<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- - ACT OF 1934
For the period ended October 5, 1997 OR
_ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
---------- ----------
Commission file number 333-29871
THERMA-WAVE, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-3000561
[State or other jurisdiction of [I.R.S. Employer
incorporation or organization] Identification Number]
1250 Reliance Way
Fremont, California 94539
[Address of principal executive offices] [Zip Code]
(510) 490-3663
Registrant's telephone number, including area code
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes No X
----------- ------------
Indicate the number of shares of the issuer's class of common stock, as of the
latest practical date:
Class Outstanding as of November 2, 1997
- -------------------------------------------------------------------------------
Class A Common stock, $.01 par value 9,073,532
Class B Common stock, $.01 par value 1,334,875
Class L Common stock, $.01 par value 1,008,170
1
<PAGE>
Contents
THERMA-WAVE, INC.
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets
September 30, 1997 and March 31, 1997 3
Condensed Consolidated Statements of Operations
Three and six months ended September 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows
Six months ended September 30, 1997 and 1996 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information
Item 1. Legal Proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
2
<PAGE>
Part I. Financial Information
Item 1. Unaudited Consolidated Condensed Financial Statements
THERMA-WAVE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
September 30, March 31,
1997 1997
------------ -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 17,614 $ 16,741
Accounts receivable, net 21,845 20,107
Receivable from parent - 1,425
Inventories 20,739 17,427
Other current assets 7,357 5,939
------------ -----------
Total current assets 67,555 61,639
Property and equipment, net 6,760 5,843
Deferred financing costs, net 10,619 -
Other assets 1,936 1,138
------------ -----------
Total assets $ 86,870 $ 68,620
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
(NET CAPITAL DEFICIENCY)
Current liabilities:
Short term debt $ - $ 3,834
Accounts payable 5,472 4,076
Other current liabilities 19,606 15,009
------------ -----------
Total current liabilities 25,078 22,919
Long term debt 115,000 23,100
Other liabilities 2,428 2,456
------------ -----------
Total liabilities 142,506 48,475
Commitments and contingencies
Mandatorily redeemable preferred stock 14,101 -
Stockholders' equity (net capital deficiency)
Common stock - 45
Common stock - Class A 91 -
Common stock - Class B 13 -
Common stock - Class L 10 -
Additional paid-in capital 21,373 60,465
Notes receivable from stockholders (298) -
Accumulated deficit (89,335) (38,927)
Currency translation adjustment (1,591) (1,438)
------------ -----------
Total stockholders' equity (net capital deficiency) (69,737) 20,145
------------ -----------
Total liabilities and stockholders' equity (net
capital deficiency) $ 86,870 $ 68,620
============ ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
THERMA-WAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
September 30, September 30,
--------------------------------- ----------------------------------
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net revenue $28,286 $31,034 $56,491 $59,749
Cost of revenue 13,138 12,876 26,401 25,769
-------------- -------------- -------------- --------------
Gross margin 15,148 18,158 30,090 33,980
Operating expenses:
Research and development 5,086 3,144 9,574 6,168
Selling, general and
administrative 6,749 5,733 11,775 11,627
Amortization of goodwill and
purchased intangibles - 478 - 956
Non-recurring
recapitalization and related
expenses 1,000 - 3,888 -
-------------- -------------- -------------- --------------
Total operating
expenses 12,835 9,355 25,237 18,751
-------------- -------------- -------------- --------------
Operating income 2,313 8,803 4,853 15,229
Other income (expense):
Interest expense (3,588) (409) (5,781) (841)
Interest income 171 39 340 84
Other, net 5 (53) - (80)
-------------- -------------- -------------- --------------
(3,412) (423) (5,441) (837)
-------------- -------------- -------------- --------------
Income (loss) before income
taxes (1,099) 8,380 (588) 14,392
Provision (benefit) for income
taxes (428) 3,457 (229) 5,966
-------------- -------------- -------------- --------------
Net income (loss) (671) $ 4,923 (359) $ 8,426
============== ==============
Accretion of preferred stock
dividend 208 324
-------------- --------------
Net loss available to common
stockholders $ (879) $ (683)
============== ==============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
THERMA-WAVE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
September 30,
--------------------------------------------
1997 1996
------------------- -------------------
<S> <C> <C>
Operating activities:
Net income (loss) $ (359) $ 8,426
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 1,663 2,138
Amortization of deferred financing costs 593 -
Non-cash recapitalization and related expenses 3,888 -
Changes in assets and liabilities:
Accounts receivable (1,738) (2,392)
Inventories (3,815) (5,913)
Other assets (1,418) (143)
Other liabilities 5,034 878
------------------- -------------------
Net cash provided by operating activities 3,848 2,994
Investing activities:
Purchases of property and equipment (1,863) (677)
Other (1,012) (474)
------------------- -------------------
Net cash used in investing activities (2,875) (1,151)
Financing activities:
Issuance of Senior Notes 115,000 -
Repayment of notes payable (26,934) (815)
Redemption of common stock (96,900) -
Proceeds from issuance of common stock 20,169 525
Deferred financing costs (11,212) -
Other (223) (143)
------------------- -------------------
Net cash used in financing activities (100) (433)
------------------- -------------------
Net increase in cash and cash equivalents 873 1,410
Cash and cash equivalents at beginning of period 16,741 7,690
------------------- -------------------
Cash and cash equivalents at end of period $ 17,614 $ 9,100
=================== ===================
Supplementary disclosures:
Cash paid for interest $ 922 $ 714
=================== ===================
Cash paid for taxes $ 2,800 $ 6,319
=================== ===================
Noncash financing activity:
Common stock issued for notes receivable from stockholders $ 298 $ -
=================== ===================
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
THERMA-WAVE, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission and include the accounts of Therma-Wave, Inc. and its
wholly owned subsidiaries (collectively "Therma-Wave" or the "Company").
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting
principles, have been condensed or omitted pursuant to such rules and
regulations. In the opinion of the Company, the financial statements reflect
all adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation of the financial position at September 30, 1997, and
the operating results and cash flows for the three and six months ended
September 30, 1997 and 1996. These financial statements and notes should be
read in conjunction with the Company's audited financial statements and
notes thereto for the year ended March 31, 1997, included in the Company's
Registration Statement on Form S-4 (Registration No. 333-29871) as declared
effective by the Securities and Exchange Commission on September 10, 1997.
The results of operations for the interim periods are not necessarily
indicative of the results of operations that may be expected for any other
period or for the fiscal year, which ends April 5, 1998.
The second fiscal quarters of 1998 and 1997 and the fiscal year 1997 ended
on October 5, 1997, October 6, 1996 and April 6, 1997, respectively. For
presentation purposes, the accompanying financial statements have been shown
as ending on the last day of the calendar month.
2. Inventories
Inventories are summarized as follows:
<TABLE>
<CAPTION>
September 30, 1997 March 31, 1997
------------------ --------------
<S> <C> <C>
Purchased materials $ 9,347 $ 8,937
Systems in process 8,259 7,252
Finished systems 3,133 1,238
------------------ --------------
$20,739 $17,427
================== ==============
</TABLE>
6
<PAGE>
3. Recapitalization
In December 1996, the Board of Directors approved the Recapitalization
Agreement (the "Recapitalization Agreement"). Pursuant to the
Recapitalization Agreement, which closed on May 16, 1997, the Company: (i)
redeemed from Toray Industries, Inc., ("Toray") and Shimadzu Corporation
("Shimadzu") approximately 86.6% of its outstanding capital stock for $96.9
million; (ii) converted its remaining outstanding capital stock of 6.1
million shares to newly issued shares of preferred stock and common stock;
(iii) repaid substantially all of its outstanding borrowings of
approximately $26.9 million; (iv) canceled its receivable from Toray and
Shimadzu of $1.4 million which was recorded as a reduction of additional
paid-in capital; and (v) paid the estimated fees and expenses of
approximately $11.2 million related to the Recapitalization. In order to
finance the transactions contemplated by the Recapitalization Agreement, the
Company: (i) issued $115.0 million in aggregate principal amount of senior
notes in a private debt offering; (ii) received an equity contribution of
approximately $20.0 million in cash from an investor group, including
investment funds associated with Bain Capital, Inc. ("Bain"), and members of
the Company's senior management team; and (iii) converted equity securities
of Toray and Shimadzu having a value of $15.0 million into newly issued
shares of preferred stock and common stock.
As a result of the Recapitalization, the outstanding equity securities of
the Company consist of 9,073,532 shares of Class A Common; 1,334,875 shares
of Class B Common; 1,008,170 shares of Class L Common; and 748,738 shares of
Preferred Stock. The shares of Class A Common and Class L Common each
entitle the holder thereof to one vote per share on all matters to be voted
upon by the stockholders of the Company and are otherwise identical, except
that the shares of Class L Common are entitled to a preference over the
Class A Common with respect to any distribution by the Company to holders of
its capital stock equal to the original cost of such share ($19.085) plus an
amount which accrues on a daily basis at a rate of 12% per annum, compounded
annually. The Class B Common is identical to the Class A common except that
the Class B Common is nonvoting and is convertible into Class A Common at
any time following an initial public offering by the Company at the option
of the holder thereof. The Preferred Stock has a liquidation preference of
$18.40 per share and is convertible into one share of Class A Common at the
option of the holder thereof. Dividends on the Preferred Stock accrue at a
rate of 6.0% per annum. The Preferred Stock has a scheduled redemption on
May 16, 2007, and is otherwise redeemable by the Company at any time from
time to time after the earlier of (i) June 30, 1998; or (ii) an initial
public offering by the Company. The Preferred Stock entitles the holder
thereof to one vote for each share of Class A Common issuable upon
conversion of such Preferred Stock.
4. Financing Arrangements
The $115.0 million of senior notes ("Notes") issued to finance the
Recapitalization are senior unsecured obligations of the Company and will
mature on May 15, 2004.
7
<PAGE>
Interest on the Notes will accrue at the rate of 10 5/8% per annum and is
payable semiannually in cash on each May 15 and November 15, commencing on
November 15, 1997, to registered holders at the close of business on May 1
and November 1, respectively, immediately preceding the applicable interest
payment date. The Notes are not entitled to the benefit of any mandatory
sinking fund and are redeemable at the Company's option in whole at any time
or in part from time to time, on and after May 15, 2001, upon not less than
30 nor more than 60 days notice, at specified redemption prices. At any
time, or from time to time, on or prior to May 15, 2000, the Company may, at
its option, use the net cash proceeds of one or more equity offerings to
redeem up to 40% of the aggregate principal amount of Notes originally
issued at a redemption price equal to 110.625% of the principal amount
thereof plus accrued and unpaid interest.
In connection with the Recapitalization Agreement, the initial purchasers of
the $115.0 million of Notes were granted certain exchange and registration
rights. Based upon the terms of such agreement, the Company issued new notes
with substantially identical terms as the old notes except that the new
notes are registered under the Securities Act and therefore do not bear
legends restricting their transfer.
In conjunction with the Recapitalization, the Company entered into a new
bank credit facility (the "Bank Credit Facility") with Bankers Trust
Company, which provides for a revolving credit facility of $30.0 million.
The Company may borrow amounts under the Bank Credit Facility to finance its
working capital requirements and other general corporate purposes. The Bank
Credit Facility requires the Company to meet certain financial tests and
contains covenants customary for this type of financing. At September 30,
1997, there were $7.6 million of outstanding letters of credit that were
collateralized by the Bank Credit Facility.
5. Recently Issued Accounting Standard
In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income." The statement established standards for the reporting
and display of comprehensive income and its components. Comprehensive income
is defined as the change in equity of a business enterprise during a period
from transactions and other events and circumstances from non-owner sources.
It includes all changes in equity during a period except those resulting
from investments by owners and distributions to owners. This standard will
require that an enterprise display an amount representing total
comprehensive income for the period. SFAS No. 130 will be effective for
fiscal year 1998. The Company does not expect the adoption of SFAS No. 130
to have a significant impact on the Company's reported results of
operations.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
When used in this discussion, the words "expects", "anticipates" and similar
expressions are intended to identify forward-looking statements. Such forward-
looking statements are subject to a number of risks and uncertainties that could
cause actual results to differ materially from the statements made. The Company
has experienced and expects to continue to experience significant fluctuations
in its quarterly results. The Company's expense levels are based, in part, on
expectations of future revenues. If revenue levels in a particular quarter do
not meet expectations, operating results are adversely affected. A variety of
factors could have an influence on the level of the Company's revenues in a
particular quarter. These factors include the cyclical nature of the
semiconductor industry, the risk that factors which allowed the Company to
experience relatively good performance in industry downturns may not protect the
Company in future downturns, the timing of the receipt of orders from major
customers, customer cancellations or delay of shipments, specific feature
requests by customers, production delays or manufacturing inefficiencies,
exchange rate fluctuations, management decisions to commence or discontinue
product lines, the Company's ability to design, introduce and manufacture new
products on a cost effective and timely basis, the introduction of new products
by the Company or its competition, the timing of research and development
expenditures, and expenses attendant to acquisitions, strategic alliances and
the future development of marketing and service capabilities.
General
The Company is a worldwide leader in the development, manufacture, marketing and
service of process control metrology systems for use in the manufacture of
semiconductors. The Company's process control metrology systems are principally
used to measure ion implantation and thin film deposition and removal. The
Company has developed two major lines of process control metrology systems: (i)
the Therma-Probe system and (ii) the Opti-Probe system. The Therma-Probe
system, introduced in 1985, utilizes the Company's proprietary thermal wave
technology and is the predominant nondestructive process control metrology
system used to measure the critical ion implantation process on product wafers
in the fabrication of semiconductors. The Opti-Probe system, introduced in
1992, significantly improves upon existing thin film metrology systems by
successfully integrating different measurement technologies into one system and
utilizing the Company's proprietary optical technologies.
The Company's second quarters of fiscal years 1998 and 1997 ended on October 5,
1997 and October 6, 1996, respectively. For presentation purposes, any reference
herein to such periods refer to the periods ended September 30 of such fiscal
year.
9
<PAGE>
Results of Operations
The following table summarizes Therma-Wave's unaudited historical results of
operations as a percentage of net revenues for the periods indicated. The
historical financial data for the three and six months ended September 30, 1997
and 1996 were derived from the Company's unaudited consolidated financial
statements which, in the opinion of management, reflect all adjustments
(consisting of normal recurring adjustments) necessary for the fair presentation
of the financial condition and results of operations for such periods.
<TABLE>
<CAPTION>
Three months ended Six months ended
September 30, September 30,
------------------------------- -------------------------------
Income Statement Data: 1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net revenue 100.0% 100.0% 100.0% 100.0%
Cost of revenue 46.4 41.5 46.7 43.1
------------- ------------- ------------- -------------
Gross margin 53.6 58.5 53.3 56.9
Operating expenses:
Research and development expenses 18.0 10.1 17.0 10.3
Selling, general and administrative 23.9 18.5 20.8 19.5
Amortization of goodwill and
purchased intangibles - 1.5 - 1.6
Non-recurring recapitalization and
related expenses 3.5 - 6.9 -
------------- ------------- ------------- -------------
Operating income 8.2 28.4 8.6 25.5
Interest expense (12.7) (1.3) (10.2) (1.4)
Interest income 0.6 0.1 0.6 0.1
Other, net - (0.2) - (0.1)
------------- ------------- ------------- -------------
Income (loss) before income taxes (3.9) 27.0 (1.0) 24.1
Provision (benefit) for income taxes (1.5) 11.1 (0.4) 10.0
------------- ------------- ------------- -------------
Net income (loss) (2.4)% 15.9% (0.6)% 14.1%
============= ============= ============= =============
</TABLE>
Net revenues for the three and six months ended September 30, 1997 were
$28.3 million and $56.5 million, respectively. Compared to the corresponding
periods of fiscal 1997, net revenues decreased $2.7 million or 8.9% and $3.3
million or 5.5%, respectively. This decrease in the Company's net revenues
is primarily attributed to lower Therma-Probe sales due to a decrease in new
semiconductor manufacturing facilities partially offset by increased service
revenues.
Gross margin percentages for the three and six months ended September 30,
1997 were 53.6% and 53.3%, respectively. Compared to the corresponding
periods of fiscal 1997, the gross margin percentage decreased 4.9 and 3.6
percentage points for the three and six months, respectively. This decrease
is attributed to increased investment in the service organization, which was
partially offset by increased system sales gross margins as a result of
higher average sales prices.
10
<PAGE>
Research and development expenses were $5.1 million and $9.6 million for
the three and six months ended September 30, 1997. Compared to the
corresponding periods of fiscal 1997, research and development expenses
increased $1.9 million, or 61.8% and $3.4 million, or 55.2% for the three
and six months, respectively. Research and development expenses as a
percentage of net revenues for the three and six months ended September 30,
1997, was 18.0% and 17.0%, respectively. The increase in research and
development is due to increased headcount and project expense increases
related to new product development, including the OP-5240, Meta-Probe and
300 millimeter products. The Company believes that technical leadership is
essential to its success and expects to continue to commit significant
resources to research and development projects.
Selling, general and administrative expenses as a percentage of net
revenues for the three and six months ended September 30, 1997, were 23.9%
and 20.8%, respectively. For the three and six months ending September 30,
1996, selling, general and administrative expenses as a percentage of net
revenues were 18.5% and 19.5%. The increase for the periods ended September
30, 1997 is a result of increased spending in marketing and related
expenses for new products, slightly offset by a decrease in sales
commissions.
Non-recurring recapitalization and related expenses for the three and six
months ended September 30, 1997 was $1.0 million and $3.9 million,
respectively. These were non-cash charges related to the arrangements for
the Company's executive officers in connection with the Recapitalization.
Interest expense for the three and six months ended September 30, 1997 were
$3.6 million and $5.8 million, respectively. Compared to the corresponding
periods of fiscal 1997, interest expense increased $3.2 million and $4.9
million, respectively. This increased interest expense is attributed to the
additional debt incurred as part of the Recapitalization.
For the three and six months ended September 30, 1997, the Company recorded
a benefit for income taxes of $0.4 million and $0.2 million, respectively.
During the three and six months ended September 30, 1996, the Company
recorded a provision for income taxes of $3.5 million and $6.0 million,
respectively. These decreases were caused by reductions in net income of
the Company for the respective periods.
Liquidity and Capital Resources
The Company's principal liquidity requirements are for working capital,
consisting primarily of accounts receivable, inventories, capital
expenditures and debt service. Historically, the Company has funded its
operating activities principally from working capital, capital infusions
from Toray and Shimadzu and working capital lines of credit.
Cash flow provided by operating activities was $3.8 million and $3.0
million for the six months ended September 30, 1997 and 1996, respectively.
The increase in cash flow
11
<PAGE>
provided by operating activities is a result of the timing between when an
obligation is incurred and when it was paid and non-cash recapitalization
expenses, offset by the decrease in net income.
Purchases of property and equipment were $1.9 million and $0.7 million for
the six months ended September 30, 1997 and 1996.
The Company issued $115.0 million in aggregate principal amount of senior
notes to finance the Recapitalization, including the repayment of notes
payable and redemption of common stock. The Company also received proceeds
of approximately $20.2 million from the issuance of common stock.
In connection with the Recapitalization, the Company entered into the Bank
Credit Facility. The Bank Credit Facility provides for borrowings of up to
$30.0 million for working capital and other general corporate purposes, and
bears interest, at the Company's option, at (i) the Base Rate (as defined
in the Bank Credit Facility) plus 1.75% or (ii) the Eurodollar Rate (as
defined in the Bank Credit Facility) plus 3.00%. The Company's borrowings
under the Bank Credit Facility are secured by substantially all of the
Company's assets and a pledge of substantially all of the capital stock of
the Company's domestic subsidiaries and 65% of the capital stock of the
Company's first-tier foreign subsidiaries. The Bank Credit Facility matures
on May 16, 2002. Subsequent to the Recapitalization, the Company used $7.6
million of the available borrowing capacity under the Bank Credit Facility
to issue letters of credit. At September 30, 1997, the Company had unused
borrowing capacity under the Bank Credit Facility of $22.4 million.
The Bank Credit Facility requires the Company to meet certain financial
tests and contains covenants customary for this type of financing.
In September 1997, the Board of Directors authorized management of the
Company to file a Registration Statement with the Securities and Exchange
Commission permitting the Company to sell shares of its common stock in an
initial public offering (the "Offering"). On October 2, 1997, the Company
filed such Registration Statement on Form S-1 with the Securities and
Exchange Commission.
Numerous factors, many of which are beyond the control of the Company, may
cause the Offering not to be completed or, if completed, to be on terms
different than those described herein. Such factors include, among other
things, market conditions in the semiconductor capital equipment industry
and the general status of the securities market (particularly, the
technology sector, thereof). As a result, no assurance can be given that
the Offering will be completed or, if completed, will be on the terms
outlined therein.
The Company's principal sources of funds are cash flows from operating
activities and borrowings under the Bank Credit Facility. The Company
believes that these funds will provide the Company with sufficient
liquidity and capital resources for the Company to meet its current and
future financial obligations, as well as to provide funds for the
12
<PAGE>
Company's working capital, capital expenditures and other needs for at
least the next twelve months. No assurance can be given, however, that this
will be the case. Depending upon its rate of growth and profitability, the
Company may require additional equity or debt financing to meet its working
capital requirements or to fund its research and development activities.
There can be no assurance that additional financing will be available when
required or, if available, will be on terms satisfactory to the Company.
The Company's future operating performance and ability to service or
refinance the Notes and to repay, extend or refinance the Bank Credit
Facility will be subject to future economic conditions and to financial,
business and other factors, many of which are beyond the Company's control.
Foreign exchange rate fluctuations have historically not had a significant
impact on the Company's results of operations. However, future exchange
rate fluctuations could have a material adverse effect on the Company's
business, financial condition and results of operations.
13
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
On July 15, 1997, the Company sold an aggregate of 206,126 shares of
Class B common to certain employees of the Company for an aggregate of
$48,440. This sale was deemed exempt from registration under the
Securities Act of 1933 by virtue of Section 4(2) thereof as a
transaction not involving a public offering.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
3.1 Restated Certificate of Incorporation of Therma-Wave, Inc. (1)
3.2 Amended and Restated By-Laws of Therma-Wave, Inc. (1)
27.1 Financial Data Schedule
_______
(1) Incorporated by reference to the same numbered exhibit to the
Company's Registration Statement on Form S-4 (Registration No.
333-29871)
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the six months
ended September 30, 1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THERMA-WAVE, INC.
(Registrant)
/s/ ANTHONY LIN
---------------
ANTHONY LIN
Executive Vice President,
Chief Financial Officer
(as Registrant and as Principal Financial Officer)
November 18, 1997
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THERMA-WAVE,
INC.'S FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> SEP-30-1997
<CASH> $17,614
<SECURITIES> 0
<RECEIVABLES> 24,657
<ALLOWANCES> 2,812
<INVENTORY> 20,739
<CURRENT-ASSETS> 67,555
<PP&E> 6,760
<DEPRECIATION> 946
<TOTAL-ASSETS> 86,870
<CURRENT-LIABILITIES> 25,078
<BONDS> 115,000
14,101
0
<COMMON> 114
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<INCOME-CONTINUING> (359)
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<EPS-PRIMARY> 0
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</TABLE>
