<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DECEMBER 9, 1999
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 December 9, 1999, the Registrant issued a press release
reporting the financial results for its fourth quarter and fiscal year ended
October 31, 1999.
Item 7. EXHIBITS
A copy of the Registrant's press release announcing its
financial results for the fourth quarter and fiscal year ended October 31, 1999
is attached hereto as Exhibit 99.1 and incorporated herein by reference.
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.
CREDENCE SYSTEMS CORPORATION
(Registrant)
Date: December 9, 1999 By /S/ DENNIS P. WOLF
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Name: Dennis P. Wolf
Title: Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER
99.1 Press Release disseminated December 9, 1999 regarding the Registrant's
financial results for the fourth quarter and fiscal year ended October 31,
1999.
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EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
NEWS RELEASE
For More Information Contact:
Dennis P. Wolf Cathi Fox - Investor Relations
Executive Vice President and CFO Connie Graybeal - Public Relations
(510) 657-7400 (510) 657-7400
CREDENCE SYSTEMS REPORTS RESULTS FOR
FOURTH QUARTER AND FISCAL YEAR 1999
FREMONT, Calif.--December 10, 1999--Credence Systems Corporation (Nasdaq
NMS: CMOS) today reported results for its fourth quarter and fiscal year ended
October 31, 1999. Net sales for the fourth quarter of fiscal 1999 were $80.2
million, an increase of 258 percent from net sales of $22.4 million in the
fourth quarter of fiscal 1998. Net sales were up $27.8 million sequentially or
53 percent from the company's third fiscal quarter of 1999. The net income for
the fourth quarter of fiscal 1999 was $8.1 million or $0.35 per diluted share,
compared to a net loss of $10.7 million during the fourth fiscal quarter of
1998, or $0.51 per share.
Included in the results of the company's recent fourth quarter is $2.2
million in special pre-tax charges associated with the acquisition and
integration of Opmaxx, Inc. with our subsidiary, Fluence Technology, Inc. during
the quarter. Before these special charges, the company's pro-forma net income
for the fourth quarter was $9.5 million or $0.42 per diluted share.
The fourth quarter 1999 net income showed improvement over the third fiscal
quarter when the company reported net income of $2.9 million or $0.13 per share.
The net loss for fiscal 1999 was $0.8 million or $0.04 per diluted share,
compared to a net loss of $26.3 million or $1.22 per diluted share in fiscal
1998.
Dr. Graham Siddall, Credence's president and chief executive officer said,
"This is an exciting time for the Company. Our bookings activity for the fourth
quarter is not only a result of the hard work and dedication of our employee
base, it signifies customer acceptance of our product offerings. Bookings
activity in the fourth quarter was at record levels with a book to bill ratio of
1.58 to 1. This increase came from our existing customer base as well as from
ten new customers during the quarter. We also saw increased order activity at
major IC manufacturers in both the U.S. and Europe."
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CREDENCE SYSTEMS REPORTS RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 1999
I. PAGE 2
Dr. Siddall continued, "We are particularly pleased with our ability to have
ramped the new Quartet line this quarter, more than doubling the shipments we
were able to make in the last quarter. The Quartet, a relatively new product,
addresses the consumer mixed-signal market."
Credence's executive vice president and chief financial officer, Mr. Dennis
Wolf, said, "We are very pleased to be reporting net income levels before
special charges this quarter that are the highest recorded since fiscal 1996.
Our sales volumes combined with firmer pricing in the industry had the effect of
further improving our gross margin, which stood at 55 percent for the quarter."
Mr. Wolf continued, "Our balance sheet continued to strengthen during the
quarter as we lowered our days sales outstanding and increased our inventory
turns from the levels recorded in the third quarter of 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
cost-of-ownership requirements of its customers.
Headquartered in Fremont, California, the company maintains advanced
production and design facilities in Hillsboro, 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 and 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,
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CREDENCE SYSTEMS REPORTS RESULTS FOR FOURTH QUARTER AND FISCAL YEAR 1999
PAGE 3
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.
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.
Credence, Credence Systems, Quartet Kalos and ValStar 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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A. CREDENCE SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Prior Fiscal Year
Ended Quarter Ended Ended
October 31, July 31, October 31,
----------------------------------- ---------------- -------------------------------
1999 1998 1999 1999 1998
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<S> <C> <C> <C> <C> <C>
Net sales $80,215 $22,446 $52,378 $197,183 $216,803
Cost of goods sold - on net sales 36,102 13,001 24,826 95,205 97,004
Cost of goods sold - restructure
and other -- 7,400 -- -- 28,352
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Gross margin 44,113 2,045 27,552 101,978 91,447
Operating expenses:
Research and development 11,128 10,191 9,631 38,908 47,484
Selling, general and
administrative 18,373 11,925 14,184 58,660 64,151
In-process research and
Development 858 (2,840) -- 858 1,998
Special charges 1,334 2,000 -- 7,565 20,386
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Total operating expenses 31,693 21,276 23,815 105,991 134,019
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Operating income (loss) 12,420 (19,231) 3,737 (4,013) (42,572)
Interest and other income
(expenses), net 328 151 (6) 261 1,302
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Income (loss) before income taxes 12,748 (19,080) 3,731 (3,752) (41,270)
Income taxes (benefit) 4,576 (8,327) 1,352 (1,372) (14,785)
Minority interest (benefit) 106 (79) 15 75 (203)
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Net income (loss) before
Extraordinary items $ 8,066 ($10,674) $ 2,364 ($ 2,455) ($ 26,282)
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Gain on extinguishment of debt -- -- 488 1,646 --
Net income (loss) $ 8,066 ($10,674) $ 2,852 ($ 809) ($ 26,282)
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Net income (loss) per share
Basic $0.37 ($0.51) $0.13 ($0.04) ($1.22)
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Diluted $0.35 ($0.51) $0.13 ($0.04) ($1.22)
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Number of shares used in
Computing per share amount
Basic 21,724 20,963 21,257 21,088 21,533
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Diluted 22,739 20,963 22,116 21,899 21,533
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</TABLE>
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CREDENCE SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
Prior Quarter
October 31, July 31, October 31,
--------------------- --------------------- ---------------------
1999 1999 1998
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<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 52,104 $ 66,066 $ 48,391
Restricted cash -- -- 2,400
Short-term investments 39,774 52,810 62,777
Accounts receivable, net 71,506 47,091 33,901
Inventories 41,218 35,822 37,406
Other current assets 23,111 27,115 40,676
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Total current assets 227,713 228,904 225,551
Long-term investments 50,005 26,381 20,357
Property and equipment, net 43,063 42,396 41,764
Other assets 19,639 16,055 18,517
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Total assets $340,420 $313,736 $306,189
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LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 23,611 $ 20,616 $8,090
Accrued liabilities 31,163 24,495 26,978
Income taxes payable 6,212 5,291 5,877
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Total current liabilities 60,986 50,402 40,945
Convertible subordinated notes & Other 97,744 96,610 115,000
Minority interest 282 175 227
Stockholders' equity 181,408 166,549 150,017
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Total liabilities and stockholders' equity $340,420 $313,736 $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 FISCAL YEAR ENDED OCTOBER 31, 1999 INCLUDED A PRE-TAX
CHARGE OF APPROXIMATELY $6.2 MILLION RELATED TO THE DISPOSAL OF EXCESS
FACILITIES AND SEVERANCE, $1.3 MILLION RELATED TO THE ACQUISITION AND
INTEGRATION OF OPMAXX, INC., AND $0.9 MILLION FOR IN-PROCESS RESEARCH AND
DEVELOPMENT CHARGES ASSOCIATED WITH THAT ACQUISITION. FISCAL 1999 ALSO INCLUDED
AN EXTRAORDINARY GAIN ON EXTINGUISHMENT OF DEBT AFTER TAXES OF $1.6 MILLION.
OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1998 INCLUDED RESTRUCTURING
CHARGES OF $48.7 MILLION OF WHICH $28.4 MILLION WAS CLASSIFIED AS COST OF GOODS
SOLD AND THE BALANCE WAS CLASSIFIED AS OPERATING EXPENSES. THESE CHARGES WERE
RECORDED AS A RESULT OF THE COMPANY'S RESPONSE TO A MAJOR DOWNTURN IN THE
OUTLOOK FOR THE ATE AND RELATED SEMICONDUCTOR INDUSTRIES WHICH TOOK PLACE DURING
THAT PERIOD. ALSO IN THE 1998 FISCAL YEAR THE COMPANY RECORDED $2.0 MILLION FOR
IN-PROCESS RESEARCH AND DEVELOPMENT CHARGES ASSOCIATED WITH THE ACQUISITION OF
HEURISTICS PHYSICS LABORATORIES, INC.
DURING THE THREE MONTH PERIOD ENDED OCTOBER 31, 1999, THE COMPANY RECORDED
SPECIAL PRE-TAX CHARGES OF $1.3 MILLION RELATED TO THE ACQUISITION AND
INTEGRATION OF OPMAXX, INC., AND $0.9 MILLION FOR IN-PROCESS RESEARCH AND
DEVELOPMENT CHARGES ASSOCIATED WITH THAT ACQUISITION.
DURING THE THREE MONTH PERIOD ENDED OCTOBER 31, 1998, CREDENCE RECORDED
RESTRUCTURING CHARGES OF $9.4 MILLION, OF WHICH $7.4 MILLION WAS CLASSIFIED AS
COST OF GOODS SOLD AND THE BALANCE WAS CLASSIFIED AS OPERATING EXPENSES. IN
ADDITION, THE COMPANY REDUCED A PREVIOUS IN-PROCESS RESEARCH AND DEVELOPMENT
CHARGE BY $2.8 MILLION AND RECORDED IT IN THE FISCAL QUARTER ENDED OCTOBER 31,
1998.
THE INFORMATION IN THE TABLES BELOW SHOWS 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.
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<TABLE>
<CAPTION>
Three Months Fiscal Year
Ended Ended
October 31, October 31,
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1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Pro forma operating income (loss) $ 14,612 $(12,671) $ 4,410 $8,164
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Pro forma income before tax (loss) 14,940 (12,520) 4,671 9,466
Pro forma income tax provision/(benefit) 5,365 (4,507) 1,682 3,391
Minority interest (benefit) 106 (79) 75 (203)
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Pro forma net income (loss) $ 9,469 ($ 8,092) $ 2,914 $6,278
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Pro forma net income (loss) per share
Basic $0.44 ($0.39) $0.14 $0.29
Diluted $0.42 ($0.39) $0.13 $0.29
Number of shares used in computing per
Share amount
Basic 21,724 20,963 21,088 21,533
Diluted 22,739 20,963 21,899 21,937
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