<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: OCTOBER 31, 1999 Commission File Number 0-26714
---------------- -------
ADE CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2441829
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
80 WILSON WAY, WESTWOOD, MASSACHUSETTS 02090
(Address of principal executive offices, including area code)
(781) 467-3500
(Registrant's telephone number, including area code)
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Common Stock, par value $.01 per share 13,389,696 shares
- ------------------------------------------------------ ------------------------------------------
<S> <C>
Class Outstanding at December 8, 1999
</TABLE>
Page 1 of 21
<PAGE>
ADE CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
PART I. - FINANCIAL INFORMATION
<S> <C>
Item 1. Condensed Consolidated Financial Statements (unaudited)
Condensed Consolidated Balance Sheet-
October 31, 1999 and April 30, 1999 3
Condensed Consolidated Statement of Operations-
Three and Six Months Ended October 31, 1999 and 1998 4
Condensed Consolidated Statement of Cash Flows -
Six Months Ended October 31, 1999 and 1998 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II. - OTHER INFORMATION 19
SIGNATURES 20
EXHIBIT INDEX 21
</TABLE>
2
<PAGE>
ADE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
October 31, April 30,
1999 1999
-------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 39,476 $ 61,278
Accounts receivable, net 11,521 11,843
Inventories 26,855 22,178
Prepaid expenses and other current assets 8,341 8,007
Deferred income taxes 4,887 7,419
-------------- ------------
Total current assets 91,080 110,725
Fixed assets, net 29,755 28,268
Deferred income taxes 5,496 2,964
Investments 3,457 3,869
Intangible assets, net 4,272 3,669
Restricted cash 3,805 3,533
Other assets 454 402
-------------- ------------
$ 138,319 $ 153,430
-------------- ------------
-------------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 587 $ 575
Accounts payable 2,695 2,256
Accrued expenses and other current liabilities 14,024 15,449
Deferred income on sales to affiliates 434 1,791
-------------- ------------
Total current liabilities 17,740 20,071
Long-term debt 12,237 12,537
STOCKHOLDERS' EQUITY:
Common stock 133 133
Capital in excess of par value 100,690 100,146
Retained earnings 7,570 20,625
-------------- ------------
108,393 120,904
Deferred compensation (51) (82)
-------------- ------------
108,342 120,822
-------------- ------------
$ 138,319 $ 153,430
-------------- ------------
-------------- ------------
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
3
<PAGE>
ADE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data, unaudited)
<TABLE>
<CAPTION>
Three months Six months
ended October 31, ended October 31,
1999 1998 1999 1998
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenue $ 13,625 $12,239 $25,987 $36,267
Cost of revenue 8,904 12,799 16,153 26,256
----------- ------------ ------------ -----------
Gross profit (loss) 4,721 (560) 9,834 10,011
----------- ------------ ------------ -----------
Operating expenses:
Research and development 4,571 6,463 10,127 13,115
Marketing and sales 3,367 3,240 6,084 6,361
General and administrative 2,877 2,213 6,437 5,092
----------- ------------ ------------ -----------
Total operating expenses 10,815 11,916 22,648 24,568
----------- ------------ ------------ -----------
Loss from operations (6,094) (12,476) (12,814) (14,557)
Interest income, net 374 701 522 1,461
----------- ------------ ------------ -----------
Loss before benefit from income taxes
and equity in net loss of affiliated companies (5,720) (11,775) (12,292) (13,096)
Benefit from income taxes - (4,201) - (4,715)
----------- ------------ ------------ -----------
Loss before equity in net loss of affiliated companies (5,720) (7,574) (12,292) (8,381)
Equity in net loss of affiliated companies (149) (324) (763) (331)
----------- ------------ ------------ -----------
Net loss $ (5,869) $ (7,898) $(13,055) $ (8,712)
----------- ------------ ------------ -----------
----------- ------------ ------------ -----------
Basic loss per share $(0.44) $(0.61) $(0.98) $(0.67)
Diluted loss per share $(0.44) $(0.61) $(0.98) $(0.67)
Weighted average shares outstanding - basic 13,360 12,965 13,277 12,944
Weighted average shares outstanding - diluted 13,360 12,965 13,277 12,944
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
4
<PAGE>
ADE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands, unaudited)
<TABLE>
<CAPTION>
Six months ended
October 31,
1999 1998
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(13,055) $ (8,712)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 2,961 2,911
Equity in net loss of affiliated companies,
net of dividends received 817 440
Changes in assets and liabilities:
Accounts receivable, net 322 6,808
Inventories (4,677) 601
Prepaid expenses and other current assets (334) 895
Accounts payable 439 (2,203)
Accrued expenses and other current liabilities (1,425) (1,538)
Deferred income on sales to affiliate (1,357) (612)
------------- ------------
Net cash used in operating activities (16,309) (1,410)
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of fixed assets (4,001) (1,260)
Change in restricted cash (272) 175
Advances to affiliated company (405) (700)
Decrease (increase) in other assets (1,102) 1
------------- ------------
Net cash used in investing activities (5,780) (1,784)
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt (288) (215)
Proceeds from issuance of common stock 575 479
Tax benefit related to the exercise of common stock options - 25
------------- ------------
Net cash provided by financing activities 287 289
------------- ------------
Net decrease in cash and cash equivalents (21,802) (2,905)
Cash and cash equivalents, beginning of period 61,278 72,711
------------- ------------
Cash and cash equivalents, end of period $39,476 $ 69,806
------------- ------------
------------- ------------
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
5
<PAGE>
ADE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The accompanying unaudited condensed consolidated financial statements of
ADE Corporation (the "Company") include, in the opinion of management, all
adjustments (consisting only of normal and recurring adjustments) necessary for
a fair statement of the Company's financial position, results of operations and
cash flows at the dates and for the periods indicated. Results of operations for
interim periods are not necessarily indicative of those to be achieved for full
fiscal years.
Pursuant to accounting requirements of the Securities and Exchange
Commission applicable to quarterly reports on Form 10-Q, the accompanying
unaudited condensed consolidated financial statements and these notes do not
include all disclosures required by generally accepted accounting principles for
complete financial statements. Accordingly, these statements should be read in
conjunction with the financial statements included in the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1999.
On June 11, 1998, pursuant to an Agreement and Plan of Merger (the "PST
Agreement"), the Company, through a wholly owned subsidiary, merged with Phase
Shift Technology, Inc. ("PST"), an Arizona corporation. PST designs,
manufactures, markets and services high-performance, non-contact surface
metrology equipment using advanced optical interferometric technology that
provides enhanced yield management for computer hard disk, semiconductor and
optics manufacturers. Pursuant to the PST Agreement, each outstanding share of
PST common stock was exchanged for two shares of the Company's common stock. A
total of 2,000,000 shares of the Company's common stock were issued in this
transaction. This transaction has been accounted for as a pooling-of-interests.
Accordingly, all financial statements presented have been restated as if the
acquisition took place at the beginning of such periods. There were no material
transactions between the Company and PST prior to the PST Agreement.
2. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
(in thousands)
October 31, April 30,
1999 1999
------------ ------------
(unaudited)
<S> <C> <C>
Raw materials and purchased parts $ 12,580 $ 13,190
Work-in-process 12,154 8,211
Finished goods 2,121 777
------------ ------------
$ 26,855 $ 22,178
------------ ------------
------------ ------------
</TABLE>
6
<PAGE>
ADE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
3. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
<TABLE>
<CAPTION>
(in thousands)
October 31, April 30,
1999 1999
------------- -----------
(unaudited)
<S> <C> <C>
Accrued salaries, wages, vacation pay and bonuses $ 1,869 $ 1,901
Accrued commissions 921 1,305
Accrued warranty costs 1,079 1,340
Accrued severance, restructuring 555 1,246
Deferred revenue 7,824 6,070
Other 1,776 3,587
------------- -----------
$ 14,024 $ 15,449
------------- -----------
------------- -----------
</TABLE>
4. LOSS PER SHARE
Basic loss per share is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding for
the period. Diluted loss per share is computed using the weighted average
number of common shares outstanding and gives effect to all dilutive
potential common shares outstanding during the period. Potential common
shares outstanding include shares issuable upon the assumed exercise of
dilutive stock options reflected under the treasury stock method and, with
respect to the first fiscal quarter, shares issued in the PST merger (Note 1)
held in escrow. For each of the periods presented, basic and diluted loss per
share are the same due to the antidilutive effect of potential common shares
outstanding.
5. RESTRUCTURING CHARGES
In January 1999, the Company implemented a restructuring of operations
plan designed to better align the Company's cost structure with its revenue
reductions resulting from the decline in capital equipment expenditures in the
semiconductor and computer hard disk industries. The plan includes workforce
reductions as well as the consolidation of manufacturing and other operational
facilities. The Company recorded restructuring charges of $2,318,000 in the
period ended January 31, 1999, comprised of the following: severance charges of
$1,202,000
7
<PAGE>
ADE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
5. RESTRUCTURING CHARGES (CONTINUED)
related to the termination of 76 employees in general and administrative,
marketing and sales, manufacturing, and engineering functions; $185,000 in lease
termination penalties and $931,000 in non-cash fixed asset impairments related
to furniture, fixtures and building improvements on the terminated leased
facilities. The fair value of the impaired assets was determined as their
estimated salvage value at the time of their eventual disposition increased by
their estimated utility during their related service period through disposition.
The Company anticipates these impaired assets will be removed from service by
December 31, 1999. As of October 31, 1999, the Company had made lease
termination payments of $185,000. Of the $1,202,000 in severance costs in
accrued expenses as of May 1, 1999, $647,000 was paid during the six months
ended October 31, 1999. Consolidation expenses are expected to continue through
December 31, 1999.
Restructuring charge activity during the second quarter of fiscal 2000 and the
related accrual as of October 31, 1999 is as follows:
<TABLE>
<CAPTION>
<S> <C>
Balance at July 31, 1999 $ 763
Restructuring provision -
Severance payments (208)
------------
Balance at October 31, 1999 $ 555
------------
------------
</TABLE>
6. SEGMENT REPORTING
The Company has three reportable segments: ADE Semiconductor Systems Group
("SSG"), ADE Phase Shift ("PST") and ADE Technologies ("ATI"). SSG
manufactures and markets metrology and inspection systems to the
semiconductor wafer and device manufacturing industries that are used to
improve yield and capital productivity. PST manufactures and markets high
performance, non-contact surface metrology equipment using advanced
interferometric technology that provides enhanced yield management to the
data storage, semiconductor and optics industries. ATI manufactures and
markets high precision magnetic characterization and non-contact dimensional
metrology gaging systems primarily to the data storage industry. Sales of the
Company's stand-alone software products and software consulting services are
included in the "other" category. The Company's reportable segments are
determined based upon the nature of the products, the external customers and
customer industries and the sales and distribution methods used to market the
products. The Company evaluates performance based upon profit or loss from
operations. The Company does not measure the assets allocated to the
segments. Management fees representing certain services provided by corporate
offices have been allocated to each of the reportable segments based upon the
usage of those services by each segment. Additionally, other income (loss),
the benefit from income taxes and the equity in losses of affiliated
companies are not included in segment profitability.
8
<PAGE>
ADE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
6. SEGMENT REPORTING (CONTINUED)
<TABLE>
<CAPTION>
(IN THOUSANDS)
SSG PST ATI OTHER TOTAL
------------------------------- ---------------------
<S> <C> <C> <C> <C> <C>
For the quarter ended October 31, 1999
Revenue from external customers $ 10,341 $ 1,874 $ 1,118 $ 38 $ 13,371
Intersegment revenue 13 - 64 243 320
Loss from operations (4,329) (233) (1,203) (629) (6,394)
Depreciation and amortization expense 1,167 4 103 111 1,385
Capital expenditures 1,659 6 36 13 1,714
FOR THE QUARTER ENDED OCTOBER 31, 1998
Revenue from external customers $ 7,282 $ 2,008 $ 2,326 $ 442 $ 12,058
Intersegment revenue 19 - 202 207 428
Income (loss) from operations (11,149) 443 (1,487) (558) (12,751)
Depreciation and amortization expense 1,161 4 102 304 1,571
Capital expenditures 786 17 133 51 987
FOR THE SIX MONTHS ENDED OCTOBER 31, 1999
Revenue from external customers $ 17,876 $ 3,109 $ 2,945 $ 162 $ 24,092
Intersegment revenue 127 - 115 326 568
Loss from operations (10,263) (634) (1,828) (1,483) (14,208)
Depreciation and amortization expense 2,411 7 205 338 2,961
Capital expenditures 3,883 39 59 20 4,001
FOR THE SIX MONTHS ENDED OCTOBER 31, 1998
Revenue from external customers $ 24,794 $ 5,078 $ 4,549 $ 855 $ 35,276
Intersegment revenue 40 - 355 382 777
Income (loss) from operations (13,571) 1,628 (2,069) (1,060) (15,072)
Depreciation and amortization expense 2,073 7 205 557 2,842
Capital expenditures 1,638 20 139 126 1,923
</TABLE>
9
<PAGE>
ADE CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
6. SEGMENT REPORTING (CONTINUED)
The following is a reconciliation for the above items where aggregate reportable
segment amounts differ from amounts contained in the Company's consolidated
financial statements.
<TABLE>
<CAPTION>
Three months Six months
ended October 31, ended October 31,
1999 1998 1999 1998
---------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total external revenue for reportable segments 13,371 12,058 24,092 35,276
Net impact of revenue recognition on sales to affiliate 254 181 1,895 991
---------- ----------- ------------ -----------
Total consolidated revenue 13,625 12,239 25,987 36,267
---------- ----------- ------------ -----------
---------- ----------- ------------ -----------
Total operating loss for reportable segments (6,394) (12,751) (14,208) (15,072)
Net impact of intercompany gross profit eliminations and
deferred profit on sales to affiliate 300 275 1,394 515
---------- ----------- ------------ -----------
Total consolidated operating loss (6,094) (12,476) (12,814) (14,557)
---------- ----------- ------------ -----------
---------- ----------- ------------ -----------
</TABLE>
10
<PAGE>
ADE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
INTRODUCTION
ADE Corporation (the "Company") designs, manufactures, markets and
services highly precise, automated measurement, defect detection and handling
equipment with current applications in the production of semiconductor wafers,
semiconductor devices and computer disks.
On June 11, 1998, pursuant to an Agreement and Plan of Merger (the "PST
Agreement"), the Company, through a wholly owned subsidiary, merged with Phase
Shift Technology, Inc. ("PST"), an Arizona corporation. PST designs,
manufactures markets and services high-performance, non-contact surface
metrology equipment using advanced optical interferometric technology that
provides enhanced yield management for computer hard disk, semiconductor and
optics manufacturers. Pursuant to the PST Agreement, each outstanding share of
PST common stock was exchanged for two shares of the Company's common stock. A
total of 2,000,000 shares of the Company's common stock were issued in this
transaction. This transaction has been accounted for as a pooling-of-interests.
Accordingly, all financial statements presented have been restated as if the
acquisition took place at the beginning of such periods. There were no material
transactions between the Company and PST prior to the PST Agreement.
The following information should be read in conjunction with the unaudited
condensed consolidated financial statements and notes thereto included in this
Quarterly Report and the audited consolidated financial statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations contained in the Company's Annual Report on Form 10-K for the fiscal
year ended April 30, 1999.
RESULTS OF OPERATIONS
RESTRUCTURING OF OPERATIONS
In January 1999, the Company commenced efforts to consolidate its
Charlotte, North Carolina operations into its Massachusetts facilities to better
align the Company's cost structure with prevailing semiconductor market
conditions and to position the Company with more efficient operations for the
expected industry recovery. Non-recurring expenses associated with this
consolidation incurred in the current period totaled $850,000. These
non-recurring expenses included travel, recruiting, and employee training and
have been included in general and administrative expenses. The Company
anticipates costs in future periods associated with replacing certain personnel
who have elected not to relocate to the Company's Massachusetts operations.
THREE MONTHS ENDED OCTOBER 31, 1999 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
1998
REVENUE. Revenue increased 11.3% to $13.6 million in the second quarter
of fiscal 2000 from $12.2 million in the second quarter of fiscal 1999.
Increased sales of the Company's products were primarily due to an increase
in demand for capital equipment in the semiconductor wafer and device
industries as well as the computer hard disk industry. Increased demand in
the semiconductor market indicates the early stages of recovery from the
current severe down cycle. Capital equipment utilization at wafer and device
manufacturers has improved, resulting in capital equipment purchases to
adjust capacity on existing lines. Advanced industry requirements have also
resulted in technology purchases to evaluate the Company's next generation of
products. For the three months ended October 31, 1999, 77.8% of the Company's
revenue was derived from the semiconductor industry compared to 69.5% for the
year earlier period. The Company sells its semiconductor products to both
wafer and device manufacturers. Historically, the Company's semiconductor
revenue has been derived to a greater extent from wafer manufacturers
compared to device manufacturers. For the three months ended October 31,
1999, 89.1% of semiconductor revenue was derived from wafer manufacturers
while 10.9% was derived from device manufacturers compared to 76.4% and
23.6%, respectively, for the year earlier period. Any increase in short-term
chip demand or increases in semiconductor market capital expenditures is
expected to impact device manufacturers prior to wafer manufacturers as wafer
manufacturers are further down on the overall semiconductor industry supply
chain. Although it is starting to show
11
<PAGE>
signs of recovery, the computer hard disk industry has been in a period of
excess supply in many disk drive market segments which has resulted in reduced
production and capital equipment purchases. The Company has continued to
experience reduced revenue in each of its metrology product lines that are
marketed to the computer hard disk industry. Disk industry revenue comprised
22.2% of total revenue for the three months ended October 31, 1999, compared to
30.5% for the year earlier period.
GROSS MARGIN. Gross margin increased to 34.6% in the second quarter of
fiscal 2000 from (4.6)% in the second quarter of 1999. This increase resulted
primarily from the non-reoccurrence of a $2.2 million charge to increase
inventory obsolescence reserves during the second quarter of 1999. The
increased inventory obsolescence reserves from the second quarter of 1999
impacted both the semiconductor and computer disk drive product lines.
Additionally, decreased indirect service costs contributed to the increase in
gross margin during the second quarter of fiscal 2000 compared to the second
quarter of 1999.
RESEARCH AND DEVELOPMENT. Research and development expense decreased $1.9
million or 29.3% to $4.6 million in the second quarter of fiscal 2000 from $6.5
million in the second quarter of 1999 and decreased as a percentage of revenue
to 33.5% from 52.8% in the second quarter of 1999. The decrease in expense
resulted primarily from decreased project materials and consulting expenditures
related to the Company's first generation surface inspection and wafer thickness
300mm tools and other cost containment measures. Also contributing to the
decrease in research and development expenses is efficiencies obtained from the
consolidation of the Charlotte, North Carolina operations into the Westwood,
Massachusetts facility. The decrease in expense as a percentage of sales
resulted from the significant decrease in research and development expense and
the increase in revenues in the second quarter of fiscal 2000 compared to the
second quarter of 1999. The Company has increased development efforts to enhance
its existing 200mm and advanced 200mm wafer systems as its semiconductor
industry customers seek to improve their yields on 200mm wafers as well as
efforts to develop and enhance bridge tools, which can be used with either 200mm
or 300mm wafers. The Company also continues to develop new products for the
computer disk industry, including those which measure the magnetic properties of
materials used in manufacturing disk drives. The Company is committed to
continuing its investment in research and development to maintain its position
as a technological leader, which may necessitate continued research and
development spending at or above current levels.
MARKETING AND SALES. Marketing and sales expense increased 3.9% to $3.4
million in the second quarter of fiscal 2000 from $3.2 million in the second
quarter of 1999 and decreased as a percentage of revenue to 24.7% from 26.5% in
the second quarter of 1999. The increased expense resulted primarily from
increased commissions expense on sales made through internal sales
representatives related to increased commission rates. The mix of sales channels
through which the Company's products are sold may have a significant impact on
the Company's marketing and sales expense and the results in any period may not
be indicative of marketing and sales expense for future periods. The decrease in
marketing and sales expense as a percentage of revenue resulted from the
increase in revenue during the second quarter of fiscal 2000 discussed above.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
30.0% to $2.9 million in the second quarter of fiscal 2000 from $2.2 million in
the second quarter of 1999 and increased as a percentage of revenue to 21.1%
from 18.1% in the second quarter of 1999. Expenses increased primarily as a
result of the costs associated with the consolidation of the Charlotte
operations into the Westwood, Massachusetts facility. The increase in general
and administrative expenses as a percent of revenue is consistent with the
overall increase in the expenses.
INTEREST INCOME, NET. Net interest income was $374,000 in the second
quarter of fiscal 2000 compared to net interest income of $701,000 in the second
quarter of 1999. The decrease in interest income resulted primarily from lower
interest returns on reduced principal balances during the current period
compared to the three months ended October 31, 1998, and interest expense
related to the Company's obligations under separate $4.5 million, $4.0 million
and $5.5 million Industrial Development Bonds ("IDB") issued in June 1999,
December 1997 and June 1996, respectively, through various state and local
bonding authorities.
12
<PAGE>
INCOME TAXES. There was no provision for or benefit from income taxes
in the second quarter of fiscal 2000 compared to a benefit from income taxes
of $4.2 million in the second quarter of fiscal 1999. The benefit from income
taxes recognized in the second quarter of fiscal 1999 reflects the Company's
estimated annual effective tax rate of 36%. The benefit from income taxes was
primarily obtained through income tax refunds resulting from net operating
loss carry-backs and from certain research and development credits. The
Company continues to monitor the realizability of its current and long term
deferred tax assets and provides for valuation allowances against these
assets as appropriate. The Company has increased its valuation allowances
during the three months ended October 31, 1999 by $1.9 million.
EQUITY IN NET LOSS OF AFFILIATED COMPANIES. Equity in net loss of
affiliated companies was $149,000 in the second quarter of fiscal 2000
compared to equity in net loss of affiliated companies of $324,000 in the
second quarter of 1999. The Company's affiliates sell primarily to the
semiconductor industry and the current period loss reflects the overall
downturn in the semiconductor industry. The Company remains uncertain about
when growth in the semiconductor industry will result in improved financial
results for its affiliates. Furthermore, there can be no assurance that any
overall growth in the semiconductor industry will result in increased
profitability for the Company's affiliates.
SIX MONTHS ENDED OCTOBER 31, 1999 COMPARED TO SIX MONTHS ENDED OCTOBER 31, 1998
REVENUE. Revenue decreased 28.3% to $26.0 million in the 6 months ended
October 31, 1999 from $36.3 million in the year earlier period. Decreased
sales of the Company's products were primarily due to reduced demand for
capital equipment in the semiconductor wafer and device industries as well as
the computer hard disk industry. Reduced demand in the semiconductor market
resulted from excess manufacturing capacity for 200mm wafers, continued
delays in large-scale production of 300mm wafers and an overall uncertainty
about short-term chip demand. For the six months ended October 31, 1999,
76.7% of the Company's revenue was derived from sales to the semiconductor
industry compared to 74.7% for the year earlier period. The Company sells its
semiconductor products to both wafer and device manufacturers. Historically,
the Company's semiconductor revenue has been derived to a greater extent from
wafer manufacturers compared to device manufacturers. For the six months
ended October 31, 1999, 85.5% of semiconductor revenue was derived from wafer
manufacturers while 14.5% was derived from device manufacturers compared to
90.4% and 9.6%, respectively, for the year earlier period. Any increase in
short-term chip demand or increases in semiconductor market capital
expenditures is expected to impact device manufacturers prior to wafer
manufacturers as wafer manufacturers are further down on the overall
semiconductor industry supply chain.
The computer hard disk industry is also in a period of excess supply,
which has resulted in reduced production and capital equipment purchases. Disk
industry revenue comprised 23.3% of total revenue for the six months ended
October 31, 1999, compared to 31.0% for the year earlier period.
GROSS MARGIN. Gross margin increased to 37.8% for the six months ended
October 31,1999 from 27.6% in the year earlier period. This increase resulted
primarily from the non-reoccurrence of a $2.2 million charge to increase
inventory obsolescence reserves during the six months ended October 31, 1998.
The increased inventory obsolescence reserves from fiscal 1999 impacted both
the semiconductor and computer disk drive product lines. Additionally,
decreased indirect service costs contributed to the increase in gross margin
during the first six months of fiscal 2000 compared to the year earlier
period.
RESEARCH AND DEVELOPMENT. Research and development expense decreased $3.0
million or 22.8% to $10.1 million in the six months ended October 31, 1999 from
$13.1 million in the year earlier period and increased as a percentage of
revenue to 39.0% from 36.2% in the second quarter of 1999. The decrease in
expense resulted primarily from decreased project materials and consulting
expenditures related to the Company's first generation surface inspection and
wafer thickness 300mm tools and other cost containment measures. Also
contributing to the decrease in research and development expenses is
efficiencies obtained from the consolidation of the Charlotte, North Carolina
operations into the Westwood, Massachusetts facility. The increase in expense as
a percentage of
13
<PAGE>
sales resulted from the significant decrease in revenue as discussed above. The
Company has increased development efforts to enhance its existing 200mm and
advanced 200mm wafer systems as its semiconductor industry customers seek to
improve their yields on 200mm wafers as well as efforts to develop and enhance
bridge tools, which can be used with either 200mm or 300mm wafers. The Company
also continues to develop new products for the computer disk industry, including
those which measure the magnetic properties of materials used in manufacturing
disk drives. The Company is committed to continuing its investment in research
and development to maintain its position as a technological leader, which may
necessitate continued research and development spending at or above current
levels.
MARKETING AND SALES. Marketing and sales expense decreased 4.4% to $6.1
million in the six months ended October 31, 1999 from $6.4 million during the
year earlier period and increased as a percentage of revenue to 23.4% from 17.5%
in the year earlier period. The reduced expense resulted primarily from reduced
commissions expense related to a lower volume of sales made through external
sales representatives in certain foreign markets, primarily in Asia, and reduced
travel expenses during the first six months of fiscal 2000. The mix of sales
channels through which the Company's products are sold may have a significant
impact on the Company's marketing and sales expense and the results in any
period may not be indicative of marketing and sales expense for future periods.
The increase in marketing and sales expense as a percentage of revenue resulted
from the decrease in revenue during the first six months of fiscal 2000 as
discussed above.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
26.4% to $6.4 million for the six months ended October 31, 1999 from $5.1
million for the year earlier period and increased as a percentage of revenue to
24.8% from 14.0% in the year earlier period. Expenses increased primarily as a
result of the costs associated with the consolidation of the Charlotte
operations into the Westwood, Massachusetts facility. The increase in general
and administrative expenses as a percent of revenue resulted from the decrease
in revenue during the first six months of fiscal 2000 as discussed above.
INTEREST INCOME, NET. Net interest income was $522,000 in the six
months ended October 31, 1999 compared to net interest income of $1.5 million
in the year earlier period. The decrease in interest income resulted
primarily from lower interest returns on reduced principal balances during
the current period compared to the six months ended October 31, 1998, and
interest expense related to the Company's obligations under separate $4.5
million, $4.0 million and $5.5 million Industrial Development Bonds ("IDB")
issued in June 1999, December 1997 and June 1996, respectively, through
various state and local bonding authorities.
INCOME TAXES. There was no provision for or benefit from income taxes for
the six months ended October 31, 1999 compared to a benefit from income taxes of
$4.7 million in the year earlier period. The benefit from income taxes
recognized in the six months ended October 31, 1998 reflects the Company's
estimated annual effective tax rate of 36%. The benefit from income taxes was
primarily obtained through income tax refunds resulting from net operating loss
carry-backs and from certain research and development credits. The Company
continues to monitor the realizability of its current and long term deferred tax
assets and provides for valuation allowances against these assets as
appropriate. The Company has increased its valuation allowances during the six
months ended October 31, 1999 by $4.2 million.
EQUITY IN NET LOSS OF AFFILIATED COMPANIES. Equity in net loss of
affiliated companies was $763,000 in the six months ended October 31, 1999
compared to equity in net loss of affiliated companies of $331,000 in the
year earlier period. The Company's affiliates sell primarily to the
semiconductor industry and the current period loss reflects the overall
downturn in the semiconductor industry. The Company remains uncertain about
when growth in the semiconductor industry will result in improved financial
results for its affiliates. Furthermore, there can be no assurance that any
overall growth in the semiconductor industry will result in increased
profitability for the Company's affiliates.
14
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At October 31, 1999, the Company had $39.5 million in cash and cash
equivalents and $73.3 million in working capital. In addition, the Company
had $3.8 million in restricted cash used as security for tax-exempt
Industrial Development Bonds issued through the Massachusetts Industrial
Finance Agency. Under the terms of the bond agreement, the Company may
substitute a letter of credit in an amount equal to approximately 105% of the
outstanding principal balance as collateral for the Company's obligations
under the IDB, assuming the Company has the ability to borrow under the
Credit Facility described below or another facility. Such actions would allow
the restricted cash balance to be used for general corporate purposes. The
Company also has an unsecured revolving line of credit facility (the "Credit
Facility") with a bank, with a maximum borrowing amount of $8 million. The
Credit Facility provides the Company the option of borrowing at either the
bank's prime rate or the bank's LIBOR rate plus 2%. At October 31, 1999, the
Company was in violation of certain financial covenants related to the Credit
Facility, which provides the bank with the right to withhold future advances
under the Credit Facility, to require cash deposits as security for any
future advances or to offset any and all of the Company's cash deposits with
the bank against any outstanding borrowings under the Credit Facility. The
Credit Facility expires and all outstanding amounts thereunder are due
December 21, 1999. There were no borrowings outstanding under the Credit
Facility at October 31, 1999. The Company does not intend to renew the credit
facility upon its expiration.
Cash used in operating activities for the six months ended October 31,
1999 was $16.3 million. This amount resulted from a net loss of $13.1 million,
adjusted for non-cash charges of $3.8 million and a $7.0 million net increase in
working capital accounts. Non-cash items consisted primarily of $3.0 million of
depreciation and amortization and $817,000 of the Company's share of the net
loss of affiliated companies.
Cash used in investing activities was $5.8 million, and consisted of
primarily of $4.0 million for purchases of fixed assets and an increase in other
assets of $1.1 million relating primarily to a payment for a license fee.
Cash provided by financing activities was $287,000, which consisted of
$575,000 of aggregate proceeds from the issuance of common stock from the
exercise of stock options, partially offset by $288,000 in repayments of
long-term debt.
The Company expects to meet its near-term working capital needs and
capital expenditures primarily through cash generated from operations, its
available cash and cash equivalents and the above-referenced Credit Facility.
YEAR 2000
The Company has a Task Force that is assessing on a continuing basis the
nature, extent and cost of remediation of any Year 2000 ("Y2K") readiness issues
confronting the Company and its suppliers, customers and other critical third
parties. The project encompasses reviewing the Company's products and internal
systems, both information technology ("IT") and non-information technology
("non-IT") as well as the Year 2000 readiness of companies with which the
Company has a material relationship, including customers, suppliers, creditors,
financial organizations, utility providers and governmental agencies. This
assessment is continuing at each of its operating units and the Company has
identified certain requisite corrective actions described below.
PRODUCTS. The Company adheres to standard Y2K testing guidelines as
recommended by an international consortium of semiconductor manufacturers.
The readiness status of specific Company products is posted on the Company's
website located at www.ade.com. Corrective actions for software included in
the Company's products have included formulating software patches that
provide proper system operation or a combination of software patches and
upgrades that provide proper system operation and proper recognition of dates
after December 31, 1999. As posted on the Company's website, these patches
and upgrades have been or will be provided to customers upon request. The
Company also sells software products that are bundled with or sold separately
from the Company's capital equipment products. The ability of a majority of
these software products to function as a Year 2000 ready product is dependent
upon the Year 2000 readiness of the user's operating system and any other
software with which the Company's products will interact. The Company has
completed all testing and corrective actions related to Year 2000 issues in
its products.
15
<PAGE>
However, notwithstanding such efforts, any failure of the Company's products
to perform, including system malfunctions due to inability to recognize dates
after December 31, 1999, could disrupt business operations and could result
in claims against the Company, which could seriously harm the Company's
business, results of operations and financial condition.
INFORMATION TECHNOLOGY. The Company has completed its review of its
internal software applications and has determined that all network systems
and server architecture are Y2K-ready. The Company utilizes standard, vendor
supplied software for its electronic mail, corporate communications,
engineering design, manufacturing and materials purchasing/planning,
accounting, desktop and database systems. The Company has contacted these
vendors to obtain assurances that these IT systems are or will be Y2K
compliant. While the Company has not received notice from any vendor of Y2K
unreadiness, nonetheless, the failure of any such IT system to be Y2K
compliant could have a material adverse effect on the Company and no
assurance can be provided that all such programs will be implemented on a
timely basis.
NON-INFORMATION TECHNOLOGY. The Company is aware of potential non-IT system
(building security, voice mail, telecommunications, utility and water systems,
etc.) risk associated with the Y2K issue and has evaluated its potential
exposure at each of its facilities. The Company has completed any necessary
renovation of its non-IT systems as well as the validation of any repairs.
Formal queries to landlords, water, utility and telecommunications providers for
the Company's domestic and international locations, and other third parties with
whom the Company has material relationships have been sent to these suppliers to
assess the systems' Y2K readiness.
SUPPLIERS AND CUSTOMERS. The Company continues the process of inquiring
of its significant suppliers and customers the status of their Y2K readiness
through completion of a Year 2000 Readiness Supplier Questionnaire that has
been developed by a consortium of semiconductor manufacturers. All such
requests have been sent and, as of October 31, 1999, the Company has received
responses to approximately 90% of these inquiries. Each of the responses
received has indicated the respective third party is or will be Y2K ready by
December 31, 1999. However, the Company has no means of assuring that third
parties will achieve Y2K readiness. Furthermore, there can be no assurance
that IT, non-IT and other suppliers who have provided Y2K readiness
documentation will be Y2K compliant or that such documentation accurately and
fully reflects the Y2K readiness of their systems. The Company's assessments
of the effects of Y2K on the Company are based, in part, upon information
received from third parties and the Company's reliance on that information.
The failure of any such supplier's systems to be Y2K compliant may have a
material adverse effect on the Company's business, results of operations or
financial condition.
YEAR 2000 COSTS AND EXPENSES. The Company has used both internal and
external resources to address Y2K readiness and to program, test and implement
software for Y2K modifications. The Company specifically tracks the costs
associated with Task Force meetings (including related travel expenditures), Y2K
educational seminars, product software testing and patch development costs
(consulting and internal payroll costs), network server upgrades, internal
payroll costs related to the contacting of third parties to determine Y2K
status, and postage and related costs associated with providing patches and
upgrades to customers for software utilized in the Company's products. The
Company has not separately tracked the costs of utilizing its internal
information systems personnel in addressing its Y2K readiness, with these costs
principally relating to payroll and related benefits. Total costs for Y2K
readiness have been estimated to be approximately $250,000, of which
approximately $157,000 have been incurred throughout all phases of the Y2K
project. Costs incurred to date have been and anticipated future costs are
expected to be funded through operations. As the Company continues to complete
its Y2K readiness plan, actual costs may exceed the current estimate.
CONTINGENCY PLANS. The Company's contingency plan with respect to the
Y2K issue continues to be developed. The Company is continuing the process of
reviewing the status of all third party suppliers. Replacement suppliers will
be identified for critical suppliers who the Company believes will not be Y2K
ready. The Company is considering contingency plans on a global basis
relative to systematic failure of electricity or telecommunications beyond
the control of the Company. There can be no assurance that any contingency
plan measures will mitigate the impact of Y2K problems.
16
<PAGE>
If unforeseen Y2K readiness efforts are required or if the cost of any
updating, modification or replacement of the Company's systems or products
exceeds the Company's estimates, the Y2K issue could result in material costs
and have a material adverse effect on the business, results of operations or
financial condition of the Company. There can be no assurance that the Company
will be successful in addressing Y2K problems as they relate to its products and
internal systems. In addition, there can be no assurance that the systems of
third parties with which the Company interacts will not suffer from Y2K
problems. Furthermore, Y2K problems that have been or may in the future be
identified with respect to the IT and non-IT systems of third parties having
widespread national and international interactions with persons and entities
generally (for example, certain systems of governmental agencies, utilities and
information and financial networks) could have a major impact on the Company's
financial condition or results of operations. The most reasonably likely worst
case Y2K scenario, in the event that the Company does not identify or fails to
fix material non-ready IT systems or non-IT systems operated by the Company or
third parties with which it has a material relationship, is the disruption of
its own business operations and/or those of customers, which could have a
material adverse effect on the Company's business and financial condition.
Another reasonably likely worst case scenario is a systematic failure beyond the
control of the Company, including but not limited to prolonged electrical or
telecommunications failures or general disruptions in global business
activities. Risks associated with such disruptions include, but are not limited
to, increased operating costs, disruption in product shipments, loss of customer
orders, and claims of mismanagement, misrepresentation or breach of contract,
any of which could have a material adverse effect on the Company. The Company is
in the process of attempting to quantify the financial impact the occurrence of
any of these worst case scenarios might have on the Company and prepare specific
contingency plans specific to each scenario.
OTHER RISK FACTORS
Capital expenditures by semiconductor wafer and device manufacturers
historically have been cyclical as they in turn depend upon the current and
anticipated demand for integrated circuits. While the semiconductor industry
appears to be recovering from a severe down cycle, it is not clear when
semiconductor wafer manufacturers, who account for approximately 66% of the
Company's revenue, will be in a position to increase their purchases of capital
equipment. The computer disk drive industry has been in a period of oversupply
and excess manufacturing capacity and this has also had an adverse impact on the
Company. At October 31, 1999, the Company's backlog was $27.0 million, which
represents a 55.2% increase from the second quarter of fiscal 1999. The Company
remains uncertain about when growth in revenue will return. The Company
continues to evaluate its cost structure relative to expected revenue and will
continue to implement aggressive cost containment measures.
Furthermore, the Company's success is dependent upon supplying
technologically superior products to the marketplace at appropriate times to
satisfy customer needs. Product development requires substantial investment and
is subject to technological risks. Delays or difficulties in product development
or market acceptance of newly developed products could adversely affect the
future performance of the Company.
17
<PAGE>
PART II.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
None
ITEM 2. CHANGES IN SECURITIES:
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
The Annual Meeting of Stockholders was held on September 16,
1999. The stockholders voted on the following matters:
1. Election of Directors
NOMINEE FOR AGAINST
Robert C. Abbe 12,207,560 72,323
Harris Clay 12,207,560 72,323
Landon T. Clay 12,207,560 72,323
H. Kimball Faulkner 12,207,560 72,323
Chris L. Koliopoulos 12,207,560 72,323
Francis B. Lothrop, Jr 12,207,560 72,323
Kendall Wright 12,206,960 72,923
There were no abstentions and 1,046,707 broker non-votes with
respect to this matter.
2. Appointment of PricewaterhouseCoopers LLP as the Company's
independent public accountants for the fiscal year ending
April 30, 2000
FOR AGAINST ABSTAIN
--- ------- -------
12,269,623 1,652 8,608
There were 1,046,707 broker non-votes with respect to this
matter.
ITEM 5. OTHER INFORMATION:
None
18
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
a. See Exhibit Index, Page 21
b. Reports on Form 8-K
None
19
<PAGE>
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.
ADE CORPORATION
Date: December 14, 1999 /s/ Brian J. Heath
---------------------------------------------
Brian J. Heath
Director of Finance
Date: December 14, 1999 /s/ Robert C. Abbe
---------------------------------------------
Robert C. Abbe
President and Chief Executive Officer
20
<PAGE>
ADE CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ----- -------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger dated as of February 27, 1997 by and
between ADE Corporation, ADE Technologies, Inc., Digital
Measurement Systems, Inc., Dennis E. Speliotis, Elias Speliotis,
Evanthia Speliotis, Ismene Speliotis, Advanced Development
Corporation, David C. Bono and Alan Sliski (filed as Exhibit 10.18
to the Company's Form 10-K for the fiscal year ended April 30, 1997
and incorporated herein by reference).
2.2 Agreement and Plan of Merger dated as of May 31, 1998 by and among
ADE Corporation, Theta Acquisition Corp., Phase Shift Technology,
Inc., Chris Koliopoulos and David Basila (filed as Exhibit 2 to the
Company's Form 8-K dated June 25, 1998 and incorporated herein by
reference).
3.1 Restated Articles of Organization (filed as Exhibit 3.1 to the
Company's Registration Statement on Form S-1 (33-96408) or
amendments thereto and incorporated herein by reference).
3.2 By-laws (filed as Exhibit 3.2 to the Company's Registration
Statement on Form S-1 (33-96408) or amendments thereto and
incorporated herein by reference).
4.1 Specimen Common Stock Certificate (filed as Exhibit 4 to the
Company's Registration Statement on Form S-1 (33-96408) or
amendments thereto and incorporated herein by reference).
4.2 Registration Rights Agreement dated as of February 28, 1997 by and
between ADE Corporation and Dennis E. Speliotis, individually and
as Trustee of Thouria Investment Trust under a Declaration of Trust
dated August 18, 1992 recorded in the Middlesex South District
Registry of Deeds at Book 22305, Page 375 (filed as Exhibit 10.21
to the Company's Form 10-K for the fiscal year ended April 30, 1997
and incorporated herein by reference).
4.3 Registration Rights Agreement dated as of May 31, 1998 by and among
ADE Corporation, Chris Koliopoulos and David Basila (filed as
Exhibit 4.6 to the Company's Form 8-K dated June 25, 1998).
10.1 Form of Employee Confidentiality Agreement (filed as Exhibit 10.1
to the Company's Registration Statement on Form S-1 (33-96408) or
amendments thereto and incorporated herein by reference).
10.2 1995 Stock Option Plan (filed as Exhibit 10.4 to the Company's
Registration Statement on Form S-1 (33-96408) or amendments thereto
and incorporated herein by reference).*
10.3 1992 Stock Option Plan (filed as Exhibit 10.5 to the Company's
Registration Statement on Form S-1 (33-96408) or amendments thereto
and incorporated herein by reference).*
10.4 1982 Stock Option Plan (filed as Exhibit 4.5 to the Company's
Registration Statement on Form S-8 (333-2280) and incorporated
herein by reference).*
10.5 Stock Option Agreement dated October 22, 1992 between the
Registrant and Kendall Wright (filed as Exhibit 4.6 to the
Company's Registration Statement on Form S-8 (333-2280) and
incorporated herein by reference).*
10.6 Employee Stock Purchase Plan (as amended) (filed as Exhibit 10.6 to
the Company's Form 10-K for the fiscal year ended April 30, 1996
and incorporated herein by reference).*
21
<PAGE>
10.7 Lease of Corporate Headquarters in Newton, Massachusetts, dated
December 9, 1988, as amended, between the Company and Wellco Newton
Limited Partnership (which Lease and amendment were filed as
Exhibit 10.6 to the Company's Registration Statement on Form S-1
(33-96408) or amendments thereto and incorporated herein by
reference); and Third Amendment dated June 6, 1997 (filed as
Exhibit 10.7 to the Company's Form 10-K for the fiscal year ended
April 30, 1999 and incorporated herein by reference).
10.8 Lease of ADE Optical Systems' Charlotte, North Carolina facility,
dated June 26, 1984, as assigned and renewed, between Pine Brook
Center Limited Partnership and ADE Optical Systems Corporation
(filed as Exhibit 10.7 to the Company's Registration Statement on
Form S-1 (33-96408) or amendments thereto and incorporated herein
by reference).
10.9 Purchase and Sale Agreement for 80 Wilson Way, Westwood,
Massachusetts, dated January 11, 1996, between Met Path New
England, Inc., and the Company, with Schedules (filed as Exhibit
10.12 to the Company's Form 10-K for the fiscal year ended April
30, 1996 and incorporated herein by reference).
10.10 Loan Agreement dated as of June 7, 1996, among GE Capital Public
Finance, Inc., Massachusetts Industrial Finance Agency and the
Company (filed as Exhibit 10.9 to the Company's Form 10-K for the
fiscal year ended April 30, 1996 and incorporated herein by
reference).
10.11 Certificate as to Nonarbitrage and Tax Compliance, dated as of June
7, 1996, from the Company to Massachusetts Industrial Finance
Agency (filed as Exhibit 10.10 to the Company's Form 10-K for the
fiscal year ended April 30, 1996 and incorporated herein by
reference).
10.12 Letter of Credit Agreement, dated June 7, 1996, between Citizens
Bank of Massachusetts and the Company (filed as Exhibit 10.11 to
the Company's Form 10-K for the fiscal year ended April 30, 1996
and incorporated herein by reference).
10.13 Mortgage, Security Agreement, and Assignment, dated June 7, 1996,
from the Company to Citizens Bank of Massachusetts (filed as
Exhibit 10.13 to the Company's Form 10-K for the fiscal year ended
April 30, 1996 and incorporated herein by reference).
10.14 Pledge Agreement, dated June 7, 1996, from the Company to Citizens
Bank of Massachusetts (filed as Exhibit 10.14 to the Company's Form
10-K for the fiscal year ended April 30, 1996 and incorporated
herein by reference).
10.15 Oil and Hazardous Materials Indemnification Agreement, dated June
7, 1996, between the Company and Citizens Bank of Massachusetts
(filed as Exhibit 10.15 to the Company's Form 10-K for the fiscal
year ended April 30, 1996 and incorporated herein by reference).
10.16 Indemnification Agreement, dated as of February 28, 1996, among
MetPath of New England, Inc., Corning Life Sciences, Inc. and the
Company (filed as Exhibit 10.16 to the Company's Form 10-K for the
fiscal year ended April 30, 1996 and incorporated herein by
reference).
10.17 Letter Agreement regarding collateral assignment of Indemnification
from the Company to Citizens Bank of Massachusetts, with
attachment, (filed as Exhibit 10.17 to the Company's Form 10-K for
the fiscal year ended April 30, 1996 and incorporated herein by
reference).
10.18 Registration Rights Agreement dated as of February 27, 1997, by and
among ADE Corporation and Advanced Development Corporation, David
C. Bono and Alan Sliski (filed as Exhibit 10.19 to the Company's
Form 10-K for the fiscal year ended April 30, 1997 and incorporated
herein by reference).
22
<PAGE>
10.19 Purchase and Sale Agreement dated as of February 28, 1997 by and
between ADE Corporation and Dennis E. Speliotis, individually and
as Trustee of Thouria Investment Trust under a Declaration of Trust
dated August 18, 1992, Elias Speliotis, Evanthia Speliotis and
Ismene Speliotis (filed as Exhibit 10.20 to the Company's Form 10-K
for the fiscal year ended April 30, 1997 and incorporated herein by
reference).
10.20 Escrow Agreement dated as of May 31, 1998 by and among ADE
Corporation, Chris Koliopoulos, David Basila, and Norman Fenton as
Escrow Agent (filed as Exhibit 10.20 to the Company's Form 10-K for
the fiscal year ended April 30, 1999 and incorporated herein by
reference).
10.21 Noncompetition Agreement dated as of May 31, 1998 by and between
ADE Corporation and Chris Koliopoulos (filed as Exhibit 10.21 to
the Company's Form 10-K for the fiscal year ended April 30, 1999
and incorporated herein by reference).
10.22 Noncompetition Agreement dated as of May 31, 1998 by and between
ADE Corporation and David Basila (filed as Exhibit 10.22 to the
Company's Form 10-K for the fiscal year ended April 30, 1999 and
incorporated herein by reference).
10.23 Employment Agreement dated as of May 31, 1998 by and between Phase
Shift Technology, Inc. and Chris Koliopoulos (filed as Exhibit
10.23 to the Company's Form 10-K for the fiscal year ended April
30, 1999 and incorporated herein by reference).
10.24 Employment Agreement dated as of May 31, 1998 by and between Phase
Shift Technology, Inc. and David Basila (filed as Exhibit 10.24 to
the Company's Form 10-K for the fiscal year ended April 30, 1999
and incorporated herein by reference).
11.1 Statement re Computation of Per Share Earnings (filed herewith as
Note 4 to the Financial Statements).
23.1 Consent of PricewaterhouseCoopers LLP (filed herewith).
24.1 Power of Attorney (filed herewith as part of the signature page
hereto).
27 Financial Data Schedule (filed herewith).
</TABLE>
- --------------------------
* Compensatory plan or agreement applicable to management and
employees.
23
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF ADE CORPORATION FOR THE
SIX MONTHS ENDED OCTOBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> OCT-31-1999
<CASH> 39,476
<SECURITIES> 0
<RECEIVABLES> 11,521
<ALLOWANCES> 0
<INVENTORY> 26,855
<CURRENT-ASSETS> 91,080
<PP&E> 29,755
<DEPRECIATION> 0
<TOTAL-ASSETS> 138,319
<CURRENT-LIABILITIES> 17,740
<BONDS> 12,237
0
0
<COMMON> 133
<OTHER-SE> 108,209
<TOTAL-LIABILITY-AND-EQUITY> 138,319
<SALES> 25,987
<TOTAL-REVENUES> 25,987
<CGS> 16,153
<TOTAL-COSTS> 16,153
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (522)
<INCOME-PRETAX> (12,292)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,292)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (13,055)
<EPS-BASIC> (0.98)
<EPS-DILUTED> (0.98)
</TABLE>
