SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 29, 1996
Commission file number 0-21294
Aseco Corporation
(Exact name of registrant as specified in its
charter)
Delaware
(State or other jurisdiction of incorporation
or organization)
04-2816806
(I.R.S. Employer Identification No.)
500 Donald Lynch Boulevard, Marlboro,
Massachusetts 01752
(Address of principal executive offices)
(508)481-8896
(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 September 29, 1996.
Common Stock, $.01 par value 3,635,215
(Title of each class) (Number of shares)
<PAGE>
ASECO CORPORATION
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
Consolidated Condensed Balance Sheets(unaudited) 3
at September 29, 1996 and March 31, 1996
Consolidated Condensed Statements of Income 4
(unaudited) for the three months and six months
ended September 29, 1996 and October 1, 1995
Consolidated Condensed Statements of Cash Flows (unaudited) 5
for the six months ended September 29, 1996 and
October 1, 1995
Notes to Consolidated Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis 7-8
of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 9
Item 2. Changes in Securities 9
Item 3. Defaults upon Senior Securities 9
Item 4. Submission of Matters to a Vote of Security 9
Holders
Item 5. Other Information 9
Item 6. Exhibits and Reports on Form 8-K 10
Signatures
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ASECO CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(unaudited)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
September 29, March 31,
1996 1996
-----------------------------
<S>
ASSETS
Current Assets
<C> <C>
Cash and cash equivalents $ 14,545 $ 14,083
Accounts receivable, less allowance
for doubtful accounts of $575,000
at September 29, 1996 and $397,000
at March 31, 1996 10,478 12,346
Inventories, net 8,871 7,059
Prepaid expenses and other current assets 1,076 864
------ ------
Total current assets 34,970 34,352
Plant and equipment, at cost 4,634 4,187
Less accumulated depreciation and
amortization 2,534 2,176
------ ------
2,100 2,011
Other assets, net 386 318
------ ------
$37,456 $ 36,681
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $2,858 $ 3,441
Accrued expenses 3,576 3,923
Income taxes payable 269 476
Current portion of capital lease
obligations 13 13
------ ------
Total current liabilities 6,716 7,853
Deferred taxes payable 370 370
Long-term capital lease obligations 35 42
Stockholders' equity
Preferred stock, $.01 par value, 1,000,000
shares authorized,none issued and outstanding --- ---
Common stock, $.01 par value: Authorized
15,000,000 shares, issued and outstanding
3,635,215 and 3,611,501 shares at September
29, 1996 and March 31, 1996, respectively 36 36
Additional paid in capital 17,342 17,234
Retained earnings 12,957 11,146
------ ------
Total stockholders' equity 30,335 28,416
------ ------
$ 37,456 $ 36,681
======== ========
</TABLE>
See notes to consolidated condensed financial statements
<PAGE>
ASECO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(unaudited)
(in thousands, except share and per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
----------------------------------------------------
September 29, October 1, September 29, October 1,
1996 1995 1996 1995
-------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 8,989 $ 9,741 $ 19,990 $ 18,877
Cost of sales 4,805 5,010 10,418 9,614
------ ------ ------ -----
Gross profit 4,184 4,731 9,572 9,263
Research and development
costs 1,275 1,083 2,511 2,225
Selling, general and 2,260 2,105 4,668 4,166
administrative expenses ------- ------ ------ -----
Income from operations 649 1,543 2,393 2,872
Other income (expense):
Interest income 164 130 323 232
Interest expense (2) (2) (4) (9)
------ ------ ------ ------
162 128 319 223
Income before income taxes 811 1,671 2,712 3,095
Income tax expense 273 618 901 1,116
------ ------ ------ ------
Net income $ 538 $ 1,053 $ 1,811 $ 1,979
====== ======= ======= =======
Earnings per share $ .15 $ .28 $ .49 $ .52
====== ======= ======= ======
Weighted average
common shares and
common equivalent
shares outstanding 3,705,000 3,820,000 3,707,000 3,772,000
</TABLE>
See notes to consolidated condensed financial statements
<PAGE>
ASECO CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six months ended
September 29, October 1,
1996 1995
------------------------------
<S> <C> <C>
Operating activities
Net income $ 1,811 $ 1,979
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 446 335
Changes in assets and liabilities:
Accounts receivable 1,868 (2,245)
Inventories, net (1,812) 107
Prepaid expenses and other current assets (212) 116
Accounts payable and accrued expenses (930) 311
Income taxes payable (207) 736
------- -------
Total adjustments (847) (640)
------- -------
Cash provided by operating activities 964 1,339
Investing activities:
Acquisition of plant and equipment (447) (180)
Increase in software development costs
and other assets (156) (40)
------- -------
Cash used in investing activities (603) (220)
Financing activities:
Net proceeds from issuance of common stock 108 443
Reductions of long-term capital lease obligations (7) (6)
------- -------
Cash provided by financing activities 101 437
------- -------
Net increase in cash and cash equivalents 462 1,556
Cash and cash equivalents at the beginning
of period 14,083 9,301
------- -------
Cash and cash equivalents at the end of period $ 14,545 $ 10,857
======= =======
</TABLE>
See notes to consolidated condensed financial statements
<PAGE>
ASECO CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
SIX MONTHS ENDED SEPTEMBER 29, 1996
1. The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the
three- and six-month periods ended September 29, 1996 are not necessarily
indicative of the results that may be expected for the year ended March 30,
1997. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Registrant Company and
Subsidiaries' annual report on Form 10-K for the year ended March 31, 1996.
2. The computations of earnings per share are based on the weighted
average number of outstanding shares of common stock and common equivalent
shares (using the treasury stock method). Fully diluted earnings per share
have not been separately presented as the amount does not differ significantly
from primary earnings per share.
3. Inventories:
Inventories consisted of:
(in thousands)
<TABLE>
<CAPTION>
September 29, March 31,
1996 1996
<S> <C> <C>
Raw Material $ 4,033 $ 3,491
Work in Process 1,976 2,218
Finished Goods 2,862 1,350
------- -------
$ 8,871 $ 7,059
======= =======
</TABLE>
4. On April 1, 1996, the Company adopted Financial Accounting Standard
No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of" which establishes criteria for the
recognition and measurement of impairment loss associated with long-lived
assets. Adoption of this standard did not have a material impact on the
Company's financial position or results of operations.
<PAGE>
Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Three and Six months ended September 29, 1996
Results of Operations
- ---------------------
Net sales for the first six months of fiscal 1997 increased 6% to $19.9
million compared to $18.9 million for the first six months of fiscal 1996.
Net sales for the second quarter of fiscal 1997 decreased 8% to
approximately $9 million versus $9.7 million for the same quarter last year.
The decrease in net sales between the two second quarter periods resulted from a
decline in the number of units shipped during the second quarter of fiscal
1997 as a result of an industry wide market downturn. The impact of the
unit decrease was partially offset by higher average selling prices across
most models which was attributable to added automation features and other
product enhancements.
International sales represented approximately 44% of net sales in the second
quarter of fiscal 1997 versus 42% in the second quarter of fiscal 1996.
Approximately 78% of all international sales were to customers located in the
Pacific Rim region.
Gross margin for the first six months of fiscal 1997 was 48% compared to 49%
in the same period last year. Gross margin in the second quarter of fiscal
1997 was 47% compared to 49% in the second quarter of fiscal 1996. The lower
margin percentages were the result of manufacturing overhead spending
declining at a slower rate than sales reflecting the Company's view that
investments in manufacturing capacity should be based on a long term plan
rather than the operating results of one or two quarters.
Research and development expenses increased 13% to $2.5 million in the first
six months of fiscal 1997 from $2.2 million in the first six months of fiscal
1996. Research and development expenses increased 18% in the second quarter
of fiscal 1997 to $1.3 million from $1.1 million in the second quarter of
fiscal 1996. Research and development expenses also increased as a
percentage of sales to 14% in the second quarter of fiscal 1997 from 11% in
the second quarter of fiscal 1996 because of increased spending on the
development of new products and enhancements to current products and the
decline in net sales in the comparable quarterly periods.
Selling, general and administrative expenses for the first six months of fiscal
1997 were $4.7 million, up 12%, versus $4.2 million in the first six months of
fiscal 1996. Selling, general and administrative expenses for the second
quarter of fiscal 1997 were $2.3 million, up 7% from $2.1 million in the same
quarter last year. The quarterly spending increase was the result of an
increase in sales and service personnel to support the Company's growing
installed base of equipment, and an increase in trade show expense.
Operating income in the first six months of fiscal 1997 was $2.4 million
compared to $2.9 million in the first six months of fiscal 1996, a decrease
of approximately 17%. Operating income in the second quarter of fiscal 1997
decreased approximately 58% to $649,000 from $1.5 million in the second
quarter of fiscal 1996.
The tax rate for the first six months of fiscal 1997 was 33% versus 36% in
the same period last year. The tax rate for the second quarter of fiscal 1997
was 34% versus 37% in the same quarter last year. Such decreases were
primarily due to increased international sales as a percentage of total
net sales and the lower tax rate associated with international sales.
<PAGE>
As a result of the foregoing, net income for the first six months of fiscal
1997 was $1.8 million, or $.49 per share, as compared to $2.0 million, or
$.52 per share, for the first six months of fiscal 1996. Net income for
the second quarter of fiscal 1997 was $538,000, or $.15 per share, versus
$1.1 million, or $.28 per share, for the second quarter of fiscal 1996.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company ended the second quarter of fiscal 1997 with a cash position of
approximately $14.5 million. Additionally, the Company has an unsecured
line of credit with a bank in the amount of $5.0 million against which there
were no borrowings at the end of the second quarter of fiscal 1997.
The Company generated approximately $1.0 million of cash from operations
during the first six months of fiscal 1997. Accounts receivable decreased
approximately $1.8 million in the first six months of fiscal 1997 due to the
decrease in net sales. Inventory increased approximately $1.8 million during
the first six months of fiscal 1997 due to several customer order
cancellations and lower than expected sales levels. Additionally during the
second quarter, the Company built equipment across all product models in
order to take advantage of late quarter changes in customer demand.
The Company used $447,000 in cash during the first six months of fiscal 1997
to fund the acquisition of capital equipment and $156,000 to fund internal
software development costs. The Company expects that its investment in
capital equipment in fiscal 1997 will be greater than in fiscal 1996.
The Company generated cash from financing activities in the first six months
of fiscal 1997 of $101,000, primarily from employee stock purchases under the
Company's employee stock plans.
The Company believes that funds generated from operations, existing cash
balances and available borrowing capacity will be sufficient to meet the
Company's cash requirements for at least the next twelve months.
CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
The Company's future results are difficult to predict and may be affected by
a number of important risk factors including, but not limited to, the
factors listed in the Company's Annual Report on Form 10K for the fiscal year
ended March 31, 1996. The Company wishes to caution readers that those
important factors, in some cases, have affected, and in the future could affect,
the Company's actual consolidated quarterly or annual operating results and
could cause those actual consolidated quarterly or annual operating results to
differ materially from those expressed in any forward looking statements made
by, or on behalf of, the Company.
<PAGE>
ASECO CORPORATION
PART II - OTHER INFORMATION
Item 1. Legal Proceedings:
None.
Item 2. Changes in Securities:
None.
Item 3. Defaults upon Senior Securities:
None.
Item 4. Submissions of Matters to a Vote of Security Holders:
On August 8 , 1996, the Annual Meeting of Stockholders was held and the
following matters were voted upon:
1. Dr. Sheldon Buckler and Dr. Gerald L. Wilson were elected as Directors
to serve for three year terms. For Dr. Buckler, the vote was 3,283,074 in
favor, 94,095 withheld. For Dr. Wilson, the vote was 3,283,074 in favor,
94,095 withheld.
2. An amendment to the Company's 1993 Omnibus Stock Plan increasing the
maximum number of shares issuable under the plan from 930,000 to 1,230,000
was approved with 1,177,389 in favor, 247,124 against, 14,660 abstaining,
and 1,938,296 broker non-votes.
3. Amendments to the Company's 1993 Non-Employee Director Stock Option Plan
increasing the number of shares issuable under the plan from 65,000 to
165,000, increasing the number of shares underlying initial option grants
under the Plan, and providing that persons serving as non-employee directors
on May 15, 1996 and to serve on the Board of Directors during fiscal 1997 be
granted an option to purchase an additional 10,000 shares were approved with
1,194,178 in favor, 322,747 against, 70,598 abstaining, and 1,789,946 broker
non-votes.
4. The Board of Directors' selection of Ernst & Young LLP as the Company's
independent auditors for the year ended March 30, 1997 was ratified with
3,350,979 in favor, 15,865 against, 10,325 abstaining, and 300 broker
non-votes.
Item 5. Other Information:
None.
Item 6. Exhibits and reports on Form 8-K:
a. See Exhibit Index.
b. There were no reports on Form 8-K filed for the three
months ended September 29, 1996.
<PAGE>
ASECO CORPORATION
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.
Signature Title Date
/s/Carl S. Archer, Jr. President and Chief November 13, 1996
- --------------------- Executive Officer
Carl S. Archer, Jr. (principal executive
officer)
/s/Sebastian J. Sicari Vice President, November 13, 1996
- ---------------------- Finance and
Sebastian J. Sicari Administration,
Chief Financial Officer,
Treasurer (principal
financial and accounting
officer)
<PAGE>
EXHIBIT INDEX
Item
- ----
10.13 Letter Agreement, as amended, August 30, 1996 between the Company
and Fleet Bank of Massachusetts, N.A.
Exhibit 10.13
Fleet Bank
August 30, 1996
Mr. Sebastian J. Sicari
Chief Financial Officer
Aseco Corporation
500 Donald Lynch Boulevard
Marlboro, MA 01752
Dear Sebastian:
Reference is hereby made to the Letter Agreement (the "Agreement") executed
by and between Aseco Corporation and Fleet Bank of Massachusetts, N.A. as of
November 27, 1992 and amended as of July 30, 1993, August 2, 1994 and
August 24, 1995. We are pleased to inform you that we have approved an
extension of the Expiration Date from September 1, 1996 to September 1, 1997.
Nothing herein shall be deemed to constitute a waiver, release or amendment
of any other terms of the agreement.
The Borrower represents and warrants that the execution of this amendment has
been duly authorized by the Borrower by all necessary corporate and other
action and that the execution will not conflict with, violate the provisions
of, or cause a default or constitute an event which, with the passage of time or
giving of notice or both, could cause a default on the part of the Borrower
under its charter documents or by-laws or under any contract, agreement, law,
rule, order, ordinance, franchise, instrument or other document, or result in
the imposition of any lien or encumbrance on any property or asset of the
Borrower.
The Borrower further represents that this agreement and the attached
Promissory Note each represent legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their
respective terms. In addition, the statements, representations and warranties
made in the Agreement continue to be correct as of the date hereof and the
Borrower is in compliance with all terms of the Agreement. Except as
expressly affected hereby, the Agreement remains in full force and effect as
heretofore.
Sebastian, we are pleased to extend the Agreement and look forward to
continuing our relationship with Aseco Corporation. Please sign below and
execute the attached note to evidence your acceptance of this amendment.
Sincerely,
Tom W. Davies
Vice President, High Technology Group
Agreed and Accepted: Sebastian J.Sicari
8/30/96 ----------------------
Vice President and CFO
Fleet Bank of Massachusetts, N.A., A Member of Fleet Financial Group
<PAGE>
Fleet Bank
Commercial Promissory Note
Boston, Massachusetts August 30, 1996
FOR VALUE RECEIVED, I, the undersigned, promise to pay to the order of Fleet
National Bank, National Association (with any subsequent holder referred to
in this note as "you") at any of your offices, the sum of Five Million
and 00/100 -------DOLLARS ($5,000,000.00) with Interest in accordance with
the provisions below which are marked.
INTEREST RATE
I will pay Interest on the unpaid principal balance of this Note as follows,
but in no event will Interest exceed the maximum rate permitted by law;
[x] FLOATING RATE. At the aggregate of the Bank's Prime Rate as the Bank
announces it from time to time, plus zero (0) percent per annum. Changes
in the Bank's Prime Rate as the Bank announces it from time to time are to
take effect, for the purposes of the determination of Interest on this Note,
when made effective generally to loans by the Bank.
[ ] FIXED RATE. At the rate of ____ percent per annum.
[ ] DISCOUNT. Interest to maturity has been deducted from the proceeds of
this Note, Interest at the rate of ____ percent per annum shall be paid on
any amount not paid when due hereunder until that amount and any such
Interest are so paid.
INTEREST PAYMENTS
I will pay interest at the above rate as follows:
[x] PERIODICALLY. Monthly/Quarterly/Monthly, in arrears, with the first
such payment due on the 30th day of September, 1996 and each subsequent
payment due on the corresponding day of each calendar month/calendar
quarter/ __________ thereafter.
[ ] AT MATURITY. At the maturity of this Note.
[ ] INTEREST INCLUDED IN REPAYMENTS. Interest is included in the
payment(s) to be made pursuant to the Repayment Provisions below.
REPAYMENT PROVISIONS
In addition to any interest payments to be made as indicated above, I will
pay you the amount stated above as follows:
[ ] ON DEMAND. On demand by you.
[ ] PAYMENTS TO BE MADE UNTIL DEMAND. On demand by you, with payments of
$________ each to be made monthly unless and until such demand is made. The
first such payments shall be due on the______ day of________, 19__ (if you
have not made demand before then) and unless and until you make demand, each
subsequent payment shall be due on the corresponding day of each month
thereafter.
[x] TIME. _____ days after the date hereof on September 1, 1997.
INSTALLMENTS. In ________ consecutive monthly installments, of____
which each but the last shall be $_____ and the final of which shall be
equal to the then unpaid principal balance of this Note plus all accrued and
unpaid interest thereon. The first such monthly installment shall be due
on the ____ day of_________, 19__ and each subsequent installment shall be
due on the corresponding day of each month thereafter, with the balance of
all principal and interest due on ________, 19__.
<PAGE>
PREPAYMENT. I will be entitled to prepay this note as follows:
LATE CHARGES. If the entire amount of any required principal and/or Interest
is not paid in full within ten (10) days after the same is due, the Borrower
shall pay to the Bank a late fee equal to five percent (5%) of the required
payment provided that such late fee shall be reduced to three percent (3%) of
any required principal and Interest payment that is not paid within fifteen
(15) days of the date it is due if this Agreement is secured by a mortgage on
an owner-occupied residence, 1-4 units.
APPLICATION OF PAYMENTS. Any payments you receive from me will be applied
first to any accrued and unpaid interest and then to the unpaid principal
balance of this Note. If any payment under this Note becomes due and payable
on the day upon which your office is legally closed to business, the due date
shall be extended to the next succeeding business day and interest shall be
payable during such extension at the rate stated above.
EACH BORROWER AND ENDORSER LIABLE. If more than one borrower has signed
below, each of us has made all of the promises contained in this Note, and we
are jointly and severally liable for all obligations on this Note. If one or
more endorser has signed below, each endorser agrees to all terms of this
Note, including without limitation the provisions relating to Security.
This Note is subject to the terms, provisions and conditions set forth on the
reverse side of this page. Signed as an instrument under seal on the date
stated above.
BORROWER(S)
Aseco Corporation
- ------------------------------------
Name of Borrower
By: Sebastian J. Sicari Vice President and CFO
-----------------------------------------------
Name Title
Address: 500 Donald Lynch Boulevard
------------------------------------------
Marlboro, Massachusetts 01752
------------------------------------------
ENDORSER(S):
- ----------------------------------------------------------------------
- ----------------------------------------------------------------------
<PAGE>
EVENTS OF DEFAULT. Upon the occurrence of any one or more of the following
Events of Default, the entire unpaid principal balance of this Note and all
unpaid accrued interest hereunder shall become immediately due and payable at
your option and without notice or demand. In addition, at your option and
without notice or demand, the occurrence of any such Event of Default shall
also constitute a default under all agreements between you and me as well as
of all instruments and papers that I have given to you Events of Default are:
(a) my failure to pay when due (or upon demand, if payable on demand) any
amount due on this Note or any other amount I owe you; (b) my failure
promptly, punctually, and faithfully to perform any other obligation or
discharge any liability of mine to you; (c) your determination that any
representation or warranty I made to you in any document, instrument,
agreement or paper was not true or accurate when given; (d) the occurrence of
any event of default under any agreement between you and me or under any
instrument or paper I have given to you notwithstanding that you may not have
exercised your rights upon default under any such other agreement, instrument or
paper; (e) any act by, against, or relating to me or my property or assets,
which act constitutes the application for, consent to, or sufferance of, the
appointment of a receiver, trustee, or other person, pursuant to court action
or otherwise over all or any part of my property, the granting of any trust
mortgage or execution of an assignment for the benefit of my creditors or the
occurrence of any other voluntary or involuntary liquidation or extension of
debt agreement for me; my written admission of my inability to pay my debts as
they mature; the filing of any complaint, application, or petition by or
against me initiating any matter in which I am or may be granted any relief
from my debts pursuant to the Federal Bankruptcy Code or pursuant to any
other insolvency statute or procedure; my offering by or entering into any
composition, extension, or any other arrangement seeking relief or extension
for my debts or any other judicial or non-judicial proceeding or agreement
by, against, or including me which seeks or intends to accomplish a
reorganization or arrangement with creditors; (f) the imposition of any lien
upon my assets or the entry of any judgment against me, which lien is not
discharged, or judgment appealed from or satisfied, within fifteen (15) days
after its imposition or entry; (g) any material adverse change in my assets,
liabilities, property, business or condition, financial or otherwise; (h) the
occurrence of any event or circumstance with respect to me such that you deem
yourself to be insecure; (i) my death, termination of existence, dissolution,
winding up, or liquidation; (j) the occurrence of any of the foregoing Events
of Default with respect to any guarantor or endorser to you of my
liabilities to you, as if such guarantor or endorser were a borrower who
signed this Note.
LOAN DOCUMENTS:SECURITY. The following loan documents and security
instruments are incorporated herein by reference with the same force and
effect as if set forth herein in full: Letter Agreement (the "Agreement")
executed by and between Aseco Corporation and Fleet National Bank (as
successor to Fleet Bank of Massachusetts, N. A.) as of November 27, 1992 and
amended as of July 30, 1993, August 2, 1995 and August 30, 1996.
The execution, endorsement or guaranty of this Note constitutes a
confirmation by each person that any security interest listed above which was
given to you before the date hereof shall continue in effect as security for
this Note. In addition to the foregoing, any and all of the deposits or other
sums at any time credited by or due from you to me or to any endorser or
guarantor of this Note, and any cash, securities, instruments, or other property
of mine or of such endorser or guarantor in your possession, whether for
safekeeping, or otherwise, shall at all times constitute security for this
Note and for any and all of my liabilities to you including, without
limitation, the liability evidenced hereby, and may be applied or set off by you
against such liabilities at any time whether or not such liabilities are then
due and whether or not other collateral is available to you.
<PAGE>
COSTS AND EXPENSES. I and each endorser and guarantor of this Note, will pay
all costs and expenses, including, without limitation, reasonable attorneys'
fees and all expenses and disbursements of counsel, in connection with the
protection or enforcement of any of your rights against me or any such endorser
and guarantor and against any collateral given to you to secure this Note or any
other of my liabilities or of such endorser and guarantor to you (whether or
not suit is instituted by or against you).
ASSIGNABILITY BY YOU. You may assign and transfer this Note to any person, firm
or corporation and deliver to the assignee any collateral or security
interest you hold in connection with this Note. In the event of such
assignment, you will have no further responsibility or liability with respect to
such collateral or security interest, and the terms of this Note and any
related documents shall inure to the benefit of your assignee and its
successors. This Note shall be binding upon me and each endorser and
guarantor hereof and upon my and their respective heirs, successors, assigns,
and representatives, and shall inure to the benefit of you and your successors
and endorsees.
SEVERABILITY. If any provision of this Note is deemed by any court having
jurisdiction thereof to be invalid or unenforceable, the other provisions of
this Note shall remain in full force and effect. If any provision of this
Note is deemed by any such court to be unenforceable because such provision is
too broad in scope, such provision shall be construed to be limited in scope to
the extent such court shall deem necessary to make it enforceable. If any
provision is deemed inapplicable by any such court to any person or
circumstances, it shall nevertheless be construed to apply to all other persons
and circumstances.
WAIVER. No delay or omission by you in exercising or enforcing any of your
powers, rights, privileges, remedies, or discretions hereunder shall operate
as a waiver thereof on that occasion nor on any other occasion. No waiver of
any default hereunder shall operate as a waiver of any other default hereunder,
nor as a continuing waiver.
ENDORSEMENT. Each endorser, jointly and severally if more than one,
unconditionally guarantees prompt payment when due, by acceleration or
otherwise, of this Note, regardless of its genuineness, validity, regularity
or enforceability and waives any right to require you to proceed against the
Borrower or any collateral which you might have been granted to secure and
endorser's liabilities under this Note.
PRESENTMENT, EXTENSION. I and each endorser and guarantor of this Note
respectively waive presentment, demand, notices, and protest, and also waive
any delay on the part of the holder hereof. Each assents to any extension or
other indulgence (including, without limitation, the release of any other
party to this Note or the release or substitution of collateral) which you
permit me or any such endorser or guarantor with respect to this Note or any
collateral given to secure this Note and any other liability of mine or such
endorser or guarantor to you.
MISCELLANEOUS. My liabilities and those of any endorser or guarantor of this
Note are joint and several; provided, however, your release of me or any
endorser or guarantor shall not release any other person obligated on account
of this Note. Each reference in this Note to me, any endorser, and any
guarantor, is to such person individually and also to all such persons
jointly. No person obligated on account of this Note may seek contribution from
any other person also obligated unless and until all liabilities to you of
the person from whom contribution is sought have been satisfied in full.
I and each endorser and guarantor of this Note authorize you to complete
this Note if delivered in incomplete form, in any respect.
<PAGE>
This Note is delivered to you at one of your offices in Massachusetts
and shall be governed by the laws of the Commonwealth of Massachusetts. I and
each endorser and guarantor of this Note submit to the jurisdiction of the
courts of the Commonwealth of Massachusetts for all purposes with respect to
this Note, any collateral given to secure their respective liabilities to you or
their respective liabilities to you or their respective relationships with you.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ASECO
CORPORATION CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTER ENDED
SEPTEMBER 29, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-29-1996
<CASH> 14,545
<SECURITIES> 0
<RECEIVABLES> 11,053
<ALLOWANCES> 575
<INVENTORY> 8,871
<CURRENT-ASSETS> 34,970
<PP&E> 4,634
<DEPRECIATION> 2,534
<TOTAL-ASSETS> 37,456
<CURRENT-LIABILITIES> 6,716
<BONDS> 0
0
0
<COMMON> 36
<OTHER-SE> 30,299
<TOTAL-LIABILITY-AND-EQUITY> 37,456
<SALES> 8,989
<TOTAL-REVENUES> 8,989
<CGS> 4,805
<TOTAL-COSTS> 4,805
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2)
<INCOME-PRETAX> 811
<INCOME-TAX> 273
<INCOME-CONTINUING> 538
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 538
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
</TABLE>
