<PAGE>
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
May 18, 1999
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Date of Report (Date of earliest event reported)
CREDENCE SYSTEMS CORPORATION
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(Exact name of registrant as specified in charter)
Delaware 0-22366 94-2878499
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
215 Fourier Avenue, Fremont, California 94539
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 657-7400
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N/A
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On May 18, 1999, the Registrant issued a press release reporting the
financial results for the fiscal quarter ended April 30, 1999.
Item 7. Exhibits.
Copy of the Registrant's May 18, 1999 press releases announcing its
financial results for the fiscal quarter ended April 30, 1999 is attached hereto
as Exhibits 99.1 and incorporated herein by reference.
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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 hereunto duly authorized.
CREDENCE SYSTEMS CORPORATION
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(Registrant)
Date: May 17, 1999 By /s/ Dennis P. Wolf
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Name: Dennis P. Wolf
Title: Chief Financial Officer
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INDEX TO EXHIBITS
Exhibit No. Description Page
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99.1 Press Release disseminated on May 18, 1999 regarding the
Registrant's financial results for the fiscal quarter
ended April 30, 1999.
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NEWS RELEASE
For More Information Contact:
Dennis P. Wolf Julie Cimino
Co-President and CFO Investor Relations
(510) 657-7400 (510) 657-7400
CREDENCE SYSTEMS REPORTS RESULTS FOR
SECOND FISCAL QUARTER OF 1999
FREMONT, Calif.--(BUSINESS WIRE)--May 18, 1999--Credence Systems
Corporation (Nasdaq/NMS:CMOS) today reported results for its second fiscal
quarter ended April 30, 1999. Net sales were $38.1 million, a decrease of 49
percent from net sales of $74.7 million in the second quarter of fiscal 1998.
Net sales were up $11.6 million sequentially or 44 percent from the company's
first fiscal quarter of 1999. The net loss for the second quarter of fiscal 1999
was $5.2 million or $0.25 per share, compared to net income of $8.8 million
during the second fiscal quarter of 1998, or $0.40 per diluted share. The second
quarter 1999 net loss did show significant improvement over the first quarter of
1999, when the company reported a net loss of $6.6 million or $0.32 per share.
Included in the loss in the company's recent second fiscal quarter is $6.2
million in pre-tax charges associated with costs relating to disposal of excess
facilities and severance. The company posted a pre-tax gain of $1.8 million for
the retirement of $9 million of its convertible subordinated notes in exchange
for 328 thousand shares of the company's common stock held in its treasury.
Before all non-recurring activities, the company's net loss for the quarter was
$2.3 million or $0.11 per share.
Credence's co-president and chief financial officer, Mr. Dennis Wolf,
said, "We are very pleased with the results. Our sales volumes increased
significantly during the quarter and this increase in volume had the effect of
improving our gross margins which stood at 50.1 percent for the quarter. We
continue to manage our operating expenses very closely and are building our
manufacturing capability." Mr. Wolf continued, "Our balance sheet strengthened
during the quarter. Despite the fact that we incurred a loss from operations of
$2.3 million during the quarter, our cash and investments were actually up by
$14.1 million from the previous quarter as a result of improved collections and
income tax refunds."
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CREDENCE SYSTEMS REPORTS RESULTS FOR SECOND FISCAL QUARTER OF 1999
Page 2
Mr. David Ranhoff, Credence's co-president said, "Our revenue and
bookings activity for the second fiscal quarter increased significantly from our
first fiscal quarter. This increase came from our existing installed base as
well as from our new products at several new major semiconductor manufacturers.
We were particularly pleased to win new business at Samsung who selected the
Quartet and ordered multiple systems for their new family of consumer mixed
signal IC's." Mr. Ranhoff continued, "We also completed key engineering projects
and took revenue on our first Quartet as well as several Kalos and Personal
Kalos systems during the quarter. In summary we are pleased with the progress we
have made on our key corporate objectives during the first half of fiscal 1999."
Credence Systems Corporation is a leader in the manufacture of automatic
test equipment (ATE) for the worldwide semiconductor industry. Credence offers a
wide range of products with test capabilities for digital, mixed-signal, and
non-volatile memory semiconductors. Utilizing its proprietary CMOS technologies,
Credence products are designed to meet the strict time-to-market and ownership
requirements of its customers.
Headquartered in Fremont, California, the company maintains advanced
production and design facilities in Beaverton, Oregon. Credence, an ISO 9001
certified manufacturer, is listed on the Nasdaq National Market under the symbol
CMOS.
Statements in this release that are forward looking involve known and
unknown risks and uncertainties, which may cause the Company's actual results in
future periods to be materially different from the future performance suggested
in this release. Such factors include, but are not limited to, economic and
currency instability in the Asia Pacific region, fluctuation in customer demand,
timing and volume of orders and shipments, competition and pricing pressures,
reliability and quality issues, the Company's ability to complete the
development of its new products, product mix, overhead absorption, cyclicality
and downturns in the semiconductor industry, continued dependence on "turns"
orders to achieve revenue objectives, the Company's ability to have an
appropriate amount of production capacity in a timely manner, the timing of new
technology, product introductions, the risk of early obsolescence and the
Company's ability to control expenses (including the ability to identify and
successfully institute additional cost-saving measures).
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CREDENCE SYSTEMS REPORTS RESULTS FOR SECOND FISCAL QUARTER OF 1999
Page 3
Further, the Company operates in an industry sector where securities
values are highly volatile and may be influenced by economic and other factors
beyond the Company's control. Reference is made to the discussion of risk
factors detailed in the Company's filings with the Securities and Exchange
Commission, including its reports on Form 10-K and 10-Q. The Company assumes no
obligation to update the information in this press release.
Note to Editors: Credence, Credence Systems, Kalos, Personal Kalos and Quartet
are trademarks of Credence Systems Corporation. Other trademarks, which may be
mentioned in this release, are the intellectual property of their respective
owners.
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CREDENCE SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Prior
Three Months Quarter Six Months
Ended Ended Ended
April 30, January 31 April 30,
----------------------- ------------ ----------------------
1999 1998 1999 1999 1998
----------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Net sales $ 38,100 $ 74,660 $ 26,490 $ 64,590 $157,035
Cost of goods sold - on net sales 19,001 31,664 15,276 34,277 67,102
----------- ---------- ------------ ----------- -----------
Gross margin 19,099 42,996 11,214 30,313 89,933
Operating expenses:
Research and development 9,146 12,233 9,003 18,149 25,724
Selling, general and administrative 13,872 17,931 12,231 26,103 38,239
Special charges 6,231 -- -- 6,231 --
----------- ---------- ------------ ----------- -----------
Total operating expenses 29,249 30,164 21,234 50,483 63,963
----------- ---------- ------------ ----------- -----------
Operating income (loss) (10,150) 12,832 (10,020) (20,170) 25,970
Interest and other income (expenses), net 240 200 (301) (61) 1,158
----------- ---------- ------------ ----------- -----------
Income (loss) before income taxes (9,910) 13,032 (10,321) (20,231) 27,128
Income taxes (benefit) (3,571) 4,290 (3,729) (7,300) 9,224
Minority interest (8) (45) (38) (46) (74)
----------- ---------- ------------ ----------- -----------
Net income (loss) before extraordinary items ($6,331) ($8,787) (6,554) (12,885) $ 17,978
=========== ========== ============ =========== ===========
Gain on extinguishment of debt 1,158 -- -- 1,158 --
Net income (loss) ($5,173) $8,787 ($6,554) ($11,727) $ 17,978
=========== ========== ============ =========== ===========
Net income (loss) per share
Basic ($ 0.25) $ 0.41 ($ 0.32) ($0.57) $0.83
=========== ========== ============ =========== ===========
Diluted ($ 0.25) $ 0.40 ($ 0.32) ($0.57) $0.81
=========== ========== ============ =========== ===========
Number of shares used in
computing per share amount
Basic 20,811 21,634 20,418 20,610 21,731
=========== ========== ============ =========== ===========
Diluted 20,811 22,146 20,418 20,610 22,257
=========== ========== ============ =========== ===========
</TABLE>
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CREDENCE SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
Prior Quarter
April 30, January 31, October 31,
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1999 1999 1998
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(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 56,694 $ 58,343 $ 48,391
Restricted cash -- -- 2,400
Short-term investments 47,236 46,770 62,777
Accounts receivable, net 34,398 37,442 33,901
Inventories 32,277 35,141 37,406
Other current assets 30,617 30,458 40,676
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Total current assets 201,222 208,154 225,551
Long-term investments 38,989 23,666 20,357
Property and equipment, net 41,549 40,630 41,764
Other assets 17,430 17,903 18,517
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Total assets $ 299,190 $290,353 $306,189
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 12,700 $ 6,433 $ 8,090
Accrued liabilities 23,629 21,936 26,978
Income taxes payable 5,846 2,017 5,877
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Total current liabilities 42,175 30,386 40,945
Convertible subordinated notes 105,960 115,000 115,000
Minority interest 160 170 227
Stockholders' equity 150,895 144,797 150,017
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Total liabilities and
stockholders' equity $299,190 $290,353 $306,189
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</TABLE>
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CREDENCE SYSTEMS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Notes: Operations for the three and six month fiscal periods ended
April 30, 1999 included a pre-tax charge of approximately $6.2 million
related to the disposal of excess facilities and severance. In
addition, during the three and six month fiscal periods ended April
30, 1999 the Company recorded a pre-tax extraordinary gain of $1.8
million for the retirement of $9.0 million of its convertible
subordinated notes in exchange for 328,000 shares of the company's
common stock held in its treasury. The information in the tables below
show pro-forma net income information excluding these non-recurring
items. This supplemental financial information does not purport to be
prepared in accordance with generally accepted accounting principles.
Three Months Six Months
Ended Ended
April 30, April 30,
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1999 1998 1999 1998
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Pro forma operating
income (loss) ($3,919) $12,832 ($13,939) $25,970
Pro forma income
before tax (loss) (3,679) 13,032 (14,000) 27,128
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Pro forma income
tax provision/(benefit) (1,324) 4,290 (5,040) 9,224
Minority interest (8) (45) (46) (74)
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Pro forma net
income (loss) ($2,347) $ 8,787 ($ 8,914) $ 17,978
========== ========= =========== ==========
Pro forma net income
(loss) per share
Basic ($ 0.11) $ 0.41 ($ 0.43) $ 0.81
========== ========= =========== ==========
Diluted ($ 0.11) $ 0.40 ($ 0.43) $ 0.81
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Number of shares used
in computing per
share amount
Basic 20,811 21,634 20,610 21,731
========== ========= =========== ==========
Diluted 20,811 22,146 20,610 22,257
========== ========= =========== ==========
