Prospectus Filed
Pursuant to 424(b)(3)
Registration No. 333-00163
[ATL LOGO]
213,428 SHARES
ADVANCED TECHNOLOGY LABORATORIES, INC.
COMMON STOCK
_____________________
This Prospectus pertains to the offer and sale from time
to time by certain persons (collectively, the "Noteholders" or
the "Selling Shareholders") of up to 213,428 shares (the
"Shares") of common stock, $.01 par value (the "Common
Stock"), of Advanced Technology Laboratories, Inc. ("ATL" or
the "Company") issued as a result ot the conversion of certain
convertible subordinated notes issued by Interspec, Inc., now
a wholly owned subsidiary of the Company. See "The Notes
and the Noteholders."
The Shares offered hereby may be sold by the Selling
Shareholders directly or through agents, underwriters or
dealers as designated from time to time or through a
combination of such methods. The Company will receive none of
the proceeds from any sale of Shares by or for the account of
the Selling Shareholder the Shares. The Selling Shareholders
and any broker-dealers that participate with one or more of
the Selling Shareholders in the distribution of the Shares may
be deemed to be underwriters and any commissions received or
profit realized by them in connection with the resale of the
Shares may be deemed to be underwriting discounts and
commissions under the Securities Act of 1933, as amended (the
"Securities Act"). See "The Notes and the Noteholders" and
"Plan of Distribution."
The Company has agreed to bear all expenses relating to
the prepartion and filing of this registration, other than
underwriting discounts and commissions preparation and filing
of this registration. In addition, the Company has agreed
to indemnify the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act.
See "The Notes and the Noteholders" and "Plan of Distribution."
The Common Stock is quoted on the Nasdaq National Market
under the symbol "ATLI". On January 31, 1996, the closing
bid price of the Common Stock as reported by Nasdaq was
$27.25.
------------------
See "Summary Information and Risk Factors" beginning on page 3
of this Prospectus for a discussion of certain factors that
should be considered by prospective purchasers of the Shares.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Shares may be offered from time to time in negotiated
transactions or otherwise at market prices prevailing at the
time of each sale, subject to the right of the Selling
Shareholders to reject any order in whole or in part. The
Company has agreed to maintain the effectiveness of the
Registration Statement of which this Prospectus is a part for
a period of six months from the date hereof.
The date of this Prospectus is February 1, 1996.
Advanced Technology Laboratories, Inc. 22100 Bothell Everett Highway
P.O. Box 3003, Bothell Washington,, Washington 98041-3003
Telephone (206) 487-7000
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission"), 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-3,
(the "Registration Statement") under the Securities Act,
and the rules and regulations promulgated thereunder, with
respect to the Shares offered pursuant to this Prospectus.
This Prospectus, which is part of the Registration
Statement, does not contain all of the information set forth
in the Registration Statement and the exhibits thereto.
Certain financial and other information relating to the
Company is contained in the documents indicated below under
"Incorporation of Certain Documents By Reference" which are
not presented herein or delivered herewith. For further
information with respect to the Company and the Shares,
reference is made to the Registration Statement and such
exhibits, copies of which may be examined without charge at,
or obtained upon payment of prescribed fees from, the Public
Reference Section of the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and
will also be available for inspection and copying at the
regional offices of the Commission located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and at Citicorp
Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois
60661-2511.
Statements contained in this Prospectus as to the
contents of any contract or other document which is filed as
an exhibit to the Registration Statement are not necessarily
complete, and each such statement is qualified in its entirety
by reference to the full text of such contract or document.
The Company is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and, in accordance therewith, files reports,
proxy statements and other information with the Commission.
Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies
of such materials can be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, DC 20549, at prescribed rates. In addition, the
Common Stock is listed on the Nasdaq National Market.
Material filed by the Company can be inspected at the offices
of the National Association of Securities Dealers, Inc., 1735
K Street, N.W., Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference
in this Registration Statement:
(a) The Registrant's Annual Report on Form 10-K for the year
ended December 31, 1994;
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act, since the end of
the fiscal year covered by the Annual Report referred to in
(a) above; and
(c) The description of the Registrant's Common Stock
contained in the Current Report on Form 8-K filed on
January 11, 1996;
(d) The description of the Registrant's Common Stock
contained in the Registration Statement on Form 10
(Registration No. 0-15160) filed with the Commission on
November 12, 1986 under Section 12(g) of the Exchange Act, and
any amendment or report filed for the purpose of updating such
description.
Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in the
Registration Statement containing this Prospectus or in any
other subsequently filed document which also is or is deemed
to be incorporated by reference herein modified or supersedes
such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus. The Company will
provide without charge to each person to whom this Prospectus
is delivered, upon the request of such person, a copy of any
or all of the foregoing documents referred to above which have
been or may be incorporated herein by reference, other than
exhibits to such
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documents (unless such exhibits are specifically incorporated
by reference into the information that this Prospectus
incorporates). Requests for such documents should be directed
to the Secretary of the Company at 22100 Bothell Everett Highway,
P.O. Box 3003, Bothell, Washington, 98041-3003.
All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after
the date hereof and prior to the filing of a post-effective
amendment, which indicates that the securities offered hereby
have been sold or which deregisters the securities covered
hereby then remaining unsold, shall also be deemed to be
incorporated by reference into this Registration Statement and
to be a part hereof commencing on the respective dates on
which such documents are filed.
SUMMARY INFORMATION AND RISK FACTORS.
On June 12, 1989 Interspec, Inc. ("Interspec") issued
certain convertible subordinated notes (the "Notes") by private
placement to five Noteholders for the total principal amount
of $10 million. Under the terms of the Notes, the unpaid principal
amount could be converted at the option of the Noteholders or
Interspec, under certain defined conditions, into common stock
of Interspec at a defined conversion price. Repayments of
principal were made by Interspec through May, 1994, at which
time the unpaid principal amount was $6.5 million.
On May 17, 1994 ATL acquired Interspec through a stock
for stock acquisition which was approved by the shareholders
of both companies. The Company registered 2,588,000 shares of
Common Stock in April, 1994 to effect the merger. An election
to convert by either party at the time of the merger would
have resulted in the issuance of 383,480 shares of Common Stock
to the Noteholders based upon the then outstanding principal
amount of the Notes, $6.5 million, and the conversion ratio
applicable to all Interspec shareholders.
On November 30, 1995 the conditions under which the
Company had the right to convert the remaining principal
amounts of the Notes into Common Stock were satisfied, and the
Company gave the four remaining Noteholders notice of its
intent to effect such a conversion on February 1, 1996. The
repayments of principal since the time of the merger had, by
November 30, 1995, reduced the principal amount of the Notes
to $3,375,000, and have thereby reduced the number of shares
required for the conversion. The Shares registered hereby
comprises Common Stock which which has been received by the
Noteholders in lieu of cash payments of principal under the Notes.
Details on all holdings of Common Stock by the Noteholders
which are known to the Company are given in the table below.
See "The Notes and the Noteholders."
A prospective purchaser of the Shares should take into
account the following:
Lack of Diversification. The Company is engaged
primarily in the diagnostic medical ultrasound business.
Consequently, the Company is subject to adverse developments
in the healthcare industry generally, and in particular in the
medical ultrasound business as a result of competition,
technological change, governmental regulation, change in third
party reimbursement policies, third party intellectual
property claims, seasonal fluctuations in medical equipment
purchasing, or other factors to a greater extent than a
company with a more diverse business.
Volatility of Stock Price; Absence of Dividends. The
market price for securities of medical technology companies
has historically been volatile. Among other things,
announcements of technical innovations or new commercial products
by ATL or its competitors, development concerning proprietary
rights, including patents and litigation matters, publicity
regarding actual or potential medical results with products under
development by ATL or its competitors, and regulatory developments
in both the United States and foreign countries, as well as period-
to-period fluctuations in revenues and financial results, can have
a significant impact on the market price of ATL Common Stock. The
Company does not pay cash dividends on shares of Common Stock.
Intense Competition. The markets for diagnostic medical
ultrasound products are intensely competitive. ATL faces
competition from many domestic and foreign companies. Several
of the Company's competitors have far greater financial,
marketing, servicing, technical and research and development
resources than those of ATL. Several of these competitors
have recently intensified their efforts in the market for
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diagnostic ultrasound and have introduced new lines of
products which compete with those of ATL. Several of these
competitors have the ability to combine their resources in
ultrasound with those of other medical imaging modalities,
including the servicing of these product lines. There can be
no assurance that actual or potential competitors will not
develop and market products which compete effectively with
those of ATL. Competition could adversely affect the
Company's revenues and profitability.
Recent Losses. For the fiscal year ending December 31, 1994
the Company reported a loss of $20.2 million, including non-
recurring charges of $12.0 million comprising $7.0 million for
the acquisition of Interspec and restructuring expenses associated
with corporate streamlining activities and a provision of $5.0
million for a patent litigation claim. For the first nine months
of 1995 the Company reported a net loss of $0.2 million, including
restructuring and relocation expenses of $4.7 million associated
with the consolidation of the Company's Interspec operations in
Ambler, Pennsylvania. The Company has reported that it expects to
incur relocation and restructuring expenses in 1995 of
approximately $6.0 million associated with this consolidation.
There can be no assurance that losses will not be sustained in the
future or that profitability will be achieved by the Company on a
short or long term basis.
Rapid Technological Change. The diagnostic medical ultrasound
business is characterized by rapidly evolving technology and
continuing competitive pressure to develop and market new products
and product features. The complexity of the Company's products could
result in delays in product delivery as improvements and new features
are made to the hardware and software of the products. There can be
no assurance that the product changes and modifications in the
factory and in the field will not result in disruption of product
sales and shipments, or additional expense, in any particular period.
There can be an assurance that the Company will be able to develop
and market new competitive products on a cost-effective and timely
basis, that such products will compete favorably with products
developed by others, or that the Company's existing technology will
not superseded by new technology developed by competitors.
Government Regulation. ATL's manufacturing facilities, products,
and product labeling are subject to extensive and rigorous governmental
regulation by the U.S. Food and Drug Administration (FDA) and
corresponding state and foreign agencies. In conjunction with the
processing of the Company's PMA application (see "Recent Developments"),
the FDA is currently auditing the Company's products and processes for
compliance with FDA rules and regulations. There can be no assurance
that the Company will be able to timely obtain necessary regulatory
approvals in the future, and delays in the receipt of or failure to
receive such approvals, the loss of existing approvals, failure to
comply with regulatory requirements, and the cost of bringing products
and processes into compliance with regulatory requirements could have
a material adverse effect on the business, financial condition
and results of operations of the Company.
Uncertain Healthcare Environment. Uncertainty of healthcare
legislation and economic conditions in recent years have caused
healthcare providers who purchase capital medical equipment including
ultrasound equipment to exercise caution in making capital purchases.
This has led to a deferral in the purchase of ultrasound and other
capital equipment. These conditions and others have led to the
consolidation of many healthcare providers and a consequent reduction
in the medical capital equipment markets in some countries. The
continuing effects of such uncertainty both domestically and in
international markets may continue to adversely affect the Company's
unit volumes, product pricing, and profit margins.
Dependence on Third-Party Reimbursement. ATL's products are used
by healthcare providers for medical services for which the provider
may seek reimbursement of purchase and/or use costs from various
third-party payors such as government programs and private health
insurance plans. Such reimbursement is subject to the regulations
and policies of governmental agencies and third-party payors. The
Company cannot predict what changes may occur in these regulations
and policies, nor the effect of such changes on the business of the
Company.
Uncertainty of Patents and Proprietary Rights. Companies in
technology businesses routinely review the products of others for
possible conflict with their own patent rights. ATL from time to time
receives notices of claims from others alleging patent infringement.
ATL is currently awaiting a decision on damages payable by the Company
in an infringement action on an expired patent in which the plaintiff
is seeking over $5 million in
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damages, and a threefold enhancement of damages. There can be
no assurance that the Company will not be subject to other claims
of patent infringement or that a claim will not require that the
Company pay substantial damages or delete certain features from
its products or both. Such claims could temporarily interrupt the
Company's ability to ship affected products.
Dependence on Suppliers For Critical Components. ATL
depends on some single-source vendors for certain important
component parts for certain products. Such vendors can
occasionally experience problems with their ability to deliver
components needed by the Company, and certain components have
long lead-times for delivery. An abrupt disruption in the
supply of these components could have a material adverse
effect on the Company's production of affected products.
RECENT DEVELOPMENTS.
On December 11, 1995 a U.S. Food and Drug Administration
(FDA) Advisory Committee Panel voted unanimously to recommend
FDA approval, with certain modifications, of the pre-market
approval (PMA) application of ATL which would allow a new
clinical application of ultrasound that, in conjunction with
mammography, would provide a high level of confidence in
differentiating benign from malignant or suspicious breast
lesions, and thereby reduce the need for breast biopsy. The
FDA usually follows the recommendation of its Advisory
Committee Panel but is not obliged to do so. On January 25,
1995 the FDA determined the PMA to be approvable pending the
satisfaction by ATL of certain conditions and requirements.
The Company is in the process or responding to the FDA.
A final determination on approval of the PMA is expected later
in 1996.
USE OF PROCEEDS.
The Shares offered are being registered for the accounts
of the Noteholders and, accordingly, the Company will not
receive any proceeds from the sale of the Shares.
THE NOTES AND THE NOTEHOLDERS.
The Notes were issued to the Noteholders on June 12, 1989
by Interspec, Inc., and interest of 11% per annum on the
outstanding principal amount of the Notes has been paid
semiannually since their issue date. The initial principal
amount of the Notes was $10 million. Of this initial amount,
$3.5 million was repaid prior to the merger of Interspec and
the Company in May, 1994, and $2,632,353 has been repaid in
accordance with the terms of the Notes since May, 1994. The
principal amount of the Notes which has been repaid in the
form of the Shares which are the subject of this registration
statement is $3,617,605.
On May 17, 1994 the Company acquired Interspec in a stock
for stock acquisition approved by the shareholders of both
companies. As a consequence thereof, the Company guaranteed
the repayment of the Notes and the Notes were amended to
become convertible into Common Stock at the option of the
Company at a conversion price of $16.95 per share (subject to
certain adjustments which have not occurred) in the event the
market price of the Common Stock exceeded the conversion price
by at least 20% for fifteen consecutive trading days. These
criteria were satisfied on November 30, 1995 and notice of the
Company's election to convert the Notes was given to all
Noteholders on November 30, 1995. The Company intends to
complete the conversion by the issuance to the Noteholders of
all Shares by February 1, 1996.
The Shares are being registered pursuant to the terms of
a Registration Agreement of July 14, 1988 between Interspec
and various Interspec securityholders, as amended June 12,
1989, which provides the Noteholders with certain "demand"
registration rights. The demand registration rights of the
Noteholders terminate on May 17, 1999. Pursuant thereto, the
Company has agreed to keep any registration statement and
prospectus filed in connection therewith effective for a
period of not less than six months. The Registration
Agreement includes a right of the Noteholders to be
indemnified against losses due to a material omission or
untrue statement in a registration statement or prospectus
filed pursuant thereto.
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The following table sets forth certain information
regarding the beneficial ownership of shares of Common Stock
by the Noteholders as of December 31, 1995, as adjusted to
reflect the acquisition and sale of the Shares to be
registered hereby. Other than their status as Noteholders, no
Noteholder held any position or office or other material
relationship with the Company or with Interspec during the
past three years. As of December 31, 1995 there were
13,609,731 shares of the Company's Common Stock outstanding.
Common Maximum Common Stock
Stock Number of Owned after
Owned Shares to be Offering(2)
Prior to Sold under this -------------
Name Offering(1) Prospectus Number Percent
- ---- --------- ---------- ------ -------
Laerdal Finans,
A.S. 17,178 17,178 0 *
Norsk Hydro, A.S. 42,946 42,946 0 *
State Farm Mutual
Automobile
Insurance Company 335,935(3) 100,207(2) 235,728 1.7%
SBC Equity
Partners Ltd. 53,097 53,097 0 *
- ---------
*Less than 1%
(1) Includes all Shares issuable upon conversion of the Notes
held by the Selling Shareholders.
(2) Assumes a disposition of all Shares, and retention of all
previously owned Common Stock, at the conclusion of the
offering.
(3) Includes 14,315 Shares to be issued to State Farm in
lieu of a remaining cash principal repayment on December 29, 1994
and 71,577 Shares issued to State Farm in lieu of a cash principal
repayment on February 1, 1996.
PLAN OF DISTRIBUTION.
The sale of Shares by the Selling Shareholders may be
effected from time to time in one or more transactions (which
may involve block transactions), in special offerings,
secondary distributions, in negotiated transactions, or a
combination or such methods of sale, at market prices
prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Such
transactions may be effected on the over-the-counter market.
The Selling Shareholders may effect such transactions by
selling the Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of
underwriting discounts, concessions or commissions from one or
more of the Selling Shareholders for whom they may act as
agent (which compensation may be in excess or customary
commissions). Without limiting the foregoing, such brokers
may act as dealers by purchasing any and all of the Shares
covered by this Prospectus either as agents for others or as
principals for their own accounts and reselling such
securities pursuant to this Prospectus. The Selling
Shareholders and any broker-dealers or other persons acting on
their behalf that participate with such Selling Shareholders
in the distribution of the Shares may be deemed to be
underwriters, and any commissions received or profit realized
by them on the resale of the Shares may be deemed to be
underwriting discounts and commissions under the Securities
Act. As of the date of this Prospectus the Company is not
aware of any agreement arrangement or understanding between
any broker or dealer and any of the Selling Shareholders.
At the time that any particular offering of Shares is
made, to the extent required by the Securities Act, an
amendment or a prospectus supplement will be distributed,
setting forth the terms of the offering, including the
aggregate number of Shares being offered, the names of any
underwriters, dealers or agents, and discounts, commissions
and other items constituting compensation from the Selling
Shareholders and any discounts, commissions or concessions
allowed or reallowed or paid to dealers.
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The Selling Shareholders may from time to time pledge the
Shares owned by them to secure margin or other loans made to
one or more of the Selling Shareholders. Thus the person or
entity receiving the pledge of any of the Shares may sell
them, in a foreclosure sale or otherwise, in the same manner
as described above for a Selling Shareholder.
The Company intends the term of effectiveness of this
registration statement to continue for six months from the
date the registration statement becomes effective.
LEGAL MATTERS
The validity of the issuance of Shares of Common Stock
offered hereby will be passed upon for the Company by Bogle &
Gates P.L.L.C., Seattle, Washington.
EXPERTS
The consolidated financial statements and schedule of the
Company as of December 31, 1994 and 1993, and for each of the
years in the three-year period ended December 31, 1994, have
been incorporated by reference herein and in this registration
statement in reliance upon the reports of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated
herein by reference, and upon the authority of said firm as
experts in accounting and auditing. The reports of KPMG Peat
Marwick LLP covering the December 31, 1994, consolidated
financial statements refer to a change in the method of
accounting for certain investments in debt and equity
securities, effective January 1, 1994.
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No dealer, salesperson, or any
other person has been authorized
to give any information or to
make any representations other than
those contained in this Prospectus 213,428 SHARES
in connection contained herein, and,
if given or made, such information
or representations must not be relied COMMON STOCK
upon as having been authorized by the
Company. This Prospectus does not ($.01 par value)
constitute an offer of any securities
other than those which it relates or
an offer to sell, or a Proceeds ADVANCED TECHNOLOGY
solicitation of an offer to buy, LABORATORIES, INC.
those to which it relates in any
jurisdiction where, or to any person
to whom, it is unlawful to make such
an offer. The delivery of this
Prospectus at any time does not imply
that there has been no change in the
information set forth herein or in the
affairs of the Company since the date
hereof.
----------------------- _______________________
TABLE OF CONTENTS
_______________________ PROSPECTUS
Page
---- FEBRUARY 1, 1996
Available Information......... 2
Incorporation of Certain _______________________
Documents by Reference........ 2
Summary Information and Risk
Factors....................... 3
Recent Developments........... 5
Use of Proceeds............... 5
The Notes and the Noteholders. 5
Plan of Distribution.......... 6
Legal Matters................. 7
Experts....................... 7
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