<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
----
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
----
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 0-22114
ASYST TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 94-2942251
(State or other jurisdiction of (IRS Employer identification No.)
incorporation or organization)
48761 KATO ROAD, FREMONT, CALIFORNIA 94538
(Address of principal executive offices)
(510) 661-5000
(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
------- -------
THE NUMBER OF SHARES OF THE REGISTRANT'S COMMON STOCK, NO PAR VALUE, OUTSTANDING
AS OF AUGUST 3, 1998 WAS 12,148,737.
- --------------------------------------------------------------------------------
<PAGE>
ASYST TECHNOLOGIES, INC.
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information Page No.
--------------------- --------
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets --
June 30, 1998 and March 31, 1998 2
Condensed Consolidated Statements of Operations --
Three Months Ended June 30, 1998 and 3
June 30, 1997
Condensed Consolidated Statements of Cash Flows --
Three Months Ended June 30, 1998 and
June 30, 1997 4
Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. Other Information 12
-----------------
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
- ----------
Exhibit Index 14
- -------------
</TABLE>
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
ITEM 1 - FINANCIAL STATEMENTS
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, March 31,
1998 1998
---------------- ---------------
<S> <C> <C>
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,280 $ 12,288
Short-term investments 81,735 70,487
Accounts receivable, net 21,232 26,534
Inventories 22,799 18,851
Prepaid expenses and other current assets 12,010 11,938
Net current assets of discontinued operations -- 1,438
-------- --------
Total current 144,056 141,536
assets
Property and equipment, net 11,133 11,133
Other assets, net 1,982 1,802
-------- --------
$157,171 $154,471
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,795 $ 8,671
Accrued liabilities and other current liabilities 13,318 13,124
Customer deposits 1,116 1,267
Net current liabilities of discontinued operations 165 --
Income taxes payable 2,284 606
-------- --------
Total current liabilities 24,678 23,668
-------- --------
Shareholders' equity:
Common stock 116,461 116,347
Retained earnings 16,032 14,456
-------- --------
Total shareholders' equity 132,493 130,803
-------- --------
$157,171 $154,471
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE>
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited: In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
------------------------------
1998 1997
------------- --------------
<S> <C> <C>
Net sales $34,073 $37,686
Cost of sales 17,603 21,314
------- -------
Gross profit 16,470 16,372
------- -------
Operating expenses:
Research and development 3,779 2,744
Selling, general and administrative 9,579 8,710
Purchased in-process research and development 1,200 --
------- -------
Total operating expenses 14,558 11,454
------- -------
Operating income 1,912 4,918
Other income, net 551 297
------- -------
Income before provision for income taxes 2,463 5,215
Provision for income taxes 887 1,878
------- -------
Net income $ 1,576 $ 3,337
======= =======
Basic earnings per share $ 0.13 $ 0.31
======= =======
Diluted earnings per share $ 0.12 $ 0.30
======= =======
Shares used in per share calculation of:
Basic earnings per share 12,078 10,662
======= =======
Diluted earnings per share 12,634 11,066
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited: In thousands)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------------------
1998 1997
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,576 $ 3,337
Adjustments to reconcile net income to net cash
provided by operating activities:
Purchased in-process research and development 1,200 --
Change in netassets/liabilities of discontinued operations 1,603 (906)
Depreciation and amortization expense 1,293 1,044
Provision for doubtful accounts 34 1,361
Changes in current assets and liabilities, net of acquisition of
FluoroTrac(R) product line:
Accounts receivable 5,268 2,210
Inventories (2,470) (4,168)
Prepaid expenses and other current assets (72) 1,242
Accounts payable (878) 206
Accrued liabilities 196 (1,071)
Customer deposits (151) (935)
Income taxes payable 1,678 1,163
-------- -------
Net cash provided by operating activities 9,277 3,483
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (935) (1,048)
Purchase of short-term investments (20,050) --
Sale of short-term investments 8,802 --
Decrease (increase) in other assets (422) 58
Cash used for acquisition of the FluoroTrac(R) product line (2,794) --
-------- -------
Net cash used for investing activities (15,399) (990)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 114 514
-------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (6,008) 3,007
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 12,288 12,021
-------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,280 $15,028
======== =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
ASYST TECHNOLOGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of Asyst
Technologies, Inc. ("the Company"), a California corporation and its wholly-
owned subsidiaries. Significant inter-company accounts and transactions have
been eliminated.
While the financial information furnished is unaudited, the condensed
consolidated financial statements included in this report reflect all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for the fair presentation of the results of operation for
the interim periods covered and of the financial condition of the Company at the
date of the interim balance sheet. The Company closes its books on the last
Saturday of each quarter and thus the actual date of the quarter-end is usually
different from the month-end dates used throughout this 10-Q report. The results
for interim periods are not necessarily indicative of the results for the entire
year. The condensed consolidated financial statements should be read in
connection with the Asyst Technologies, Inc. consolidated financial statements
for the year ended March 31, 1998 included in its Annual Report on Form 10-K.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments with an original maturity of
three month or less from the date of purchase to be cash and cash equivalents.
The carrying value of cash equivalents approximates their current fair market
value.
SHORT-TERM INVESTMENTS
As of June 30, 1998 and March 31, 1998, the Company's short-term investments
consist of liquid debt investments with maturities, at the time of purchase,
greater than three months and less than one year. All such investments have been
classified as "available-for-sale" and are carried at fair value, with
unrealized holding gains and losses, net of taxes reported as a separate
component of shareholders' equity. The cost of the debt security is adjusted for
amortization of premiums and accretion of discounts to maturity. Such
amortization, interest income, realized gains and losses and declines in value
that are considered to be other than temporary, are included in other income
(expense), net, on the accompanying condensed consolidated statements of
operations. There have been no declines in value that are considered to be other
than temporary for any of the three months in the period ended June 30, 1998.
The cost of investments sold is based on specific identification. The Company
does not intend to hold the individual securities for greater than one year.
Short-term investments by security type consist of the following (in thousands):
<TABLE>
<CAPTION>
COST / FAIR VALUE
------------------
JUNE 30, MARCH 31,
1998 1998
------- -------
(unaudited)
<S> <C> <C>
Debit securities issued by states of the United States and political subdivisions of
the states........................................................................... $58,185 $50,487
Corporate debt securities.............................................................. 23,550 20,000
------- -------
Total................................................................................ $81,735 $70,487
======= =======
</TABLE>
5
<PAGE>
INVENTORIES
Inventories are stated at the lower of cost (first in, first out) or market and
include materials, labor and manufacturing overhead costs. Inventories consist
of the following (in thousands):
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1998 1998
------------ -----------
<S> <C> <C>
(unaudited)
Raw materials........................ $18,611 $15,019
Work-in-process and finished goods... 4,188 3,832
------- -------
$22,799 $18,851
======= =======
</TABLE>
EARNINGS PER SHARE
Earnings per share has been reported based upon Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share", which requires presentation of basic and
diluted earnings per share. Basic earnings per share has been computed using the
weighted average number of actual common shares outstanding, while diluted
earnings per share has been computed using the weighted average number of common
equivalent shares outstanding. Common equivalent shares used in the computation
of diluted earnings per share result from the assumed exercise of stock options,
using the treasury stock method.
The following table sets forth the calculation of basic and diluted earnings per
share (in thousands, except per share amounts):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
--------------------------
1998 1997
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Basic earnings per share:
Net income................................ $ 1,576 $ 3,337
------- -------
Weighted average common shares............ 12,078 10,662
------- -------
Basic earnings per share........ $ 0.13 $ 0.31
======= =======
Diluted earnings per share:
Net income................................ $ 1,576 $ 3,337
------- -------
Weighted average common shares............ 12,078 10,662
Weighted average common share equivalents:
Options............................... 556 404
------- -------
Diluted weighted average common shares.... 12,634 11,066
------- -------
Diluted earnings per share...... $ 0.12 $ 0.30
======= =======
</TABLE>
PROVISION FOR INCOME TAXES
Income tax expense for the three month periods ended June 30, 1998 and June 30,
1997, includes a provision for federal, state and foreign taxes based upon the
annual estimated effective tax rates applicable to the Company and its
subsidiaries for the year.
6
<PAGE>
NEW ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income," which establishes standards for reporting and
presentation of comprehensive income. SFAS No. 130, requires companies to report
a new measure of income. The Company adopted SFAS No. 130 during the first
quarter of fiscal 1999. "Comprehensive Income" is to include foreign currency
translation gains and losses and other unrealized gains and losses that have
historically been excluded from net income and reflected in instead in equity.
The Adoption of SFAS No. 130 did not have a material impact on the Company's
financial statements.
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures About Segments of an Enterprise and Related Information," which
establishes standards for disclosure of segment information. SFAS No. 131 will
become effective for the Company's year ending March 31, 1999.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Investments and Hedging Activities," which
establishes standards for the accounting for derivative transactions and
derivative portion of certain other contracts. SFAS No. 133 will become
effective for the Company's year ending March 31, 2001. The Company believes
that SFAS No. 133 will not have a material impact on the Company's financial
statements.
ACQUISITION OF THE FLUOROTRAC(R) PRODUCT LINE
In April 1998, the Company entered into an agreement with Fluoroware, Inc.
("Fluoroware"), a supplier of materials management solutions, to acquire
Fluoroware's FluoroTrac(R) automated radio frequency
identification ("RFID") technology for automated work-in-progress tracking in
semiconductor factories. Under the terms of the agreement, the Company acquired
all of the FluoroTrac intellectual property including RFID tracking solutions,
inventory and installed-base opportunities from Fluoroware in consideration for
approximately $2.8 million in cash and liabilities assumed by the Company.
In connection with the acquisition, approximately $1.2 million of the intangible
assets acquired consisted of in-process research and development. Because there
can be no assurance that the Company will be able to successfully complete the
development of FluoroTrac products or that the technology has any alternative
future use, such in-process research and development was charged to expense. As
a result of the purchase price allocation, approximately $0.3 million was
assigned to intangible assets related to existing product technology, the
assembled workforce and the excess purchase price over the net assets acquired.
These intangibles are being amortized over a three to five year period.
Management believes that the unamortized balance of these assets, which is
included in other assets, net, in the accompanying condensed consolidated
balance sheets, is recoverable.
SHAREHOLDER RIGHTS PLAN
On June 22, 1998, the Board of Directors of the Company, declared a dividend of
one preferred share purchase right (a "Right") for each outstanding share of
common stock, without par value per share, (the "Common Shares") of the Company.
The dividend is effective as of July 10, 1998 (the "Record Date") with respect
to the shareholders of record on that date. The Rights will also attach to new
Common Shares issued after the Record Date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, without par value per share, (the
"Preferred Shares") of the Company at a price of $140 per one one-hundredth of a
Preferred Share (the "Purchase Price"), subject to adjustment. Each Preferred
Share is designed to be the economic equivalent of 100 Common Shares.
STOCK REPURCHASE PROGRAM
On June 22, 1998, the Board of Directors of the Company, authorized a stock
repurchase program whereby up to 2,000,000 shares of its Common Stock may be
repurchased by the Company using existing cash, from time-to-time at market
prices, and as market and business conditions warrant, in the open market, or in
negotiated transactions. The Company will utilize a portion of the reacquired
shares for reissuance in connection with certain employee stock programs.
7
<PAGE>
ACQUISITION OF HINE DESIGN INCORPORATED
On July 31, 1998, the Company completed its acquisition of Hine Design
Incorporated ("Hine Design"). The acquisition originally announced on July 6,
1998, was structured as a purchase of all of the outstanding capital stock of
Hine Design for approximately $11.3 million in cash. In addition, the Company
granted options to purchase the Company's common stock in substitution for
outstanding , vested options to purchase capital stock of Hine Design worth
approximately $1.0 million and assumed certain liabilities of Hine Design of
approximately $11.7 million. Hine Design, a supplier of wafer-handling robots
for semiconductor process tools, is now a wholly owned subsidiary of the
Company.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except for the historical information contained herein, the following discussion
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those discussed here.
Factors that could cause or contribute to such differences include, but are not
limited to, those discussed in this section and those contained in the Company's
Annual Report on Form 10-K for the year ended March 31, 1998.
RESULTS OF OPERATIONS
- ---------------------
Net sales. Net sales decreased from $37.7 million for the three months ended
June 30, 1997, to $34.1 million, a 9.6 percent decrease, for the three months
ended June 30, 1998. Net sales also decreased sequentially from the fourth
quarter of fiscal year 1998 by $11.1 million or 24.5 percent. The decrease in
net sales were consistent across all of the Company's products except software
products, which increased approximately 1.2 percent. The decrease in the
Company's net sales was caused by the rapid downward change in the semiconductor
manufacturing industry's capital expenditures due to an excess global supply of
integrated circuit devices. In addition, the economic downturn in Asia, which
has accounted for about 20 percent of the industry's global consumption of
semiconductor products, has also impacted the global demand for products from
semiconductor foundries. Both sales to original equipment manufacturers (OEMs)
and adaptive sales to semiconductor foundry channels of distribution are down
from the levels in the same quarter of the prior year. Net sales for the next
several quarters are expected to be significantly lower than those in the same
prior year periods. The increase in software net sales is due primarily to
greater acceptance of Asyst software products in the semiconductor industry and
its low base in prior periods.
Furthermore, international sales for the Company decreased from 63.8 percent
of net sales or $24.0 million in the quarter ended June 30, 1997, to 61.6
percent of net sales or $21.0 million for the three months ended June 30,
1998. International sales by region for the three month period ended June 30,
1998 are summarized as follows:
<TABLE>
<CAPTION>
Geographic Net Sales Percentage of
Region (in millions) Net Sales
--------- ------------- ------------
<S> <C> <C>
Taiwan $15.9 46.7%
Japan 2.6 7.6%
Singapore 1.2 3.5%
Europe 1.3 3.8%
Korea 0.0 0.0%
----- ----
$21.0 61.6%
===== ====
</TABLE>
A substantial portion of the Company's international sales have been to
customers in the Asia Pacific region. The economies of many of those countries
are currently in turmoil. There can be no assurance that the economic problems
of the region and its related impact on the economies of the other areas served
by the Company will not result in future cancellations or delays in orders.
9
<PAGE>
RESULTS OF OPERATIONS (CONTINUED).
- ----------------------------------
Gross Margin. Gross margin increased from 43.4 percent for the three months
ended June 30, 1997, to 48.3 percent for the three months ended June 30, 1998.
The increase in gross margin resulted from improved production scheduling and
cost reduction efforts in the Company's manufacturing operations, particularly
in its Load Port Product line, which accounted for 39.6 percent of net sales
for the three months ended June 30, 1998 compared to 48.0 percent for the same
three month period in the prior fiscal year. The Company expects that its
gross margin will continue to fluctuate in the future as the level of net
sales change and product mix varies. With the expected decline in net sales
for the next several quarters it is very likely that the gross margin will be
adversely effected.
Research and development. Research and development expenses increased from $2.7
million, or 7.3 percent of net sales, during the three months ended June 30,
1997, to $3.8 million, or 11.1 percent of net sales, during the three months
ended June 30, 1998. The increase in spending level is due primarily to
increases in staffing and personnel related expenses and other costs driven by
the Company's continuing development of new products and product enhancements.
The increase as a percent of net sales was caused by continuation of certain
projects to protect the long term position of the Company as a leader in its
markets despite the decrease in net sales. However, the Company did reduce its
research and development spending levels from its fourth quarter for the year
ended March 31, 1998, by approximately 3 percent. The Company expects that its
research and development costs will fluctuate in future periods, both in the
dollar level of spending and as a percentage of net sales.
Selling, general and administrative. Selling, general and administrative
expenses increased from $8.7 million, or 23.1 percent of net sales, during the
three months ended June 30, 1997, to $9.6 million, or 28.1 percent of net
sales, during the three months ended June 30, 1998. The increase in selling,
general and administrative expenses as a percentage of net sales for the three
month period ended June 30, 1998, over the same period in the prior fiscal
year is the result of both higher spending levels and lower net sales in the
quarter just ended. The increase in the spending level is due to the addition
of the FluoroTrac operation at the beginning of the quarter and increases in
people and related expenses during the prior fiscal year in response to higher
net sales in each quarter during the prior fiscal year. In addition, the
Company has continued to pursue patent infringement actions to protect the
Company's intellectual property through the discovery stage during the three
month period ended June 30, 1998. For further discussion of the Company's
patent infringement actions, see Part II - Other Information, Item 1: "Legal
Proceedings", of this report. Late in the quarter, the Company took steps to
reduce its selling, general and administrative spending levels in response to
the decrease in net sales activity the Company is currently experiencing. The
Company expects that selling, general and administrative spending will
decrease in future periods in response to the decrease in net sales although
spending may increase as a percentage of net sales.
Purchased in-process research and development and amortization. In April 1998,
the Company completed the acquisition of the FluoroTrac product line from
Fluoroware, Inc. The transaction was recorded using purchase accounting in the
quarter ended June 30, 1998. In connection with the acquisition of FluoroTrac,
the Company recorded a write-off of $1.2 million of in-process research and
development (See the Notes to Condensed Consolidated Financial Statements) in
the quarter ended June 30, 1998. The remaining excess cost of purchase price
over net assets acquired of approximately $0.3 million is being amortized over
three to five years.
Other income, net. Other income, net, increased from $0.3 million during the
three months ended June 30, 1997 to $0.6 million during the three months ended
June 30, 1998. The increase in other income, net, resulted from higher average
cash, cash equivalents and short-term investments available during the period,
partially offset by lower royalty income due to the expiration of certain
license agreements during the prior fiscal year. The Company expects other
income, net, to decrease in future quarters as cash is used for acquisitions,
including the acquisition of Hine Design Incorporated, and the repurchase of
its common stock pursuant to its Stock Repurchase Program.
10
<PAGE>
RESULTS OF OPERATIONS (CONTINUED).
- ----------------------------------
Provision for income taxes. The Company's effective income tax rate was 36.0
percent for the three month periods ended June 30, 1998 and 1997. The rates were
based upon the Company's then current estimate of the effective tax rate for the
related fiscal year. The rate for the current fiscal year may change as the
estimate of pretax income and the impact of various tax benefits available to
the Company changes.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of June 30, 1998, the Company had approximately $88.0 million in cash, cash
equivalents and short-term investments and approximately $119.4 million of
working capital. In addition, under a working capital line of credit agreement
with a bank, the Company can borrow up to $20.0 million conditioned upon meeting
certain financial covenants, including maintaining specific levels of quarterly
and annual earnings, working capital, tangible net worth and liquidity. As of
June 30, 1998, there were no outstanding borrowings against the line of credit
and the Company was in compliance with all the financial covenants required by
the bank. Interest is at the bank's prime rate.
Subsequent to June 30, 1998, the Company completed its acquisition of Hine
Design Incorporated ("Hine Design"). The acquisition originally announced on
July 6, 1998, was structured as a purchase of all of the outstanding capital
stock of Hine Design for approximately $11.3 million in cash. In addition, the
Company granted options to purchase the Company's common stock in substitution
for outstanding , vested options to purchase capital stock of Hine Design worth
approximately $1.0 million and assumed certain liabilities of Hine Design of
approximately $11.7 million. Hine Design, a supplier of wafer-handling robots
for semiconductor process tools, is now a wholly owned subsidiary of the
Company.
Although the Company cannot anticipate with certainty the effect of inflation on
its operations, to date, inflation has not had a material impact on the
Company's net sales or results of operations. The functional currency of the
Company is the US dollar. To date, the impact of currency translation gains or
losses has not been material to the Company's sales or results of operations.
The nature of the semiconductor industry, combined with the current economic
environment, make it very difficult for the Company to predict future liquidity
requirements with certainty. However, the Company believes that its existing
cash, cash equivalents and short-term investments, cash generated from
operations and existing sources of working capital will be adequate to finance
its operations, planned acquisitions and stock repurchase plan through fiscal
year 1999.
IMPACT OF YEAR 2000 ISSUE
- -------------------------
As a result of many computer programs using two digits rather than four to
express dates, the performance of the Company's computer systems and those of
its suppliers and customers in the Year 2000 is uncertain. In conjunction with
expert third-party Year 2000 consultants, the Company is assessing and
implementing programs to address its potential exposures to the Year 2000
issue. With respect to its internal business systems, the Company is working
with the third-party vendors of such systems to ensure that Year 2000
compliance either exists today or will be achieved via vendor supplied
upgrades in a timely manner. The Company has adopted programs which it
continues to evaluate and modify to ensure Year 2000 compliance is met, for
both future shipments of its products and for its products already in the
current customer installed base. Many products have already been found to be
compliant, while others still may require further modification in order to be
compliant. Furthermore, the Company is addressing the potential impact to the
Company of non-compliance by any of its key suppliers or customers. The
Company's programs include communications with the Company's significant
suppliers and customers to determine the extent to which the Company is
vulnerable to any failures by them to address the Year 2000 issue. On a case
by case basis, where the Company determines that it may be at a material
adverse risk due to non-compliance by any of its key suppliers, the Company
may develop contigency plans for an alternate source of supply. The Company
expects to incur internal staff and engineering costs as well as consulting
and other expenses related to the Year 2000 project. At this time, these costs
of effecting any such product modifications, or the impact on the operations
of the Company should it or one of its suppliers be unable to successfully
address the Year 2000 issue, are not yet estimable but are believed to not be
material. Despite these efforts, there can be no assurance that the Year 2000
issue will not have a material adverse effect on the Company in the future.
11
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
In October 1996, the Company filed a lawsuit in the United
States District Court for the Northern District of California
against Jenoptik A.G. ("Jenoptik"), Jenoptik-Infab, Inc.
("Infab"), a joint venture comprised of Jenoptic, Emtrak, Inc.
(Emtrak") and Empak, Inc. ("Empak"), Emtrak and Empak alleging
infringements of two patents related to the Company's SMART
Traveler System(TM). The Company amended its Complaint in April
1997 to allege causes of action for breach of fiduciary duty
against Jenoptik and Meissner & Wurst, GmbH and
misappropriation of trade secrets and unfair business
practices against all defendants. The Company's Complaint
seeks damages and injunctive relief against further
infringement. All defendants have filed counter claims, seeking
a judgment declaring the patents invalid, unenforceable and
not infringed. Jenoptik, Infab, and Emtrak have also alleged
that the Company has violated federal antitrust laws. The
Company has denied these allegations. In May 1998, the Company
and Empak stipulated to a dismissal without prejudice of their
respective claims and counter claims against each other. A
trial date has been set for April 1999. While it is not
possible to predict accurately or to determine the eventual
outcome of these matters, the Company believes that the
outcome of these legal proceedings will not have a material
adverse effect on the financial position of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule
(b) Form 8-K
The Company filed a current report Form 8-K relating to
its adoption of a Shareholder Rights Plan on June 29,
1998
12
<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.
ASYST TECHNOLOGIES, INC.
Date: August 11, 1998 By: /s/ Douglas J. McCutcheon
---------------------- ----------------------------
Douglas J. McCutcheon
Senior Vice President
Chief Financial Officer
Signing on behalf of the registrant
and as the principal accounting and
financial officer
13
<PAGE>
EXHIBIT INDEX
Sequential
Page
Exhibit Number Description of Exhibit Number
- -------------- ---------------------- ------
27.1 Financial Data Schedule 15
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE THREE MONTHS ENDED JUNE 30, 1998 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-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 6,280
<SECURITIES> 81,735
<RECEIVABLES> 22,298
<ALLOWANCES> 1,066
<INVENTORY> 22,799
<CURRENT-ASSETS> 144,056
<PP&E> 22,212
<DEPRECIATION> 11,079
<TOTAL-ASSETS> 157,171
<CURRENT-LIABILITIES> 24,678
<BONDS> 0
0
0
<COMMON> 116,461
<OTHER-SE> 16,032
<TOTAL-LIABILITY-AND-EQUITY> 157,171
<SALES> 34,073
<TOTAL-REVENUES> 34,073
<CGS> 17,603
<TOTAL-COSTS> 17,603
<OTHER-EXPENSES> 14,558
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17
<INCOME-PRETAX> 2,463
<INCOME-TAX> 887
<INCOME-CONTINUING> 1,576
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,576
<EPS-PRIMARY> 0.13
<EPS-DILUTED> 0.12
</TABLE>
