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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1995 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 0-17139
GENUS, INC.
(Exact name of registrant as specified in its charter)
California 94-279080
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1139 Karlstad Drive, Sunnyvale, California 94089
(Address of principal executive offices) (Zip code)
(408) 747-7120
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name, former address and former fiscal year,if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such 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 ___X____ No ________
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Common shares outstanding at May 10, 1995: 15,674,329
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GENUS, INC.
Index
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PART I. FINANCIAL INFORMATION
Page No.
<C> <S> <C>
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 9
Signatures 12
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GENUS, INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Net sales for the quarter ended March 31, 1995 were $22.5 million compared
with net sales of $13.8 million in the same period of 1994, a 63 percent
increase. The increase was primarily due to the introduction of the tungsten
chemical vapor deposition (CVD) 7000 product line with higher average selling
prices (ASP), higher unit sales of ion implantation systems and greater
spares revenue. The Company's net sales results continue to benefit from
strong market conditions in Korea.
Gross margin for the quarter ended March 31, 1995 was 41 percent compared to
39 percent for the same period in 1994. The improvement in gross margin was
primarily due to higher ASP, higher unit sales volumes, greater absorption of
manufacturing costs, and other gross margin improvement programs. The
Company's gross margins have historically been affected by variations in ASP,
changes in the mix of product sales, unit shipments levels, the level of
foreign sales, and competitive pricing pressures.
During the first quarter of 1995, Research and Development (R&D) expenses as
a percentage of net sales, were 13 percent compared to 15 percent in the same
period of 1994. The change was primarily due to higher net sales volumes.
On an absolute dollar basis, R&D expenses during the first quarter of 1995
increased $1.0 million when compared with the same period in 1994. The
increase was primarily due to higher development material cost and
depreciation expense for new product development. The Company continually
evaluates its R&D investment in view of evolving competitive and market
conditions.
Selling, general and administrative expenses (S,G&A) were 19 percent of net
sales during the first quarter of 1995 compared to 20 percent in the same
period of 1994. The change was primarily due to higher sales volume. On an
absolute dollar basis, S,G&A increased $1.5 million when compared with the
same period in 1994. The change was primarily due to increased headcount and
related payroll costs, higher sales commissions and increased depreciation
expense.
During the first quarter of 1995, the Company earned the same amount in other
income when compared with the same period in 1994. The effective tax rate
for the first quarter of 1995 was 7 percent compared with the effective tax
rate of 4 percent during the same period in 1994.
In recent quarters, the Company has recorded positive financial performance
and consistently solid order rates. These results have been primarily due to
strong market conditions for the Company's products in Korea, as a result of
increased investments in DRAM manufacturing facilities in this region. The
Company anticipates that these positive trends will continue in the
near-term. However, due to the continued competitive market
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environment for the Company's products, the cyclical nature of the
semiconductor equipment market and the Company's reliance on a limited number
of customers for a significant portion of its orders, the Company remains
cautiously optimistic about the future prospects for its business. The
Company continues to make strategic investments for new product development
and manufacturing improvements with a view to improve future performance by
enhancing product offerings; however, such investment may adversely affect
short-term operating performance. The Company is also continuing its efforts
to implement productivity improvements for future operating performance. The
Company believes that the future economic environment could continue to
lengthen the order and sales cycles for its products, causing it to continue
to simultaneously book and ship some orders during the same quarter.
LIQUIDITY AND CAPITAL RESOURCES
During the first quarter ended March 31,
1995, the Company's cash and cash equivalents increased $7.3 million
principally due to the net proceeds from the issuance of common stock of
$16.4 million, offset by cash used in operating activities of $4.3 million,
payment of short-term bank borrowings of $3.8 million and the purchase of
property and equipment of $0.6 million. The negative change in cash from
operating activities primarily resulted from an increase of $6.8 million in
accounts receivable due to higher net sales, and the inability to collect
shipments made late in the quarter, and an increase in inventories of $2.9
million as a result of inventory purchases received late in the quarter to
support shipments early in the second quarter of 1995. The reduction in cash
from operating activities was offset by the increase in accounts payable of
$2.8 million as a result of higher inventory purchases and the cash
management practices of the Company; depreciation and amortization of $0.9
million and net income of $1.9 million.
The Company's primary source of funds at March 31, 1995 consisted of $17.5
million in cash and cash equivalents, and funds available under a $10.0
million revolving line of credit. The line of credit is secured by
substantially all of the assets of the Company and expires in May 1996. At
March 31, 1995, the Company had no borrowings outstanding under the line of
credit.
Capital expenditures during the first quarter of 1995 were $1.0 million and
related primarily to acquisition of machinery and equipment for the Company's
R&D and Applications Laboratories. The Company anticipates that it will
continue to make capital expenditures during the remainder of 1995. These
expenditures, primarily for the R&D and Applications Laboratories are
anticipated to be funded through existing working capital or lease financing.
On February 17, 1995, the Company sold 2,539,018 shares of Common Stock
through a private placement offering, which generated gross proceeds of
approximately $17.5 million.
The Company believes that cash generated from operations, if any, proceeds
from the private placement offering and existing credit facilities will be
sufficient to satisfy its cash needs during the next twelve months and for the
foreseeable future.
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GENUS, INC.
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.
Date: May 24, 1995 GENUS, INC.
William W.R. Elder
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William W.R. Elder
Chairman and Chief Executive Officer
Todd S. Myhre
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Todd S. Myhre,
President and
Chief Operating Officer
Acting Chief Financial
Officer
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