<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 15, 2000
CERPROBE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
86-0312814
(Commission File No.) (IRS Employer Identification No.)
1150 NORTH FIESTA BOULEVARD
GILBERT, ARIZONA 85233
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (480) 333-1500
<PAGE> 2
ITEM 5. OTHER EVENTS.
Cerprobe Corporation, a Delaware corporation ("Cerprobe") is
voluntarily filing this current report on Form 8-K to publish its financial
statements for the year ended December 31, 1999 in order to have updated current
financial statements on file with the Securities and Exchange Commission.
In connection therewith, Cerprobe desires to correct a discrepancy between the
audited financial statements filed herewith and the financial statements
included in a press release issued by Cerprobe on February 16, 2000. Subsequent
to such press release of Cerprobe's earnings for its fourth quarter and full
year ended December 31, 1999, it was determined that a special charge of
$329,000, net of tax, should have been made to research and development expense.
Cerprobe hereby incorporates by reference the audited financial statements for
year ended December 31, 1999 filed as Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
11 Computation of Net Income
21 List of Subsidiaries
23.1 Consent of KPMG LLP, Independent Auditors.
27.1 Financial Data Schedule, Period End 12-31-1999
27.2 Financial Data Schedule, Period End 12-31-1998
99.1 Audited Financial Statements for the year ended
December 31, 1999.
2.
<PAGE> 3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Company has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
CERPROBE CORPORATION
Dated: March 7, 2000 By: /s/ Randal L. Buness
---------------------------
Randal L. Buness
Senior Vice President
Chief Financial Officer
3.
<PAGE> 4
INDEX TO EXHIBITS
11 Computation of Net Income
21 List of Subsidiaries
23.1 Consent of KPMG LLP, Independent Auditors.
27.1 Financial Data Schedule, Period End 12-31-1999
27.2 Financial Data Schedule, Period End 12-31-1998
99.1 Audited Financial Statements for the year ended December 31, 1999.
<PAGE> 1
CERPROBE CORPORATION
COMPUTATION OF NET INCOME (LOSS) PER SHARE
EXHIBIT 11
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
---------------------------
1999 1998
------------ -----------
<S> <C> <C>
Net loss $(12,580,672) $ (495,908)
============ ===========
Weighted average number of
common shares outstanding 7,884,628 7,963,747
Common equivalent shares representing shares
issuable upon exercise of stock options 62,768 287,626
Convertible preferred stock -- --
Subtraction of common equivalent shares due to
antidilutive nature (62,768) --
------------ -----------
Dilutive adjusted weighted average shares
and assumed conversions 7,884,628 8,251,373
============ ===========
Basic net loss per share $ (1.60) $ (0.06)
============ ===========
Diluted net loss per share $ (1.60) $ (0.06)
============ ===========
</TABLE>
<PAGE> 1
CERPROBE CORPORATION
LIST OF SUBSIDIARIES
EXHIBIT 21
SUBSIDIARIES OF CERPROBE CORPORATION:
Cerprobe Interconnect Solutions, Inc.
SVTR, Inc.
Cerprobe Europe Limited
Cerprobe Asia Holdings Pte Ltd
Cerprobe Europe S.A.S.
OZ Technologies, Inc.
SUBSIDIARIES OF OZ Technologies, Inc.
Triple S Engineering, Inc.
SUBSIDIARIES OF CERPROBE ASIA HOLDINGS PTE LTD:
Cerprobe Asia Pte Ltd. *
SUBSIDIARIES OF CERPROBE ASIA PTE LTD.:
Cerprobe Singapore Pte Ltd
Cerprobe Taiwan Company Ltd
* 70% owned by Cerprobe Corporation until August 18, 1997, at which time
Cerprobe's ownership was reduced to 60%.
<PAGE> 1
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, No. 333-03015, No. 333-34979 and No. 333-43469) filed on
Form S-8 and No. 33-61805 on Form S-3 of Cerprobe Corporation of our report
dated February 15, 2000, relating to the consolidated balance sheets of Cerprobe
Corporation and subsidiaries as of December 31, 1999 and 1998, and the related
consolidated statements of operations, stockholders' equity and comprehensive
income, and cash flows for each of the years in the three-year period ended
December 31, 1999, which report appears in Form 8-K of Cerprobe Corporation
dated March 7, 2000.
Phoenix, Arizona
March 7, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Consolidated Balance Sheet at December 31, 1999 and the Consolidated Statements
of Operations for the year ended December 31, 1999 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,484,045
<SECURITIES> 0
<RECEIVABLES> 12,644,062
<ALLOWANCES> 331,009
<INVENTORY> 9,728,500
<CURRENT-ASSETS> 32,819,882
<PP&E> 38,906,165
<DEPRECIATION> 15,369,144
<TOTAL-ASSETS> 83,367,545
<CURRENT-LIABILITIES> 21,008,331
<BONDS> 7,654,671
0
0
<COMMON> 493,162
<OTHER-SE> 52,623,678
<TOTAL-LIABILITY-AND-EQUITY> 83,367,545
<SALES> 62,655,751
<TOTAL-REVENUES> 62,655,751
<CGS> 41,637,001
<TOTAL-COSTS> 41,637,001
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,000
<INTEREST-EXPENSE> 582,135
<INCOME-PRETAX> (14,831,479)
<INCOME-TAX> 2,710,579
<INCOME-CONTINUING> (12,575,350)
<DISCONTINUED> (5,322)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,580,672)
<EPS-BASIC> (1.60)
<EPS-DILUTED> (1.60)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the
Consolidated Balance Sheet at December 31, 1998 and the Consolidated Statements
of Operations for the year ended December 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 4,753,696
<SECURITIES> 14,305,400
<RECEIVABLES> 9,285,044
<ALLOWANCES> 333,364
<INVENTORY> 5,303,631
<CURRENT-ASSETS> 36,928,688
<PP&E> 31,732,238
<DEPRECIATION> 10,562,304
<TOTAL-ASSETS> 63,685,574
<CURRENT-LIABILITIES> 6,410,068
<BONDS> 3,204,118
0
0
<COMMON> 406,564
<OTHER-SE> 53,067,286
<TOTAL-LIABILITY-AND-EQUITY> 63,685,574
<SALES> 76,207,477
<TOTAL-REVENUES> 76,207,477
<CGS> 45,052,300
<TOTAL-COSTS> 45,052,300
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 186,585
<INTEREST-EXPENSE> 269,115
<INCOME-PRETAX> 8,921,960
<INCOME-TAX> (3,685,308)
<INCOME-CONTINUING> 5,236,652
<DISCONTINUED> (5,732,560)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (495,908)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
<PAGE> 1
Exhibit 99.1
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders of
Cerprobe Corporation:
We have audited the accompanying consolidated balance sheets of Cerprobe
Corporation and subsidiaries as of December 31, 1999 and 1998 and the related
consolidated statements of operations, stockholders' equity and comprehensive
income, and cash flows for each of the years in the three-year period ended
December 31, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cerprobe Corporation
and subsidiaries as of December 31, 1999 and 1998 and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1999 in conformity with generally accepted accounting
principles.
KPMG LLP
PHOENIX, ARIZONA
FEBRUARY 15, 2000
F-1
<PAGE> 2
CERPROBE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
ASSETS 1999 1998
----------------------------
<S> <C> <C>
Current assets:
Cash $ 3,484,045 $ 4,753,696
Short-term investment securities -- 14,305,400
Accounts receivable, net of allowance of $331,009
in 1999 and $333,364 in 1998 12,313,053 8,951,680
Inventories, net 9,728,500 5,303,631
Accrued interest receivable 22,157 102,093
Prepaid expenses 1,107,378 869,382
Income taxes receivable 4,041,140 714,811
Deferred tax asset 2,123,609 446,092
Net assets of discontinued operations -- 1,481,903
------------ ------------
Total current assets 32,819,882 36,928,688
Property, plant, and equipment, net 23,537,021 21,169,934
Intangible assets, net 26,334,157 4,579,035
Other assets 676,485 1,007,917
------------ ------------
Total assets $ 83,367,545 $ 63,685,574
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,687,143 $ 2,534,997
Accrued expenses 5,584,724 3,075,894
Current portion of notes payable 10,334,878 138,985
Current portion of capital lease obligations 954,957 660,192
Net liabilities of discontinued operations 446,629 --
------------ ------------
Total current liabilities 21,008,331 6,410,068
Notes payable, less current portion 5,200,034 731,555
Capital lease obligations, less current portion 2,454,637 2,472,563
Deferred tax and other liabilities 472,158 7,073
------------ ------------
Total liabilities 29,135,160 9,621,259
------------ ------------
Minority interest 1,115,545 590,465
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.05 par value; authorized 10,000,000
shares; issued and outstanding none -- --
Common stock, $.05 par value; authorized 25,000,000
shares; issued 9,863,245 and outstanding 9,419,052 shares at
December 31, 1999 and issued 8,131,279 and outstanding
7,645,126 shares at December 31, 1998 493,162 406,564
Additional paid-in capital 67,830,701 55,271,200
Retained earnings (deficit) (9,074,938) 3,505,734
Accumulated other comprehensive loss:
Foreign currency translation (236,534) (188,131)
------------ ------------
59,012,391 58,995,367
Treasury stock, at cost, 444,193 shares at December 31, 1999
and 486,153 shares at December 31, 1998 (5,027,278) (5,521,517)
Notes receivable from related parties (868,273) --
------------ ------------
Total stockholders' equity 53,116,840 53,473,850
------------ ------------
Total liabilities and stockholders' equity $ 83,367,545 $ 63,685,574
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-2
<PAGE> 3
CERPROBE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Net sales $ 62,655,751 $ 76,207,477 $ 69,012,395
Costs of goods sold 41,637,001 45,052,300 39,251,446
------------ ------------ ------------
Gross profit 21,018,750 31,155,177 29,760,949
------------ ------------ ------------
Expenses:
Selling, general, and administrative 21,214,773 18,316,839 16,218,709
Engineering and product development 4,806,971 3,101,082 996,253
In-process research and development 8,815,000 1,568,000 --
Goodwill amortization 785,981 461,301 386,467
------------ ------------ ------------
Total expenses 35,622,725 23,447,222 17,601,429
------------ ------------ ------------
Operating income (loss) (14,603,975) 7,707,955 12,159,520
------------ ------------ ------------
Other income (expense):
Interest income 881,769 1,323,918 348,816
Interest expense (582,135) (269,115) (388,025)
Other, net (527,138) 542,839 323,065
------------ ------------ ------------
Total other income (expense) (227,504) 1,597,642 283,856
------------ ------------ ------------
Income (loss) from continuing operations before
minority interest and income taxes (14,831,479) 9,305,597 12,443,376
Minority interest (454,450) (383,637) 29,715
------------ ------------ ------------
Income (loss) from continuing operations before income taxes (15,285,929) 8,921,960 12,473,091
Income tax (expense) benefit 2,710,579 (3,685,308) (4,810,167)
------------ ------------ ------------
Income (loss) from continuing operations (12,575,350) 5,236,652 7,662,924
Discontinued operations:
Loss from operations of SVTR, Inc., net of taxes (5,322) (1,924,820) (5,766,956)
Loss on disposal of SVTR, Inc., net of taxes -- (3,807,740) --
------------ ------------ ------------
Loss from discontinued operations (5,322) (5,732,560) (5,766,956)
------------ ------------ ------------
Net income (loss) $(12,580,672) $ (495,908) $ 1,895,968
============ ============ ============
Net income (loss) per common share:
Basic:
From continuing operations $ (1.60) $ 0.66 $ 1.14
From discontinued operations -- (0.72) (0.86)
------------ ------------ ------------
Net income (loss) per common share $ (1.60) $ (0.06) $ 0.28
============ ============ ============
Weighted average number of common
shares outstanding 7,884,628 7,963,747 6,690,265
============ ============ ============
Diluted:
From continuing operations $ (1.60) $ 0.63 $ 1.10
From discontinued operations -- (0.69) (0.83)
------------ ------------ ------------
Net income (loss) per common share $ (1.60) $ (0.06) $ 0.27
============ ============ ============
Weighted average number of common and
common equivalent shares outstanding 7,884,628 8,251,373 6,982,368
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE> 4
CERPROBE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF PREFERRED
COMMON SHARES NUMBER OF
SHARES ISSUED AND TREASURY COMMON PREFERRED TREASURY
ISSUED OUTSTANDING SHARES STOCK STOCK STOCK
---------- ----------- --------- -------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 6,027,714 330 -- $301,386 $ 16 $ --
Exercise of stock options 95,265 -- -- 4,763 -- --
Issuance of common stock for acquisition 175,000 -- -- 8,750 -- --
Issuance of common stock in secondary offering, 1,800,000 -- -- 90,000 -- --
net of issuance cost of $226,764
Redemption of preferred stock -- (330) -- -- (16) --
Tax benefit from exercise of nonqualified stock options -- -- -- -- -- --
Comprehensive income (loss):
Foreign currency translation, net of taxes -- -- -- -- -- --
Net income
Total comprehensive income
---------- ---------- -------- -------- --------- -----------
Balance, December 31, 1997 8,097,979 -- -- $404,899 $ -- $ --
Exercise of stock options 31,300 -- -- 1,565 -- --
Expenses from issuance of common stock -- -- -- -- -- --
Issuance of common stock for employee stock purchase plan 37,198 -- -- 480,454
Exercise of warrants 2,000 (1,551) 100 -- (33,114)
Purchase of treasury stock -- -- (521,800) -- -- (5,968,857)
Tax benefit from exercise of nonqualified stock options -- -- -- -- -- --
Comprehensive income (loss):
Foreign currency translation, net of taxes -- -- -- -- -- --
Net loss -- -- -- -- -- --
Total comprehensive loss
---------- ---------- -------- -------- --------- -----------
Balance, December 31, 1998 8,131,279 -- (486,153) $406,564 $ -- $(5,521,517)
Exercise of stock options 231,966 -- -- 11,598 -- --
Issuance of common stock for acquisition 1,500,000 -- -- 75,000 -- --
Issuance of common stock for employee stock purchase plan 41,960 -- -- 494,239
Tax benefit from exercise of nonqualified stock options -- -- -- -- -- --
Notes receivable from related parties -- -- -- -- -- --
Comprehensive loss:
Foreign currency translation, net of taxes -- -- -- -- -- --
Net loss -- -- -- -- -- --
Total comprehensive loss
---------- ---------- -------- -------- --------- -----------
Balance, December 31, 1999 9,863,245 -- (444,193) $493,162 $ -- $(5,027,278)
========== ========== ======== ======== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
NOTES ACCUMULATED
ADDITIONAL RETAINED RECEIVABLE OTHER TOTAL
PAID-IN EARNINGS FROM RELATED COMPREHENSIVE STOCKHOLDERS'
CAPITAL (DEFICIT) PARTIES INCOME (LOSS) EQUITY
------------ ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 $ 20,652,290 $2,105,674 $ $ -- $ 42,596 $ $ 23,101,962
Exercise of stock options 811,702 -- -- -- 816,465
Issuance of common stock for acquisition 1,662,062 -- -- -- 1,670,812
Issuance of common stock in secondary offering, 37,015,237 -- -- -- 37,105,237
net of issuance cost of $226,764
Redemption of preferred stock (5,249,984) -- -- -- (5,250,000)
Tax benefit from exercise of nonqualified stock options 245,000 -- -- -- 245,000
Comprehensive income (loss):
Foreign currency translation, net of taxes -- -- -- (241,406) (241,406)
Net income 1,895,968 1,895,968
------------
Total comprehensive income 1,654,562
------------ ------------ --------- ------------ ------------
Balance, December 31, 1997 $ 55,136,307 $ 4,001,642 $ -- $ (198,810) $ 59,344,038
Exercise of stock options 204,048 -- -- -- 205,613
Expenses from issuance of common stock (178,650) -- -- -- (178,650)
Issuance of common stock for employee stock purchase plan (74,519) -- -- -- 405,935
Exercise of warrants 33,014 -- -- -- --
Purchase of treasury stock -- -- -- -- (5,968,857)
Tax benefit from exercise of nonqualified stock options 151,000 -- -- -- 151,000
Comprehensive income (loss):
Foreign currency translation, net of taxes -- -- -- 10,679 10,679
Net loss -- (495,908) -- -- (495,908)
------------
Total comprehensive loss (485,229)
------------ ------------ --------- ------------ ------------
Balance, December 31, 1998 $ 55,271,200 $ 3,505,734 $ -- $ (188,131) $ 53,473,850
Exercise of stock options 1,387,065 -- -- -- 1,398,663
Issuance of common stock for acquisition 11,263,000 -- -- -- 11,338,000
Issuance of common stock for employee stock purchase plan (184,564) -- -- -- 309,675
Tax benefit from exercise of nonqualified stock options 94,000 -- -- -- 94,000
Notes receivable from related parties -- -- (868,273) -- (868,273)
Comprehensive loss:
Foreign currency translation, net of taxes -- -- -- (48,403) (48,403)
Net loss -- (12,580,672) -- (12,580,672)
------------
Total comprehensive loss (12,629,075)
------------ ------------ --------- ------------ ------------
Balance, December 31, 1999 $ 67,830,701 $ (9,074,938) $(868,273) $ (236,534) $ 53,116,840
============ ============ ========= ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE> 5
CERPROBE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Income (loss) from continuing operations $(12,575,350) $ 5,236,652 $ 7,662,924
Adjustments to reconcile net income (loss) from continuing operations
to net cash provided by (used in) continuing operations:
Depreciation and amortization 6,068,223 4,676,110 3,546,154
In-process research and development 8,815,000 1,568,000 --
Loss on sale of equipment 184,763 373,245 12,583
Tax benefit from exercise of nonqualified stock options 94,000 151,000 245,000
Deferred income taxes (596,951) (509,174) 8,062
Provision for losses on accounts receivable 4,000 186,585 24,000
Provision for obsolete inventory 180,000 534,000 621,000
Compensation expense -- -- (33,536)
Income (loss) applicable to minority interest 454,450 383,637 (29,715)
Changes in working capital of continuing operations
Accounts receivable 499,745 571,725 (2,689,975)
Inventories (1,248,621) (736,703) (1,728,051)
Prepaid expenses and other assets (42,877) (72,967) (236,085)
Income taxes receivable (1,224,804) (243,765) (256,949)
Accounts payable and accrued expenses 369,742 (1,359,857) 2,075,238
Accrued income taxes -- (108,648) --
Other liabilities (7,073) (9,627) --
------------ ------------ ------------
Net cash provided by continuing operations 974,247 10,640,213 9,220,650
------------ ------------ ------------
Net cash used in discontinued operations (51,500) (1,161,467) (7,558,443)
------------ ------------ ------------
Net cash provided by operating activities 922,747 9,478,746 1,662,207
------------ ------------ ------------
Cash flows from investing activities:
Purchase of property, plant, and equipment (6,339,844) (11,900,133) (6,302,918)
Redemption (purchase) of investment securities 14,305,400 12,695,298 (24,019,378)
Investment in CRPB Investors, L.L.C 213,620 88,455 107,293
Purchase of OZ Technologies, Inc., net of cash acquired (25,326,966) -- --
Purchase of Upsys-Cerprobe, L.L.C., net of cash acquired -- (376,366) --
Purchase of Cerprobe Europe S.A.S., net of cash acquired (31,135) (3,230,230) --
Purchase of Cerprobe Interconnect Solutions, Inc., net of cash acquired -- -- (80,102)
Purchase of SVTR, net of cash acquired -- -- (2,590,697)
Proceeds from sale of equipment 11,487 15,267 74,683
Payment (issuance) of notes receivable (560,448) -- 250,000
------------ ------------ ------------
Net cash used in investing activities (17,727,886) (2,707,709) (32,561,119)
------------ ------------ ------------
Cash flows from financing activities:
Issuance of notes payable 20,066,555 1,661,310 357,010
Redemption of convertible preferred stock -- -- (5,250,000)
Payments on notes payable (6,261,632) (768,110) (1,856,141)
Net proceeds (costs) from issuance of common stock -- (178,650) 37,105,237
Purchase of treasury stock -- (5,968,857) --
Net proceeds from employee stock purchase plan 309,675 405,935 --
Net proceeds from exercise of stock options 1,398,663 205,613 816,465
Capital contribution by minority interest partners -- -- 100,000
------------ ------------ ------------
Net cash provided by (used in) financing activities 15,513,261 (4,642,759) 31,272,571
------------ ------------ ------------
Effect of exchange rates on cash 22,227 (90,072) (241,406)
------------ ------------ ------------
Net increase (decrease) in cash (1,269,651) 2,038,206 132,253
Cash, beginning of period 4,753,696 2,715,490 2,583,237
------------ ------------ ------------
Cash, end of period $ 3,484,045 $ 4,753,696 $ 2,715,490
============ ============ ============
</TABLE>
F-5
<PAGE> 6
CERPROBE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Supplemental disclosures of cash flow information from continuing operations:
Interest paid $ 582,135 $ 182,133 $ 221,248
============ ============ ============
Income taxes paid $ 482,597 $ 2,049,282 $ 2,060,000
============ ============ ============
Supplemental disclosures of non-cash investing activities:
The Company made acquisitions for $37.9 million, $3.6 million, and $4.5
million in the years ended December 31, 1999, 1998, and 1997,
respectively. The purchase prices were allocated to the assets acquired
and liabilities assumed based on their fair values as indicated in the
notes to the consolidated financial statements. A summary of the
acquisitions is as follows:
Purchase price $ 37,899,135 $ 3,626,366 $ 4,546,825
Less cash acquired (1,203,034) (19,770) (285,316)
Common stock issued (11,338,000) -- (1,670,812)
------------ ------------ ------------
Cash invested $ 25,358,101 $ 3,606,596 $ 2,590,697
============ ============ ============
Notes receivable from the exercise of stock options from related parties $ 868,273 $ -- $ --
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE> 7
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS
Cerprobe Corporation offers comprehensive solutions for semiconductor
test integration and is a leading manufacturer of probe cards, automatic
test equipment ("ATE") interface assemblies, and ATE test boards. The
Company believes it is the only company that designs, manufactures, and
assembles each of the electromechanical components that assure the
integrity of the electrical test signal that passes from the ATE to the
integrated circuits ("ICs") device under test. The Company's products
address critical functions to assure IC quality, reduce manufacturing
costs, improve the accuracy of manufacturing yield data, and identify
repairable memory ICs.
Unless the context indicates otherwise, all references to "Cerprobe" or
the "Company" refer to Cerprobe Corporation and its subsidiaries.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Cerprobe
Corporation and its subsidiaries: Cerprobe Europe Limited, Cerprobe
Europe S.A.S., Cerprobe Asia Holdings Pte Ltd, Cerprobe Interconnect
Solutions, Inc. ("CIS"), SVTR, Inc. ("SVTR"), Cerprobe Japan Co., Ltd,
and OZ Technologies, Inc ("OZ"). All significant intercompany
transactions have been eliminated in consolidation.
Cerprobe Asia Holdings Pte Ltd is a 60% owner of Cerprobe Asia Pte Ltd;
the balance is owned by Asian investors. Cerprobe Asia Pte Ltd's wholly
owned subsidiaries, Cerprobe Singapore Pte Ltd and Cerprobe Taiwan Co.,
Ltd., operate full service sales and manufacturing plants.
In January 1997, the Company acquired all of the outstanding stock of
SVTR, Inc., a company that refurbishes, reconfigures, and services wafer
probing equipment. In the third quarter of 1998, the Company discontinued
operations of SVTR. See Note 17.
In May 1997, the Company entered into a joint venture with Upsys Reseau
Eurisys ("Upsys"), a French company owned by IBM and GAME COGEMA Group, a
French testing and engineering company. The joint venture, called
Upsys-Cerprobe, L.L.C., assembled and repaired Upsys's vertical probe
card that had been distributed by Cerprobe throughout the United States
and Asia. Cerprobe owned 55% of the joint venture and Upsys owned 45%. On
June 25, 1998, the Company terminated its distribution agreement with
Upsys, and in connection therewith, Cerprobe purchased Upsys's 45%
interest in Upsys-Cerprobe, L.L.C. Accordingly, the consolidated
financial statements as of and for the years ended December 31, 1999,
1998, and 1997 include the activities of Upsys-Cerprobe, L.L.C. as a
consolidated entity with a minority interest through June 25, 1998.
In September 1998, the Company acquired France-based Cerprobe Europe
S.A.S. The Company designs, manufactures and distributes probe cards at
its manufacturing plant near Marseilles. Accordingly, the consolidated
financial statements as of and for the year ended December 31, 1998
include Cerprobe Europe S.A.S.'s activities since the date of
acquisition. See Note 18.
In March 1999, the Company formed Cerprobe Japan Co., Ltd. to operate a
sales and distribution facility in Yokohama, Japan.
In December 1999, the Company acquired California-based OZ Technologies,
Inc. The Company offers systems solutions for IC package test and is a
leading designer and producer of high performance test sockets and
contactors. OZ also designs and distributes ATE test boards and burn-in
interfaces and systems. Accordingly, the consolidated financial
statements as of December 31, 1999 and for the year ended December 31,
1999 include OZ Technologies, Inc.'s activities since the date of
acquisition. See Note 18.
F-7
<PAGE> 8
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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 at the balance sheet dates and
reporting of revenues and expenses during the reporting periods 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 cost (first-in, first-out method)
or market.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost and depreciated using
the straight-line method over the following estimated useful lives:
<TABLE>
<S> <C>
Building 39 years
Manufacturing tools and equipment 3-7 years
Office furniture and equipment 3-7 years
Computer hardware and software 3-5 years
Leasehold improvements Life of lease
</TABLE>
INTANGIBLES
Intangibles consist of a license, goodwill, assembled workforce, patents
and technology.
Goodwill represents the amount by which the cost of businesses purchased
exceeds the fair value of the net assets acquired. Goodwill is amortized
over a period of seven to ten years using the straight-line method.
Assembled workforce represents the amount allocated to an acquired
company's existing personnel infrastructure and is being amortized over
four years using the straight-line method. Patents and technology are
stated at fair market value at the date of acquisition and are amortized
over a period of five to eight years using the straight-line method.
Research and development costs and any costs associated with internally
developed patents, formulas or other proprietary technology are expensed
in the year incurred. The Company continually evaluates whether events
and circumstances have occurred that indicate the remaining estimated
useful lives of intangibles may warrant revision or that the remaining
balances may not be recoverable. When factors indicate that the assets
should be evaluated for possible impairment, the Company uses an estimate
of the undiscounted net cash flows over the remaining life of the assets
in measuring whether the asset is recoverable.
In November 1998, the Company entered into a 10 year manufacturing
license agreement with Feinmetall GMBH Co., to acquire an exclusive
non-transferrable royalty bearing license to manufacture, use, sell,
distribute, and repair ViProbe(R). This license covers worldwide
territories except Europe. The license will be amortized over the period
in which products are produced and will not exceed the ten-year license
term.
INCOME TAXES
The Company uses the asset and liability method of accounting 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. 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.
F-8
<PAGE> 9
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOREIGN CURRENCY TRANSLATION
The financial statements of the Company's Europe, France, and Asia
subsidiaries are translated into U.S. dollars in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign
Currency Translation". Assets and liabilities of the subsidiaries are
translated into U.S. dollars at current exchange rates. Income and
expense items are translated at the average exchange rate for the year.
The resulting translation adjustments are recorded directly as a separate
component of stockholders' equity and minority interest. All transaction
gains or losses are recorded in the statement of operations.
REVENUE RECOGNITION
The Company records revenue when goods are shipped.
STOCK BASED COMPENSATION
In accordance with the provisions of Accounting Principals Board Opinion
No. 25, "Accounting for Stock Issued to Employees," the Company measures
stock-based compensation expense as the excess of the market price at the
grant date over the amount the employee must pay for the stock. The
Company's policy is to grant stock options at fair market value at the
date of grant; accordingly, no compensation expense is recognized. As
permitted, the Company has elected to adopt the pro forma disclosure
provisions only of SFAS No. 123, "Accounting for Stock-Based
Compensation." ("SFAS No. 123").
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risk consists principally of cash, investment
securities, forward currency contracts, and accounts receivable. The
Company invests primarily in U.S. Treasury and government agency
securities and corporate debt securities rated A1 or higher which have
minimal credit risk. The Company places forward currency contracts with
high credit-quality financial instruments in order to minimize credit
risk exposure. Concentrations of credit risk with respect to accounts
receivable are limited due to the Company's large semiconductor industry
customer base.
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting
for Derivative Instruments and Hedging Activities", which establishes
standards for the accounting and reporting for derivative instruments,
including certain derivative instruments embedded in other contracts, and
hedging activities. This statement generally requires recognition of
gains and losses on hedging transactions. As issued, SFAS No. 133 is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999. In June 1999, the FASB issued SFAS No. 137, "Accounting
for Derivative Instruments and Hedging Activities -- Deferral of the
Effective Date of FASB Statement No. 133 -- An Amendment of FASB
Statement No. 133, "which deferred the effective date of SFAS No. 133
until June 15, 2000. The company is currently evaluating the impact of
SFAS No. 133.
RECLASSIFICATIONS
Certain amounts in the 1997 and 1998 financial statements have been
reclassified to conform with the 1999 presentation.
F-9
<PAGE> 10
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(2) INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Raw materials $ 8,313,504 $ 5,147,311
Work-in-process 1,257,863 416,409
Finished goods 288,053 4,567
----------- -----------
9,859,420 5,568,287
Reserve for obsolete inventories (130,920) (264,656)
----------- -----------
$ 9,728,500 $ 5,303,631
=========== ===========
</TABLE>
(3) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Land $ 587,433 $ 589,950
Building 2,340,887 2,394,679
Manufacturing tools and equipment 17,479,305 15,385,727
Office furniture and equipment 3,372,043 2,489,523
Leasehold improvements 4,615,870 2,380,259
Computer hardware and software 9,523,321 4,675,543
Construction in progress 1,956,360 3,816,557
------------ ------------
39,875,219 31,732,238
Accumulated depreciation and amortization (16,338,198) (10,562,304)
------------ ------------
$ 23,537,021 $ 21,169,934
============ ============
</TABLE>
(4) INTANGIBLE ASSETS
Intangible assets consist of the following:
<TABLE>
<CAPTION>
1999 1998
------------ -----------
<S> <C> <C>
Licenses $ 1,650,000 $ 1,528,575
Goodwill and assembled workforce 26,296,245 4,072,156
Patents and technology 613,057 340,840
------------ -----------
28,559,302 5,941,571
Accumulated amortization (2,225,145) (1,362,536)
------------ -----------
$ 26,334,157 $ 4,579,035
============ ===========
</TABLE>
F-10
<PAGE> 11
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(5) OTHER ASSETS
Other assets consist of the following:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Investment in CRPB Investors, L.L.C $ 249,865 $ 463,845
Other assets and deposits 426,620 544,072
---------- ----------
$ 676,485 $1,007,917
========== ==========
</TABLE>
In September 1996, the Company acquired a 36% interest in CRPB Investors,
L.L.C., for $659,233. CRPB Investors, L.L.C., an Arizona limited
liability company, was formed for the purpose of owning and operating the
83,000 square foot facility which serves as Cerprobe's worldwide
headquarters. The investment is accounted for by the equity method of
accounting. In 1999 and 1998, $(116,870) and $100,721, respectively, was
recorded by Cerprobe as income (loss) from CRPB Investors, L.L.C.
(6) ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Accrued payroll and related taxes $2,579,820 $2,390,522
Other accrued expenses 2,279,484 685,372
Accrued acquisition costs 513,275 --
Lease termination costs 212,145 --
========== ==========
$5,584,724 $3,075,894
========== ==========
</TABLE>
(7) NOTES PAYABLE AND LINE OF CREDIT
In December 1999, the Company entered into a three-year senior secured
credit facility with Bank of America, N.A. (the "Loan and Security
Agreement"). The Loan and Security Agreement includes a revolving credit
facility in the amount of $15,000,000 subject to borrowing base
requirements providing for advances of up to eighty-five (85%) of
eligible accounts receivable. Advances on the revolving credit facility
bear interest at prime rate plus 0.50%. The facility also includes an
inventory term loan in the amount of approximately $5,800,000 and a
machinery and equipment term loan in the amount of $2,000,000, both of
which bear interest at prime rate plus 2.00%. The inventory term loan
shall be repaid based upon a 24-month amortization with a balloon payment
of the outstanding principal balance at the end of 12 months. The
machinery and equipment term loan shall be repaid based upon a 60-month
amortization with a balloon payment of the outstanding principal balance
at the end of 36 months. All loans, advances, and other obligations,
liabilities, and indebtedness of the Company shall be secured by valid,
perfected, and enforceable first priority liens upon and security
interest in substantially all of the Company's present and future assets,
including all accounts, contract rights, inventory instruments,
documents, fixtures, chattel paper, general intangibles, patents,
trademarks, copyrights, trade names, deposit accounts, vehicles,
equipment, and pledge of stock of all domestic subsidiaries of Cerprobe
and OZ and 65% of the stock of each wholly-owned foreign subsidiary of
Cerprobe. The facility is also guaranteed by all wholly-owned
subsidiaries of Cerprobe and OZ. Advances under the revolving credit
facility, the inventory term loan, and the machinery and equipment term
loan were $1,300,878, $5,834,000, and $2,000,000 respectively, at
December 31, 1999. The inventory term loan and the equipment term loan
are at the maximum currently available under the terms of these loans.
F-11
<PAGE> 12
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Loan and Security Agreement contains a number of covenants that,
among other things, restrict the ability of the Company to dispose of
assets, incur additional indebtedness, incur guaranty obligations, prepay
indebtedness except in accordance with relevant subordination provisions,
pay dividends or make capital distribution (other than distributions in
capital stock), create liens on assets, engage in mergers or
consolidations (except for any subsidiary which is acquired solely with
the Company's Common Stock and that any subsidiary of the Company may
voluntarily merge into another subsidiary), engage in certain
transactions with subsidiaries and affiliates, make any change in
accounting policies or reporting practices except as required or
permitted by generally accepted accounting principles and otherwise
restrict corporate activities. In addition, the Loan and Security
Agreement requires the Company to comply with certain financial
covenants, including the maintenance of a consolidated Tangible Net Worth
(as defined in the Loan and Security Agreement). At December 31, 1999,
the Company was in violation of the Tangible Net Worth covenant under the
line of credit agreement which was waived by the lender.
The Loan and Security Agreement contains customary events of default,
including the failure to pay principal when due or any interest or other
amount that becomes due, any representation or warranty being made by the
Company that is incorrect in any material respect on or as of the date
made, a default in the performance of any covenant which continues for
more than thirty days, default in certain other indebtedness, certain
insolvency events, certain ERISA events, and certain change of control
events.
In addition, pursuant to the OZ Technologies, Inc. acquisition, the
Company issued to Selling Stockholders notes in the amount of $2,830,000
(the "Subordinated Promissory Note") and $2,800,000 (the "Promissory
Note").
The Subordinated Promissory Note accrues interest at a rate of 10% per
annum and matures December 3, 2002.
The Promissory Note accrues interest at a rate of 10% per annum and was
to have matured on February 3, 2000. The Selling Stockholders have agreed
to extend maturity on this note until June 30, 2000. The Company may
satisfy the Promissory Note on June 30, 2000 by paying in cash all
amounts then due under the Promissory Note or by transferring its real
property located at 10365 Sanden Drive, Dallas, Texas (the "Real
Property") to the Selling Stockholders' agent, unencumbered except for
minor liens and any mortgage that is executed by the Company in favor of
the Selling Stockholders with respect to the Real Property. In the event
that the Company satisfies the Promissory Note by transferring the Real
Property to the Selling Stockholders' agent on June 30, 2000, the Stock
Purchase Agreement provides that the Company and the Selling
Stockholders' agent shall assign a value (the "Appraised Value") to the
Real Property equal to the appraised value for the Real Property as
determined by a mutually agreed-upon real estate appraiser. The Stock
Purchase Agreement further provides that (i) to the extent the Appraised
Value is less than $2,800,000 plus interest due under the Promissory
Note, the amount of the difference shall be added to the principal amount
of the Subordinated Promissory Note and (ii) to the extent the Appraised
Value is more than $2,800,000 plus interest due under the Promissory
Note, the amount of the difference may be applied to reduce the principal
amount of the Subordinated Promissory Note if doing so does not cause the
Company to violate any covenant in any loan document to which it is a
party.
The Company also has various demand loans outstanding to minority
shareholders of Cerprobe Asia Holdings, Pte Ltd. Interest is accrued at
the five year Treasury Rate plus 1.50% per anum. These loans are not
contractually due or expected to be paid within the next 12 months, and
accordingly, are classified as long-term debt. The outstanding balances,
including interest at December 31, 1999, totaled $770,034.
F-12
<PAGE> 13
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Long-term debt consists of the following:
<TABLE>
<CAPTION>
1999 1998
------------ ---------
<S> <C> <C>
Notes payable $ 15,534,912 $ 870,540
Less current portion (10,334,878) (138,985)
------------ ---------
Notes payable, less current portion $ 5,200,034 $ 731,555
============ =========
</TABLE>
Annual maturities of long-term debt are as follows:
<TABLE>
<S> <C>
2000 $ 10,334,878
2001 400,000
2002 4,030,000
Thereafter 770,034
-------------
$ 15,534,912
=============
</TABLE>
(8) LEASES
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 manufacturing tools and equipment and
office furniture at a cost of $5,547,998 and $4,710,745 with related
accumulated amortization of $2,090,492 and $1,454,205 as of December 31,
1999 and 1998, respectively. In addition, the Company is obligated under
certain noncancelable operating leases for the Company's manufacturing
and office space. Certain operating lease agreements provide for annual
rent escalations and renewal options.
The following is a schedule of the future minimum lease payments for the
years ending December 31:
<TABLE>
<CAPTION>
RENTALS
RECEIVABLE
CAPITAL OPERATING UNDER
LEASES LEASES SUBLEASES
----------- ----------- ----------
<S> <C> <C> <C>
2000 $ 1,140,177 $ 2,334,323 $47,600
2001 904,016 2,154,005 --
2002 709,554 1,807,902 --
2003 527,421 1,417,884 --
2004 308,613 1,342,071 --
Thereafter 248,837 9,340,323 --
----------- ----------- -------
Total future minimum lease payments $ 3,838,618 $18,396,508 $47,600
=========== =======
Less amounts representing interest
(at rates ranging from 6.0% to 9.82%) (429,024)
-----------
Present value of net minimum capital
lease payments $ 3,409,594
Less current portion (954,957)
-----------
Capital lease obligations, less current
portion $ 2,454,637
===========
</TABLE>
F-13
<PAGE> 14
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Depreciation expense for assets under capital leases is charged to
depreciation and amortization expense.
Rental expense for the years ended December 31, 1999, 1998, and 1997 was
$1,959,970, $1,663,829, and $1,640,272, respectively.
(9) INCOME TAXES
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- ----------
<S> <C> <C> <C>
Foreign $ 805,988 $ 549,245 $ 115,763
Federal (3,177,178) 2,488,841 3,643,959
State (339,389) 647,222 1,050,445
----------- ----------- ----------
$(2,710,579) $ 3,685,308 $4,810,167
=========== =========== ==========
Current $(1,734,320) $ 4,194,482 $4,802,105
Deferred (976,259) (509,174) 8,062
----------- ----------- ----------
$(2,710,579) $ 3,685,308 $4,810,167
=========== =========== ==========
</TABLE>
A reconciliation of actual income taxes to income taxes at the
"expected" United States federal corporate income tax rate of 34% is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Income tax expense (benefit) at
"expected" federal corporate rate $(5,042,763) $ 3,033,466 $ 4,240,851
State income taxes, net of federal tax
effect (223,997) 427,167 693,294
In-process research and
development expense not benefited 2,996,420 -- --
Foreign income taxed at lower
than U.S. federal rate (151,450) (3,326) (79,408)
Amortization of intangibles 240,307 156,843 131,406
Foreign sales corporation benefit -- (106,236) (82,501)
Utilization of federal tax credit (703,642) -- --
Nontaxable income -- -- (79,013)
Utilization of net operating loss
carryforwards -- -- (47,706)
Change in foreign and state valuation
allowance 143,514 171,810 --
Other 31,032 5,584 33,244
----------- ----------- -----------
$(2,710,579) $ 3,685,308 $ 4,810,167
=========== =========== ===========
</TABLE>
F-14
<PAGE> 15
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The tax effects of temporary differences that give rise to significant portions
of the deferred tax asset and deferred tax liability are as follows:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Deferred tax assets:
Foreign tax loss carryforward $ 86,738 $ 349,364
Acquisition costs not currently deductible 581,902 616,747
Amortization not currently deductible 253,024 1,693
Currency translation not currently deductible 120,399 192,589
Reserves and accruals not currently deductible 1,024,801 446,092
Net operating loss carry forward 1,125,339 --
Income tax credits 379,609 --
----------- -----------
Deferred tax assets $ 3,571,812 $ 1,606,485
Less valuation allowance (492,878) (349,364)
----------- -----------
Deferred tax assets $ 3,078,934 $ 1,257,121
Deferred tax liabilities:
Difference between book and tax depreciation of
property, plant and equipment (1,427,483) (581,930)
----------- -----------
Net deferred tax asset (liability) $ 1,651,451 $ 675,191
=========== ===========
</TABLE>
Summary of current and long-term portion of deferred tax items are as follows:
<TABLE>
<CAPTION>
1999 1998
--------- -------
<S> <C> <C>
Current asset 2,123,609 446,092
Long-term asset (included in other assets) -- 229,099
Long-term liability (included in other liabilities) (472,158) --
--------- -------
1,651,451 675,191
========= =======
</TABLE>
The valuation allowance increased by $143,514 in 1999 and $171,810 in
1998, and is due to state and foreign losses for which there is no
assurance of realizing a tax benefit. A valuation allowance has not been
provided for the other deferred tax assets since management believes
realization of the deferred tax assets is considered more likely than
not.
(10) STOCKHOLDER'S EQUITY
SHAREHOLDER RIGHTS PLAN
On October 8, 1998, each shareholder of record received one Preferred
Share Purchase Right ("Right") on each outstanding share of Common Stock
owned. Each Right entitled shareholders to buy one one-thousandth of a
share of newly created Series A Junior Participating Preferred Stock of
the Company at an exercise price of $110. The Rights will be exercisable
if a person or group hereafter acquires 15% or more of the Common Stock
of the Company or announces a tender offer for 15% or more of the Common
Stock. Should this occur, the Right will entitle its holder to purchase,
at the Right's exercise price, a number of shares of Common Stock having
a market value at the time of twice the Right's exercise price. Rights
held by the 15% holder will become void and will not be exercisable to
purchase shares at the bargain purchase price. If the Company is acquired
in a merger or other business combination transaction after a person
acquires 15% or more of the Company's Common Stock, each Right will
entitle its holder to purchase, at the Right's then current exercise
price, a number of the acquiring company's common shares having a market
value at that time of twice the Right's exercise price.
TREASURY STOCK
During 1998, the Company repurchased 503,541 shares, or approximately 6%,
of the Company's Common Stock in the open market at an approximate price
of $11.37 per share. The Company has utilized 60,899 shares of the
reacquired shares for reissuance in connection with its Employee Stock
Purchase Plan.
F-15
<PAGE> 16
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
WARRANTS AND NON-EMPLOYEE STOCK OPTION
Additionally, the Company issued 39,275 Common Stock warrants in January
1996. These warrants give the holder the right to purchase from the
Company not more than 39,275 fully paid and non-assessable shares of the
Company's Common Stock, $.05 par value, at a price of $16.55 per share on
or after January 16, 1997, with expiration in January 2001. In 1998,
2,000 warrants were exercised.
(11) STOCK OPTION PLANS
The Company adopted in 1983, 1989, 1995, respectively, an incentive stock
option plan, a non-qualified stock option plan, and a combination stock
option plan. In 1999 the Company adopted a broad-based non-qualified
stock option plan with a maximum of 1,000,000 shares of Common Stock to
be issued under the plan. The combined plans provide for the issuance of
options to purchase 3,585,000 shares of the Company's Common Stock, of
which 1,126,600 were available for grant as of December 31, 1999. In
accordance with the plans, options are to be granted at no less than 100%
of the fair market value of the shares at the date of grant. The options
become exercisable on a basis as established by the Company's
Compensation Advisory Committee of the Board of Directors and are
exercisable for a period of 5 to 10 years.
The Company has elected to follow APB Opinion No. 25, "Accounting for
Stock Issued to Employees," and related Interpretations in accounting for
its plans. Under APB No. 25, because the exercise price of the Company's
employee stock options equals the market price of the underlying stock on
the date of the grant, no compensation expense is recognized. Pro forma
information regarding net income (loss) and earnings (loss) per share is
required by SFAS No. 123 as if the Company had accounted for its employee
stock options under the fair value method. The fair value of each option
granted for 1999, 1998, and 1997 was estimated as of the date of the
grant using the Black-Scholes option pricing model with the following
weighted average assumptions for 1999, 1998, and 1997, respectively;
risk-free interest rates of 5.2%, 5.1%, and 5.6%; dividend yields of zero
for all years; volatility factors of the expected market price of the
Company's Common Stock of 60%, 52%, and 52%, respectively; and weighted
average expected lives of the options of 5 years for 1999 and 3 years for
1998 and 1997.
Pro forma net income (loss) reflects only options granted in years 1995
through 1999. Therefore, the full impact of calculating compensation cost
for employee stock options under SFAS No. 123 is not reflected in the pro
forma amounts presented below because compensation cost is reflected over
the options' vesting periods of generally between 3 and 4 years and the
compensation cost for options granted before January 1, 1995 is not
considered. The Company's pro forma information follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------ --------- ----------
<S> <C> <C> <C> <C>
Net income (loss) As reported $(12,580,672) $(495,908) $1,895,968
Pro forma (unaudited) $(13,196,904) $(708,146) $1,784,019
Basic net income
(loss) per share As reported $ (1.60) $ (0.06) $ 0.28
Pro forma (unaudited) $ (1.67) $ (0.09) $ 0.27
Diluted net income
(loss) per share As reported $ (1.60) $ (0.06) $ 0.27
Pro forma (unaudited) $ (1.67) $ (0.09) $ 0.26
</TABLE>
F-16
<PAGE> 17
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the Company's employee stock option activity and related
information for the years ended December 31 follows:
<TABLE>
<CAPTION>
1999 1998 1997
---------------------- --------------------- -------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
SHARES PRICE SHARES PRICE SHARES PRICE
---------------------- --------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at
beginning of year 1,199,566 $10.19 639,866 $ 8.81 593,631 $ 8.46
Granted 423,000 $ 8.43 984,000 $13.44 153,000 $10.38
Exercised (231,966) $ 6.03 (31,300) $ 6.57 (95,265) $ 8.57
Expired/canceled (199,300) $10.86 (393,000) $16.37 (11,500) $12.88
--------- --------- -------
Outstanding at end
of year 1,191,300 $10.27 1,199,566 $10.19 639,866 $ 8.81
========= ========= =======
Exercisable at
end of year 540,196 $10.70 569,898 $ 9.01 367,320 $ 7.45
========= ========= =======
Weighted average
fair value of
options granted
during the year $4.76 $5.35 $4.16
========= ========= =======
</TABLE>
The following table summarizes information about stock options
outstanding at December 31, 1999:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------- -----------------------
WEIGHTED-
AVERAGE WEIGHTED- WEIGHTED-
NUMBER REMAINING AVERAGE NUMBER AVERAGE
OUTSTANDING CONTRACTUAL EXERCISE EXERCISABLE EXERCISE
AT 12/31/99 LIFE PRICE AT 12/31/99 PRICE
----------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
$5.50 100,000 9.80 $ 5.50 20,000 $ 5.50
$7.00 150,000 10.00 $ 7.00 30,000 $ 7.00
$8.00 to $9.75 70,000 9.24 $ 8.34 30,000 $ 8.77
$10.25 to $10.50 263,800 7.31 $10.38 180,500 $10.37
$11.00 to $11.875 303,000 8.26 $11.15 152,664 $11.24
$12.250 to $13.125 243,500 8.72 $12.34 114,832 $12.44
$15.125 61,000 9.13 $15.13 12,200 $15.13
------------ -------
1,191,300 8.59 $10.26 540,196 $10.26
============ =======
</TABLE>
F-17
<PAGE> 18
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(12) COMPREHENSIVE INCOME
The Company recognized comprehensive income (loss) for the years ended
December 31, as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1999 1998 1997
------------ --------- -----------
<S> <C> <C> <C>
Net income (loss) $(12,580,672) $(495,908) $ 1,895,968
Other comprehensive income (loss),
net of tax:
Foreign currency translation
adjustment (80,672) 17,798 (402,344)
Tax benefit (expense) from
foreign currency translation 32,269 (7,119) 160,938
------------ --------- -----------
Net other comprehensive
income (loss) (48,403) 10,679 (241,406)
------------ --------- -----------
Comprehensive income (loss) $(12,629,075) $(485,229) $ 1,654,562
============ ========= ===========
</TABLE>
(13) RELATED PARTY TRANSACTIONS
In August 1999, the Company and certain of its Directors and Officers
entered into Secured Promissory Notes and Stock Pledge Agreements, which
totaled $841,465. The purpose of the loans was to exercise stock options
scheduled to expire. Interest on the notes is at 6% per annum with note
maturities in August 2002. The notes are fully recourse to the borrowers
and are also collateralized by the Company's Common Stock.
(14) SEGMENT INFORMATION
The Company operates principally in one industry segment; the design,
development, manufacture and market of semiconductor integrated circuit
test products and services. The Company's principal customers are North
American, European, and Asian-based semiconductor manufacturing
companies.
Two of the Company's customers exceeded 10% of net sales. The first
customer accounted for 14%, 17%, and 17% of net sales for the years ended
December 31, 1999, 1998, and 1997, respectively. The accounts receivable
from that customer were $327,118, $586,318, and $1,081,424 at December
31, 1999, 1998, and 1997, respectively. The second customer accounted for
13%, 12%, and 10% of net sales for the years ended December 31, 1999,
1998, and 1997, respectively, with accounts receivable of $639,091,
$451,766, and $654,015 at December 31, 1999, 1998, and 1997,
respectively.
International sales represented 23%, 18%, and 18% of the Company's net
sales in 1999, 1998, and 1997, respectively.
F-18
<PAGE> 19
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of the Company's geographic operations:
<TABLE>
<CAPTION>
NORTH EUROPE
AMERICA AND ASIA ELIMINATIONS CONSOLIDATED
----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
1999
- -----------
Customer sales $48,288,270 $ 4,367,481 $ -- $62,655,751
Intercompany sales 673,472 3,162,820 (3,836,292) --
----------- ----------- ------------ -----------
Total sales $48,961,742 $17,530,301 $ (3,836,292) $62,655,751
=========== =========== ============ ===========
Long-lived assets $60,059,515 $ 3,537,614 $(13,049,467) $50,547,662
=========== =========== ============ ===========
1998
- -----------
Customer sales $62,412,140 $13,795,337 $ -- $76,207,477
Intercompany sales 494,987 3,304,021 (3,799,008) --
----------- ----------- ------------ -----------
Total sales $62,907,127 $17,099,358 $ (3,799,008) $76,207,477
=========== =========== ============ ===========
Long-lived assets $28,134,572 $ 4,375,940 $ (5,753,626) $26,756,886
=========== =========== ============ ===========
1997
- -----------
Customer sales $56,670,599 $12,341,796 $ -- $69,012,395
Intercompany sales 864,575 2,110,599 (2,975,174) --
----------- ----------- ------------ -----------
Total sales $57,535,174 $14,452,395 $ (2,975,174) $69,012,395
=========== =========== ============ ===========
Long-lived assets $18,514,131 $ 1,967,317 $ (2,805,672) $17,675,776
=========== =========== ============ ===========
</TABLE>
Management does not believe significant credit risk existed at December
31, 1999. The Company monitors its customers' financial condition and
does not require collateral. Historically, the Company has not
experienced significant losses related to receivables from any individual
or groups of customers.
(15) COMMITMENTS AND CONTINGENCIES
In October 1998, the Company filed an action against the former
President, Director and shareholder of Silicon Valley Test & Repair,
Inc., which was acquired by the Company by way of a merger into its
wholly-owned subsidiary, SVTR, Inc., in January 1997. The suit seeks
rescission of the acquisition and/or monetary damages arising from
failure of the defendants to disclose material facts regarding the
origins of certain software necessary for SVTR, Inc.'s business. In
February 1999, the defendants filed a counter claim against the Company
alleging conversion, interference with contractual relations, unfair
business practices, breach of contract, and specific performance
allegedly arising from the Company's actions to preclude the defendants
from selling the Company stock received by defendants as part of the
purchase price of Silicon Valley Test & Repair, Inc.; the Company seeks
to recover this stock and the balance of the purchase price through its
claims for rescission. In March 1999, the Company and SVTR filed an
amended complaint. The defendants have responded and the action is
proceeding to trial. While the Company intends to vigorously prosecute
this action, it is impossible to predict the outcome of this or any
litigation. It is not anticipated that this suit will have a material
adverse impact on the Company's financial condition or results of
operations.
F-19
<PAGE> 20
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company is involved in other legal actions arising in the ordinary
course of business. In the opinion of management, the disposition of
these actions would not have a material adverse effect on the Company.
(16) EMPLOYEE BENEFIT PLANS
In December 1997, the Board of Directors approved the Employee Stock
Purchase Plan (the "ESPP") which provides employees the means to acquire
an equity interest in the Company. Eligible employees of the Company can
purchase Common Stock through payroll deductions at the lower of 85% of
the closing price of the Common Stock on the offering commencement date
or the offering termination date. Payroll deductions for the purchase of
the stock may not exceed 10% of the employee's base compensation or
$25,000. As of December 31, 1999, 60,899 shares had been purchased under
this plan. The maximum number of shares that may be issued under this
plan is 150,000.
The Company established the Cerprobe Corporation 401(k) Plan ("the Plan")
in 1993. Employees who have reached 18 years of age and who have
completed 90 days of service for the Company are eligible to participate
in the Plan. Participants may elect to defer up to 15% of their salary.
Any contribution by the Company is at its discretion and only for those
participants who have completed one year of service for the Company. The
Company expensed discretionary contributions pursuant to the Plan in the
approximate amounts of $264,778, $324,000, and $241,000 for the years
ended December 31, 1999, 1998, and 1997, respectively. The participants
are fully vested in their and the Company's contributions.
(17) DISCONTINUED OPERATIONS
In the third quarter of 1998, the Company discontinued operations of
SVTR, a wafer prober refurbishing and upgrading subsidiary acquired by
the Company in January 1997. The discontinuance resulted from questions
regarding the origins of certain software necessary for SVTR's business.
In March 1999, Cerprobe sold certain SVTR assets for $500,000. No gain or
loss was recognized on the sale.
SVTR has been accounted for as a discontinued operation and accordingly,
its results of operations and financial position are segregated for all
periods presented in the accompanying consolidated financial statements.
Net sales, related losses and income taxes associated with the
discontinued operations are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------
1999 1998
------- -----------
<S> <C> <C>
Net sales $ -- $ 3,871,292
------- -----------
Loss from operations $(8,869) $(3,550,636)
Income tax benefit 3,547 1,625,816
------- -----------
Loss from operations, net $(5,322) $(1,924,820)
======= ===========
Loss on disposal $ -- $(6,346,233)
Income tax benefit -- 2,538,493
------- -----------
Loss on disposal, net $ -- $(3,807,740)
======= ===========
</TABLE>
The effective tax rate used in calculating the income tax benefit from
discontinued operations is approximately the same as the Company's
effective tax rate for continuing operations.
F-20
<PAGE> 21
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company recorded a pretax charge of $4,597,034 to write down its
assets to estimated net realizable value and to record additional
liabilities in the shut down period. A charge of $1,749,199 was also
recorded to reflect the estimated phase out costs and losses from
operations associated with SVTR. The tax benefit associated with these
charges was $2,538,493.
The net assets (liabilities) of SVTR, as reclassified in the accompanying
consolidated balance sheets, include the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1999 1998
----------- -------------
<S> <C> <C>
Current assets $ 554,585 $ 3,445,737
Property, plant and equipment, net -- --
Intangibles, net -- --
Other assets 63,011 46,865
Current liabilities (289,358) (931,913)
Long term debt (5,286) (19,847)
Other long term liabilities (769,581) (1,058,939)
----------- -----------
$ (446,629) $ 1,481,903
=========== ===========
</TABLE>
(18) ACQUISITIONS
UPSYS-CERPROBE L.L.C.
On June 25, 1998, the Company purchased Upsys's 45% interest in
Upsys-Cerprobe L.L.C. The acquisition resulted in $376,366 of goodwill,
which is being amortized on a straight-line basis over eight years.
CERPROBE EUROPE S.A.S. (FORMERLY SEMICONDUCTEUR SERVICES S.A.)
On September 30, 1998, the Company acquired France-based Cerprobe Europe
S.A.S. for $3.0 million in cash and $250,000 in acquisition related
expenses. Cerprobe Europe S.A.S. designs, manufactures and distributes
probe cards. The acquisition resulted in $1,568,000 of in-process
research and development, which was charged to operations upon
acquisition, and $508,051 in goodwill, which is being amortized on a
straight-line basis over 10 years, and $98,000 in assembled workforce,
which is being amortized on a straight line basis over 4 years.
The acquisition was accounted for as a purchase and, accordingly, the
accompanying consolidated balance sheet includes the assets purchased and
liabilities assumed of Cerprobe Europe S.A.S. at December 31, 1998 and
the accompanying consolidated statements of operations include the
results of Cerprobe Europe S.A.S. since the date of acquisition.
OZ TECHNOLOGIES, INC. ("OZ")
In December 1999, the Company acquired all of the outstanding stock of
OZ, a manufacturer of systems solutions for IC package testing and a
leading designer and producer of high performance test sockets and
contactors for $36 million. OZ also designs and distributes ATE test
boards and burn-in interfaces and systems. The purchase price consisted
of $19 million in cash, notes payable of $5.6 million, and 1.5 million
shares of Common Stock. Of the 1.5 million shares of common stock, up to
554,089 can be sold during the 180-day period on or after the effective
date of the registration statement on Form S-3 with the Securities and
Exchange Commission. If the selling shareholders sell the common stock
during the 180 day period and the average proceeds per share after
selling expenses are less than $7.58 per share, the product of the
difference between $7.58 per share and the average proceeds per share and
the number of shares of Cerprobe Common Stock sold during the 180-day
period shall be added to the Subordinated Promissory Note.
F-21
<PAGE> 22
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The acquisition has been accounted for as a purchase and, accordingly,
the purchase price has been allocated to the assets acquired and the
liabilities assumed based upon the estimated fair values at the date of
acquisition. The acquisition resulted in $8,815,000 in-process research
and development, which was charged to operations upon acquisition,
$21,183,864 in goodwill which is being amortized on a straight-line basis
over seven years and $1,009,091 in assembled workforce which is being
amortized on a straight-line basis over four years. The purchase price of
$36 million plus acquisition costs of $1.9 million was allocated as
follows:
<TABLE>
<CAPTION>
<S> <C>
Purchase price:
Cash $ 19,000,000
Note payable 5,630,000
Common Stock and additional paid in capital 11,338,000
Costs of acquisition 1,900,000
------------
$ 37,868,000
============
Assets acquired and liabilities assumed:
Current assets $ 8,945,021
Property, plant and equipment 1,822,749
Other assets 87,209
In-process research and development 8,815,000
Goodwill and assembled workforce 22,192,955
Current liabilities (3,994,934)
------------
$ 37,868,000
============
</TABLE>
At acquisition, the state of the research and development products was
not yet at a technological or commercially viable state. The Company did
not believe that the research and development products had any future
alternative use because if these products were not finished and brought
to ultimate product completion, they would have no other value.
Therefore, consistent with generally accepted accounting principles, the
Company recorded a charge for the full value of the in-process research
and development.
The consolidated balance sheet as of December 31, 1999 includes the
accounts of OZ and results of operations since the date of acquisition.
The following summary, prepared on a pro forma basis, excluding the
charge for in-process research and development, present the results of
operations as if the acquisition had occurred on January 1, 1998.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------
1999 1998
----------- -----------
(unaudited) (unaudited)
<S> <C> <C>
Net sales $89,292,000 $97,082,000
Net income (loss) (938,400) 2,944,600
Basic net income (loss) per share (0.10) 0.31
Diluted net income (loss) per share (0.10) 0.30
</TABLE>
F-22
<PAGE> 23
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The pro forma results are not necessarily indicative of what the actual
consolidated results of operations might have been if the acquisition had
been effective at the beginning of 1998 or as a projection of future
results.
(19) FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires that the Company disclose estimated fair values for its
financial instruments. The following summary presents a description of
the methodologies and assumptions used to determine the amounts.
The carrying amount of investment securities, receivables, accounts
payable, and accrued expenses approximates fair value because of the
short term nature of these items. The fair value of notes payable and
capital lease obligations approximate the terms in the marketplace at
which they could be replaced. Therefore, the fair value approximates the
carrying value of these financial instruments.
(20) SUPPLEMENTAL FINANCIAL INFORMATION
A summary of additions and deductions related to the allowances for
accounts receivable and inventories for the years ended December 31,
1999, 1998 and 1997 follows:
<TABLE>
<CAPTION>
BALANCE AT BALANCE AT
BEGINNING END OF
OF YEAR ADDITIONS ACQUISITIONS DEDUCTIONS YEAR
--------- --------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Year ended
December 31, 1999 $333,364 $ 4,000 $-- $ 6,355 $331,009
Year ended
December 31, 1998 $215,179 $186,585 $-- $ 68,400 $333,364
Year ended
December 31, 1997 $223,000 $ 24,000 $-- $ 31,821 $215,179
Allowance for
obsolescence of
inventories:
Year ended $264,656 $180,000 $-- $313,736 $130,920
December 31, 1999
Year ended $244,000 $534,000 $-- $513,344 $264,656
December 31, 1998
Year ended
December 31, 1997 $129,000 $621,000 $-- $506,000 $244,000
</TABLE>
F-23
<PAGE> 24
CERPROBE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(21) NET INCOME (LOSS) PER SHARE
The following table sets forth the computation of basic and diluted net
income (loss) per share:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ----------- ----------
<S> <C> <C> <C>
Net income (loss) $(12,580,672) $ (495,908) $1,895,968
============ =========== ==========
Weighted average outstanding common shares 7,884,628 7,963,747 6,690,265
Effect of dilutive securities:
Stock options 62,768 287,626 292,103
Convertible preferred stock -- -- --
Antidilutive effect of
dilutive securities (62,768) -- --
------------ ----------- ----------
Weighted average and common equivalent
shares outstanding 7,884,628 8,251,373 6,982,368
============ =========== ==========
Basic net income (loss) per share $ (1.60) $ (0.06) $ 0.28
============ =========== ==========
Diluted net income (loss) per share $ (1.60) $ (0.06) $ 0.27
============ =========== ==========
</TABLE>
(22) QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER(1) QUARTER(2)
------- ------- ---------- ----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
- ----------------------------
Net sales $15,606 $14,103 $14,932 $ 18,015
Gross profit 5,560 4,246 5,189 6,023
Operating income (loss) 335 (2,556) (1,070) (11,313)
Income (loss) from continuing operations 150 (1,659) (878) (10,189)
Net income (loss) 145 (1,659) (878) (10,189)
Basic net income (loss) per share 0.02 (0.22) (0.11) (1.22)
Diluted net income (loss) per share 0.02 (0.22) (0.11) (1.22)
YEAR ENDED DECEMBER 31, 1998
- ----------------------------
Net sales $22,953 $18,139 $20,107 $ 15,008
Gross profit 9,879 7,253 8,593 5,430
Operating income 4,445 1,686 1,354 223
Income from continuing operations 2,748 1,202 1,036 251
Net income (loss) 2,345 467 (3,557) 249
Basic net income (loss) per share 0.29 0.06 (0.46) 0.03
Diluted net income (loss) per share 0.28 0.06 (0.45) 0.03
</TABLE>
(1) 1998 includes a write-off of in-process research and development of $1.6
million, or $0.11 per diluted share, related to the acquisition of
Cerprobe Europe S.A.S.
(2) 1999 includes a write-off of in-process research and development of $8.8
million or $ 1.05 per diluted share, related to the acquisition of OZ
Technologies, Inc.
F-24
