SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q SB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended: September 30, 1995
Transition report under Section 13 or 15(d) of the Exchange Act.
For the transition period from _________________ to _______________
Commission file number: 0-11370
CerProbe Corporation
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(Exact Name of Small Business Issuer As Specified In Its Charter)
Delaware 86-0312814
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(State of Incorporation) (IRS Employee Identification Number)
600 South Rockford Drive, Tempe, Arizona 85281
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(Address of Principal Executive Offices) (Zip Code)
(602) 967-7885
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(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No
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4,095,851 Shares of Common Stock issued and outstanding as of November 13, 1995
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(Number of Shares of Common Stock Outstanding)
Traditional Small Business Disclosure Format (check one):
Yes No X
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<PAGE>
CERPROBE CORPORATION
(INDEX)
Page Number
-----------
Part I.
Financial Information
Balance Sheets -
at September, 30 1995 and December 31, 1994 3
Statements of Operations and Retained Earnings (Deficit)
- Nine and Three Months Ended September 30, 1995 4
and September 30, 1994
Statements of Cash Flows - Nine Months
Ended September 30, 1995 and September 30, 1994 5
Notes To Financial Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II
Other Information 14
<PAGE>
CERPROBE CORPORATION
BALANCE SHEETS
September 30, 1995 December 31
ASSETS (unaudited) 1994
------ ------------------ -----------
CURRENT ASSETS:
Cash and cash equivalents $ 243,785 $ 738,319
Trade accounts receivable, net of allowance
for doubtful accounts (Notes B & D) 3,773,765 2,201,712
Inventories (Notes C & D) 2,684,468 1,693,198
Deferred income taxes 102,875 93,974
----------- -----------
TOTAL CURRENT ASSETS 6,804,893 4,727,203
----------- -----------
PROPERTY AND EQUIPMENT (Notes D and E)
Manufacturing tools and equipment 4,335,394 3,056,849
Office furniture and equipment 1,707,487 839,521
Leasehold improvements 563,016 439,894
Construction in progress 420,285 41,620
Patents and technology 116,875 0
Computer software 39,775 39,775
----------- -----------
7,182,832 4,417,659
Less accumulated depreciation and amortization (3,173,267) (2,271,579)
----------- -----------
4,009,565 2,146,080
----------- -----------
GOODWILL, net of amortization 1,989,720 0
OTHER ASSETS 355,817 142,090
----------- -----------
TOTAL ASSETS $13,159,995 $7,015,373
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Trade accounts payable $1,200,197 $443,559
Accrued payroll and related taxes 742,802 204,297
Accrued income taxes 40,422 376,442
Other accrued expenses 150,506 32,907
Grant/Loan Scotland 10,867 3,602
Deferred revenue 37,672 46,656
Current portion of long-term debt (Note E) 245,460 100,312
----------- -----------
TOTAL CURRENT LIABILITIES 2,427,926 1,207,775
----------- -----------
DEFERRED RENT 21,532 35,374
LONG TERM DEFERRED REVENUE 39,385 58,554
LONG TERM DEBT (Note E) 609,702 195,716
SUBORDINATED DEBENTURES (Note E) 595,000 595,000
STOCKHOLDERS' EQUITY:
Common stock, par value $.05 per share:
Authorized, 10,000,000 shares;
Issued and outstanding 4,095,851 and 3,223,351 204,792 161,167
Additional paid-in-capital 6,512,240 3,685,432
Foreign currency translation (6,341) 12,138
Retained earnings 2,755,759 1,064,217
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 9,466,450 4,922,954
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,159,995 $ 7,015,373
=========== ===========
<PAGE>
<TABLE>
CERPROBE CORPORATION
STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
(Unaudited)
<CAPTION>
Nine Months Ended Sept 30 Three Months Ended Sept 30
------------------------- --------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES $ 17,968,454 $ 10,111,136 $ 6,834,260 $ 3,376,850
COST OF GOODS SOLD 9,390,742 6,164,262 3,551,627 2,366,434
------------ ------------ ------------ ------------
GROSS MARGIN 8,577,712 3,946,874 3,282,633 1,010,416
------------ ------------ ------------ ------------
EXPENSES:
Engineering and product development 529,068 316,498 199,745 112,510
Selling, general and administrative 5,110,197 2,387,087 2,197,764 837,813
------------ ------------ ------------ ------------
5,639,265 2,703,585 2,397,509 950,323
------------ ------------ ------------ ------------
OPERATING INCOME 2,938,447 1,243,289 885,124 60,093
------------ ------------ ------------ ------------
OTHER REVENUE AND (EXPENSES):
Interest expense (133,976) (109,826) (50,042) (38,055)
Other income 154,071 78,328 39,076 53,920
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 2,958,542 1,211,791 874,158 75,958
PROVISION FOR INCOME TAXES 1,267,000 420,000 362,000 30,000
------------ ------------ ------------ ------------
NET INCOME 1,691,542 791,791 512,158 45,958
DIVIDENDS PAID (89,477) 0
RETAINED EARNINGS (DEFICIT), beginning of 1,064,217 (59,129) 2,243,601 597,227
------------ ------------ ------------ ------------
RETAINED EARNINGS (DEFICIT), end of period $ 2,755,759 $ 643,185 $ 2,755,759 $ 643,185
============ ============ ============ ============
NET INCOME PER COMMON EQUIVALENT SHARE
PRIMARY:
NET INCOME PER SHARE $ 0.42 $ 0.23 $ 0.12 $ 0.01
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING 4,022,993 3,381,526 4,405,372 3,377,319
============ ============ ============ ============
FULLY DILUTED:
NET INCOME PER SHARE $ 0.36 $ 0.20 $ 0.10 $ 0.01
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON AND COMMON EQUIVALENT
SHARES OUTSTANDING 4,708,352 3,995,165 4,992,874 4,006,327
============ ============ ============ ============
</TABLE>
<PAGE>
CERPROBE CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended September 30
------------------------------
1995 1994
---- ----
OPERATING ACTIVITIES:
Net income $ 1,691,542 $ 745,833
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 485,502 189,687
Loss (Gain) on sale of fixed assts 6,444 (50)
Deferred income taxes (8,901)
Changes in operating assets and liabilities:
Trade accounts receivable (808,701) (533,898)
Inventories (840,603) (232,179)
Other assets (322,438) 31,263
Trade accounts payable and other
accrued expenses 504,569 226,259
Accrued payroll and related taxes 440,384 17,676
Accrued income taxes (336,020) 264,180
Deferred rent and other revenue (34,730) (13,539)
----------- -----------
Net cash provided by operating activities 777,048 695,232
----------- -----------
INVESTING ACTIVITIES:
Capital expenditures (1,187,269) (728,123)
Cost incurred in Fresh Test
Technology acquisition (402,865)
Cash acquired in purchase of
Fresh Test Technology 321,167
Proceeds from sale of fixed assets 43,613 50
----------- -----------
Net cash used in investing activities: (1,225,354) (728,073)
----------- -----------
FINANCING ACTIVITIES:
Dividends paid (89,477)
Proceeds from issuance of long-term debt (88,983)
Principal payments on long-term debt
and capital leases (253,692)
Net proceeds from issuance of common stock 207,464 6,379
----------- -----------
Net cash used in financing activities (46,228) (172,081)
----------- -----------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (494,534) (204,922)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 738,319 509,446
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 243,785 $ 304,524
=========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Property acquired under capital leases $ 547,613
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION :
Interest paid $ 110,263 $ 88,244
=========== ===========
Income taxes paid $ 1,679,876 $ (10,381)
=========== ===========
Issuance of stock for purchase of
assets and assumption of liabilities of
Fresh Test Technology $ 2,662,969
=========== ===========
<PAGE>
CERPROBE CORPORATION
--------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NINE AND THREE MONTH PERIODS ENDING SEPTEMBER 30, 1995
------------------------------------------------------
A. NOTE TO FINANCIAL STATEMENTS (UNAUDITED)
----------------------------------------
The balance sheet as of September 30, 1995, the statements of
operations for the nine and three month periods ended September 30,
1995 and September 30, 1994, and the statements of cash flows for the
nine month periods ended September 30, 1995 and September 30, 1994 have
been prepared by the Company without audit. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows for all periods presented have
been made.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's 1994
Annual Report. The results of operations of the interim periods are not
necessarily indicative of the results to be obtained for the entire
year.
B. ALLOWANCE FOR DOUBTFUL ACCOUNTS
-------------------------------
The allowance for doubtful accounts at September 30, 1995 and December
31, 1994 was $74,000 and $23,000, respectively.
C. INVENTORIES
-----------
Inventories are stated at the lower of cost (determined on the
first-in, first-out method) or market and consist of the following:
September 30, December 31,
1995 1994
------------ -----------
Raw Materials $ 1,255,257 $ 777,199
Work-In-Process 1,576,211 967,999
Reserve for Obsolete Inventory (147,000) (52,000)
------------ -----------
Total $ 2,684,468 $ 1,693,198
============ ===========
D. NOTES PAYABLE
-------------
On June 12, 1995, CerProbe Corporation (the "Company") renewed a loan
agreement with First Interstate Bank. The loan agreement provides up to
$750,000 in revolving credit for accounts receivable financing.
The revolving credit agreement expires April 27, 1996. The revolving
credit agreement is collaterized by accounts receivable, inventories,
equipment, contract rights and intangibles. At September 30, 1995,
there was no amount outstanding under this agreement.
The interest rate under the revolving credit agreement is 0.25 percent
above the First Interstate Bank index rate which was 8.75% at September
30, 1995.
On April 3, 1995, due to the acquisition of Fresh Test Technology
Corporation ("Fresh Test"), the Company acquired three notes payable.
One note is for an exclusive license for probe card technology which
provides for monthly payments of $2,500 per month. At September 30,
1995, the outstanding balance of this note was $15,000. The other notes
are payable to a former officer and director of Fresh Test.
These two notes were paid in full on July 17, 1995.
E. LONG-TERM DEBT AND COMMITMENTS
------------------------------
In March and April 1991, the Company issued $1,000,000 in aggregate
principal amount of Convertible Subordinated Debentures. The Debentures
are convertible into shares of the Company's Common Stock at a
conversion price equal to $1.00 per share, subject to adjustment. To
assist the Company in meeting the minimum stockholders' equity
requirement for listing on Nasdaq, certain holders of the Debentures
agreed to convert $360,000 in principal amount of the Debentures into
360,000 shares of the Company's Common Stock in October 1992. On
September 3, 1993, $5,000 in principal amount of the Debentures was
converted into 5,000 shares of the Company's Common Stock. On September
21, 1994, an additional $40,000 in principal amount of the Debentures
was converted into 40,000 shares of the Company's Common Stock.
Accordingly, $595,000 in principal amount of the Debentures was
outstanding at September 30, 1995, $495,000 of which is due in December
1996 ($480,000 of which bears interest at 12 1/2% and $15,000 of which
bears interest at 25%, payable semi-annually in June and December of
each year) and the remaining $100,000 of which is due in March 1996 and
bears interest at 25% payable quarterly in January, April, July and
October of each year. The proceeds from the sale of the Debentures were
used by the Company to refinance $440,000 of short term indebtedness,
purchase capital equipment, and provide additional working capital.
In May 1993, the Company signed a Lease Agreement with Norwest
Equipment Finance, Inc. The agreement provides up to $200,000 on open
credit for a term of 36 months for equipment leasing. The interest rate
is 7.785%. In accordance with this agreement, in 1993, various
manufacturing equipment with an aggregate cost of $160,798 was leased
from Norwest Equipment Finance, Inc. At September 30, 1995, there was
no long term portion.
In June 1994, the Company signed a Lease Agreement with First
Interstate Bank of Arizona ("First Interstate"). The agreement provides
up to $2,000,000 on open credit for a term of 11 months for equipment
leasing. In accordance with this agreement, on March 15, 1995, the
Company leased various manufacturing equipment with an aggregate cost
of $95,200 from First Interstate. The interest rate for this lease is
9.18%. On September 30, 1995, the long term portion of this lease was
$70,540. In addition, on April 11, 1995, the Company leased additional
manufacturing equipment with an aggregate cost of $171,255 from First
Interstate purchased under a second lease. The interest rate for the
second lease is 8.96%. The long term portion of the second lease was
$129,750 on September 30, 1995.
In June 1995, the Company renewed the Lease Agreement with First
Interstate. The new agreement provides up to $1,000,000 on open credit
for a term of 11 months for equipment leasing. In accordance with this
agreement, on July 24, 1995, the Company leased various equipment with
an aggregate cost of $281,157.96 from First Interstate. The interest
rate on this lease is 7.54%. On September 30, 1995, the long term
portion of this lease was $225,930.
In August 1994, the Company signed a Lease Agreement with PFC, Inc. The
agreement provides up to $1,000,000 on open credit for a term of 11
months for equipment leasing. The interest rate is 8.777%. In
accordance with this agreement, on August 9, 1994, the Company leased
various manufacturing equipment with an aggregate cost of $190,233 from
PFC, Inc. On September 30, 1995, the long term portion of the PFC, Inc.
lease was $118,890.
On September 17, 1995 the Company signed a sublease for a portion of
the Santa Clara facility to Advanced Point Corporation. The sublease is
for four years and nine months commencing October 1, 1995 and ending
July 31, 2002. On September 19, 1995, the Company signed a sublease for
the remaining portion of the Santa Clara facility to Silicom
Electronics Inc. The sublease is for two years and one month commencing
on October 1, 1995 and ending November 30, 1997.
The Company moved the Santa Clara facility to San Jose, California. On
July 18, 1995, the Company signed a new building lease for the San
Jose, California facility for seven years and one month commencing on
August 1, 1995 ending on August 30, 2002.
On June 30, 1995, the Company signed a new building lease for the
Westboro, Massachusetts facility for five years commencing on July 1,
1995 and ending June 30, 2000.
On June 29, 1995, the Company signed a month-to-month lease for the
Colorado customer service office. The lease provides that either the
landlord or the tenant, without cause or approval of the other party,
may terminate this lease upon 30 days written notice.
On June 23, 1995, the Company signed a letter of intent to lease the
building for the Singapore facility for three years commencing on
September 3, 1995 and ending on September 2, 1998.
Pursuant to the acquisition of Fresh Test Technology on April 3, 1995,
the Company acquired a building lease for the Chandler, Arizona
facility for two years commencing on November 1, 1993 and ending
October 31, 1995. This lease was subsequently amended for an additional
one year and two months commencing on November 1, 1995 and ending
December 31, 1996. The Company leased additional building space for the
Chandler, Arizona facility for five years commencing on December 1,
1993 and ending on November 30, 1998. The Company leased additional
building space for three years commencing on October 8, 1990 and ending
on October 7, 1993. This lease was amended for an additional three
years commencing on November 3, 1992 and ending on November 2, 1995.
This facility is currently subleased to another tenant for twenty
months commencing on February 1, 1994 and ending on October 31, 1995.
The Company's leasing obligation expired October 31, 1995 and the
Company has no intention of renewing this lease.
F. PRO FORMA DATA - FRESH TEST TECHNOLOGY ACQUISITION
--------------------------------------------------
Nine Months Three Months
Ended Sept. 30 Ended Sept. 30
1995 1994 1995 1994
--------------------- ---------------------
Net sales 19,446,606 13,429,844 6,834,260 4,438,356
Net income 1,871,418 742,733 512,158 104,774
Primary earnings
per share .46 .22 .12 .03
Fully diluted earnings
per share .40 .19 .10 .03
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
GENERAL
Cerprobe Corporation designs and manufactures a family of products used in
electronic screening and verification of integrated circuits (IC) and hybrid
substrates (MCM) for the semiconductor industry. This family of products
includes probe cards which range in price from $500 to $20,000,
performance/Device Under Test (DUT) boards which range in price from $500 to
$8,000, and electro-mechanical systems (interface products) which range in price
from $10,000 to $60,000.
Cerprobe was founded in 1976. Following a change in the Company's management
team in 1990, the Company has experienced significant internal expansion, with
revenues exceeding $14 million in 1994. Cerprobe has doubled its share of the
domestic probe card market during the past five years to become a major supplier
of probe cards in the United States and on a worldwide basis. Cerprobe began
expanding its international market during 1994 by opening a full service
manufacturing and repair facility in Scotland to serve Europe. This facility is
now fully operational. Plans are in place to open offices in the Asia Pacific
area during 1995. The Company operates manufacturing facilities in Tempe and
Chandler, Arizona; San Jose, California; Austin. Texas; and Westboro,
Massachusetts, and maintains sales offices in Beaverton, Oregon; Colorado
Springs, Colorado; and Boca Raton, Florida. Product sales are made both by
Company employed sales personnel and independent distributors.
On April 3, 1995, the Company completed the acquisition of Fresh Test Technology
Corporation ("Fresh Test"). In connection with the acquisition, Cerprobe issued
712,500 shares of its common stock to the shareholders of Fresh Test. Fresh
Test, based in Chandler, Arizona, was founded in 1987 and specializes in the
design and manufacturing of controlled impedance, high frequency, ATE interface
boards and systems for testing digital, mixed signals and analog integrated
circuits. The Company believes that this acquisition allowed the combination of
product lines and the consolidation of engineering expertise.
THIRD QUARTER OF 1995 AND 1994 COMPARISONS
- - RESULTS OF OPERATIONS
Net sales for the third quarter of 1995 were $6,834,260, an increase of 102%
over net sales for the third quarter of 1994 of $3,376,850. Net sales for the
first nine months of 1995 were $17,968,454, an increase of 78% over net sales
for the first nine months of 1994 of $10,111,136. The increase in net sales
reflects a continuation of higher order rates for the Company's probe card
products and the contribution from the recent acquisition of Fresh Test.
Gross margin for the third quarter of 1995 was 48% of sales compared to 30% of
sales for the comparable period in 1994. For the first nine months of 1995, the
gross margin was 48% of sales compared to 39% of sales for the first nine months
of 1994. The increase in gross margin is primarily a result of the increase in
net sales and the positive effect of fixed manufacturing costs being spread over
a larger revenue base.
Engineering and product development expenses increased 78% for the third quarter
of 1995 over the third quarter of 1994. For the first nine months of 1995,
engineering and product development expenses increased 67% over the comparable
period for 1994. This increase represents a controlled expansion of research and
development efforts to pursue the development of new integrated circuit testing
systems for the future.
Selling, general and administration (SG&A) expenses for the third quarter of
1995 were $2,197,764, an increase of 162% compared with $837,813 for the
comparable period in 1994. SG&A expenses for the first nine months of 1995 were
$5,110,197, an increase of 114% compared to $2,387,087 for the comparable period
in 1994. The increase in total SG&A
expenses resulted primarily from the increase in fixed general and
administrative costs due to the Company's continued facility expansion and the
acquisition of Fresh Test.
Operating income for the third quarter of 1995 was $885,124, an increase of
1,373% compared to $60,093 for the third quarter of 1994. Operating income for
the first nine months of 1995 was $2,938,447, an increase of 136% compared with
$1,243,289 for the first nine months of 1994. The increase in operating income
resulted primarily from the increase in net sales and an increase in the gross
margin.
Interest expense for the third quarter of 1995 was $50,042, an increase of 31%
over the comparable period in 1994. Interest expense for the first nine months
of 1995 was $133,976, an increase of 22% over the comparable period in 1994. The
increase in interest expense is primarily attributable to the increase in lease
equipment financing and the additional debt financing related to the acquisition
of Fresh Test.
Other income for the third quarter of 1995 was $39,076, a decrease of 27% over
the comparable period in 1994. This decrease was primarily due to the royalty
income recognition in 1994 that did not occur in the third quarter of 1995.
Other income for the first nine months of 1995 was $154,071, an increase of 97%
over the comparable period in 1994. This increase is primarily due to maximizing
available vendor discounts.
Income before taxes for the third quarter of 1995 was $874,158, an increase of
1,050% over the comparable period in 1994. Income before taxes for the first
nine months of 1995 was $2,958,542, an increase of 144% over the comparable
period in 1994. Net income for the third quarter of 1995 was $512,158, an
increase of 1,014% over the comparable period in 1994. Net income for the first
nine months of 1995 was $1,691,542, an increase of 114% over the comparable
period in 1994. Once again, the increase is primarily due to the increase in net
sales and the increase in gross margin.
The Company has used all of its available loss carryforwards and has begun to
feel the full impact of the income tax rates. The current estimated income tax
rate in the U.S. is 37.7%; on a consolidated basis, however, it is 42.8% due to
the nondeductible tax loss from the Scotland subsidiary.
For the nine months ended September 30, 1995, the Company's full service
manufacturing facility in Scotland experienced a net loss of $403,323, with no
resulting tax benefit, which translates into a $.10 primary and $.09 fully
diluted effect on earnings per share for the nine months ended September 30,
1995. The Company expects the Scottish facility to continue to have some
negative impact on earnings through the fourth quarter of 1995, but less than
that experienced in 1994.
Cerprobe Europe Ltd., continued production, training and the build up of
inventory in the third quarter of 1995. Cerprobe Europe Ltd. accounted for
revenues of $341,939 year-to-date. Capital and training grants from the local
Economic Development Agency helped defray start up costs for this subsidiary and
are being recognized as income over 36 months.
LIQUIDITY AND CAPITAL RESOURCES
Working capital increased from $3,519,428 at December 31, 1994 to $4,376,967 at
September 30, 1995. The current ratio decreased from 3.9 at December 31, 1994 to
2.8 at September 30, 1995, primarily as a result of the purchases of equipment,
the increase in accounts payable and other accrued expenses and an increase in
the notes payable from the acquisition of Fresh Test. These increases are due to
the continued planned expansion.
On June 12, 1995, the Company signed a Loan Agreement with First Interstate.
First Interstate's Loan Agreement provides up to $750,000 in revolving credit
for accounts receivable financing. The interest rate on the revolving credit
agreement is 0.25 percentage points above First Interstate's index rate. As of
September 30, 1995, there was no amount outstanding.
The Company entered into an equipment financing arrangement with Norwest
Equipment Finance in May 1993. The Company has leased equipment valued at
$160,798 for a term of 36 months. The interest rate is 7.785%. At the end of the
lease term, the Company will purchase the equipment for $1.00.
The Company entered into an equipment financing arrangement with First
Interstate in June 1994. On March 15, 1995, the Company leased equipment valued
at $95,200 for a term of 60 months. The interest rate is 9.18%. At the end of
the lease term, the Company will purchase the equipment for $1.00. On June 12,
1995, the Company renewed the Lease Agreement with First Interstate. The Company
leased additional equipment valued at $281,158 for a term of 60 months, the
interest rate is 7.54%. At the end of the lease term, the Company will purchase
the equipment for $1.00.
The Company entered into an equipment financing arrangement with PFC, Inc. in
August 1994. The Company leased equipment valued at $190,233 for a term of 60
months. The interest rate is 8.777%. At the end of the lease term, the Company
will purchase the equipment for $1.00.
On July 7, 1994, CerProbe Europe Ltd. signed a month-to-month building lease for
the East Kilbride, Scotland facility. In November 1994, the Company approved a
formal lease for five years commencing on August 28, 1994 and ending August 27,
1999. The lease provides that unless the tenant gives a six week notice prior to
the end of the term, the lease will continue to run year to year.
In 1994, the Company received a grant from Locate in Scotland, an economic
development agency of the British government. The Company has already met 2 of
the 3 tiers with respect to the grant and has received 70,000 pounds
(approximately $110,000 at the exchange rate in effect on September 30, 1995).
The receipt of the funds pursuant to the grant has helped the Company defray
start-up expenses in connection with establishing this facility.
On June 23, 1995, the Company signed a letter of intent to lease the building
for its Singapore facility for three years commencing on September 3, 1995 and
ending on September 2, 1998.
The Company intends to establish and operate a manufacturing repair and sales
facility at this location. The Company estimates that up to $400,000 will be
used to acquire necessary equipment and to modify the facility to meet the
Company's specifications.
The coverage ratio of Total Debt to Net Worth was .42 at December 31, 1994
compared to .39 at September 30, 1995. This decrease indicates longer term
financial security and a greater flexibility to borrow in the future. The
Company believes that its existing line of credit and lease line combined with
cash generated from operations will be sufficient to meet the Company's
currently anticipated cash requirements for at least the next twelve months.
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
a. None
Item 2 Changes in Securities
a. None
Item 3 Defaults on Senior Securities
a. None
Item 4 Submission of Matters to Vote of Security Holders
a. None
Item 5 Other Information
a. None
Item 6 Exhibits and Reports on Form 8K
a. Exhibits required by Item 601 of Regulation S-K
1. None
b. Reports on Form 8-K
1. Form 8-K/A3 filed on October 12, 1995 to report
the acquisition of Fresh Test Technology. The
following financial statements were filed with
the form 8-K/A3:
Pro Forma Condensed Combined Statements of
Earnings (unaudited) for Year Ended December
31, 1994.
Pro Forma Condensed Combined Balance Sheet
(unaudited) as of March 31, 1995.
Pro Forma Condensed Combined Statement of
Earnings (unaudited) for the Three Months Ended
March 31, 1995.
Notes to Pro Forma Condensed Combined Financial
Statements.
Fresh Test Technology Corporation Financial
Statements as of March 31, 1994 and 1993.
Fresh Test Technology Corporation Financial
Statements as of March 31, 1995 and 1994.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CERPROBE CORPORATION
C. Zane Close
-------------------------
C. Zane Close
President, Chief Executive Officer
November 13, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from
the Balance Sheet at September 30, 1995 and the Statements of
Operations and Retained Earnings (deficit) and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<EXCHANGE-RATE> 1
<CASH> 243,785
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 2,684,468
<CURRENT-ASSETS> 6,804,893
<PP&E> 7,182,832
<DEPRECIATION> 3,173,267
<TOTAL-ASSETS> 13,159,995
<CURRENT-LIABILITIES> 2,427,926
<BONDS> 1,204,702
<COMMON> 204,792
0
0
<OTHER-SE> 2,550,967
<TOTAL-LIABILITY-AND-EQUITY> 13,159,995
<SALES> 17,968,454
<TOTAL-REVENUES> 17,968,454
<CGS> 9,390,742
<TOTAL-COSTS> 9,390,742
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,958,542
<INCOME-TAX> 1,267,000
<INCOME-CONTINUING> 2,958,542
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,691,542
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.36
</TABLE>
