<PAGE>
PROSPECTUS
1,359,080 SHARES
GENUS, INC.
COMMON STOCK
The shares offered by this Prospectus may be sold by certain
shareholders (see "Selling Shareholders") from time to time through brokers,
to dealers acting as principals, directly to purchasers in negotiated
transactions, or any combination of these methods of sale. Sales may be made
at prevailing market prices at the time of such sales, at prices related to
such prevailing prices, at fixed prices that may be changed or at negotiated
prices. The Company will not receive any proceeds from the sale of the
shares offered by this Prospectus.
The Company will pay the expenses of this offering (excluding brokerage
commissions), estimated at $11,000.
On June 7, 1995, the last price of the Common Stock on the Nasdaq
National Market was $13.375 per share (symbol GGNS).
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THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
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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 date of this Prospectus is June 8, 1995.
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AVAILABLE INFORMATION
As used in this Prospectus, unless the context otherwise requires, the
terms "Genus" and the "Company" mean Genus, Inc. and its subsidiaries. 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 and other information with the Securities and
Exchange Commission (the "Commission"). Reports and proxy information filed
with the Commission pursuant to the informational requirements of the
Exchange Act may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following regional offices of the
Commission: New York Regional Office, 75 Park Place, 14th Floor, New York,
New York 10007; and Chicago Regional Office, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material may be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Company also has filed with the Commission a Registration Statement
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities offered hereby. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information, reference is made to
the Registration Statement, copies of which may be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the fees prescribed by the Commission. Statements
contained in this Prospectus as to the contents of any contract or any other
document filed, or incorporated by reference, as an exhibit to the
Registration Statement, are qualified in all respects by such reference.
INFORMATION INCORPORATED BY REFERENCE
The following documents, previously filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by
reference, except as superseded or modified herein:
Annual Report on Form 10-K for the fiscal year ended December 31, 1994
(the "1994 Form 10-K");
Form 10-K/A to the 1994 Form 10-K filed May 25, 1995;
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1995 (the "March 31, 1995 Form 10-Q"); and
Form 10-Q/A to the March 31, 1995 Form 10-Q filed May 25, 1995.
Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to the
termination of this offering shall be deemed to be incorporated by reference
into this Prospectus and shall be part hereof from the date of filing of such
document. Any statement contained in any document incorporated or deemed to
be incorporated by reference in this Prospectus shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any document described above (other than exhibits).
Requests for such copies should be directed to Genus, Inc. at its principal
offices located at 1139 Karlstad Drive, Sunnyvale, California 94089,
telephone (408) 747-7120, attention: Investor Relations.
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<PAGE>
RISK FACTORS
An investment in the shares being offered by this Prospectus involves a
high degree of risk. The following factors, in addition to those discussed
elsewhere in this Prospectus, should be carefully considered in evaluating
the Company and its business prospects before purchasing shares offered by
this Prospectus.
HISTORICAL PERFORMANCE. Although the Company had net income of $4.2
million in the year ended December 31, 1994, the Company experienced losses
of $4.0 million, $17.1 million and $6.9 million for the years ended December
31, 1991, 1992 and 1993. Although the Company has experienced improved sales
and operating results in recent quarters, there can be no assurance that the
Company will be able to sustain similar revenue growth on a quarterly or
annual basis, or that the Company will be able to maintain profitability on a
quarterly or annual basis.
COMPETITION. The semiconductor manufacturing capital equipment industry
is highly competitive. The Company faces substantial competition throughout
the world. The Company believes that to remain competitive, it will require
significant financial resources in order to offer a broader range of
products, to maintain customer service and support centers worldwide and to
invest in product and process research and development. Many of the
Company's existing and potential competitors have substantially greater
financial resources, more extensive engineering, manufacturing, marketing and
customer service and support capabilities, as well as greater name
recognition than the Company. The Company expects its competitors to
continue to improve the design and performance of their current products and
processes and to introduce new products and processes with improved price and
performance characteristics. If the Company's competitors enter into
strategic relationships with leading semiconductor manufacturers covering MeV
or CVD products similar to those sold by the Company, this could have a
material adverse effect on the Company's ability to sell its products to
these manufacturers. No assurance can be given that the Company will
continue to compete successfully in the United States or worldwide. The
Company faces direct competition in CVD tungsten silicide from Applied
Materials, Inc. and Tokyo Electron, Ltd. In the ion implantation
marketplace, the Company's MeV ion implantation systems compete with high
current and medium current systems marketed by Eaton Corporation and other
manufacturers. There can be no assurance that competitors will not succeed
in developing new technologies, in offering products that are offered at
lower prices than those of the Company or in obtaining market acceptance for
products more rapidly than the Company.
DEPENDENCE ON NEW PRODUCTS AND PROCESSES. The Company believes that its
future performance will depend in part upon its ability to continue to
enhance its existing products and their process capabilities and to develop
and manufacture new products with improved process capabilities. As a
result, the Company expects to continue to invest in research and
development. The Company also must manage product transitions successfully,
as introductions of new products could adversely affect sales of existing
products. There can be no assurance that the market will accept the
Company's new products or that the Company will be able to develop and
introduce new products or enhancements to its existing products and processes
in a timely manner which satisfy customer needs or achieve market acceptance.
The failure to do so could have a material adverse effect on the Company's
business, financial condition and results of operations. Furthermore, if the
Company is not successful in the development of advanced processes or
equipment for manufacturers with whom it has formed strategic alliances, its
ability to sell its products to those manufacturers would be adversely
affected.
CYCLICAL NATURE OF THE SEMICONDUCTOR INDUSTRY. The Company's business
depends upon the capital expenditures of semiconductor manufacturers, which
in turn depend on the current and anticipated market demand for integrated
circuits and products utilizing integrated circuits. The semiconductor
industry is cyclical and has historically experienced periodic downturns,
which often have had an adverse effect on the semiconductor industry's demand
for semiconductor manufacturing capital equipment. Prior semiconductor
industry downturns have adversely affected the Company's revenue, operating
margins and results of operations. No assurance can be given that the
Company's revenue and operating results will not be materially and adversely
affected if a downturn in the semiconductor industry occurs in the future.
In addition, the need for continued investment in research and development,
substantial capital equipment requirements and extensive ongoing worldwide
customer service and support capability may limit the Company's ability to
reduce expenses or to maintain them at current levels. Accordingly, there is
no assurance that the Company will be able to remain profitable in the future.
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<PAGE>
RELIANCE ON INTERNATIONAL SALES
International sales accounted for approximately 70%, 84%, 89% and 80%,
respectively, of total net sales in fiscal 1992, 1993 and 1994 and the first
three months of 1995. In addition, net sales to Korean customers accounted
for approximately 11%, 32%, 50% and 72%, respectively, of total net sales
during the same periods. The Company anticipates that international sales,
including sales to Korea, will continue to account for a significant portion
of net sales. As a result, a significant portion of the Company's sales will
be subject to certain risks, including unexpected changes in regulatory
requirements, tariffs and other barriers, political and economic instability,
difficulties in accounts receivable collection, difficulties in managing
distributors or representatives, difficulties in staffing and managing
foreign subsidiary operations and potentially adverse tax consequences.
Although the Company's foreign sales are denominated in U.S. dollars and the
Company does not engage in hedging transactions, the Company's foreign sales
are subject to the risks associated with unexpected changes in exchange
rates, which could have the effect of making the Company's products more or
less expensive. There can be no assurance that any of these factors will not
have a material adverse effect on the Company's business, financial condition
and results of operations.
RELIANCE ON A SMALL NUMBER OF CUSTOMERS. Historically, the Company has
relied on a limited number of customers for a substantial portion of its net
sales. In fiscal 1992, net sales to Innotech and IBM accounted for 32% and
16%, respectively, of total net sales. In fiscal 1993, net sales to Innotech,
Samsung and SGS Thomson accounted for 26%, 23% and 14%, respectively, of
total net sales. In fiscal 1994, net sales to Samsung, Innotech and SGS
Thomson accounted for 33%, 19% and 14%, respectively, of total net sales and,
in the first three months of 1995, net sales to Samsung and SGS Thomson
accounted for 70% and 15%, respectively, of total net sales. Because the
semiconductor manufacturing industry is concentrated in a limited number of
generally larger companies, the Company expects that a significant portion of
its future product sales will be concentrated within a limited number of
customers. None of these customers has entered into a long-term agreement
requiring it to purchase the Company's products. Furthermore, sales to
certain of these customers may decrease in the future when those customers
complete their current semiconductor equipment purchasing requirements for
new or expanded fabrication facilities. Although the composition of the
Company's largest customers has varied from year to year, the loss of a
significant customer or any reductions in orders from a significant customer,
including reductions due to customer departures from recent buying patterns,
market, economic or competitive conditions in the semiconductor industry or
in the industries that manufacture products utilizing integrated circuits,
could have a material adverse effect on the Company's business, financial
condition and results of operations.
PRODUCT CONCENTRATION; RAPID TECHNOLOGICAL CHANGE. Semiconductor
manufacturing equipment and processes are subject to rapid technological
change. The Company derives its revenue primarily from the sale of its MeV
ion implantation and tungsten silicide CVD systems. The Company estimates
that the life cycle for these systems is generally from three to five years.
The Company believes that its future prospects will depend in part upon its
ability to continue to enhance its existing products and their process
capabilities and to develop and manufacture new products with improved
process capabilities. As a result, the Company expects to continue to make
significant investments in research and development. The Company also must
manage product transitions successfully, as introductions of new products
could adversely affect sales of existing products. There can be no assurance
that future technologies, processes or product developments will not render
the Company's product offerings obsolete or that the Company will be able to
develop and introduce new products or enhancements to its existing products and
processes in a timely manner which satisfy customer needs or achieve market
acceptance. The failure to do so could adversely affect the Company's
business, financial condition and results of operations. Furthermore, if the
Company is not successful in the development of advanced precesses or
equipment for manufacturers with whom it currently does business, its ability
to sell its products to those manufacturers would be adversely affected.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS. The Company's revenue and
operating results may fluctuate significantly from quarter to quarter. The
Company derives its revenue primarily from the sale of a relatively small
number of high-priced systems, many of which are ordered and shipped during
the same quarter. The Company's results of operations for a particular
quarter could be adversely affected if anticipated orders for even a small
number of systems were not received in time to enable shipment during the
quarter, if anticipated shipments were delayed or canceled by one or more
customers or if shipments were delayed due to manufacturing difficulties.
The Company's revenue and operating results may also fluctuate due to the mix
of products sold and the channel of distribution.
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<PAGE>
DEPENDENCE ON KEY SUPPLIERS. Certain of the components and
sub-assemblies included in the Company's products are obtained from a single
supplier or a limited group of suppliers. Disruption or termination of these
sources could have a temporary adverse effect on the Company's operations.
The Company believes that alternative sources could be obtained and qualified
to supply these products, if necessary. Nevertheless, a prolonged inability
to obtain certain components could have a material adverse effect on the
Company's business, financial condition and results of operations.
DEPENDENCE ON INDEPENDENT DISTRIBUTORS. The Company currently sells and
supports its ion implantation and CVD products through direct sales and
customer support organizations in the U.S. and Western Europe and through
five exclusive sales representatives and distributors in the U.S., Japan,
Korea, Taiwan and Hong Kong. Although the Company believes that alternative
sources of distribution are available, the disruption or termination of its
existing distributor relationships could have a temporary adverse effect on
the Company's business, financial condition and results of operations.
IMPACT OF SHARES ELIGIBLE FOR FUTURE SALE. Sales of substantial amounts
of the Company's Common Stock in the public market after this offering could
have a material adverse effect on the market price of the Common Stock and
the Company's ability to raise capital. In addition to the 1,359,080 shares
of Common Stock offered hereby, the Company is required to file a
registration statement before February 17, 1996 covering the offering of an
additional 1,179,939 shares of the Company's Common Stock to the public.
VOLATILITY OF STOCK PRICE. The Company's Common Stock has experienced
substantial price volatility, particularly as a result of quarter-to-quarter
variations in the actual or anticipated financial results of, or
announcements by, the Company, its competitors or its customers. Also, the
stock market has experienced extreme price and volume fluctuations which have
affected the market price of many technology companies, in particular, and
which have often been unrelated to the operating performance of these
companies. These broad market fluctuations, as well as general economic and
political conditions in the United States and the countries in which the
Company does business, may adversely affect the market price of the Company's
Common Stock.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership by the Selling Shareholders of shares of the Company's
Common Stock. The Selling Shareholders named below may sell the shares of
Common Stock offered hereby from time to time and may choose to sell less
than all or none of such shares.
<TABLE>
<CAPTION>
Beneficial
Ownership Number of Beneficial
Before Shares Ownership
Offering Offered After Offering
--------------- --------- -----------------
Number Percent Number Percent**
------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
ING Sviluppo Gestioni SpA 429,183 3.3 429,183 -- --
TR Technology Investment Trust, PLC 318,311 2.4 318,311 -- --
Conseco Capital Management 214,593 1.6 214,593 -- --
Oberweis Emerging Growth Fund 143,061 1.1 143,061 -- --
San Paolo Fundi SpA 143,060 1.1 143,060 -- --
HTR Global Technology Fund 110,872 * 110,872 -- --
<FN>
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* Less than 1%.
** Assumes all shares offered by this Prospectus are sold and no beneficially
owned shares are sold other than by this Prospectus.
</TABLE>
The shares offered by this Prospectus were purchased by the Selling
Shareholders from the Company at a price of $6.99 per share.
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<PAGE>
PLAN OF DISTRIBUTION
The sale of all or a portion of the shares of Common Stock offered
hereby by the Selling Shareholders may be effected from time to time at
prevailing market prices at the time of such sales, at prices related to such
prevailing prices, at fixed prices that may be changed or at negotiated
prices. The Selling Shareholders may effect such transactions by selling
directly to purchasers in negotiated transactions, to dealers acting as
principals or through one or more brokers, or any combination of these
methods of sale. Dealers or brokers may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders. The
Selling Shareholders and any brokers or dealers that participate in the
distribution may under certain circumstances be deemed to be "underwriters"
within the meaning of the Securities Act, and any commissions received by
such brokers or dealers and any profits realized on the resale of shares by
them may be deemed to be underwriting discounts and commissions under the
Securities Act. The Company and the Selling Shareholders may agree to
indemnify such brokers or dealers against certain liabilities, including
liabilities under the Securities Act. In addition, the Company has agreed to
indemnify the Selling Shareholders and any underwriter with respect to the
shares of Common Stock offered hereby against certain liabilities, including,
without limitation, certain liabilities under the Securities Act, or, if such
indemnity is unavailable, to contribute toward amounts required to be paid in
respect of such liabilities.
To the extent required under the Securities Act or the rules of the
Commission, a supplemental prospectus will be filed, disclosing (i) the name
of any such brokers or dealers, (ii) the number of shares involved, (iii) the
price at which such shares are to be sold, (iv) the commissions paid or
discounts or concessions allowed to such brokers or dealers, where
applicable, (v) that such brokers or dealers did not conduct any
investigation to verify the information set out or incorporated by reference
in this Prospectus, as supplemented, and (vi) other facts material to the
transaction.
There is no assurance that any of the Selling Shareholders will sell any
or all of the shares of Common Stock offered hereby.
The Company has agreed to pay certain costs and expenses incurred in
connection with the registration of the shares of Common Stock offered
hereby, except that the Selling Shareholders shall be responsible for all
selling commissions, transfer taxes and related charges in connection with
the offer and sale of such shares.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon by
Wilson, Sonsini, Goodrich & Rosati, Professional Corporation, Palo Alto,
California.
EXPERTS
The Consolidated Financial Statements of the Company at December 31,
1994 and 1993 and for each of the three years in the period ended December
31, 1994, incorporated by reference in this Prospectus and Registration
Statement, have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their report thereon incorporated by reference
in this Prospectus and Registration Statement. Such financial statements
have been incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
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