<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
/X/ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended December 31, 1995, or
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
COMMISSION FILE NO. 0-17139
GENUS, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 94-2790804
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
1139 KARLSTAD DRIVE
SUNNYVALE, CA 94089
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 747-7120
------------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON STOCK, NO PAR VALUE
COMMON SHARE PURCHASE RIGHTS
(TITLE OF CLASS)
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 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 X No _
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based on the closing sale price of the Common Stock on March 28,
1996, in the over-the-counter market as reported by the Nasdaq National Market,
was approximately $78,512,616. Shares of Common Stock held by each officer and
director and by each person who owns 5% or more of the outstanding voting stock
have been excluded in that such persons may be deemed to be affiliates. This
determination of affiliate status is not necessarily a conclusive determination
for other purposes.
As of March 28, 1996, Registrant had 16,249,323 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by reference in Parts II, III
and IV of this
Form 10-K Report:
(1) Registrant's 1995 Annual Report to Shareholders -- Items 5, 6, 7, 8 and 14;
and
(2) Proxy Statement for Registrant's 1995 Annual Meeting of Shareholders --
Items 10, 11, 12 and 13.
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<PAGE>
PART I
ITEM 1. BUSINESS
GENERAL
Genus, Inc. ("Genus" or "the Company") designs, manufactures and markets
capital equipment and processes for advanced semiconductor manufacturing. The
Company's products -- high energy MeV (millions of electron volts) ion
implantation systems and chemical vapor deposition ("CVD") equipment are used
worldwide to produce integrated circuits ("ICS") for the data processing,
communications, medical, military, transportation and consumer electronics
industries. Genus was the first to market high energy MeV ion implantation and
the chemical vapor deposition of tungsten silicide, which perform two critical
steps in the manufacture of semiconductors.
The Company's global customer base consists of semiconductor manufacturers
in the United States, Europe and Asia/Pacific including Japan, Korea and Taiwan.
PRODUCTS
The primary products manufactured by Genus include two MeV ion implantation
models and three CVD models. Each of these products is available with a variety
of options and/or upgrades.
MEV ION IMPLANTATION
Ion implanters accelerate and drive electrically charged atoms (ions) into
the surface of a silicon wafer to convert silicon into semiconductor material as
part of the process of manufacturing integrated circuits. The market for ion
implanters consists of three primary segments: high current, medium current and
high energy (MeV). Currently, high and medium current ion implanters make up
approximately 85 percent of the total ion implantation market. However, the
Company believes that high energy ion implantation is the fastest growing
segment due to its use in emerging advanced technology applications and low cost
of ownership.
CURRENT MEV ION IMPLANT PRODUCTS.
TANDETRON-TM- 1520. In November 1995, Genus introduced the Tandetron-TM-
1520, a third-generation MeV ion implanter which evolved from the Genus 1500
system, introduced in 1988, and the Genus 1510 system, introduced in 1992.
Although specifically designed for high energy applications, the Tandetron
implants with a wide range of energies from 10keV (thousands of electron volts)
to 3 MeV. This broad range allows the system to effectively meet both medium
current and high energy application requirements. Key differentiating features
of the Tandetron are its small footprint, enhanced performance and low
cost-of-ownership. The system also offers significant production throughput
advantages for MeV applications including up to 50% higher throughput for single
implants and up to 66% increased throughput for chained implants. Genus has a
patent application pending on the Buried Implanted Layer for Lateral Isolation
("BILLI") structure. The Company believes that the BILLI technology may offer a
significant competitive advantage for process simplification and epi
replacement, especially in logic applications.
GENUS 1510. The Company's G1510 MeV ion implantation system was designed to
meet low and medium dose requirements in the 40 keV to 3 MeV range. Introduced
in September 1992, the 1510 is Genus' second generation MeV ion implanter and
incorporates the basic design and field experience of its predecessor, the
G1500. It is a fully automated, highly reliable implanter with strong beam
purity at specified throughput of up to 180 wafers per hour on 200mm wafers.
Currently, the Tandetron 1520 and the Genus 1510 are the only commercially
viable implanters capable of performing the full range of implants required for
the BILLI structure, which Genus believes is critical to the future of MeV
technology for advanced memory and logic applications.
Ion implant customers include: Fujitsu, LG, Hitachi, Hyundai, IBM,
Mitsubishi, Samsung, SGS-Thomson, Sharp and Sony.
2
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THIN FILM (CVD)
To manufacture an IC, there are a series of steps during which layers of
conductive and non-conductive materials are deposited onto the surface of wafers
made of semiconducting material. Deposited thin films include those used for
interconnect layers (conductors of electrical current) and those used for
dielectrics (insulating or nonconductive layers). The interconnect or metal
layer is deposited on the wafer surface to provide the electrical connection
between the various circuit elements, while the dielectric layer is deposited
between the interconnect layers to provide electrical insulation between
conductive interconnect layers.
CURRENT THIN FILM PRODUCTS
Genus' CVD products are designed for the deposition of tungsten silicide on
gate interconnects to increase speed. The Company offers three basic hardware
architectures. The most recent hardware architecture is the 7000 series, a
single wafer, tungsten silicide cluster tool. The Company's two other hardware
architectures, the 8700 Series and the 6000 Series, also deposit tungsten
silicide.
GENUS 7000 SYSTEM. To meet the advanced technology requirements of the 64M
DRAM generation and beyond, in December 1994, the Company introduced the Genus
7000, a single wafer, open architecture cluster tool. The initial processes on
this platform are silane and DCS (dichlorosilane) tungsten silicide. The modular
design of the 7000 provides customers with the flexibility of multiple process
configurations while offering standard mechanical interfaces, statistical
process control, diagnostics and industry standard interfaces for factory host
computers. The 7000 uses a small volume, computer-modeled process chamber with
specialized gas distribution which yields a high productivity process and low
downtime.
GENUS 8700 SERIES. A batch CVD tungsten silicide product, the 8700 Series
incorporates six heated chucks in the batch chamber and six gas injection ports,
which enable individual wafer process adjustment of gas flows and chuck
temperature for superior wafer-to-wafer repeatability. The dual cassette load
lock system provides continuous wafer loading and unloading capability, which
results in high system throughput (wafers per hour).
The cold wall reaction chamber and robotic wafer handling system are
designed to ensure highly reliable operation with a minimum of foreign material
generation. The system's through-the-wall mounted main frame design is ideally
suited for use in Class 1 or above cleanrooms. All models of the 8700 can be
configured to process from 100mm (4") to 200mm (8") wafers.
GENUS 6000 SERIES. Similar in design to the 8700 Series, the 6000 Series is
a third-generation tool incorporating new designs to ensure reliability and ease
of maintenance. It was designed to meet the factory automation needs of the
industry. The 6000 Series consists of a closed architecture cluster system which
incorporates the 8700-style six-chuck batch CVD chamber. This system also offers
dual cassette load lock architecture which enables continuous batch processing.
A new robotic handling system allows mechanical set-up through
computer-controlled recipes. The overall design features component upgrades
which provide production-worthy processing of 100mm (4") to 200mm (8") wafers.
Genus' thin film customers include: AMD, Fujitsu, LG, Hitachi, Hyundai, IBM,
Samsung, Sanyo, SGS-Thomson and Sharp.
MARKETING, SALES AND SERVICE
Genus sells and supports its ion implantation and CVD products through
direct sales and customer support organizations in the U.S., Western Europe and
Korea and through six exclusive sales representatives and distributors in the
U.S., Japan, Korea, Taiwan and Hong Kong. Yarbrough Southwest provides sales
distribution in the southwestern region of the United States, and Semifore in
the Northwest. Innotech Corporation, a value-added distributor, offers sales
distribution and field service in Japan. Genus Korea, Ltd., established in
January 1996, provides in-country field service and support. Sales in the Korean
and Taiwanese markets are served by the representative organizations of Aju-Exim
and Spirox, respectively. Hong Kong, Singapore and the Peoples Republic of China
are
3
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served by Katech International, LTD., based in Hong Kong. The Asia/Pacific
organizations provide sales and service, as well as distribution assistance for
spare parts. Genus distributes spare parts from several worldwide depots
including: Sunnyvale, California; Tokyo, Japan; Seoul, Korea; Hsin-Chu City,
Taiwan; and Evry, France. To facilitate its marketing efforts, the Company has a
clean room applications laboratory in Sunnyvale, California.
Genus' products are sold primarily to domestic and foreign device
manufacturers, including both foundries (companies producing semiconductors
principally for other semiconductor manufacturers) and companies producing
semiconductors mainly for outside sales. Genus has sold, installed and supported
equipment to almost every major semiconductor manufacturer in the world.
The Company maintains sales, technical support and service personnel at its
principal executive offices located in Sunnyvale, California, and in
Newburyport, Massachusetts. Genus has also established several foreign
subsidiaries to facilitate its sales and service activities abroad: Genus Korea,
Ltd. in Seoul Korea; Genus KK in Tokyo Japan; Genus Europa SARL in Evry, France;
Genus Europa Ltd. in Melbourn, Herts, England; Genus Europa GmbH in Stuttgart,
Germany; and Genus Europa Srl. in Milan, Italy. These subsidiaries provide
installation, field service, and maintenance, as well as additional technical
support to assist Genus' customers in effectively utilizing the Company's
products. Such services are also provided by the Company's distributors in
Tokyo, Seoul, Taipei and Hong Kong. The Company warrants its products against
defects in material and workmanship for twelve months.
In 1995, one customer accounted for 63% of the Company's net sales. Three
customers accounted for 33%, 19% and 14% of net sales in 1994. In 1993, three
customers accounted for 26%, 23% and 14% of net sales. See Note 14 of Notes to
Consolidated Financial Statements. Although export sales are subject to certain
control restrictions, including approval by the Office of Export and
Administration of the U.S. Department of Commerce, Genus has not experienced any
significant difficulties related to such limitations.
BACKLOG. The Company's backlog at December 31, 1995, was approximately
$45.0 million, compared with approximately $44.0 million at December 31, 1994.
Genus includes in its backlog only those orders for which a customer purchase
order has been received and a delivery date within twelve months has been
specified. The Company's backlog at December 31, 1995 consisted of product
shipments expected to be delivered during calendar year 1996. However, because
of the possibility of customer changes in delivery schedules or cancellations of
orders, the Company's backlog as of any particular date may not be
representative of actual sales for any succeeding period.
RESEARCH AND DEVELOPMENT
Constant technological change, fierce competition and a high rate of
technical obsolescence are key characteristics of the semiconductor equipment
industry. Genus' future prospects depend in part on the Company's ability to
broaden its market acceptance by differentiating its products on the basis of
production-worthiness, technical capability, productivity, particle control, and
customer support. To maintain close relationships with its customers and remain
responsive to their requirements, continued investment is needed for research
and development. In 1993, 1994 and 1995, the Company's research and development
expenditures were approximately $7.8 million, $9.0 million and $12.3 million,
respectively.
As part of its research and development program, the Company has established
technical research relationships with certain major semiconductor manufacturers
to further enhance its products for advanced ULSI devices.
COMPETITION
The Company believes that the principal competitive factors in the
semiconductor equipment market are product performance, quality and reliability,
wafer throughput, customer support, equipment automation, price and
relationships.
4
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Genus competes with a number of companies which historically have had wider
name recognition, broader product acceptance within the industry and
substantially greater resources. In addition, the rapid rate of technological
change in the industry creates opportunities for firms to enter this market and
apply new technologies to meet its needs. Accordingly, the Company anticipates
that it will face competition in the domestic as well as foreign marketplace
from both well-established and new competitors.
In the ion implantation marketplace, the Company's MeV ion implantation
system competes with one other MeV system. The Company believes that its high
energy MeV system currently has certain technological advantages over the
competing MeV system. Genus has new applications for MeV ion implantation
technology which it believes will see widespread use in the future since they
enable significant manufacturing cost reduction and improved integrated circuit
performance. The Company faces direct competition from Eaton Corporation. The
presence of Eaton in the MeV market place has continued to increase during 1995.
There can be no assurance that competition in the Company's particular MeV
product market will not intensify or that Genus' technical advantages may not be
reduced or lost as a result of technical advances made by competitors or changes
in semiconductor processing technology.
In the CVD market, Genus competes with other producers of CVD systems, as
well as alternative methods of deposition, such as sputtering, and thin films
other than tungsten silicide. The Company faces direct competition in tungsten
silicide from Applied Materials, Inc. and Tokyo Electron, Ltd. The impact of
their presence in the CVD tungsten silicide market continued to increase during
1995. There can be no assurance that levels of competition in the Company's
particular CVD product market will not intensify or that Genus' technical
advantages may not be reduced or lost as a result of technical advances made by
competitors or changes in semiconductor processing technology.
MANUFACTURING AND SUPPLIERS
Most of the components for the Company's CVD tungsten silicide systems are
produced in subassemblies by independent domestic suppliers according to the
Company's design and procurement specifications. Many components of the
Company's MeV ion implantation systems are also acquired as subassemblies from
outside domestic vendors. The Company anticipates that the use of such
subassemblies will continue to increase in order to achieve additional
manufacturing efficiencies. The Company has alternate sources of supply for the
components and parts purchased from outside suppliers, except for certain
components used in its CVD tungsten and MeV ion implantation products which are
presently available only from single sources. To date, the Company has been able
to obtain adequate supplies of such components in a timely manner from existing
sources. However, the inability to develop alternate sources or to obtain
sufficient source components as required in the future, could result in delays
of product shipments which could have a material adverse affect on the Company's
operating results.
The Company's thin film CVD operation is located in Sunnyvale, California,
while its MeV ion implantation technology manufacturing operation is located in
Newburyport, Massachusetts.
INTELLECTUAL PROPERTY
The Company believes that because of the rapid technological change in the
industry its future prospects will depend primarily upon the expertise and
creative skills of its personnel in process technology, new product development,
marketing, application engineering, and product engineering, rather than on
patent protection. Nevertheless, the Company has a policy to actively pursue
domestic and foreign patent protection to cover technology developed by the
Company. The Company's current patents include technology relating to cold wall
CVD of tungsten silicide, ion beam formation, high energy ion acceleration, ion
implant angle control, wafer cleaning, and wafer heating and handling in vacuum.
5
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In 1987, the Company's Ion Technology Division (formerly General Ionex) and
Eaton Corporation entered into a licensing agreement whereby the Company uses
certain ion implantation related technology.
EMPLOYEES
As of December 31, 1995, the Company employed 319 people on a full-time
basis. The Company believes that its relations with its employees are
satisfactory. None of the employees are covered by a collective bargaining
agreement.
ENVIRONMENTAL REGULATION
Federal, state and local regulations impose various environmental controls
on the discharge of chemicals and gases used in the manufacturing process. The
Company believes that its activities conform to present environmental
regulations. Increasing public attention has, however, been focused on the
environmental impact of semiconductor operations. While the Company has not
experienced any materially adverse effects on its operations from governmental
regulations, there can be no assurance that changes in such regulations will not
impose the need for additional capital equipment or other requirements. Any
failure by the Company to adequately restrict the discharge of hazardous
substances could subject it to future liabilities or could cause its
manufacturing operations to be suspended.
ITEM 2. PROPERTIES
The Company's executive offices and thin film manufacturing and research and
development operations are presently located in one building in Sunnyvale,
California, totalling approximately 100,500 square feet. The California
facilities are occupied under a lease expiring in October 2002, with a current
annual rental expense of approximately $650,000. Genus' Ion Technology Division
is located in Newburyport, Massachusetts. This facility, totalling approximately
25,000 square feet, is occupied by the Company under a month-to-month lease,
with a current annual rental expense of approximately $175,000. In September
1995, the Company entered into an agreement to lease a new facility for the Ion
Technology Division. The Division expects to move to the new facility by May
1996. This facility, totalling approximately 70,000 square feet, will be
occupied under a lease expiring in May 2017, with an annual rental expense of
approximately $805,000. The Company also leases sales and support offices in
Seoul, South Korea; Tokyo, Japan; Melbourn, Herts, England; Evry, France; and
Rockville Center, New York. The Company owns substantially all of the machinery
and equipment used in its facilities. See Notes 3 and 8 of Notes to Consolidated
Financial Statements. The Company believes that its existing facilities and
capital equipment are adequate to meet its current requirements and that
suitable additional or substitute space will be available as needed.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
6
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The principal market in which the Company's common stock is traded and the
related security holder matters are set forth under the caption "Common Stock
Information" on page 28 of the Company's 1995 Annual Report to Shareholders.
This information is incorporated herein by this reference thereto. The market
value of the Company's common stock on March 28, 1996 was $5.75 per share.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data of the Company for the years 1991 through 1995 is
included under the caption "Selected Consolidated Financial Data" on page 10 of
the Company's 1995 Annual Report to Shareholders. This information is
incorporated herein by this reference thereto.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The information required by this Item is included under the caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" on pages 11 to 13 of the Company's 1995 Annual Report to
Shareholders. This information is incorporated herein by this reference thereto.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's consolidated financial statements and related notes thereto,
together with the Report of Independent Accountants and the selected quarterly
financial data of the Company are presented on pages 14 to 27 of the Company's
1995 Annual Report to Shareholders. This information is incorporated herein by
this reference thereto.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
------------------------
With the exception of the information incorporated by reference from the
Company's 1995 Annual Report to Shareholders in Parts II and IV of this Form
10-K, the Company's 1995 Annual Report to Shareholders is not to be deemed filed
as a part of this Report.
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7
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PART III
Certain information required by Part III is omitted from this Report in that
the Registrant will file a definitive proxy statement pursuant to Regulation 14A
relating to the Registrant's 1996 Annual Meeting of Shareholders (the "Proxy
Statement") not later than 120 days after the end of the fiscal year covered by
this Report, and certain information included therein is incorporated herein by
reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information regarding directors and nominees for directors of the
Company is incorporated by reference to the Company's Proxy Statement.
The executive officers of the Company, who are elected by and serve at the
discretion of the Board of Directors, and their ages at March 28, 1996, are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ --- ---------------------------------------------------------------
<S> <C> <C>
William W. R. Elder................. 57 Chairman and Chief Executive Officer
Kent L. Robertson................... 54 Executive Vice President, Chief Financial Officer and Secretary
James M. Burns...................... 49 Executive Vice President and General Manager, Thin Films
Division
John E. Aldeborgh................... 39 Vice President and General Manager, Ion Division
William D. Cole..................... 41 Vice President, Sales
Kevin C. Conlon..................... 42 Vice President, Marketing
Thomas E. Seidel.................... 60 Vice President, Chief Technical Officer
Ernest P. Quinones.................. 36 Corporate Controller, Chief Accounting Officer, and Treasurer
Mario M. Rosati..................... 49 Assistant Secretary
</TABLE>
Except as set forth below, all of the executive officers have been
associated with the Company in their present or other capacities for more than
the past five years. Officers are elected annually by the Board of Directors and
serve at the discretion of the Board. There are no family relationships among
executive officers of the Company.
Mr. Elder, a founder of the Company, served as President and as a director
of the Company from its organization in November 1981 through April 1990. In
April 1990, he was named Chairman of the Board, President and Chief Executive
Officer. Mr. Elder currently serves as Chairman of the Board and Chief Executive
Officer of the Company.
Mr. Robertson joined the Company in June 1995 as Executive Vice President,
Chief Financial Officer and Secretary of the Company. From January 1994 to June
1995 and from February 1987 to March 1992, Mr. Robertson was Senior Vice
President, Chief Financial Officer and Secretary of Pyramid Technology
Corporation, a manufacturer of computer servers. From March 1992 to December
1993, he was associated with RasterOps Corporation, a manufacturer of truecolor
photo realistic imaging systems, as Executive Vice President, Chief Financial
Officer and Secretary. From September 1980 to January 1987 he served as Vice
President, Chief Financial Officer and Secretary of Telco Systems Inc., a
manufacturer of telecommunications equipment.
Mr. Burns joined the Company in February 1995 as Executive Vice President
and General Manager of the Company's Thin Films Division. From August 1992 to
January 1995, Mr. Burns was with Hughes Network Systems, a manufacturer of
advance commercial telecommunications, as Assistant Vice President, Operations.
From December 1991 to July 1992, he was associated with Trimble Navigation, LTD,
a manufacturer of navigational systems, as Director of Customer Satisfaction and
Quality. From November 1990 to July 1991, Mr. Burns was Vice President of
Operations with
8
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Domestic Automation Company, a manufacturer of computerized metering and
communication products. From May 1972 to October 1990, he served in various
positions at Hewlett-Packard Company, a computer and instrumentation
manufacturer, most recently as Group Manufacturing Manager, Peripherals Group.
Mr. Aldeborgh joined the Company in June 1989 as Director of Operations of
the Company's Ion Technology Division. Mr. Aldeborgh has served as Vice
President and General Manager of this Division since January 1993. Prior to
joining the Company, Mr. Aldeborgh was with LTX Corporation, a manufacturer of
semiconductor test equipment, from May 1983 to May 1989, in various management
positions, most recently as Director of Manufacturing for its Linear
Manufacturing Division.
Mr. Cole joined the Company in January 1993 as Vice President of Sales. From
December 1984 to December 1992, he was associated with Teradyne, Inc., a
semiconductor equipment manufacturer, in various sales positions, most recently
as National Sales Manager.
Mr. Conlon joined the Company in April 1992 as Vice President of Marketing.
From February 1990 to April 1992, Mr. Conlon held marketing and operations
management positions at Novellus Systems, Inc., a semiconductor equipment
manufacturer, most recently as Director of Manufacturing. From April 1980 to
February 1990, he served in various positions at Applied Materials, Inc., a
semiconductor equipment manufacturer, most recently as Product Marketing
Manager, Implant Division.
Mr. Seidel joined the Company in January 1996, as Vice President and Chief
Technical Officer. From July 1988 to January 1996, Mr. Seidel was associated
with SEMATECH, a Semiconductor-Industry Consortium, in various senior management
positions, most recently as Chief Technologist and Director of Strategic
Technology. From March 1987 to July 1988, Mr. Seidel was associated with the
University of California at Santa Barbara, as head of the Microelectronics
department. From February 1985 to March 1987, Mr. Seidel was employed with J.C.
Schumacher Co., a semiconductor equipment manufacturer, most recently as Senior
Vice President of Technology. From June 1966 to February 1985, Mr. Seidel was
associated with AT&T Bell Laboratories in various technical management
positions.
Mr. Quinones joined the Company in June 1989 as the Company's Director of
Corporate Finance. From October 1991 through February 1995, he served as the
Company's Corporate and Thin Films Division Controller. Mr. Quinones was
appointed Genus' Corporate Controller, Chief Accounting Officer and Treasurer in
March 1995. Prior to joining the Company, Mr. Quinones was with Coopers &
Lybrand L.L.P., a public accounting firm, from July 1982 to May 1989, in various
audit positions, most recently as Audit Manager.
Mr. Rosati has been Assistant Secretary and a director of the Company since
the Company's inception in November 1981 to June 1995. From July 1995 to the
present, Mr. Rosati has been the Company's Assistant Secretary. He is a member
of Wilson, Sonsini, Goodrich & Rosati, P.C., general counsel to the Company.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference to the
Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated by reference to the
Company's Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated by reference to the
Company's Proxy Statement.
9
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this Report:
1. FINANCIAL STATEMENTS. The following Consolidated Financial Statements
of Genus, Inc. and Report of Independent Accountants are incorporated by
reference to pages 14 through 27 of the Registrant's 1995 Annual Report to
Shareholders:
Consolidated Balance Sheets - December 31, 1995 and 1994
Consolidated Statements of Operations - Years Ended December 31, 1995, 1994
and 1993
Consolidated Statements of Shareholders' Equity - Years Ended December 31,
1995, 1994 and 1993
Consolidated Statements of Cash Flows - Years Ended December 31, 1995, 1994
and 1993
Notes to Consolidated Financial Statements
Report of Independent Accountants
2. FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules of Genus, Inc. for the years ended December 31, 1995, 1994 and 1993
are filed as part of this Report and should be read in conjunction with the
Consolidated Financial Statements of Genus, Inc.
<TABLE>
<CAPTION>
SCHEDULE PAGE
--------------------------------------------------------- -----
<S> <C> <C>
Report of Independent Accountants........................ S-1
II -- Valuation and Qualifying Accounts........................ S-2
</TABLE>
Schedules not listed above have been omitted because they are not applicable
or are not required or the information required to be set forth therein is
included in the Consolidated Financial Statements or Notes thereto.
3. EXHIBITS. The Exhibits listed on the accompanying Index to Exhibits
immediately following the financial statement schedules are filed as part of, or
incorporated by reference into, this Report.
4. REPORTS ON FORM 8-K. No reports on Form 8-K were filed by the Company
during the fiscal quarter ended December 31, 1995.
10
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of
Sunnyvale, State of California, on the 28th day of March, 1996.
GENUS, INC.
By: /s/ WILLIAM W. R. ELDER
-----------------------------------
William W. R. Elder
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints, William W. R. Elder and Kent L. Robertson,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Report on Form 10-K, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<C> <S> <C>
NAME TITLE DATE
- ------------------------------------------------------ -------------------------------- -----------------------
/s/ WILLIAM W. R. ELDER Chairman, Chief Executive
------------------------------------------- Officer and Director (Principal March 28, 1996
William W. R. Elder Executive Officer)
/s/ KENT L. ROBERTSON Executive Vice President, Chief
------------------------------------------- Financial Officer, Secretary March 28, 1996
Kent L. Robertson (Principal Financial Officer)
Corporate Controller, Chief
ERNEST P. QUINONES Accounting Officer and
------------------------------------------- Treasurer (Principal Accounting March 28, 1996
Ernest P. Quinones Officer)
STEPHEN F. FISHER
------------------------------------------- Director March 25, 1996
Stephen F. Fisher
G. FREDERICK FORSYTH
------------------------------------------- Director March 28, 1996
G. Frederick Forsyth
TODD S. MYHRE
------------------------------------------- Director March 28, 1996
Todd S. Myhre
MARIO M. ROSATI
------------------------------------------- Director March 28, 1996
Mario M. Rosati
</TABLE>
11
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of Genus, Inc. and subsidiaries on Form S-8 (File Nos. 33-28394 and 33-38657) of
our reports dated January 26, 1996, on our audits of the consolidated financial
statements and financial statement schedules of Genus, Inc. and subsidiaries as
of December 31, 1995 and 1994, and for each of the three years in the period
ended December 31, 1995, which reports are included in this Annual Report on
Form 10-K.
Coopers & Lybrand L.L.P.
San Jose, California
March 27, 1996
12
<PAGE>
SCHEDULE I
REPORT OF INDEPENDENT ACCOUNTANTS
To The Board of Directors and Shareholders
Genus, Inc.
Our report on the consolidated financial statements of Genus, Inc. and
subsidiaries has been incorporated by reference in this Form 10-K from page 27
of the 1995 Annual Report to Shareholders of Genus, Inc. In connection with our
audits of such financial statements, we have also audited the related financial
statement schedule listed in the index of page 10 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
Coopers & Lybrand L.L.P.
San Jose, California
January 26, 1996
S-1
<PAGE>
SCHEDULE II
GENUS, INC.
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
COLUMN B COLUMN C COLUMN E
----------- ----------- -----------
COLUMN A BALANCE AT CHARGED TO COLUMN D BALANCE
- ----------------------------------------------------------------- BEGINNING COSTS AND ---------- AT END
DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS OF PERIOD
- ----------------------------------------------------------------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
1995
Allowance for doubtful accounts.................................. $ 250 $ -- $ -- $ 250
Inventory reserves............................................... 2,665 995 389 3,271
Product warranty and installation accruals....................... 2,394 3,640 1,716 4,318
1994
Allowance for doubtful accounts.................................. 250 0 0 250
Inventory reserves............................................... 3,250 947 (1,533) 2,665
Product warranty and installation accruals....................... 2,042 2,094 (1,742) 2,394
1993
Allowance for doubtful accounts.................................. 270 475 (495) 250
Inventory reserves............................................... 4,766 1,419 (2,935) 3,250
Product warranty and installation accruals....................... 1,737 1,381 (1,076) 2,042
</TABLE>
S-2
<PAGE>
GENUS, INC.
ANNUAL REPORT ON FORM 10-K
YEAR ENDED DECEMBER 31, 1995
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ----------- ----------------------------------------------------------------------------------------- ---------------
<C> <S> <C>
3.1 Restated Articles of Incorporation of Registrant (2)..................................... --
3.2 By-laws of Registrant, as amended (4).................................................... --
4.1 Common Shares Rights Agreement, dated as of April 27, 1990, between Registrant and Bank
of America, N.T. and S.A., as Rights Agent (6).......................................... --
10.3 Lease dated December 6, 1985 for Registrant's facilities at 4 Mulliken Way, Newburyport,
Massachusetts, and amendment and extension of lease dated March 17, 1987 (1)............ --
10.6 Lease dated June 15, 1988 for Registrant's facilities at 100 Merrick Road, West Building,
Rockville Center, New York (1).......................................................... --
10.7 Assignment of Lease dated April 1986 for Registrant's facilities at Unit 11A Melbourn
Science Park, Melbourn, Hertz, England (1).............................................. --
10.8 Registrant's 1981 Incentive Stock Option Plan, as amended (3)............................ --
10.10 Registrant's 1989 Employee Stock Purchase Plan, as amended (7)........................... --
10.11 International Distributor Agreement dated November 23, 1987 between General Ionex
Corporation and Innotech Corporation (1)................................................ --
10.12 Distributor/Representative Agreement dated August 1, 1984 between Registrant and Aju Exim
(formerly Spirox Holding Co./You One Co. Ltd.) (1)...................................... --
10.15 Exclusive Sales and Service Representative Agreement dated October 1, 1989 between
Registrant and AVBA Engineering Ltd (5)................................................. --
10.16 Exclusive Sales and Service Representative Agreement dated as of April 1, 1990 between
Registrant and Indosale PVT Ltd (5)..................................................... --
10.18 License Agreement dated November 23, 1987 between Registrant and Eaton Corporation (1)... --
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. DESCRIPTION PAGE
- ----------- ----------------------------------------------------------------------------------------- ---------------
<C> <S> <C>
10.21 Exclusive Sales and Service Representative Agreement dated May 1, 1989 between Registrant
and Spirox Taiwan, Ltd. (4)............................................................. --
10.22 Lease dated April 7, 1992 between Registrant and The John A. and Susan R. Sobrato 1979
Revocable Trust for property at 1139 Karlstad Drive, Sunnyvale, California (8).......... --
10.24 Term Loan Agreement dated April 17, 1992 between the Registrant and Silicon Valley Bank
(8)..................................................................................... --
10.25 Asset Purchase Agreement, dated May 28, 1992, by and between the Registrant and Advantage
Production Technology, Inc. (9)......................................................... --
10.26 License and Distribution Agreement, dated September 8, 1992, between the Registrant and
Sumitomo Mutual Industries, Ltd. (10)................................................. . --
10.28 Mortgage dated February 1, 1993 with Bay Bank Middlesex for Registrant's facilities at
One Merrimack Landing, Unit 26, Newburyport, Massachusetts (11)......................... --
10.29 Revolving Loan Agreement between the Registrant and Silicon Valley Bank dated May 15,
1994 (12)............................................................................... --
10.30 Lease Agreement dated as of October 1995 for Registrant's facilities at Lot 62 Stanley
Tucker Drive, Newburyport, Massachusetts................................................ --
11.1 Computation of Net Income/Loss Per Share................................................. --
13.1 Annual Report to Shareholders for the year ended December 31, 1995 (to be deemed filed
only to the extent required by the instructions to exhibits for reports on Form 10-K)... --
22.1 Subsidiaries of Registrant (10).......................................................... --
23.1 Consent of Independent Accountants (included on page 12)................................. --
24.1 Power of Attorney (included on page 11).................................................. --
27.1 Financial Data Schedule
</TABLE>
- ------------------------
(1) Incorporated by reference to the exhibit filed with Registrant's
Registration Statement on Form S-1 (No. 33-23861) filed August 18, 1988 and
amended on September 21, 1988, October 5, 1988, November 3, 1988, November
10, 1988 and December 15, 1988, which Registration Statement became
effective November 10, 1988.
(2) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1988.
(3) Incorporated by reference to the exhibit filed with the Registrant's
Registration Statement on Form S-8 filed January 17, 1991.
I-2
<PAGE>
(4) Incorporated by reference to the exhibit filed with the Registrant's
Registration Statement on Form S-1 (No. 33-28755) filed on May 17, 1989 and
amended May 24, 1989, which Registration Statement became effective May 24,
1989.
(5) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1989.
(6) Incorporated by reference to the exhibit filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1990.
(7) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1990.
(8) Incorporated by reference to the exhibit filed with the Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1992.
(9) Incorporated by reference to the exhibit filed with the Registrant's Report
on Form 8-K dated June 12, 1992.
(10) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 21, 1992.
(11) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1993.
(12) Incorporated by reference to the exhibit filed with the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
I-3
<PAGE>
EXHIBIT 11.1
GENUS, INC.
COMPUTATION OF EARNINGS PER COMMON
AND COMMON EQUIVALENT SHARE (A)
(IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Average common shares outstanding.............................................. 15,334 12,545 12,170
Computation of incremental outstanding shares
Net effect of dilutive stock options based on treasury stock method.......... 729 561 --
--------- --------- ---------
16,063 13,106 12,170
--------- --------- ---------
--------- --------- ---------
Net income (loss).............................................................. $ 19,282 $ 4,177 $ (6,883)
--------- --------- ---------
--------- --------- ---------
Earnings (loss) per share (b).................................................. $ 1.20 $ 0.32 $ (0.57)
--------- --------- ---------
--------- --------- ---------
</TABLE>
(a) See Note 1 of Notes to Consolidated Financial Statements.
(b) Primary and fully diluted earnings per share are materially the same for all
years presented.
