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 20, 1999
Date of Report (Date of earliest event reported)
CREDENCE SYSTEMS CORPORATION
(Exact name of registrant as specified in charter)
Delaware 000-22366 94-2878499
-------- --------- ----------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
215 Fourier Avenue, Fremont, California 94539
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 657-7400
N/A
(Former name or former address, if changed since last report.)
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Item 5. OTHER EVENTS
-------------
On August 20, 1999, the Registrant issued a press release reporting the
financial results for its third quarter ended July 31, 1999.
On July 31, 1999, the Registrant issued a press release announcing Graham
J. Siddall as the new President and Chief Executive Officer.
Item 7 EXHIBITS
----------
A copy of the Registrant's press release announcing its financial results
for the third quarter ended July 31, 1999 is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
A copy of the Registrant's press release announcing Graham J. Siddall as
new President and Chief Executive Officer is attached hereto as Exhibit 99.2 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: August 20, 1999 By /s/ Dennis P. Wolf
-------------------------
Name: Dennis P. Wolf
Title: Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number
- ------
99.1 Press Release disseminated August 20, 1999 regarding the Registrant's
financial results for the third quarter ended July 31, 1999.
99.2 Press Release disseminated July 31, 1999 regarding the Registrant's
announcement of Graham J. Siddall as the new President and Chief Executive
Officer.
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FOR IMMEDIATE RELEASE
News Release
For More Information Contact:
Dennis P. Wolf Julie Cimino
Executive Vice President and CFO Investor Relations
(510) 657-7400 (510) 657-7400
CREDENCE SYSTEMS REPORTS RESULTS FOR
THIRD FISCAL QUARTER OF 1999
FREMONT, Calif. - August 20, 1999 - Credence Systems Corporation (Nasdaq
NMS: CMOS) today reported results for its third fiscal quarter ended July 31,
1999. Net sales were $52.4 million, an increase of 40 percent from net sales of
$37.3 million in the third quarter of fiscal 1998. Net sales were up $14 million
sequentially or 37 percent from the company's second fiscal quarter of 1999. The
net income for the third quarter of fiscal 1999 was $2.9 million or $0.13 per
diluted share, compared to a net loss of $33.6 million during the third fiscal
quarter of 1998, or $1.55 per share. The third quarter 1999 net income showed
improvement over the second fiscal quarter when the company reported a net loss
of $5.2 million or $0.25 per share.
The company posted a pre-tax gain of $763,000 for the retirement of $9.4
million of its convertible subordinated notes in exchange for 275,000 shares of
the company's common stock held in its treasury during the third quarter. Before
the extraordinary gain for the retirement of this debt, the company's net income
for the third quarter was $2.4 million or $0.11 per diluted share.
Credence's executive vice president and chief financial officer, Mr. Dennis
Wolf, said, "We are very pleased to be reporting net income this quarter. Our
sales volumes continued to increase during the quarter and this increased volume
had the effect of further improving our gross margin, which stood at 52.6
percent for the quarter. The operating expenses grew a modest three percent
above the second quarter of fiscal 1999 level, excluding special charges." Mr.
Wolf continued, "Our balance sheet continued to strengthen during the quarter as
we increased cash and investments despite a significant sales ramp."
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CREDENCE SYSTEMS REPORTS RESULTS FOR THIRD FISCAL QUARTER OF 1999
Page 2
Mr. David Ranhoff, Credence's executive vice president said, "Our revenue
and bookings activity for the third fiscal quarter increased from our second
fiscal quarter. This increase came from our existing customer base as well as
from our new products at several new major semiconductor manufacturers. During
the quarter we won eleven new accounts with new business continuing to account
for greater than 20 percent of our bookings. We also saw increased order
activity from major IC manufacturers in both the U.S. and Europe." Mr. Ranhoff
continued, "We are particularly pleased with our ability to have ramped the new
Quartet line this quarter. It is a new product that meets today's consumer
mixed-signal IC needs."
On July 31, 1999 the company announced the appointment of Dr. Graham J.
Siddall as its new President and CEO and as a member of the Board of Directors.
Commenting on this appointment, Dr. William Howard, Credence's Chairman stated,
"Graham brings to Credence Systems Corporation precisely the kind of experience
we need right now as we move from being a smaller company to becoming a larger
company. I am confident that Graham knows what initiatives are required and how
to lead us along this path."
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 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 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
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CREDENCE SYSTEMS REPORTS RESULTS FOR THIRD FISCAL QUARTER OF 1999
Page 3
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).
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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CREDENCE SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Prior
Three Months Quarter Nine Months
Ended Ended Ended
July 31, April 30, July 31,
----------------------------------- ---------------- --------------------------
1999 1998 1999 1999 1998
--------------- --------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Net sales $52,378 $37,322 $38,100 $116,968 $194,357
Cost of goods sold - on net sales 24,826 16,901 19,001 59,103 84,003
Cost of goods sold - restructure -- 20,952 -- -- 20,952
and other
---------------- --------------- ---------------- -------------- ------------
Gross margin 27,552 (531) 19,099 57,865 89,402
Operating expenses:
Research and development 9,631 11,569 9,146 27,780 37,293
Selling, general and 14,184 13,987 13,872 40,287 52,226
administrative
Special charges -- 23,224 6,231 6,231 23,224
---------------- --------------- ---------------- -------------- --------------
Total operating expenses 23,815 48,780 29,249 74,298 112,743
---------------- --------------- ---------------- -------------- --------------
Operating income (loss) 3,737 (49,311) (10,150) (16,433) (23,341)
Interest and other income
(expenses), net (6) (7) 240 (67) 1,151
---------------- --------------- ---------------- --------------- --------------
Income (loss) before income taxes 3,731 (49,318) (9,910) (16,500) (22,190)
Income taxes (benefit) 1,352 (15,682) (3,571) (5,948) (6,458)
Minority interest (15) (50) (8) (31) (124)
---------------- --------------- ---------------- -------------- --------------
Net income (loss) before
extraordinary items $ 2,364 ($33,586) ($ 6,331) ($ 10,583) ($ 15,608)
================ =============== ================ ============== ==============
Gain on extinguishment of debt 488 -- 1,158 1,646 --
Net income (loss) $ 2,852 ($33,586) ($ 5,173) ($ 8,937) ($ 15,608)
================ =============== ================ ============== ==============
Net income (loss) per share
Basic $0.13 ($1.55) ($0.25) ($0.42) ($0.72)
================ =============== ================ ============== ==============
Diluted $0.13 ($1.55) ($0.25) ($0.42) ($0.72)
================ =============== ================ ============== ==============
Number of shares used in
computing per share amount
Basic 21,257 21,674 20,811 20,874 21,726
================ =============== ================ ============== ==============
Diluted 22,116 21,674 20,811 20,874 21,726
================ =============== ================ ============== ==============
</TABLE>
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CREDENCE SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
Prior Quarter
July 31, April 30, October 31,
--------------------- ------------------ ---------------------
1999 1999 1998
--------------------- --------------------- ---------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 66,066 $ 56,694 $ 48,391
Restricted cash -- -- 2,400
Short-term investments 52,810 47,236 62,777
Accounts receivable, net 47,091 34,398 33,901
Inventories 35,822 32,277 37,406
Other current assets 27,115 30,617 40,676
--------------------- --------------------- ---------------------
Total current assets 228,904 201,222 225,551
Long-term investments 26,381 38,989 20,357
Property and equipment, net 42,396 41,549 41,764
Other assets 16,055 17,430 18,517
--------------------- --------------------- ---------------------
Total assets $313,736 $299,190 $306,189
===================== ===================== =====================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 20,616 $ 12,700 $8,090
Accrued liabilities 24,495 23,629 26,978
Income taxes payable 5,291 5,846 5,877
--------------------- --------------------- ---------------------
Total current liabilities 50,402 42,175 40,945
Convertible subordinated notes 96,610 105,960 115,000
Minority interest 175 160 227
Stockholders' equity 166,549 150,895 150,017
--------------------- --------------------- ---------------------
Total liabilities and stockholders' equity $313,736 $299,190 $306,189
===================== ===================== =====================
</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 nine month fiscal period ended July 31, 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 nine month fiscal
periods ended July 31, 1999, the Company recorded pre-tax extraordinary gains of
$0.8 million and $2.6 million respectively, for the retirement of $18.4 million
of its convertible subordinated notes in exchange for 603,000 shares of the
company's common stock held in its treasury. Operations for the three and nine
month periods ended July 31, 1998 include pre-tax charges of approximately $44.2
million for the restructuring of the Company's business and the write-off of
in-process research and development attributable to the acquisition of assets of
Heuristic Physics Laboratories, Inc. 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.
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
July 31, July 31,
----------------------------- -------------------------------
1999 1998 1999 1998
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
Pro forma operating income (loss) $ 3,737 $(5,135) ($ 10,202) $20,835
----------- ------------ ------------- ------------
Pro forma income before tax (loss) 3,731 (5,142) (10,269) 21,986
Pro forma income tax provision/(benefit) 1,352 (1,635) (3,701) 6,376
Minority interest (15) (50) (31) (124)
----------- ------------ ------------- ------------
Pro forma net income (loss) $ 2,364 ($ 3,557) ($ 6,599) $15,486
=========== ============ ============= ============
Pro forma net income (loss) per share
Basic $0.11 ($0.16) ($0.32) $0.71
=========== ============ ============= ============
Diluted $0.11 ($0.16) ($0.32) $0.70
=========== ============ ============= ============
Number of shares used in computing per
Share amount
Basic 21,257 21,674 20,874 21,726
=========== ============ ============= ============
Diluted 22,116 21,674 20,874 22,257
=========== ============ ============= ============
</TABLE>
####
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FOR IMMEDIATE RELEASE
News Release
Dennis P. Wolf David A. Ranhoff
Executive Vice President and CFO Executive Vice President
510.657.7400 510.657.7400
Editorial/Media: Investment Community:
Connie Graybeal Julie Cimino
Marketing Communications Manager Investor Relations
510.623.4774 or 510.623.2524 fax 510.623.4702 or 510.623.2591 fax
Email: [email protected] Email: [email protected]
CREDENCE SYSTEMS ANNOUNCES GRAHAM J. SIDDALL
AS NEW PRESIDENT AND CHIEF EXECUTIVE OFFICER
FREMONT, Calif. - July 31, 1999 - Credence Systems Corporation (Nasdaq NMS:
CMOS) today announced that Dr. Graham J. Siddall has been named president and
chief executive officer. Graham will also join Credence Systems Corporation's
Board of Directors.
Dr. Siddall joins Credence Systems Corporation from KLA-Tencor where he was
executive vice president of the Wafer Inspection Group. This organization
comprises the largest Group at KLA-Tencor. Prior to this assignment, he served
as chief operating officer of Tencor, and was pivotal in the integration of
Tencor with KLA.
Dr. William G. Howard will continue as chairman of Credence Systems
Corporation. Dr. Howard commented, "We are extremely pleased that Graham has
joined Credence. He brings to the company proven experience in managing a high
growth semiconductor capital equipment company." Dr. Howard added, "Credence is
at a crossroads now of becoming a large company and Graham has successfully
demonstrated an ability to manage through this phase effectively. We know that
Graham will bring that experience to bear at Credence. Graham is also an
accomplished technologist and will help the company continue as the innovative
leader in its industry. Because of these strengths, the Board unanimously agreed
that Graham is the ideal candidate to leverage Credence's core strengths during
this time of rapid growth." Dr. Howard added, "We wish to express our sincere
gratitude to Dave Ranhoff and Dennis Wolf for all of their efforts and skill
during the interim period as the Board completed its search. Dave and
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CREDENCE SYSTEMS ANNOUNCES GRAHAM J. SIDDALL AS NEW PRESIDENT
AND CHIEF EXECUTIVE OFFICER (continued..)
Dennis are doing an outstanding job in improving the company's operations,
launching and ramping the new products, and improving the overall financial
strength of the company. With the addition of Graham we have rounded out this
team to take on the next high growth phase for Credence."
"I am extremely excited about joining Credence Systems," said Siddall.
"Credence is a company of great opportunity. The company has a very powerful
brand, is well respected, has superb technology, strong customer relationships
and very talented employees. I am delighted to have the opportunity to lead this
team."
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 Hillsboro, Oregon. Credence, an ISO 9001
certified manufacturer, is listed on the Nasdaq National Market under the symbol
CMOS.
Credence and Credence Systems 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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