Mr. Krieger. The Employment Agreement provides Mr. Krieger with an annual base
salary of $150,000 and the right to participate in Amtech's benefit plans. Under
the terms of the Registration Rights Agreement, Amtech granted P. R. Hoffman
piggyback registration rights with respect to the unregistered shares of Amtech
Common Stock issued to P. R. Hoffman in connection with the Acquisition,
including shares of common stock that may be issued at the Company's option in
connection with the earnout. Any unregistered shares issued to P. R. Hoffman in
connection with the Acquisition are subject to a two-year lock-up period. Under
the terms of the Sublease Agreement, Amtech will be leasing its operating
facility relating to the Acquisition from Mr. Krieger for a period of three (3)
years at an annual rent of $126,900.
Related liabilities of P. R. Hoffman assumed by Amtech include certain
proratable expenses, obligations under certain contracts, leases and purchase
orders expressly assumed by Amtech, and product claims and return obligations of
P. R. Hoffman, subject to reimbursement by P. R. Hoffman if a specified dollar
threshold is met.
The total cost of the Acquisition was $3.5 million, including transaction costs.
Transaction costs requiring cash total $.2 million and include due diligence
expenses and fees of legal counsel, accountants and investment bankers. The
Company also issued to its investment bankers a warrant granting the right to
acquire up to 152,000 shares of the Company's $.01 par value Common Stock
anytime during the five year period ending June 30, 2002, at an exercise price
of $3 per share. Subject to change, based upon a valuation using of a recognized
option pricing model, the warrant has tentatively been valued at a total of $.4
million.
The total cost of the Acquisition has been allocated based upon estimated fair
market values as follows: inventories and certain prepaids and deferred charges
totaling $1.3 million; trade receivables of $1.1 million; certain fixed assets
valued by the parties at $.4 million; and goodwill and intangible assets valued
by the parties at $.7 million. These amounts are subject to change pending
completion of a review of the amounts reflected in Seller's June 30, 1997
closing balance sheet. Following Acquisition, Amtech intends to continue using
the assets purchased for substantially the same purpose as they were used before
the Acquisition.
Amtech financed the $2.6 million aggregate cash cost of the transaction,
including cash consideration paid to the seller and the cash expenses incurred
in connection with the Acquisition, with available cash and short-term
investments.
P. R. Hoffman will be operated through Amtech's wholly owned subsidiary, P. R.
Hoffman Machine Products, Inc. (the "Subsidiary"), and is expected to remain
headquartered in Carlisle, Pennsylvania. As of July 1, 1997, all current
employees, approximately 35, of P. R. Hoffman became employees of the
Subsidiary.
3
<PAGE>
Item 7. Financial Statements and Exhibits.
Item 7. Financial Statements and Exhibits is hereby amended to
include the following financial information:
(a) Financial Statements.
---------------------
Audited financial statements of P.R. Hoffman Machine
Products Corporation for the years ended December 31,
1996 and 1995 with the Report of Independent Public
Accounts thereon and unaudited interim financial
statements for the six months ended June 30, 1997 and
1996.
(b) Pro Forma Financial Information.
--------------------------------
Pro Forma Combined Balance Sheet as of March 31, 1997
for Amtech and as of June 30, 1997 for P.R. Hoffman.
Pro Forma Combined Statement of Operations for the
fiscal year ended September 30, 1996 for Amtech and
December 31, 1996 for P.R. Hoffman.
Pro Forma Combined Statement of Operations for the six
months ended March 31, 1997 for Amtech and June 30, 1997
for P.R. Hoffman.
(c) Exhibits.
---------
Method
Exhibit No. Description of Filing
----------- ----------- ---------
23 Consent of Arthur Andersen LLP X
4
<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.
Date: September 8, 1997 AMTECH SYSTEMS, INC.
By: /s/ Robert T. Hass
-----------------------------------
Robert T. Hass
Vice President-Finance (Chief
Financial & Accounting Officer)
5
<PAGE>
FINANCIAL STATEMENT INDEX
Description Page
- ----------- ----
Historical Financial Statements of
P. R. Hoffman Machine Products Corporation:
Report of Independent Accountants............................................F-1
Audited Balance Sheets as of December 31, 1996
and 1995 and Unaudited Interim Balance Sheet
as of June 30, 1997........................................................F-2
Audited Statements of Operations for the
Years Ended December 31, 1996 and 1995 and
Unaudited Interim Statements of Operations
for the Six Months Ended June 30, 1997 and 1996............................F-3
Audited Statements of Stockholders' Investment for the
Years Ended December 31, 1996 and 1995 and
Unaudited Interim Statements of Stockholders'
Investment for the Six Months Ended June 30, 1997..........................F-4
Audited Statements of Cash Flows for the
Years Ended December 31, 1996 and 1995 and
Unaudited Interim Statements of Cash Flows
for the Six Months Ended June 30, 1997 and 1996............................F-5
Notes to Financial Statements................................................F-6
Pro Forma Combined Financial Statements:
Introduction to Pro Form Combined Financial Statements......................F-13
Pro Forma Combined Statement of Operations of Amtech
Systems, Inc. for the Six Months ended June 30,
1997, adjusted to include the operations of
P. R. Hoffman Machine Products Corporation,
as if the acquisition had occurred on October 1, 1995.....................F-15
Pro Forma Combined Statement of Operations of Amtech
Systems, Inc. for the Year Ended September 30,
1996, adjusted to include the operations of
P. R. Hoffman Machine Products Corporation,
as if the acquisition had occurred on October 1, 1995.....................F-18
Pro Forma Combined Balance Sheet of Amtech Systems, Inc.
as of March 31, 1997, to reflect the acquisition of
P. R. Hoffman Machine Products Corporation as
if it had occurred on that date...........................................F-21
Consent of Arthur Andersen LLP .............................................F-24
6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Amtech Systems, Inc.:
We have audited the accompanying balance sheets of P.R. HOFFMAN MACHINE PRODUCTS
CORPORATION (a Delaware S corporation) as of December 31, 1996 and 1995, and the
related statements of income, stockholder's investment and cash flows for the
years then ended. 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, the financial statements referred to above present fairly, in
all material respects, the financial position of P.R. Hoffman Machine Products
Corporation as of December 31, 1996 and 1995, and the results of its operations
and its cash flows for the years then ended in conformity with generally
accepted accounting principles.
Arthur Andersen LLP
Phoenix, Arizona,
June 23, 1997.
F-1
<PAGE>
P. R. HOFFMAN MACHINE PRODUCTS CORPORATION
BALANCE SHEETS AS OF
<TABLE>
<CAPTION>
June 30, December 31, December 31,
---------- ------------ ------------
1997 1996 1995
---------- ------------ ------------
(Unaudited)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents (Notes 2) $ 28,700 $ 30,221 $ 70,053
Accounts receivable, less allowance for doubtful
accounts of $18,650 in 1997, 1996 and 1995 1,127,401 484,339 543,551
Inventories (Notes 2 and 4) 1,047,630 1,126,165 1,286,099
Prepaid expenses and other current assets 13,187 12,798 12,383
---------- ---------- ----------
Total current assets 2,216,918 1,653,523 1,912,086
PROPERTY, PLANT AND EQUIPMENT, net (Notes 2 and 5) 1,261,616 1,308,485 1,261,288
---------- ---------- ----------
$3,478,534 $2,962,008 $3,173,374
========== ========== ==========
LIABILITIES AND STOCKHOLDER'S INVESTMENT
CURRENT LIABILITIES:
Accounts payable $ 135,503 $ 122,359 $ 381,106
Borrowings under line of credit (Note 4) -- 180,443 250,000
Current portion of long-term debt and obligation
under capital lease (Notes 5 and 7) 5,160 5,759 3,045
Accrued liabilities 139,714 97,244 209,040
Due to stockholder (Note 6) -- 115,156 156,156
---------- ---------- ----------
Total current liabilities 280,377 520,961 999,347
---------- ---------- ----------
LONG-TERM DEBT AND OBLIGATION UNDER
CAPITAL LEASE (Notes 5 and 7) 969,046 974,460 907,501
---------- ---------- ----------
OTHER LIABILITIES (Notes 2 and 8) 109,149 136,087 301,814
---------- ---------- ----------
COMMITMENTS AND CONTINGENCIES (Notes 8 and 9)
STOCKHOLDER'S INVESTMENT:
Common stock, $1.00 par value, 1,000 shares
authorized, issued and outstanding 1,000 1,000 1,000
Additional paid-in capital 204,561 204,561 204,561
Retained earnings 1,914,401 1,124,939 759,151
---------- ---------- ----------
Total stockholder's investment 2,119,962 1,330,500 964,712
---------- ---------- ----------
$3,478,534 $2,962,008 $3,173,374
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
F-2
<PAGE>
P. R. HOFFMAN MACHINE PRODUCTS CORPORATION
STATEMENTS OF OPERATION
<TABLE>
<CAPTION>
Years Ended December 31, Six Months Ended June 30,
--------------------------- ---------------------------
1996 1995 1997 1996
----------- ----------- ----------- -----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
NET SALES $ 6,614,667 $ 4,866,345 $ 3,677,621 $ 3,933,468
COST OF SALES 4,719,789 3,347,373 2,323,181 2,590,139
----------- ----------- ----------- -----------
Gross margin 1,894,878 1,518,972 1,354,440 1,343,329
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 1,285,855 1,230,426 495,205 600,756
----------- ----------- ----------- -----------
OPERATING PROFIT 609,023 288,546 859,235 742,573
INTEREST EXPENSE, net 144,271 125,073 69,775 75,041
OTHER EXPENSE, net 6,537 2,535 -- --
----------- ----------- ----------- -----------
NET INCOME $ 458,215 $ 160,938 $ 789,462 $ 667,532
=========== =========== =========== ===========
PRO FORMA TAX INFORMATION (Note 2):
Provision for (benefit from) income taxes $ 120,000 $ (1,000) $ 300,000 $ 230,000
Net income $ 338,215 $ 161,938 $ 489,460 $ 437,532
Income per common share $ 338 $ 162 $ 489 $ 438
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
P. R. HOFFMAN MACHINE PRODUCTS CORPORATION
STATEMENTS OF STOCKHOLDER'S INVESTMENT
<TABLE>
<CAPTION>
Common Stock
---------------------------
Number Additional Total
of Paid-in Retained Stockholder's
Shares Amount Capital Earnings Investment
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1994 1,000 $ 1,000 $ 204,561 $ 874,213 $ 1,079,774
Net income -- -- -- 160,938 160,938
Stockholder dividends -- -- -- (276,000) (276,000)
----------- ----------- ----------- ----------- -----------
BALANCE AT DECEMBER 31, 1995 1,000 1,000 204,561 759,151 964,712
Net income -- -- -- 458,215 458,215
Stockholder dividends -- -- -- (92,427) (92,427)
----------- ----------- ----------- ----------- -----------
BALANCE AT DECEMBER 31, 1996 1,000 $ 1,000 $ 204,561 $ 1,124,939 $ 1,330,500
Net income (Unaudited) -- -- -- 789,462 789,462
----------- ----------- ----------- ----------- -----------
BALANCE AT JUNE 30, 1997 (Unaudited) 1,000 $ 1,000 $ 204,561 $ 1,914,401 $ 1,119,962
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
P.R. HOFFMAN MACHINE PRODUCTS CORPORATION
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31, Six Months Ended June 30,
------------------------ -------------------------
1996 1995 1997 1996
--------- --------- --------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 458,215 $ 160,938 $ 789,462 $ 667,532
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation (Note 2) 111,133 97,404 58,808 43,466
Amortization of negative goodwill (Note 2) (185,600) (185,600) (30,923) (92,800)
Loss on sale of property and equipment 5,406 643 -- --
Decrease (increase) in operating assets:
Accounts receivable 59,212 44,388 (643,062) (271,208)
Inventories 159,934 (504,268) 78,535 (129,118)
Prepaid expenses and other current assets (415) 5,125 (389) 7,643
Increase (decrease) in operating liabilities:
Accounts payable (258,747) 183,391 13,144 116,583
Accrued liabilities (111,796) 100,698 42,470 (99,311)
Other liabilities 19,873 (17,565) 3,980 --
--------- --------- --------- ---------
Net cash provided by
(used in) operating activities 257,215 (114,846) 312,030 242,787
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (163,836) (298,359) (11,939) (125,126)
Other liabilities 19,873 (17,565) 3,980 --
--------- --------- --------- ---------
Net cash used in investing activities (163,736) (296,359) (11,939) (125,126)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments to) stockholder (41,000) 156,156 (115,156) (41,000)
Proceeds from long-term debt 75,000 -- -- --
Net borrowings (payments) on line of credit (69,557) 250,000 (180,443) (112,282)
Principal payments on capital lease obligation (3,045) (2,659) (5,415) (1,471)
Principal payments on long-term debt (2,282) -- (599) --
Dividends paid (92,427) (276,000) -- --
--------- --------- --------- ---------
Net cash provided by
(used in) financing activities (133,311) 127,497 (301,612) (154,753)
NET DECREASE IN CASH AND EQUIVALENTS (39,832) (283,708) (1,521) (37,092)
CASH AND EQUIVALENTS, beginning of year 70,053 353,761 30,221 70,053
--------- --------- --------- ---------
CASH AND EQUIVALENTS, end of year $ 30,221 $ 70,053 $ 28,700 $ 32,961
========= ========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for interest $ 144,271 $ 125,073 $ 69,773 $ 61,980
========= ========= ========= =========
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Obligation incurred for capital lease $ -- $ 913,205 $ -- $ --
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
P. R. HOFFMAN MACHINE PRODUCTS CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
(1) NATURE OF OPERATIONS:
P.R. Hoffman Machine Products Corporation (the Company), a Delaware S
corporation with a sole stockholder, is based in Carlisle, Pennsylvania. The
Company specializes in developing, manufacturing, and marketing double-sided
precision lapping and polishing machines and related products including
carriers, semiconductor polishing templates, and replacement parts. The
Company's niche is serving high-tech customers requiring high throughput surface
processing systems able to consistently modify surface characteristics to exact
tolerances. Double-sided lapping and polishing machines are designed to process
wafer type products such as semiconductor wafers, computer disk media, and
ceramic components for wireless communication devices to exact tolerances of
thickness, flatness, parallelism, and surface finish.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Revenue Recognition
Revenue is recognized on the accrual basis when the product is shipped and title
passes to the customer.
Cash Equivalents
Cash equivalents consist of money market investments with original maturities of
three months or less.
Inventories
Inventories include the costs of material, labor and overhead directly related
to the manufacturing process and are stated at the lower of cost (first-in,
first-out) or market. The components of inventory as of December 31, 1996 and
1995 are as follows:
1996 1995
---------- ----------
Raw materials $ 474,167 $ 406,158
Work-in-process 213,347 533,564
Finished goods 438,651 346,377
---------- ----------
$1,126,165 $1,286,099
========== ==========
F-6
<PAGE>
Property, Plant and Equipment
Property, plant and equipment are stated at cost and are depreciated using the
straight line method over the estimated useful lives of the assets as follows:
Property under capital lease and leasehold improvements Life of lease
Machinery, equipment, furniture and fixtures 5-7 years
Depreciation expense totaled $111,133 and $97,404 for 1996 and 1995,
respectively.
Maintenance and repairs are charged to expense as incurred. The costs of
additions and improvements are capitalized. The cost of property retired or sold
and the related accumulated depreciation are removed from the applicable
accounts and any gain or loss is recognized.
Property, plant and equipment consist of the following as of December 31, 1996
and 1995:
1996 1995
----------- -----------
Property under capital lease $ 913,205 $ 913,205
Leasehold improvements 54,801 54,801
Machinery and equipment 459,674 311,789
Furniture and fixtures 106,365 95,920
----------- -----------
1,534,045 1,375,715
Less: accumulated depreciation and amortization (225,560) (114,427)
----------- -----------
$ 1,308,485 $ 1,261,288
=========== ===========
The Company has adopted Statement of Financial Accounting Standards No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of. This Statement requires that long-lived assets be reviewed for
impairment whenever events or circumstances indicate that the carrying amount of
the asset may not be recoverable. If the expected future cash flows from an
asset to be held and used in operations is less than the carrying value of the
asset, an impairment loss is recognized. Adoption of this Statement did not have
a material effect on the Company's financial position or results of operations.
Net Assets Acquired in Excess of Purchase Price
The Company was acquired in 1992 for $205,561. An excess of $928,000 in the fair
value of net current assets acquired over the purchase price was recorded as
"negative goodwill" and is included in other liabilities in the accompanying
balance sheets. Negative goodwill amounted to $30,923 and $216,523 at December
31, 1996 and 1995, respectively, and is being amortized over a period of five
years using the straight-line method. Amortization income of $185,600 in 1996
and 1995 related to this deferred credit is an offset to selling, general and
administrative expenses in the accompanying statements of income.
F-7
<PAGE>
Income Taxes
Under the Company's S corporation election, all income is passed through and
included in the tax return of the stockholder. The Company periodically makes
distributions to the stockholder to fund the personal tax liability resulting
from the Company's taxable income.
The Company reports certain income and expense items for income tax purposes on
a basis different from that reflected in the accompanying financial statements.
These temporary differences are principally related to certain accrued expenses
which are not deductible for income tax purposes until paid, and expenses
related to establishing reserves for excess and obsolete inventory which are not
deductible until the inventory is disposed of. In addition, amortization of
negative goodwill is a permanent difference which is excluded from taxable
income and has been considered in the calculation of the pro forma tax
information included in the accompanying statements of income.
Income per Common Share
Income per common share for 1996 and 1995 is computed using the 1,000 weighted
average shares of common stock outstanding. The Company has no contingent shares
of common stock issuable at December 31, 1996 or 1995.
Use of Estimates
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 and 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.
Fair Value of Financial Instruments
The carrying value of the Company's current assets, current liabilities and
negative goodwill approximate fair value due to the short-term nature of these
instruments. The carrying values of the Company's long-term debt approximates
its fair value as the rate of interest on this debt fluctuates with the market
for similar debt instruments. The fair value of the obligation under capital
lease is $1,273,000 at December 31, 1996. The carrying value of the Company's
pension liability approximates fair value as it is actuarially determined using
a market-determined discount rate.
F-8
<PAGE>
(3) MAJOR CUSTOMERS AND FOREIGN SALES:
Approximately 29% and 69% of net sales were to the Company's ten largest
customers in 1996 and 1995, respectively. The Company had major customers which
account for more than 10% of sales as follows:
1996 1995
---- ----
17% 21%
-- 13
-- 13
---- ----
17% 47%
==== ====
The individual line items above do not reflect the same customers in each year.
As of December 31, 1996, receivables from three customers comprise 39% of
accounts receivable, representing a concentration of credit risk as defined by
SFAS No. 105.
The Company's sales were to the following geographic regions:
1996 1995
---- ----
United States (including 1% or
less to Canada) 86% 80%
Europe 3 1
Asia 10 8
Central and South America 1 11
---- ----
100% 100%
==== ====
(4) LINE OF CREDIT:
The Company has a $500,000 demand line of credit with a bank; there is no
scheduled expiration date on the line. Balances of $180,443 and $250,000 were
outstanding on the line at December 31, 1996 and 1995, respectively. The line
bears interest at the bank's base rate plus 1/2%. As of December 31, 1996, this
rate was 9%. The line is guaranteed by the sole stockholder and his spouse and
is secured by the Company's inventory.
(5) LONG-TERM DEBT:
The Company borrowed $75,000 from a bank during 1996. The loan bears interest at
a variable rate equal to the bank's base rate plus 1/2%. As of December 31,
1996, this rate was 9%. The note requires 35 regular monthly payments and one
final payment of all remaining principal and interest due on March 21, 1999. The
note is guaranteed by the sole stockholder and his spouse and is secured by
certain machinery for which the note was incurred.
F-9
<PAGE>
Outstanding debt at December 31, 1996, will mature as follows:
1997 $ 2,273
1998 2,273
1999 68,172
--------
72,718
Less: current portion (2,273)
--------
$ 70,445
========
(6) DUE TO STOCKHOLDER:
As of December 31, 1996 and 1995, the Company owed $115,156 and $156,156,
respectively, to the sole stockholder. This obligation was paid subsequent to
year-end.
(7) OBLIGATION UNDER CAPITAL LEASE:
The Company leases its building from a company owned in part by the sole
stockholder. Minimum rental commitments under this lease are as follows as of
December 31, 1996:
1997 $ 126,900
1998 126,900
1999 126,900
2000 126,900
2001 126,900
Thereafter 3,045,600
-----------
Total lease payments 3,680,100
Less: Amount representing interest (2,772,599)
Less: Current portion of principal obligation (3,486)
-----------
Principal lease payments $ 904,015
===========
(8) EMPLOYEE BENEFIT PLANS:
The Company sponsors a defined benefit pension plan which provides retirement
benefits to hourly employees based on length of service. The Company's policy is
to fund the maximum contribution deductible for Federal income tax purposes. The
Plan assets are invested principally in cash equivalents and bank common trust
funds including fixed income, equity and variable funds.
Pension expense for the fiscal years ended December 31, 1996 and 1995, was as
follows:
1996 1995
-------- --------
Service cost $ 5,598 $ 6,452
Interest cost 18,547 18,471
Return on plan assets (6,859) (18,492)
Net amortization and deferral (3,543) 9,996
-------- --------
Net pension cost $ 13,743 $ 16,427
======== ========
F-10
<PAGE>
The following table sets forth the funded status of the defined benefit pension
plan at December 31, 1996 and 1995:
1996 1995
-------- --------
Actuarial present value of:
Vested benefit obligation $292,927 $271,872
Nonvested benefit obligation 4,059 1,900
-------- --------
Projected benefit obligation 296,986 273,772
Plan assets at fair value 191,822 188,481
-------- --------
Accrued pension liability (included in
other liabilities) $105,164 $ 85,291
======== ========
The projected benefit obligation was determined using an assumed discount rate
of 7% for 1996 and 1995. The assumed long-term rate of return on plan assets was
7% for 1996 and 1995.
The Company also maintains a 401(k) defined contribution retirement plan for all
employees age 21 or over who have completed one year of service, as defined in
the plan agreement. Employer contributions to the plan are discretionary. The
Company's discretionary contribution to the plan was $0 and $40,200 in 1996 and
1995, respectively.
(9) COMMITMENTS AND CONTINGENCIES:
Operating Leases
The Company leases certain office equipment under noncancelable operating
leases. Total rent expense for the years ended December 31, 1996 and 1995, was
approximately $3,800 and $2,800, respectively. The future minimum aggregate
rentals under these noncancelable leases are as follows:
1997 $3,800
1998 1,291
1999 455
2000 227
------
$5,773
======
Licensing Agreement
In November 1995, the Company entered into a licensing agreement with a vendor
to manufacture, use and sell certain products patented by the vendor. Under the
agreement, the Company pays a royalty of 4.75% to the vendor on all sales of the
vendor's patented products. Royalty expense related to this agreement amounted
to $24,000 and $0 in 1996 and 1995, respectively.
F-11
<PAGE>
(10) SUBSEQUENT EVENT:
On April 23, 1997, the Company entered into a letter of intent with Amtech
Systems, Inc. (Amtech) whereby Amtech intends to acquire essentially all the
assets and liabilities of the Company effective June 30, 1997. Amtech engineers,
assembles, and sells equipment used in certain thermal processes of
manufacturing semiconductors.
(11) INTERIM REPORTING
The accompanying interim financial statements are unaudited; however, these
financial statements contain all adjustments which are, in the opinion of
management, necessary for a fair presentation of the financial position of the
Company as of June 30, 1997, and the results of its operations for the six
months ended June 30, 1997 and 1996, and its cash flows for the six months ended
June 30, 1997 and 1996.
The accounting policies followed by the Company are set forth in Note 2 to the
financial statements. Inventories as of June 30, 1997, included work-in-process
of $292,955. The remaining inventory primarily consists of purchased parts and
completed subassemblies. The results of operations for the six months ended June
30, 1997 and 1996, are not necessarily indicative of the results to be expected
for the full year.
F-12
<PAGE>
Amtech Systems Inc. and Subsidiaries
Pro Forma Combined Financial Statements
(Unaudited)
Introduction
On July 1, 1997, Amtech Systems, Inc. ("Amtech") purchased substantially all of
the assets of P. R. Hoffman Machine Products Corporation ("P. R. Hoffman" or the
"Seller") (the "Acquisition"). The cost of the Acquisition was approximately
$3.5 million, including the $2.9 purchase price, comprised of $2.2 million in
cash and 32,338 common shares of Amtech distributed at closing, the assumption
of $.4 million in operating liabilities and a post-closing purchase price
adjustment based upon P. R. Hoffman's June 30, 1997 balance sheet. In addition,
$.2 million in transaction costs were paid in cash and a warrant was issued to
the Company's investment bankers that has been tentatively valued at $.4
million. Amtech is also to pay the seller contingent purchase payments equal to
fifty percent (50%) of the of pre-tax earnings derived from the assets acquired
from P. R. Hoffman in excess of $800,000 per year for a period of five years.
The warrant grants the right to acquire up to 152,000 shares of the Company's
$.01 par value Common Stock during the five year period ending June 1, 2002, at
an exercise price of $3 per share. See Item 2. to this Report on Form 8-K for a
more detailed description of the transaction.
The following unaudited pro forma combined financial information of Amtech
Systems, Inc. and Subsidiaries gives effect to the Acquisition. The purpose of
the pro forma combined balance sheet as of March 31, 1997, the date of the last
balance sheet of Amtech filed with the Securities and Exchange Commission prior
to the Acquisition, is to reflect the financial condition of the Company as if
the Acquisition occurred on that date. The purpose of the pro forma combined
statements of operations for the fiscal year ended September 30, 1996 and for
the six months ended March 31, 1997, is to reflect what the results of
continuing operations might have been if the acquisition had taken place on
October 1, 1995. The historical statements of operations of Amtech presented in
these pro forma statements of operations do not include discontinued operations.
The pro forma combined statements of operations for the year ended September 30,
1996 and the six months ended March 31, 1997, include the operations of P. R.
Hoffman for the year ended December 31, 1996, and June 30, 1997, respectively.
The pro forma combined balance sheet as of March 31, 1997 includes the
historical balance sheet of P. R. Hoffman as of June 30, 1997.
The pro forma financial statements should be read in conjunction with the
historical financial statements of Amtech filed on Form 10-K for the year ended
September 30, 1997, and filed on Form 10-Q for the six months ended March 31,
1997, as well as the historical financial statements of P. R. Hoffman included
in this amendment to the related Report on Form 8-K. The unaudited pro forma
combined financial information presented herein does not purport to represent
what the Company's actual results of operations would have been had the
Acquisition occurred on those dates or to project the Company's results of
operations for any future period.
F-13
<PAGE>
FORWARD-LOOKING INFORMATION
This report contains certain forward-looking information. The forward-looking
information contained herein is based upon current expectations that involve a
number of risks and uncertainties. The forward-looking information is based upon
a number of assumptions, including, without limitation, those enumerated in the
related section of the Management's Discussion and Analysis included in the
Company's 1996 annual report on Form 10-K, which are hereby incorporated by
reference. Assumptions related to the foregoing involve judgments with respect
to, among other things, future economic, competitive and market conditions, and
future business decisions, all of which are beyond the control of the Company.
Although the Company believes that the assumptions underlying the
forward-looking information are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the results
contemplated in forward-looking information will be realized. In addition, the
business and operations of the Company are subject to substantial risks which
increase the uncertainty inherent in such forward-looking information. In light
of the significant uncertainties inherent in such forward-looking information
included herein, the inclusion of such information should not be regarded as a
representation by the Company, or any other person, that the objectives or plans
for the Company will be achieved.
F-14
<PAGE>
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
Historical
-------------------------- Ref Pro Forma Pro Forma
Amtech (1) Hoffman (1) # Adjustments Combined
----------- ----------- -- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net product sales $ 4,590,327 $ 3,677,621 $ 0 $ 8,267,948
Cost of product sales 3,220,516 2,323,181 (2) 40,072 5,583,769
----------- ----------- ----------- -----------
Gross margin 1,369,811 1,354,440 (40,072) 2,684,179
(2) 7,633
Selling and general 1,207,802 493,330 (3) 54,255 1,763,020
Gain on sale of assets (115,487) - - (115,487)
Photo-CVD project 39,711 - - 39,711
Other research and development 91,183 1,875 - 93,058
----------- ----------- ----------- -----------
Operating profit 146,602 859,235 (101,960) 903,877
(2) 61,776
(4) 7,999
Interest income (expense) - net 94,149 (69,775) (5) (66,000) 28,149
----------- ----------- ----------- -----------
Income from continuing
operations before income taxes 240,751 789,460 (98,185) 932,026
Income tax provision 75,000 0 (6) 270,000 345,000
----------- ----------- ----------- -----------
Net income $ 165,751 $ 789,460 ($ 368,185) $ 587,026
----------- ----------- ----------- -----------
Earnings Per Share
From Continuing operations:
- ------------------------------
Primary $ 0.04 (7) $ 0.10
Fully Diluted $ 0.04 (7) $ 0.10
Average shares outstanding 6,485,201 (7) 6,665,151
</TABLE>
The accompanying notes are an integral part
of these pro forma financial statements.
F-15
<PAGE>
Amtech Systems Inc. and Subsidiaries
Pro Forma Combined Statement of Operations
For The Six Months Ended March 31, 1997
Notes and Pro Forma Adjustments
(Unaudited)
(1) The historical statements of operations of P. R. Hoffman, for the six
months ended June 30, 1997, and of Amtech, for the six months ended
March 31, 1997, were used as the basis for this pro forma combined
statement of operations.
(2) Eliminates depreciation ($15,745) and interest expense ($61,766)
recorded in the historical financial statements of P. R. Hoffman in
connection with a thirty year capital lease of P. R. Hoffman's
premises, which was not assumed by Amtech. The reduction in
depreciation expense is shown net of $63,450, representing one-half of
the annual rent expense that will be incurred under a three year
operating sub-lease of those same premises. That net adjustment for
depreciation and rent has been allocated to cost of sales and selling
and general expenses.
(3) To record an increase to expense resulting from reversing $30,923 of
negative goodwill amortization recorded in the historical financial
statements of P. R. Hoffman, arising out of an earlier acquisition, and
$23,332 of amortization of goodwill arising from the Acquisition.
Goodwill is being amortized over a fifteen year period using the
straight-line method. See Note 8 regarding additional goodwill that may
arise in the future if the criteria for contingent payments is met.
(4) To eliminate interest expense related to debt not assumed.
(5) To reduce interest income based upon the assumption that the Company
earned an average of five percent (5%) per year on the short-term funds
used in the Acquisition..
(6) The amount of incremental income tax that would have resulted from the
historical income of P. R. Hoffman and the pro forma adjustments.
(7) Pro forma earnings per common share are computed using the modified
treasury stock method. This reflects the dilutive effect of the stock
warrant granted to the Company's investment bankers for their services
in connection with the acquisition. The average outstanding shares for
the calculation of fully diluted earnings per share were not materially
different. In computing the earnings per share pursuant to the modified
treasury stock method, it was assumed that the proceeds from the
exercise of stock options and warrants would first be used to reduce
debt and the balance invested in short-term government securities,
resulting in an assumed increase in net interest income. The result was
that
F-16
<PAGE>
income after tax used in the earnings per share calculations were
increased by $94,000 and $101,000, on a historical and pro forma basis,
respectively.
(8) Contingent upon the criteria set-forth in the earnout formula,
additional payments to the Seller of up to $2 million may be required.
Such payments, if any, will be added to goodwill and amortized over the
remainder of the fifteen year amortization period. The amount of
contingent consideration that would have been accrued during the six
months covered by this pro forma statement of operations would have
been $190,304, subject to adjustment based upon on the earnings during
the remainder of the year. If the future earnings of P. R. Hoffman for
each of the first five years after the Acquisition equal twice the
adjusted earnings reflected in the pro forma statement for the six
months ended March 31, 1997, $1,903,040 of the $2 million maximum
contingent consideration would be paid. Assuming that the maximum
amount of contingent payments are earned during the preceding five
years, pursuant to the earnout formula, amortization expense in the
sixth through fifteenth year following the acquisition would be
increased by approximately $166,667 and net income and would be reduced
by $93,333, or $.01 per share.
F-17
<PAGE>
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Historical
------------------------- Ref Pro Forma Pro Forma
Amtech (1) Hoffman (1) # Adjustments Combined
----------- ----------- -- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net product sales $ 8,414,005 $ 6,614,667 $ -- $15,028,672
(2) $ 80,144
Cost of product sales 5,516,936 4,719,789 (3) 139,761 10,456,630
----------- ----------- ----------- -----------
Gross margin 2,897,069 1,894,878 (219,905) 4,572,042
(2) 15,266
(4) (225,000)
Selling and general 2,386,466 1,260,209 (5) 232,263 3,669,204
Equity in losses of joint venture 65,063 -- 65,063
Photo-CVD project 132,243 -- -- 132,243
Other research and development 192,484 32,183 -- 224,667
----------- ----------- ----------- -----------
Operating profit 120,813 602,486 (242,434) 480,865
(2) 123,855
(6) 20,416
Interest income (expense) - net 226,778 (144,271) (7) (132,000) 94,778
----------- ----------- ----------- -----------
Income from continuing
operations before income taxes 347,591 458,215 (230,163) 575,643
Income tax provision 150,000 -- (8) 70,000 220,000
----------- ----------- ----------- -----------
Net income $ 197,591 $ 458,215 ($ 300,163) $ 355,643
----------- ----------- ----------- -----------
Earnings Per Share
From Continuing operations:
- ------------------------------
Primary $ 0.05 (9) $ 0.08
Fully Diluted $ 0.05 (9) $ 0.08
Average Shares Outstanding 6,341,027 (9) 6,519,334
</TABLE>
The accompanying notes are an integral part of
these pro forma financial statements.
F-18
<PAGE>
Amtech Systems Inc. and Subsidiaries
Pro Forma Combined Statement of Operations
For The Year Ended September 30, 1996
Notes and Pro Forma Adjustments
(Unaudited)
(1) The historical statements of operations of P. R. Hoffman, for the year
ended December 31, 1996, and of Amtech, for the year ended September
30, 1997, were used as the basis for this pro forma combined statement
of operations.
(2) Eliminates depreciation ($31,490) and interest expense ($123,855)
recorded in the historical financial statements of P. R. Hoffman in
connection with a thirty year capital lease of P. R. Hofman's premises,
which was not assumed by Amtech. The reduction in depreciation expense
is shown net of $126,900, representing the annual rent expense that
will be incurred under a three year operating sub-lease of those same
premises. That net adjustment for depreciation and rent has been
allocated to cost of sales and selling and general expenses.
(3) To record the added cost of goods sold equal to write-up of inventory
to fair market value due to the application of purchase accounting.
This adjustment is based upon the assumption that work-in-process and
finished goods inventories would have turned-over at least once during
this period.
(4) To eliminate executive compensation in excess of the $150,000 to be
paid pursuant to the four year employment agreement with Mr. Krieger,
the President of P. R. Hoffman, entered into in conjunction with the
Acquisition.
(5) To record an increase to expense resulting from reversing $185,600 of
negative goodwill amortization recorded in the historical financial
statements of P. R. Hoffman, arising out of an earlier acquisition, and
$46,663 of amortization of goodwill arising the Acquisition. Goodwill
is being amortized over a fifteen year period using the straight-line
method. See Note 10 regarding additional goodwill that may arise in the
future if the criteria for contingent payments is met.
(6) To eliminate interest expense related to debt not assumed.
(7) To reduce interest income based upon the assumption that the Company
earned an average of five percent (5%) per year on the short-term funds
used in the Acquisition.
(8) The amount of incremental income tax that would have resulted from the
historical income of P. R. Hoffman and the pro forma adjustments.
(9) Pro forma earnings per common share are computed using the modified
treasury stock method. This reflects the dilutive effect of the stock
warrant granted to the Company's investment bankers for their services
in connection with the acquisition. The average outstanding shares for
the calculation of fully diluted
F-19
<PAGE>
earnings per share were not materially different. In computing the
earnings per share pursuant to the modified treasury stock method, it
was assumed that the proceeds from the exercise of stock options and
warrants would first be used to reduce debt and the balance invested in
short-term government securities, resulting in an assumed increase in
net interest income. The result was that income after tax used in the
earnings per share calculations were increased by $146,000 and
$148,000, on a historical and pro forma basis, respectively.
(10) Contingent upon the criteria set-forth in the earnout formula,
additional payments to the Seller of up to $2 million may be required.
Such payments, if any, will be added to goodwill and amortized over the
remainder of the fifteen year amortization period. No contingent
consideration would have been accrued during the year covered by this
pro forma statement of operations because the earnings of P. R. Hoffman
reflected therein are less that than the $800,000 threshold. Assuming
that the maximum amount of contingent payments are earned during the
preceding five years, pursuant to the earnout formula, amortization
expense in the sixth through fifteenth years following the acquisition
would be increased by approximately $166,667 and net income would be
reduced by $93,333, or $ .01 per share.
F-20
<PAGE>
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
Historical
---------------------------- Ref Pro Forma Pro Forma
Amtech (1) Hoffman (1) # Adjustments Combined
------------ ------------ -- ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
------
CURRENT ASSETS
Cash and equivalents $ 1,439,920 $ 28,700 (2) ($ 1,368,714) $ 99,906
Short-term investments 2,239,354 -- (2) (1,267,966) 971,388
Accounts receivable, less an
allowance for doubtful accounts 3,457,520 1,127,401 -- 4,584,921
Inventories 693,350 1,047,630 (3) 139,761 1,880,741
Deferred income taxes 268,000 -- (4) 58,283 326,283
Prepaid expenses 52,120 13,187 -- 65,307
------------ ------------ ------------ ------------
Total current assets 8,150,264 2,216,918 (2,438,636) 7,928,546
PROPERTY, PLANT AND EQUIPMENT
Land, building and improvements 577,710 968,006 (5) (921,318) 624,398
Equipment and machinery 456,237 488,891 (5) (170,991) 774,137
Furniture and fixtures 640,704 89,087 (5) (26,538) 703,253
------------ ------------ ------------ ------------
1,674,651 1,545,984 (1,118,847) 2,101,788
Less- accumulated depreciation (680,541) (284,368) (5) 284,368 (680,541)
------------ ------------ ------------ ------------
994,110 1,261,616 (834,479) 1,421,247
OTHER ASSETS 59,799 -- (6) 699,947 759,746
------------ ------------ ------------ ------------
$ 9,204,173 $ 3,478,534 ($ 2,573,168) $ 10,109,539
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of
the pro forma balance sheet.
F-21
<PAGE>
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
AS OF MARCH 31, 1997
<TABLE>
<CAPTION>
Historical
---------------------------- Ref Pro Forma Pro Forma
Amtech (1) Hoffman (1) # Adjustments Combined
------------ ------------ -- ------------ ------------
<S> <C> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
CURRENT LIABILITIES
Accounts payable $ 1,203,494 $ 135,503 $ 0 $ 1,338,997
Current portion of long-term debt
and capital lease obligations -- 5,160 (7) (5,160) --
Accrued liabilities: -- -- -- --
Compensation and related taxes 399,233 79,606 -- 478,839
Warranty and installation expense 246,608 -- 246,608
Other accrued liabilities 186,718 60,108 -- 246,826
Income taxes payable 204,000 -- -- 204,000
------------ ------------ ------------ ------------
Total current liabilities 2,240,053 280,377 (5,160) 2,515,270
CAPITAL LEASE OBLIGATIONS
AND LONG-TERM DEBT 234,705 969,046 (7) (969,046) 234,705
ACCRUED PENSION LIABILITY -- 109,149 109,149
COMMITMENTS AND CONTINGENCIES --
STOCKHOLDERS' INVESTMENT
Preferred stock, none issued -- -- --
Common stock, $.01 par value 41,517 1,000 (8) (676) 41,841
Additional paid-in capital 7,118,008 204,561 (8) (139,885) 7,182,684
Additional paid in capital-warrants -- -- (9) 456,000 456,000
Cumulative currency translation adj (183,774) -- -- (183,774)
Retained earnings (deficit) (246,336) 1,914,401 (8) (1,914,401) (246,336)
------------ ------------ ------------ ------------
Total stockholders' investment 6,729,415 2,119,962 (1,598,962) 7,250,415
------------ ------------ ------------ ------------
$ 9,204,173 $ 3,478,534 ($ 2,573,168) $ 10,109,539
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part
of the pro forma balance sheet.
F-22
<PAGE>
Amtech Systems Inc. and Subsidiaries
Pro Forma Combined Balance Sheet
As Of March 31, 1997 (Unaudited)
Notes and Pro Forma Adjustments
(1) The historical balance sheets of P. R. Hoffman, as of June 30, 1997,
and Amtech, as of March 31, 1997, were used as the basis for the pro
forma combined balance sheet.
(2) Reflects the use of existing cash and short term investments to make
payments to the seller ($2,421,689), including the estimated
post-closing adjustment, and to pay estimated costs associated with the
transaction ($214,991).
(3) Reflects adjustment of inventory to fair value as of the purchase date.
(4) Records the deferred tax asset relating to certain liabilities which
are not yet deductible for income tax purposes.
(5) Reverses the net book value of land, building and equipment recorded in
the historical financial statements pursuant to a capital lease not
assumed by Amtech. The right to use these facilities has been secured
under a three year operating lease. See Note (7) below. This entry also
adjusts other fixed assets to their fair value as of the purchase date.
(6) To record the amount of the purchase price in excess of the fair value
of the assets acquired net of the liabilities assumed (i.e. goodwill).
(7) Eliminates debt, including capital lease obligations, not assumed under
the purchase agreement.
(8) Eliminates the P. R. Hoffman's equity accounts and records the issuance
of 32,822 shares of Amtech Common Stock to the seller. These shares
have been recorded at $65,000, their fair value, taking into
consideration the fact that these are unregistered shares subject to a
two (2) year lock-up, during which the shares can not be sold.
(9) Records the estimated fair value of the warrant to purchase 152,000
shares of Amtech Common Stock issued to the Company's investment
bankers as compensation for their services in connection with the
Acquisition. The warrant has an exercise price of $3 per common share
and expire June 30, 2002.
F-23
ARTHUR ANDERSEN
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independant public accountants, we hereby consent to the incorporation of our
report included in this Form 8-Ka, into the Company's previously filed
Registration Statements on Forms S-3 and Forms S-8 (File Numbers 333-09917,
333-10117, 333-09911 and 333-09909).
ARTHUR ANDERSEN LLP
Phoenix, Arizona,
September 4, 1997.
F-24
