SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 15, 1997
CERPROBE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-11370 86-0312814
- ------------------------------ --------------------- ---------------------
(State or other (Commission File No.) (IRS Employer ID No.)
jurisdiction of incorporation)
600 Rockford Drive, Tempe, Arizona 85281
----------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (602) 967-7885
<PAGE>
CERPROBE CORPORATION
CURRENT REPORT ON
FORM 8-K/A
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Acquisition of Silicon Valley Test & Repair, Inc.
On January 15, 1997 (the "Closing Date"), pursuant to an Agreement of
Merger and Plan of Reorganization (the "Agreement"), by and among Cerprobe
Corporation, a Delaware corporation, ("Registrant"), EMI Acquisition, Inc., a
Delaware corporation and wholly-owned subsidiary of Registrant ("Acquisition"),
Silicon Valley Test & Repair, Inc., a California corporation ("SVTR"), and
William E. Mayer and Carol Mayer, husband and wife (together, "Mayer"),
Registrant acquired SVTR by merger of SVTR with and into Acquisition. The
purchase price paid by Registrant under the Agreement consisted of $2,753,217 in
cash and the issuance of 300,000 shares of the common stock of the Registrant,
of which 125,000 shares have been placed in escrow as a source of recourse for
certain indemnification claims Registrant and Acquisition may have against Mayer
pursuant to the Agreement. Under the Agreement, Mayer may receive up to an
additional $500,000 in cash and up to 50,000 additional shares of Registrant's
common stock if Acquisition achieves certain sales and operating profit targets
for calendar year 1997.
The amount and nature of the purchase price were determined by
arms-length negotiations among the parties. The cash used in the transaction was
provided from the proceeds of a private placement of convertible preferred stock
issued by the Registrant on January 18, 1996.
ITEM 7. FINANCIAL STATEMENTS, UNAUDITED PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(a) Financial Statements of Business Acquired
Independent Auditors' Report
Balance Sheet as of December 31, 1996
Statement of Operations for the Year Ended December 31, 1996
Statement of Cash Flows for the Year Ended December 31, 1996
Notes to Financial Statements
(b) Unaudited Pro Forma Financial Information
Unaudited Pro Forma Combined Condensed Balance Sheet as of
December 31, 1996
Unaudited Pro Forma Combined Condensed Statement of Operations
for the Year Ended December 31, 1996
Notes to Unaudited Pro Forma Combined Condensed Financial
Statements
2
<PAGE>
(c) Exhibits
Exhibit No. Description of Exhibit
- ----------- ----------------------
1 Agreement of Merger and Plan of Reorganization dated January
15, 1997, by and among Registrant, EMI Acquisition, Inc.,
Silicon Valley Test & Repair, Inc., and William and Carol
Mayer*
2 Registration Rights Agreement dated January 15, 1997, by and
between Registrant and William and Carol Mayer*
3 Employment Agreement dated January 15, 1997, by and between
Registrant and William and Carol Mayer*
*Previously Filed
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.
CERPROBE CORPORATION
By:/s/ Randal L. Buness
-----------------------
Randal L. Buness
Vice President, Chief Financial
Officer, Secretary, and Treasurer
Dated as of: March 28, 1997
3
<PAGE>
Notes to Unaudited Pro Forma Combined Condensed Financial Statements
Note 1. General Information
The Unaudited Pro Forma Combined Condensed Balance Sheet is presented assuming
the merger occurred on December 31, 1996. The Unaudited Pro Forma Combined
Condensed Statement of Operations is presented as if the merger occurred on
January 1, 1996.
The Unaudited Pro Forma Combined Condensed Financial Statements reflect the
payment of $2,753,217 in cash and the issuance of 300,000 shares of Cerprobe
common stock, $.05 par value. The acquisition has been recorded as a purchase
transaction in accordance with generally accepted accounting principles and,
accordingly, SVTR's assets and liabilities are recorded at their estimated fair
values at the date of the merger.
Certain reclassifications of SVTR balances have been made to conform to the
Cerprobe reporting format.
Note 2. Pro Forma Adjustments
(a) The purchase price has been allocated to the assets acquired and
liabilities assumed as follows (in thousands):
Purchase price:
Cash consideration $ 2,753
Common stock 15
Additional paid in capital 2,849
Acquisition costs 98
---------
Total $ 5,715
Assets acquired and liabilities assumed:
Working capital $ 183
Fixed assets 652
Other assets 185
Purchased research and development 5,664
Liabilities assumed (969)
--------
Total $5,715
A 33% discount on the value of Cerprobe common stock from its market value of
$14.25 per share on the day immediately preceding the date of announcement of
the merger has been recorded due to issuance of Restricted Stock that will not
be registered under the Securities Act of 1993, as amended or any state
securities act and is subject to Rule 144 promulgated under the 1933 Act.
The Company performed a valuation analysis of all research and development
projects in process that had not yet been completed or for which the resulting
product was not yet commercialized. The 10 projects that were identified could
be utilized in future production. The Company estimated what the cost to
complete the product would be, and once completed, what the expected revenues as
well as direct costs of production would be to ascertain the incremental profit
margin of this product if and when it was completed. A risk assessment was then
made of each of these products to ascertain the risk of product completion,
product commercialization and market demand in order to complete the valuation
of the product. The projected future revenues were risk weighted and
4
<PAGE>
then the ultimate incremental after tax discounted cash flow was discounted with
a present value factor of 25%. The valuation of these potential products is
$5,664,000. The Company believes that these products do not have any future
alternative use because if they are not finished and brought to ultimate
completion, they have no other value. However, based upon their current state
which is not yet at technological feasibility or commercially viable stage, they
do have a value in assessing the overall valuation of SVTR. Since the products
are not currently deriving revenue and not until the products are completed
would they derive revenue, the company believes that these products have no
separate economic value and therefore, should be written off as research and
development costs immediately upon the acquisition of SVTR. Accordingly, these
costs have been charged to operations as of the date of consummation of the
merger.
Note 3. Unaudited Pro Forma Net Income Per Share
The Unaudited Pro Forma Combined Condensed Statement of Operations for Cerprobe
and SVTR have been prepared as if the merger was completed on January 1, 1996.
The unaudited pro forma combined net income per common and common equivalent
share is based on the weighted average number of common and common equivalent
shares of Cerprobe common stock after giving effect to the issuance of 300,000
shares to SVTR in connection with the merger.
5
<PAGE>
CERPROBE CORPORATION
PRO FORMA COMBINED CONDENSED BALANCE SHEET
December 31, 1996
Unaudited
(In Thousands)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
Cerprobe SVTR Adjustments Combined
-------- ---- ----------- --------
<S> <C> <C> <C> <C>
Assets
Current Assets
Cash and cash equivalents $ 5,565 $ 154 $ (2,753)a $ 2,966
Accounts receivables, net 5,564 1,581 7,145
Inventories 3,863 3,295 7,158
Other current assets 1,043 375 (250)c 1,168
------------- ----------- ---------------- ---------------
Total current assets 16,035 5,405 (3,003) 18,437
Property and equipment, net 11,446 694 (158)b 11,982
Other assets 3,930 228 (283)b 3,875
------------- ----------- ---------------- ---------------
$ 31,411 $ 6,327 $ (3,444) $ 34,294
============= =========== ================ ===============
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 2,739 $ 1,455 $ $ 4,194
Accrued liabilities 1,600 998 2,598
Current portion of long-term debt 1,793 3,155 (250)c 4,698
------------- ----------- ---------------- ---------------
Total current liabilities 6,132 5,608 (250) 11,490
Long-term debt, less current portion 1,742 275 2,017
Other liabilities 394 50 444
------------- ----------- ---------------- ---------------
Total liabilities 8,268 5,933 (250) 13,951
Minority interest in net assets of
consolidated subsidiaries 13 - 13
Stockholders' equity
Preferred stock - - -
Common stock 301 10 5 a,c 316
Additional paid-in capital 20,652 - 2,849 a 23,501
Retained earnings (deficit) 2,106 384 (6,048) b,c (3,558)
Cumulative translation adjustment 71 - 71
------------- ----------- ---------------- ---------------
Total stockholders' equity 23,130 394 (3,194) 20,330
------------- ----------- ---------------- ---------------
Total liabilities and stockholders'
equity $ 31,411 $ 6,327 $ (3,444) $ 34,294
============= =========== ================ ===============
</TABLE>
a To record the disbursement of cash and the issuance of common stock for the
purchase of SVTR.
b To record the assets acquired and the liabilities assumed at their fair
value at the date of acquisition considering the in-process research and
development write-off.
c To record intercompany eliminations.
See accompanying notes to pro forma combined condensed financial statements.
<PAGE>
CERPROBE CORPORATION
PRO FORMA COMBINED CONDENSED
STATEMENT OF OPERATIONS
Year ended December 31, 1996
Unaudited
(In thousands, except per share data)
<TABLE>
<CAPTION>
Cerprobe* Pro Forma Pro Forma
Corporation SVTR Adjustments Combined
----------- ---- ----------- --------
<S> <C> <C> <C> <C>
Net sales $ 47,732 $ 14,617 $ 62,349
Costs of goods sold 27,893 11,541 39,434
---------------- ---------------- ---------------- ---------------
Gross margin 19,839 3,076 - 22,915
Expenses:
Selling, general and administrative 13,124 2,939 16,063
Engineering and product development 903 549 1,452
Purchased research and development 4,584 - $ 5,664 10,248
---------------- ---------------- ---------------- ---------------
Total expenses 18,611 3,488 5,664 27,763
---------------- ---------------- ---------------- ---------------
Operating Income 1,228 (412) (5,664) (4,848)
Other income (expense):
Interest income 354 - 354
Interest expense (222) (320) (542)
Other income, net 247 13 260
---------------- ---------------- ---------------- ---------------
Total other income (expense): 379 (307) - 72
---------------- ---------------- ---------------- ---------------
Income (loss) before income taxes
and minority interest 1,607 (719) (5,664) (4,776)
Minority interest share of loss 95 95
---------------- ---------------- ---------------- ---------------
Income (loss) before income taxes 1,702 (719) (5,664) (4,681)
Provision for income taxes (2,884) 295 (2,589)
---------------- ---------------- ---------------- ---------------
Net income (loss) $ (1,182) $ (424) $ (5,664) $ (7,270)
================ ================ ================ ===============
Net income (loss) per common and common equivalent share
Primary (0.26) (1.49)
Weighted average number of common and
common equivalent shares outstanding 4,579,598 4,879,598
</TABLE>
*Includes the operations of CompuRoute, Inc., a subsidiary of Cerprobe
Corporation acquired December 27, 1996. The Statement of Operations assumes that
the merger occurred on January 1, 1996.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Financial Statements
December 31, 1996
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholder
Silicon Valley Test & Repair, Inc.:
We have audited the accompanying balance sheet of Silicon Valley Test & Repair,
Inc. as of December 31, 1996 and the related statements of operations and
retained earnings, and cash flows for the year 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 audit.
We conducted our audit 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 audit provides 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 Silicon Valley Test & Repair,
Inc. as of December 31, 1996 and the results of its operations and its cash
flows for the year then ended in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
Phoenix, Arizona
February 7, 1997
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Balance Sheet
December 31, 1996
<TABLE>
Assets
------
<S> <C>
Current assets:
Cash $ 154,340
Accounts receivable 1,580,889
Inventories 3,295,238
Income taxes receivable 267,204
Deferred tax assets 94,690
Other current assets 12,440
------------------
Total current assets 5,404,801
Property and equipment, net 694,679
Other assets 227,736
------------------
Total assets $ 6,327,216
==================
Liabilities and Stockholder's Equity
------------------------------------
Current liabilities:
Accounts payable $ 1,455,108
Accrued expenses 998,138
Line of credit 1,927,266
Current portion of notes payable and capital lease obligations 1,119,050
Due to affiliated company 108,672
------------------
Total current liabilities 5,608,234
Notes payable and capital lease obligations, less current portion 33,187
Note payable, stockholder 241,022
Deferred tax liability 50,490
------------------
Total liabilities 5,932,933
------------------
Commitments and contingencies
Stockholder's equity:
Common stock; no par value; 10,000,000 shares authorized, 100,000 shares
issued and outstanding 10,000
Retained earnings 384,283
------------------
Total stockholder's equity 394,283
------------------
Total liabilities and stockholder's equity $ 6,327,216
==================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Statement of Operations and Retained Earnings
Year ended December 31, 1996
<TABLE>
<S> <C>
Net sales $ 14,617,369
Cost of goods sold 11,541,075
------------------
Gross margin 3,076,294
------------------
Operating expenses:
Research and development 548,749
Marketing and selling 1,312,020
General and administrative 1,627,687
------------------
Total operating expenses 3,488,456
------------------
Operating loss (412,162)
------------------
Interest expense (306,715)
------------------
Loss before income taxes (718,877)
Income tax benefit 295,000
------------------
Net loss $ (423,877)
Retained earnings, beginning of year 808,160
------------------
Retained earnings, end of year $ 384,283
==================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Statement of Cash Flows
Year ended December 31, 1996
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss $ (423,877)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 156,186
Changes in operating assets and liabilities:
Accounts receivable (283,970)
Inventories (667,704)
Income taxes receivable (688,214)
Other assets (244,773)
Accounts payable 428,559
Accrued expenses 476,528
------------------
Net cash used in operating activities (1,247,265)
------------------
Cash flows from investing activities - capital expenditures (343,200)
------------------
Cash flows from financing activities:
Repayment of bank loan (800,000)
Proceeds from line of credit 1,927,266
Net proceeds from notes payable 547,574
------------------
Net cash provided by financing activities 1,674,840
------------------
Net increase in cash 84,375
Cash, beginning of year 69,965
------------------
Cash, end of year $ 154,340
==================
Supplemental disclosures of cash flow information:
Cash paid for interest $ 297,159
==================
Cash paid for income taxes $ 413,790
==================
Equipment acquired under capital lease arrangements $ 40,486
==================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements
(1) Summary of Significant Accounting Policies
Silicon Valley Test & Repair, Inc. (the Company) was incorporated in the
state of California in 1990, and is engaged in the redesign, manufacture,
service and sales of equipment used in the production process in the
electronics and semiconductor industry.
Use of Estimates
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these financial statements
in conformity with generally accepted accounting principles. Actual
results could differ from those estimates.
Inventories
Inventories are stated at the lower of first-in, first-out cost or
market.
Property and Equipment
Property and equipment are stated at cost and depreciated by the
straight-line method for assets acquired subsequent to December 31, 1995
and the double-declining balance method for assets acquired prior to
December 31, 1995. Estimated useful lives are as follows:
Machinery and equipment 5-7 years
Furniture and fixtures 7-10 years
Computer equipment 3-7 years
Vehicles 5-7 years
Office equipment 5-10 years
Leasehold improvements the lesser of
7-10 years or the
lease term
Revenue Recognition
Revenue from the sale of systems is recognized upon shipment. Service
revenue is recognized ratably over the period of the related service
contract or upon completion.
Barter Transactions
Barter agreements are entered into whereby the Company provides credit to
be used for equipment, parts or services in exchange for equipment or
parts received from customers. A liability is recorded at the fair market
value of the goods received.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements, Continued
Warranty Accrual
The Company warrants its products for a period of 90 days upon sale.
Future estimated warranty costs are charged to operations at the time of
sale.
Income Taxes
The Company accounts for income taxes under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases, and to operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
Impairment of Long-Lived Assets
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of", (SFAS No. 121) which requires
impairment losses to be recorded on long-lived assets to be used in
operations when indicators of impairment are present and the undiscounted
cash flows estimated to be generated by those assets are less than the
assets' carrying amount. SFAS No. 121 also addresses the accounting for
long-lived assets that are expected to be disposed of. The Company
adopted SFAS No. 121 in the first quarter of the fiscal year ended
December 31, 1996 and this adoption did not have a material impact on the
financial statements.
(2) Inventories
Inventories consist of the following at December 31, 1996:
Raw materials and subassemblies $ 2,790,058
Work-in-process 505,180
------------------
$ 3,295,238
==================
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements, Continued
(3) Property and Equipment
Property and equipment consist of the following at December 31, 1996:
Machinery and equipment $ 568,918
Furniture and fixtures 124,799
Computer and office equipment 247,521
Vehicles 43,255
Leasehold improvements 209,685
------------
1,194,178
Less: accumulated depreciation and amortization 499,499
------------
$ 694,679
============
(4) Accrued Expenses
Accrued expenses consist of the following at December 31, 1996:
Accrued payroll and 401(k) expenses $ 178,890
Accrued commissions 538,365
Other accrued expenses 157,675
------------
$ 874,930
============
(5) Long-term Debt
The Company maintains a $3,250,000 line of credit to finance working
capital needs until July 5, 1997. Interest on outstanding balances is at
the prime rate plus 1.0%. The line of credit is collateralized by all
inventory and equipment and is guaranteed by the sole shareholder. At
December 31, 1996, $1,927,266 was outstanding under the line of credit.
Notes payable and capital lease obligations consist of the following at
December 31, 1996:
Bank loan $ 759,350
Note payable - employee 100,000
Note payable - other 250,000
Capital lease obligations 42,887
------------
1,152,237
Less current maturities 1,119,050
------------
$ 33,187
============
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements, Continued
Annual maturities of long-term debt are as follows:
1997 $ 1,119,050
1998 9,350
1999 9,350
2000 9,350
2001 5,137
-------------
$ 1,152,237
=============
The bank loan with Cupertino National Bank and Trust is a term loan for 5
years payable in monthly installments of $13,806. The loan calls for
interest at the prime rate plus 2.0%. The loan is secured by all
inventory, receivables, intangibles and equipment and is guaranteed by
the sole shareholder of the Company. The bank loan requires the
maintenance of certain covenants. The Company has not met these
requirements and no waiver of the covenants has been provided by the
bank. Since the Company is in default with respect to the loan, the
entire balance of the loan at December 31, 1996 has been classified as
current.
The note with the employee bears interest at 10% per quarter payable at
note termination. The original note is unsecured and had a 90 day
maturity, which has been renewed, thus the note is classified as current.
The note payable - other is due to Cerprobe Corporation. Interest on the
outstanding balance is 1% in excess of the prime rate. As of December 31,
1996, the interest rate was 9.25%. This note was repaid upon the
acquisition of the Company by Cerprobe Corporation on January 15, 1997.
See note 11.
(6) Income Taxes
The components of income tax benefit are as follows:
Current - federal $ 271,000
Deferred:
Federal 20,400
State 3,600
------------
24,000
------------
$ 295,000
============
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements, Continued
A reconciliation of the difference between income tax benefit and income
tax benefit at the United States federal statutory rate follows:
1996
---------------
Income tax benefit at statutory rate $ 244,400
Temporary difference for which no tax
expense was realized 50,600
---------------
$ 295,000
===============
The components of the Company's deferred tax asset and deferred tax
liability are as follows at December 31, 1996:
Deferred tax assets:
Warranty reserve $ 20,000
Inventory reserves 59,227
Vacation accrual 15,463
===========
Total deferred tax assets $ 94,690
===========
Deferred tax liability:
Difference between book and tax
depreciation of property, plant and
equipment $ 50,490
===========
A valuation allowance has not been provided for the deferred tax assets
since management believes realization of the deferred tax assets is
considered more likely than not.
(7) Related Party Transactions
A note receivable of $209,311 and a note payable of $450,333, including
interest, due to shareholder bear interest at 7% and are due on demand.
As of December 31, 1996, the notes have been netted in the balance sheet.
The note payable represents a loan from the shareholder to provide
additional working capital and is subordinated to the bank line of
credit.
Amount due to affiliated company of $108,672 represents research and
development services performed by the affiliated company which is owned
55% by the sole stockholder of the Company.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements, Continued
(8) Major Customer
One customer accounted for 10% of net sales for the year ended December
31, 1996.
(9) Commitments
The Company leases certain equipment under capital leases. These assets
have been capitalized at the present value of the future minimum lease
payments and are included with machinery and equipment at a cost of
$50,167 with related accumulated amortization of $4,404 at December 31,
1996. In addition, the Company is obligated under certain noncancelable
operating leases for the Company's manufacturing and office space.
The following is a schedule of the minimum future lease payments as of
December 31, 1996:
<TABLE>
<CAPTION>
Capital Operating
leases leases
-------------- --------------
<S> <C> <C> <C>
1997 $ 14,975 226,812
1998 13,440 129,229
1999 13,440 103,800
2000 13,440 107,400
2001 5,534 18,000
-------------- --------------
Total minimum future lease payments 60,829 $ 585,241
==============
Less amounts representing interest 17,942
Less currrent portion 9,700
--------------
Present value of net minimum future lease payments $ 33,187
==============
</TABLE>
Amortization expense applicable to assets under capital leases is charged
to depreciation and amortization expense.
Rental expense for the year ended December 31, 1996 was $196,604.
The Company had two open purchase commitments as of December 31, 1996
with its vendors for the purchase of inventory in 1997. The balance of
the orders were $776,250 and $288,750, respectively. Purchases made in
1996 under these commitments were $824,550.
<PAGE>
SILICON VALLEY TEST & REPAIR, INC.
Notes to Financial Statements, Continued
(10) 401(k) Profit Sharing Plan
The Company maintains a qualified contributory Profit Sharing Plan (Plan)
covering all employees who have been employed for one year and whose
annual service exceeds 1,000 hours in the Plan year. Provisions of
Regulation 401(k) were added to the Plan since January 1, 1995. The
Company's annual contribution to the Profit Sharing Plan is determined by
the Board of Directors and is discretionary. Company contributions are
allocated to eligible participants on a ratio of each participant's
compensation to the total compensation of all Plan participants. No
discretionary contributions were made for the year ended December 31,
1996.
Under the 401(k) provisions, the Company contributes a percentage of the
amount of salary deferral contributions made by each participating
employee up to 3% of the compensation. Company contributions are 20%
vested after an employee's second year of service, an additional 20% will
be vested for each year of service thereafter, becoming fully vested in
five years. Company matching contributions were $61,832 for the year
ending December 31, 1996.
(11) Subsequent Event
On January 15, 1997, the stock of the Company was acquired by Cerprobe
Corporation. The purchase price paid by Cerprobe Corporation consisted of
$2,753,217 in cash and 300,000 shares of Cerprobe's common stock.
Under the terms of the agreement, Cerprobe Corporation has agreed to pay
an additional $500,000 in cash and up to 50,000 additional shares of
common stock if certain sales and operating profit targets for calendar
year 1997 are achieved by the Company.
The current operations of the Company did not generate sufficient cash
flows to fund operations and cover current obligations. The Company
incurred debt on a line of credit and was also advanced funds from
Cerprobe Corporation . These financial statements have been prepared
based on the assumption the Company will continue as a going concern.
Cerprobe Corporation has the financial ability and intent to support the
operations of the Company after the date of acquisition.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Cerprobe Corporation
We consent to incorporation by reference in the registration statements (No.
33-8348, No. 33-65200 and No. 333-03015) filed on Form S-8 of Cerprobe
Corporation of our report dated February 7, 1997, relating to the balance sheet
of Silicon Valley Test & Repair, Inc. as of December 31, 1996, and the related
statements of operations and retained earnings, and cash flows for the year
ended December 31, 1996, which report appears in the March 28, 1997 Form 8-K/A
of Cerprobe Corporation.
KPMG PEAT MARWICK LLP
Phoenix, Arizona
March 28, 1997
