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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
August 7, 1997
Date of Report
(Date of earliest event reported)
SUBMICRON SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of other jurisdiction of incorporation)
0-19507 13-3607944
(Commission File Number) (IRS Employer Identification No.)
6330 Hedgewood Dr., #150
Allentown, PA 18106
(Address of principal executive offices) (Zip Code)
(610) 391-9200
(Registrant's telephone number, including area code)
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Item 2. Acquisitions or Dispositions of Assets
On August 7, 1997 (the "Closing Date"), the Company completed the sale of
certain assets, net of liabilities assumed, of its wholly owned subsidiary,
Systems Chemistry Incorporated to British Oxygen Company ("BOC"), for a
negotiated sales price of $17.3 million before closing adjustments. The Company
received $15.8 million in cash after a holdback allowance of $1.5 million to
cover potential post closing working capital adjustments. In addition, the
Company received the proceeds from a $5.0 million subordinated, non-interest
bearing note due in August 2000. The Company applied $18.5 million, after
transaction costs and bank fees, to reduce the outstanding balance on its line
of credit.
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Item 7. Financial Statements and Exhibits
Listed below are the financial statements, pro forma financial information and
exhibits, if any, filed as a part of this Report:
(a) None
(b) Pro Forma Financial Information
1. Pro Forma Consolidated Statement of Operations for the
year ended December 31, 1996.
2. Pro Forma Consolidated Statement of Operations for the
six months ended June 30, 1997.
3. Pro Forma Consolidated Balance Sheet as of June 30,
1997.
4. Notes to the Pro Forma Consolidated Financial
Statements.
(c) Exhibits - None
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SIGNATURE
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 hereunto duly authorized.
Date: August 22, 1997 SUBMICRON SYSTEMS CORPORAITON
/s/ JOHN W. KIZER
--------------------------------------
John W. Kizer
Chief Financial Officer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
PAGE
EXHIBIT DESCRIPTION OF EXHIBIT NUMBER
- ------------- ----------------------------------------------- ----------
<S> <C> <C>
(a) None
(b) Summary Pro Forma Financial Information 6
(b)1 Pro Forma Consolidated Statement of
Operations for the year ended December 31, 1996 7
(b)2 Pro Forma Consolidated Statement of
Operations for the six months ended June 30, 1997 8
(b)3 Pro Forma Consolidated Balance Sheet as
of June 30, 1997 9
(b)4 Notes to the Pro Forma Consolidated Financial
Statements 10
</TABLE>
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SubMicron Systems Corporation
Summary Pro Forma Financial Information
The following Unaudited Pro Forma Consolidated Financial Statements give effect
to the Company's sale of Systems Chemistry Incorporated described below.
On August 7, 1997 (the "Closing Date"), the Company completed the sale of
certain assets, net of liabilities assumed, of its wholly owned subsidiary,
Systems Chemistry Incorporated to British Oxygen Company ("BOC"), for a
negotiated sales price of $17.3 million before closing adjustments. The Company
received $15.8 million in cash after a holdback allowance of $1.5 million to
cover potential post closing working capital adjustments. In addition, the
Company received the proceeds from a $5.0 million subordinated, non-interest
bearing note due in August 2000. The Company applied $18.5 million, after
transaction costs and bank fees, to reduce the outstanding balance on its line
of credit.
The pro forma consolidated statements of operations for the year ended December
31, 1996 and the six months ended June 30, 1997 reflect the operations of the
Company as if the above disposition had occurred at the beginning of the periods
presented. The pro forma consolidated balance sheet as of June 30, 1997 reflects
the financial position of the Company if the disposition had occurred as of June
30, 1997. The pro forma Consolidated Statements of Operations for each period
presented do not reflect the estimated gain on this sale of approximately $2.3
million.
The unaudited pro forma consolidated financial statements are based upon
preliminary estimates, available information, and certain assumptions that
management deems appropriate. Management does not expect material changes to the
final transaction adjustments. The unaudited pro forma consolidated financial
information presented herein is not necessarily indicative of the results of
operations or financial position that the Company would have obtained had such
events occurred at the beginning of the period, as assumed, or the future
results of the Company. The pro forma consolidated financial information should
be read in connection with the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1996 and the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997.
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SUBMICRON SYSTEMS CORPORATION ("SSC")
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
SSC ADJUSTMENTS SSC
------------ -------------- ------------
<S> <C> <C> <C>
System sales, net $ 140,823 $ (42,460)(a) $ 98,363
Service and other sales 30,661 (15,297)(a) 15,364
------------ -------------- ------------
Total net sales 171,484 (57,757) 113,727
------------ -------------- ------------
Cost of system sales 118,800 (32,070)(a) 86,730
Cost of service and other sales 23,948 (14,709)(a) 9,239
------------ -------------- ------------
Total cost of sales 142,748 (46,779) 95,969
------------ -------------- ------------
Gross profit 28,736 (10,978) 17,758
------------ -------------- ------------
Selling, general and administrative 41,337 (11,143)(a) 30,194
Research and development 9,373 (885)(a) 8,488
------------ -------------- ------------
Operating loss (21,974) 1,050 (20,924)
------------ -------------- ------------
Other income (expense):
Interest income 383 (35)(a) 348
Interest expense (5,244) 1,635 (b) (3,609)
Other, net 160 (90)(a) 70
------------ -------------- ------------
(4,701) 1,510 (3,191)
------------ -------------- ------------
Loss before income tax
benefit (26,675) 2,560 (24,115)
Income tax benefit (6,566) - (6,566)
------------ -------------- ------------
Net loss $ (20,109) $ 2,560 $ (17,549)
-=========== -============= -===========
Net loss per common share $ (1.20) $ (1.05)
============ ============
Weighted average number of
shares outstanding 16,713 16,713
============ ============
</TABLE>
See accompanying notes to the Pro Forma Consolidated Financial Statements.
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SUBMICRON SYSTEMS CORPORATION("SSC")
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 1997
(UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
SSC ADJUSTMENTS SSC
------------ -------------- ------------
<S> <C> <C> <C>
System sales, net $ 42,702 $ (15,007)(a) $ 27,695
Service and other sales 13,763 (7,272)(a) 6,491
------------ -------------- ------------
Total net sales 56,465 (22,279) 34,186
------------ -------------- ------------
Cost of system sales 37,985 (11,121)(a) 26,864
Cost of service and other sales 14,787 (10,617)(a) 4,170
------------ -------------- ------------
Total cost of sales 52,772 (21,738) 31,034
------------ -------------- ------------
Gross profit 3,693 (541) 3,152
------------ -------------- ------------
Selling, general and administrative 18,587 (4,119)(a) 14,468
Research and development 4,891 (406)(a) 4,485
Restructuring charges 3,792 - 3,792
------------ --------------- ------------
Operating loss (23,577) 3,984 (19,593)
------------ -------------- ------------
Other income (expense):
Interest income 93 (14)(a) 79
Interest expense (2,842) 733 (b) (2,109)
Other, net (30) 57 (a) 27
------------ -------------- ------------
(2,779) 776 (2,003)
------------ -------------- ------------
Loss before provision for
income taxes and
extraordinary items (26,356) 4,760 (21,596)
Provision for income taxes 3,000 - 3,000
------------ -------------- ------------
Loss before extraordinary item $ (29,356) $ 4,760 $ (24,596)
============ ============== ============
Net loss before extraordinary item
per common share $ (1.74) $ (1.45)
============ ============
Weighted average number of
shares outstanding 16,918 16,918
============ ============
</TABLE>
See accompanying notes to the Pro Forma Consolidated Financial Statements.
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SUBMICRON SYSTEMS CORPORATION ("SSC")
PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED)
AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
SSC ADJUSTMENTS SSC
------------ -------------- -----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,792 $ (1,345)(a) $ 1,447
Accounts receivable, net 27,176 (14,592)(c) 12,584
Inventories, net 33,944 (6,096)(c) 27,848
Prepaids and other 5,498 (438)(c) 5,060
------------ -------------- -----------
Total current assets 69,410 (22,741) 46,939
Property and equipment, net 18,410 (1,031)(c) 17,379
Intangibles and other, net 5,225 (1,730)(c) 3,495
------------ --------------- -----------
Total assets $ 93,045 $ (25,232) $ 67,813
============ ============== ===========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Line of Credit $ 26,803 $ (18,500)(b) $ 8,303
Current portion of long-term debt 2,619 - 2,619
Accounts payable 14,906 (2,782)(c) 12,124
Deferred revenues 5,100 (4,256)(c) 844
Accrued expenses and other 20,370 (5,694)(c) 14,676
------------ ---------- ------
Total current liabilities 69,798 (31,232) 38,566
Long-term debt 15,943 3,700 (e) 19,643
------------ -------------- -----------
Total liabilities 85,741 (27,532) 58,209
------------ -------------- -----------
Shareholders' equity:
Common stock 2 - 2
Preferred stock 9,415 - 9,415
Additional paid-in capital 41,418 - 41,418
Accumulated deficit (43,531) 2,300 (d) (41,231)
------------ -------------- -----------
Total shareholders' equity 7,304 2,300 (d) 9,604
------------ -------------- ------------
Total liabilities and
shareholders' equity $ 93,045 $ (25,232) $ 67,813
============ ============== ============
</TABLE>
See accompanying notes to the Pro Forma Consolidated Financial Statements.
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SUBMICRON SYSTEMS CORPORATION
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
1. HISTORICAL.
The historical balances represent the financial position and consolidated
results of operations of SubMicron Systems Corporation and were derived from the
respective financial statements for the indicated periods.
2. DISPOSITION OF ASSETS OF SYSTEMS CHEMISTRY INCORPORATED.
On August 7, 1997, the Company completed the sale of certain assets, net of
liabilities assumed, of its wholly owned subsidiary, Systems Chemistry
Incorporated, for $17.3 million. The Company received $15.8 million in cash
after a holdback allowance of $1.5 million to cover potential post closing
working capital adjustments. In addition, the Company received the proceeds from
a $5.0 million subordinated, non-interest bearing note, due in August 2000. The
Company applied $18.5 million, after transaction costs and bank fees, to reduce
the outstanding balance on its line of credit. The Company estimates a gain on
the sale of approximately $2.3 million to be recorded in the third quarter of
1997.
The pro forma consolidated statements of operations for the year ended December
31, 1996 and the six months ended June 30, 1997 reflect the operations of the
Company as if the above disposition had occurred at the beginning of the periods
presented. The pro forma consolidated balance sheet as of June 30, 1997 reflects
the financial position of the Company if the disposition had occurred as of June
30, 1997. The pro forma financial information presented is not necessarily
indicative of the financial position and results of operations that the Company
would have obtained had such events occurred at the beginning of the periods.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET ADJUSTMENTS
THE UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 1997 HAS BEEN
ADJUSTED TO REFLECT THE FOLLOWING:
(a) All closing costs and associated liabilities paid, resulting from the
transaction, were assumed to reduce the net proceeds received from the
sale.
(b) To reflect the net cash proceeds received from the sale applied to the
outstanding line of credit.
(c) To eliminate the assets sold by the Company and liabilities assumed by
BOC.
(d) To reflect the gain on the sale.
(e) To reflect the present value of the $5 million non-interest bearing note,
due in August 2000.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS ADJUSTMENTS
THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 1996 HAS BEEN ADJUSTED TO REFLECT THE FOLLOWING:
(a) To eliminate the operating results of Systems Chemistry Incorporated for
the entire period presented.
(b) To reduce interest expense attributable to decreased average outstanding
line of credit borrowings from the application of the sale proceeds
utilizing the weighted average interest rates in effect during the period,
offset by imputed interest expense on the $5.0 million loan from BOC.
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THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS
ENDED JUNE 30, 1997 HAS BEEN ADJUSTED TO REFLECT THE FOLLOWING:
(a) To eliminate the operating results of Systems Chemistry Incorporated for
the entire period presented.
(b) To reduce interest expense attributable to decreased average outstanding
line of credit borrowings from the application of the sale proceeds
utilizing the weighted average interest rates in effect during the period,
offset by imputed interest expense on the $5.0 million loan from BOC.
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