<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 quarterly period ended JUNE 30, 1996
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: 0-26482
PLASMA & MATERIALS TECHNOLOGIES, INC.
-------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
California 95-4054321
- ---------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) number)
</TABLE>
9255 Deering Avenue, Chatsworth, California 91311
--------------------------------------------------
(Address of principle executive offices) (Zip Code)
(818) 886-8000
--------------------------------------------------------
(Registrant's telephone number, including area code)
Not Applicable
--------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicated 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 periods 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
---- --
As of June 30, 1996, the total number of outstanding shares of the Registrant's
common stock was 8,689,266.
<PAGE>
Plasma & Materials Technologies, Inc.
<TABLE>
<CAPTION>
Page
INDEX Number
- -----------------------------------------------------------------------------------------------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements:
Condensed Consolidated Balance Sheets at June 30, 1996 (unaudited) 3
and December 31, 1995
Unaudited Condensed Consolidated Statements of Operations for the 4
Three Months ended June 30, 1996 and 1995 and for the Six Months
ended June 30, 1996 and 1995
Unaudited Condensed Consolidated Statements of Cash Flows for the 5
Six Months ended June 30, 1996 and 1995
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and 9
Results of Operations
PART II. OTHER INFORMATION 12
SIGNATURE PAGE 13
EXHIBITS 14
</TABLE>
2
<PAGE>
Plasma & Materials Technologies, Inc.
Item 1 - CONDENSED CONSOLIDATED BALANCE SHEETS
----------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995 (1)
------------- -------------
<S> <C> <C>
(unaudited)
Assets
Current assets:
Cash and cash equivalents........................ $ 8,474,627 $24,770,363
Short-term investments........................... 15,098,658 13,992,109
Accounts receivable.............................. 16,591,556 8,423,272
Inventories...................................... 12,884,976 5,453,835
Demonstration inventory.......................... 3,077,658 1,367,233
Prepaid expenses................................. 586,453 223,970
----------- -----------
Total current assets.......................... 56,713,928 54,230,782
Property, equipment and leasehold improvements,
net of accumulated depreciation and amortization 8,640,118 4,576,043
Other assets...................................... 1,626,498 486,182
----------- -----------
Total assets...................................... $66,980,544 $59,293,007
=========== ===========
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued expenses............ $ 8,888,206 $ 4,023,705
Warranty expense................................. 694,033 449,295
Accrued salaries and related liabilities......... 305,667 228,998
Current portion of capital lease obligations..... 509,877 491,561
----------- -----------
Total current liabilities..................... 10,397,783 5,193,559
Capital lease obligations, less current portion... 434,090 686,230
Commitments and contingencies
Shareholders' equity:
Preferred Stock undesignated
Authorized shares - 20,000,000
Issued and outstanding - None
Convertible Preferred Stock (Series A and B), no
par value
Authorized shares -- None
Issued and outstanding -- None
Common Stock, no par value:
Authorized shares -- 16,666,666
Issued and outstanding -- 8,689,266 at June 30,
1996 and 8,659,843 at December 31, 1995........ 61,089,597 60,975,483
Accumulated deficit.............................. (4,940,926) (7,562,265)
----------- -----------
Total shareholders' equity........................ 56,148,671 53,413,218
----------- -----------
Total liabilities and shareholders' equity........ $66,980,544 $59,293,007
=========== ===========
</TABLE>
(1) The Balance Sheet at December 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by Generally Accepted Accounting
Principles for complete financial statements.
See notes to condensed consolidated financial statements.
3
<PAGE>
Plasma & Materials Technologies, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
-----------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended Six months ended
-------------------------- ---------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenues:
Product sales.................... $10,193,030 $5,476,477 $17,946,259 $ 7,091,896
License revenues................. -- -- -- 400,000
Contract revenues................ 459,600 -- 848,678 --
----------- ---------- ----------- -----------
10,652,630 5,476,477 18,794,937 7,491,896
Costs and expenses:
Cost of goods sold............... 5,379,194 2,822,651 9,127,436 3,746,756
Research and development......... 1,814,097 1,086,016 3,559,796 2,043,235
Selling, general and
administrative................. 2,445,614 1,316,013 4,266,702 2,736,093
----------- ---------- ----------- -----------
9,638,905 5,224,680 16,953,934 8,526,084
----------- ---------- ----------- -----------
Income (loss) from operations...... 1,013,725 251,797 1,841,003 (1,034,188)
Other:
Interest income (expense), net... 354,622 (90,247) 792,818 (147,918)
----------- ---------- ----------- -----------
Income (loss) before income tax
provision...................... 1,368,347 161,550 2,633,821 (1,182,106)
Income tax provision............. 4,509 -- 12,482 --
----------- ---------- ----------- -----------
Net income (loss)................ $ 1,363,838 $ 161,550 $ 2,621,339 $(1,182,106)
=========== ========== =========== ===========
Net income (loss) per share:
Primary........................ $0.15 $0.03 $0.29 $(0.24)
=========== ========== =========== ===========
Average common shares and
equivalents.................... 9,170,201 5,167,083 9,131,432 5,023,435
=========== ========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
Plasma & Materials Technologies, Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
-----------------------------------------------------------
<TABLE>
<CAPTION>
Six months ended
--------------------------------
June 30, June 30,
1996 1995
------------- ------------
<S> <C> <C>
Operating activities
Net income (loss)................................. $ 2,621,339 $(1,182,106)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization................... 754,158 599,553
Provision for loss on accounts receivable -- 3,522
Advances to employees/officers/shareholders -- 54,750
Changes in operating assets and liabilities:
Accounts receivable......................... (8,168,284) (2,779,783)
Inventories................................. (7,431,141) 807,251
Demonstration inventory..................... (1,710,425) 4,646
Prepaid expenses............................ (362,483) (24,428)
Accounts payable and other accrued expenses. 5,204,226 (579,888)
------------ -----------
Net cash used in operating activities............. (9,092,610) (3,096,483)
Investing activities
Purchases of property, equipment and leasehold
improvements.................................... (4,818,233) (435,668)
Proceeds from sales of short-term investments..... 12,450,129 --
Purchases of short-term investments............... (13,556,678) --
Other assets...................................... (1,115,477) (5,517)
------------ -----------
Net cash used in investing activities............. (7,040,259) (441,185)
Financing activities
Borrowings under line of credit................... -- 1,310,707
Repayments of line of credit...................... -- (2,000,000)
Proceeds from sale of Preferred Stock............. -- 3,366,204
Proceeds from sale of Common Stock................ 89,273 17,290
Payments on capital lease obligations............. (252,140) (293,268)
------------ -----------
Net cash used in financing activities............. (162,867) 2,400,933
------------ -----------
Net decrease in cash and cash equivalents......... (16,295,736) (1,136,735)
Cash and cash equivalents at beginning of
period........................................... 24,770,363 3,563,753
------------ -----------
Cash and cash equivalents at end of period........ $ 8,474,627 $ 2,427,018
============ ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
Plasma & Materials Technologies, Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
----------------------------------------------------------------
June 30, 1996
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The operating results for the six months ended June 30, 1996 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
Note B - Inventories
Inventories are stated at the lower of cost (first-in, first-out method) or
market. The components of inventory consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Components.................. $ 7,833,966 $3,774,458
Work in process............. 4,877,881 1,611,382
Finished goods.............. 173,129 67,995
----------- ----------
12,884,976 5,453,835
Demonstration inventory...... 3,077,658 1,367,233
----------- ----------
$15,962,634 $6,821,068
=========== ==========
</TABLE>
Demonstration inventory or evaluation units represent completed systems located
at certain strategic customer sites or at the Company's facilities. The Company
provides these demonstration systems at no charge for a specified evaluation
period. All operating costs incurred during the evaluation period are paid by
the customer. At the conclusion of the agreed upon evaluation period, provided
that the equipment performs to required specifications, management expects that
the customer, while not obligated to do so, will purchase the system.
Demonstration inventory is stated at lower of cost or estimated net realizable
value. Demonstration inventory is not amortized.
Note C - PMT CVD Partners, L.P.
On March 29, 1996, the Company entered into a number of agreements with PMT CVD
Partners, L.P. (the "Limited Partnership") and the limited partners thereof (the
"Limited Partners"). The Limited Partnership was formed to fund research and
development costs and expenses relating to chemical vapor deposition ("CVD")
technology and applications. An aggregate of approximately $5,350,000 is
available to the Limited Partnership to fund such research and development
efforts. The Limited Partnership owns the rights to the technology developed.
PMT has entered into a license agreement with the Limited Partnership whereby
PMT is obligated to pay stated royalties to the Limited Partnership on sales of
related products, and the royalty percentage will vary based on the geographic
location of the sale. There is no
6
<PAGE>
Plasma & Materials Technologies, Inc.
Note C - PMT CVD Partners, L.P. (continued)
provision for royalty payments to the Limited Partners in fiscal 1996. PMT has
been granted an exclusive option to purchase all of the Limited Partners'
interest in the Limited Partnership, based on an established purchase price
formula which terminates PMT's obligation under the license agreement. PMT may
exercise such option at its sole discretion.
PMT has agreed to provide certain personnel to the Limited Partnership to
perform such research and development activities. PMT will be paid for such
services at an amount equal to its actual direct costs, as defined, plus a
stated percentage of such costs. During the quarter and six months ended June
30, 1996, the amount of research and development costs incurred, including the
stated percentage of 250% of direct costs, with respect to CVD technology and
applications was $459,600 and $848,678, respectively and is reflected in
contract revenue in the accompanying statement of operations.
Note D - Impact on Financial Statements of Recently Issued Accounting Standards
In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
("SFAS No. 121"), which will be effective for the Company's fiscal year ending
December 31, 1996. SFAS No. 121 requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are presented
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. SFAS No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company adopted SFAS No. 121 for the annual reporting period of fiscal 1996,
during the first quarter ended March 31, 1996. No adjustments are required with
respect to such action.
In October 1995, the FASB issued Statement of Financial Accounting Standards No.
123, Accounting for Awards of Stock-Based Compensation to Employees ("SFAS No.
123"), which will be effective for the Company's fiscal year ending December 31,
1996. SFAS No. 123 provides alternative accounting treatment to APB No. 25 with
respect to stock-based compensation and requires certain additional disclosures,
including disclosures if the Company elects not to adopt the accounting
requirements of SFAS No. 123. The Company intends to make additional disclosure
requirements of SFAS No. 123 for the annual reporting period of fiscal 1996, but
will elect to continue to measure compensation costs following present
accounting rules under APB No. 25. Consequently, the Company will provide pro
forma disclosures of what net income and earnings per share would have been had
the fair market value method of SFAS No. 123 been used for the relevant periods.
Note E - Income Taxes
The provision for income taxes at June 30, 1996 differs from the statutory
federal rate of 35% due to the reduction of the valuation allowance attributed
to the utilization of the net operating loss carryforwards.
Note F - Net Income (Loss) Per Share
Net income (loss) per share is computed using the weighted average number of
shares of Common Stock outstanding. Common equivalent shares from stock options
and warrants (using the treasury stock method) have been included in the
computation when dilutive, and common equivalent shares from the redeemable
convertible Preferred Stock and convertible Preferred Stock which converted into
Common Stock in connection with the Company's Initial Public Offering are
included as if converted at the original date of issuance, even though inclusion
is anti-dilutive, for the three and six months ended June 30, 1995. Pursuant to
the Securities and Exchange Commission (SEC) Staff Accounting Bulletins, all
common and common equivalent shares issued by the Company at an exercise price
below the Initial Public Offering price of $14.00 per share during the twelve-
month period prior to the offering (cheap stock) have been
7
<PAGE>
Plasma & Materials Technologies, Inc.
Note F - Net Income (Loss) Per Share
included in the calculation as if they were outstanding for the three and six
months ended June 30, 1995 (using the treasury stock method at the Initial
Public Offering price of $14.00 per share and the if-converted method for
redeemable convertible Preferred Stock and convertible Preferred Stock). For the
six months ended June 30, 1996, such cheap stock shares were not included in the
calculation.
Note G - Revolving and Equipment Line of Credit
On June 5, 1996, the Company renewed its line of credit agreement ("the
"Agreement") with a commercial bank which provides for borrowing up to the
lesser of 80% of eligible accounts receivable or $3,000,000. Interest on the
line of credit is payable monthly at prime (8.25% at June 30, 1996) plus 0.5%.
The Agreement also provides for equipment loans which allows the Company to
borrow up to the lesser of 80% of eligible equipment purchases or $3,000,000,
subject to certain limits. Interest on borrowings under the equipment line is
payable monthly at prime plus 1.5%. At June 30, 1996, there were no balances
outstanding on either of these two loans.
Note H - Subsequent Events
Acquisition
On July 17, 1996 the Company executed a definitive agreement to purchase
Electrotech Limited and Electrotech Equipments Limited, United Kingdom
corporations for $75,000,000 cash and the issuance of 5,600,000 shares of the
Company's common stock. The agreement is subject to certain conditions including
obtaining shareholder approval and obtaining appropriate financing. Included in
other assets are approximately $917,904 of direct costs of the acquisition. If
the agreement is terminated, except in certain circumstances, the Company will
be required to pay a $1,000,000 termination fee which along with all direct
acquisition costs incurred will be charged to operations in the period the
contract is terminated.
8
<PAGE>
Plasma & Materials Technologies, Inc.
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
This Management's Discussion and Analysis of Financial Condition and Results of
Operations set forth below contains forward looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements are set forth in paragraph 3
of Revenues and paragraphs 3, 4 and 5 of Liquidity and Capital Resources.
Overview
During the second quarter of fiscal 1996, Plasma & Materials Technologies, Inc.
("PMT" or the "Company") reported product sales and net income of $10.2 million
and $1.4 million, respectively.
Results of Operations
The following table sets forth the statement of operations data of the Company
expressed as a percentage of revenues for the period indicated.
<TABLE>
<CAPTION>
Three months ended Six months ended
--------------------- ---------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Revenues....................... 100.0% 100.0% 100.0% 100.0%
Cost of sales.................. 50.5% 51.6% 48.6% 50.0%
--------- ---------- --------- ----------
Gross profit................. 49.5% 48.4% 51.4% 50.0%
Operating expenses:
Research and development..... 17.0% 19.8% 18.9% 27.3%
Selling, general and
administrative............... 23.0% 24.0% 22.7% 36.5%
--------- ---------- --------- ----------
Total operating expenses..... 40.0% 43.8% 41.6% 63.8%
--------- ---------- --------- ----------
Income (loss) from operations 9.5% 4.6% 9.8% (13.8%)
Interest income (expense), net 3.3% (1.7%) 4.2% (2.0%)
--------- ---------- --------- ----------
Income (loss) before income tax
provision.................... 12.8% 2.9% 14.0% (15.8%)
Income tax provision........... --% --% .1% --%
--------- ---------- --------- ----------
Net income (loss) 12.8% 2.9% 13.9% (15.8%)
========= ========== ========= ==========
</TABLE>
Revenues
Product Sales. Product sales for the second quarter of fiscal 1996 increased 86%
to $10.2 million compared to $5.5 million for the second quarter of fiscal 1995.
Product sales increased as a result of the shipment of five of the Company's
PINNACLE 8000R(TM) plasma processing systems. Product sales for the six month
period ending June 30, 1996 increased 153% to $17.9 million from $7.1 million
for the six months ending June 30, 1995. Product sales increased as a result of
the shipment of one PINNACLE 8000(R) and eight PINNACLE 8000R(TM) systems, four
M0RI sources and one process module for the six months ended June 30, 1996 as
compared to two PINNACLE 8000(R) systems, twelve MORI sources and three process
modules shipped in the six months ended June 30, 1995.
9
<PAGE>
Plasma & Materials Technologies, Inc.
International sales, which are predominately to customers based in Japan and
Korea, accounted for 80% and 15% of product sales for the second quarter of
fiscal years 1996 and 1995, respectively. International product sales accounted
for 76% and 22% for the six months ending June 30, 1996 and 1995, respectively.
License Revenue. The Company received no license revenues for the second quarter
and six month period of fiscal 1996, compared to $0 and $400,000 for the second
quarter and six month period of fiscal 1995, because all of the past license
agreements the Company had entered into were fully paid prior to 1996. The
Company does not anticipate the receipt of any additional license revenues in
the next twelve months. However, the Company may enter into additional license
agreements as it deems appropriate in order to broaden the applications of its
M0RI(trademark) technology, or to improve the Company's market penetration.
Contract Revenue. The Company received contract revenues for the second quarter
and six month period of fiscal 1996 of $459,600 and $848,678, respectively, as
compared to no contract revenue for the second quarter and six month period of
fiscal 1995. This increase was due to the March 1996 agreement between PMT and
PMT CVD Partners, L.P. See Note C to Notes to Condensed Consolidated Financial
Statements.
Gross Margin on Product Sales
The Company's gross margin on product sales for the second quarter of fiscal
1996 increased to 47% as compared to 48% for the second quarter of fiscal 1995,
and for the six months ended June 30, 1996 it increased to 49% in comparison to
47% for the six months ended June 30, 1995. The improved margin is attributable
principally to the higher sales volume which resulted in increased production
efficiencies and higher average selling prices.
Research and Development
Research and development expenses for the second quarter of fiscal 1996 were
$1.8 million, or 17% of net revenues, compared to $1.1 million, or 20% of net
revenues, for the second quarter of fiscal 1995. For the six months ended June
30, 1996, research and development expenses were $3.6 million, or 19% of net
revenues, as compared to $2.0 million, or 27% of net revenues, for the six
months ended June 30, 1995. As the Company's revenues have increased, these
expenses became a smaller percentage of net revenues. The dollar increases in
expenses are attributable principally to the Company's continued investment in
further expanding its proprietary plasma source technology to develop new
processes in meeting customer requirements and maintaining its strong
technological position in the industry. In addition, expenses include costs
incurred associated with the contract revenue from PMT, CVD Partners, L.P., with
respect to CVD applications of the Company's technology. See Note C of Notes to
Condensed Consolidated Financial Statements.
Selling, General and Administrative Expenses
Selling, general and administrative expenses for the second quarter of fiscal
1996 were $2.4 million, or 23% of net revenues, compared to $1.3 million, or 24%
of net revenues, for the second quarter of fiscal 1995. For the six months ended
June 30, 1996, selling, general and administrative expenses were $4.3 million,
or 23% of net revenues, as compared to $2.7 million, or 37% of net revenues, for
the six months ended June 30, 1995. The increased expense was due primarily to
the expansion of PMT's customer service department to support increased number
of systems (including evaluation systems) that were installed at customer sites
worldwide.
Income Tax Provision
The Company paid a nominal amount of Federal and State income taxes for the
first six months of fiscal 1996. In addition, a nominal amount of income tax was
paid by the Company's Korean subsidiary. The Company paid no income tax for the
first six months of fiscal 1995 due to the Company's ability to utilize
10
<PAGE>
Plasma & Materials Technologies, Inc.
prior net operating loss and credit carryforwards that can be applied against
future income but is subject to an annual limitation due to the ownership change
limitations provided by the Internal Revenue Code of 1986 and similar state
provisions. The provision for income taxes at June 30, 1996 differs from the
statutory federal rate of 35% due to the reduction of the valuation allowance
attributed to the utilization of the net operating loss carryforwards.
Liquidity and Capital Resources
At June 30, 1996, PMT had $23.6 million in cash, cash equivalents and short-term
investments, compared to $38.8 million at December 31, 1995. This $16.2 million
decrease was primarily due to increases in inventory and accounts receivable. In
addition, $4.8 million was invested in capital equipment as the Company used
funds to expand its applications laboratory to support process development and
customer demonstrations.
At June 30, 1996, there were no borrowings outstanding under the revolving
credit line, and $3,000,000 was available for borrowings under that agreement.
The agreement has been recently extended and presently runs through June 5,
1997. The agreement places certain restrictions on PMT which, among other
things, prohibit PMT from paying cash dividends or repurchasing its stock, and
requires PMT to comply with certain financial ratios and covenants. PMT is
currently in compliance with all covenants and restrictions contained in the
revolving line of credit. PMT also has $3,000,000 equipment leasing facility
that runs through December 30, 1996. At June 30, 1996 there were no borrowings
under the equipment leasing facility.
PMT anticipates that it will spend approximately $6.8 million for capital
expenditures during fiscal 1996, of which $4.8 million has been invested in
capital equipment during the first six months of 1996. This is expected to
include investments in demonstration and test equipment, information systems,
and other capital items that should enable PMT to expand its ability to support
and develop new products and services. In addition, PMT expects to increase its
investment in inventory of evaluation systems at customer sites.
In March 1996, PMT sponsored a partnership with certain third-party investors to
fund research and development costs and expenses relating to CVD technology and
application. Third-party investors invested an aggregate of approximately
$5,350,000 in the partnership, which aggregate amount is available to fund such
costs and expenses. See Note C to Notes to Condensed Consolidated Financial
Statements.
While the Company's cash requirements will fluctuate based on the timing and
extent of the normal operation of the business, PMT believes that cash generated
from operations, together with the existing cash, cash equivalents, short-term
investments and borrowings under existing bank lines should be sufficient to
support its stand alone operations over the next 12 months, although there can
be no assurance in that regard.
On July 17, 1996 the Company executed a definitive agreement to purchase
Electrotech Limited and Electrotech Equipments Limited, United Kingdom
corporations. Assuming consummation of the Acquisition, PMT anticipates that it
will issue approximately $65.0 million of Subordinated Notes in the Private
Financing. Additionally, to satisfy the Working Capital Condition, PMT
anticipates the establishment of the New Credit Facility which, among other
things, will provide to PMT approximately $30.0 million in available borrowings.
PMT believes that cash provided or available from the Subordinated Notes, the
New Credit Facility and other sources of capital available to PMT, including
cash on hand, will be sufficient to support PMT's liquidity needs over the next
12 months, including the cash payment requirements resulting from the
Acquisition. See Note H to Notes to Condensed Consolidated Financial Statements.
11
<PAGE>
Plasma & Materials Technologies, Inc.
PART II - OTHER INFORMATION
---------------------------
Item 6 Exhibits and Reports on Form 8-K
--------------------------------
(a) The following exhibits are included herein:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
11.1 Computation of Per Share Earnings
27.1 Financial Statement Data
</TABLE>
12
<PAGE>
Plasma & Materials Technologies, 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.
PLASMA & MATERIALS TECHNOLOGIES, INC.
Date August 14, 1996 /s/ John W. La Valle
------------------------ ------------------------------------------
John W. La Valle
Vice President, Chief Financial Officer and
Secretary
13
<PAGE>
Plasma & Materials Technologies, Inc.
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------- -------------------------------------- ------
<S> <C> <C>
11.1 Computation of Per Share Earnings..........................................
27.1 Financial Statement Data...................................................
</TABLE>
14
<PAGE>
EXHIBIT 11.1 - STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
--------------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended Six months ended
------------------------- ---------------------------
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
----------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
Primary:
Average Common shares outstanding............ 8,685,142 938,776 8,675,835 939,713
Preferred Stock converted to common
shares..................................... -- 3,031,279 -- 3,031,279
Stock options and warrants issued
during the period prior to the initial
public offering using the treasury
method (offer price of $14 per
share)..................................... -- 1,052,461 -- 1,052,461
Net effect of dilutive stock options -
based on the treasury stock method
using average fair market price........... 429,006 144,311 401,435 --
Net effect of dilutive warrants - based
on the treasury stock method
using average fair market price............ 56,054 256 54,162 --
----------- --------- ----------- -----------
Total Shares................................... 9,170,201 5,167,083 9,131,432 5,023,453
=========== ========= =========== ===========
Net income (loss).............................. $1,363,838 $ 161,550 $2,621,339 $(1,182,106)
=========== ========= =========== ===========
Per share amount............................... $ 0.15 $ 0.03 $ 0.29 $ (0.24)
=========== ========= =========== ===========
Fully diluted:
Average Common shares outstanding.............. 8,685,142 938,776 8,675,835 939,713
Preferred Stock converted to common
shares....................................... -- 3,031,279 -- 3,031,279
Stock options and warrants issued
during the period prior to the initial
public offering using the treasury
method (offer price of $14 per
share)........................................ -- 1,052,461 -- 1,052,461
Net effect of dilutive stock options -
based on the treasury stock method
using the greater of the fair market
price or average fair market price
at the end of the period...................... 429,018 204,196 419,092 --
Net effect of dilutive warrants - based
on the treasury stock method using
the greater of the fair market price
or average fair market price
at the end of the period...................... 56,054 72,882 56,000 --
----------- --------- ----------- -----------
Total shares.................................... 9,170,213 5,299,594 9,150,927 5,023,453
=========== ========= =========== ===========
Net income (loss)............................... $1,363,838 $ 161,550 $2,621,339 $(1,182,106)
=========== ========= =========== ===========
Per share amount................................ $ 0.15 $ 0.03 $ 0.29 $ (0.24)
=========== ========= =========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,267
<SECURITIES> 20,306
<RECEIVABLES> 16,592
<ALLOWANCES> 0
<INVENTORY> 12,885
<CURRENT-ASSETS> 56,714
<PP&E> 12,552
<DEPRECIATION> (3,912)
<TOTAL-ASSETS> 66,981
<CURRENT-LIABILITIES> 10,398
<BONDS> 0
0
0
<COMMON> 61,090
<OTHER-SE> (4,941)
<TOTAL-LIABILITY-AND-EQUITY> 66,981
<SALES> 17,946
<TOTAL-REVENUES> 18,795
<CGS> 9,127
<TOTAL-COSTS> 16,954
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (91)
<INCOME-PRETAX> 2,634
<INCOME-TAX> 12
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,621
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
</TABLE>
