<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 23, 2000
ASYST TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
000-22430 94-2944251
(Commission File No.) (IRS Employer Identification No.)
48761 Kato Road
Fremont, California 94538
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (510) 661-5000
<PAGE>
Item 2. Acquisition or Disposition of Assets
On March 23, 2000, Asyst Technologies, Inc. ("Asyst") completed the second phase
of its acquisition of a majority interest in Mecs Corporation, a Japanese
corporation ("Mecs") by acquiring an additional 68.7 percent of the common stock
of Mecs in exchange for $9.8 million in cash, excluding transaction costs of
approximately $800,000. Originally announced on September 22, 1999, the
transaction was structured as a staged acquisition, with Asyst acquiring 9.9
percent of the common stock of Mecs in exchange for $1.5 million in cash,
excluding transaction costs of approximately $300,000. Under the terms of the
purchase agreement, Asyst agreed to move to a majority ownership position upon
attainment by Mecs of certain business objectives and has the right to purchase
100 percent of the outstanding common stock of Mecs. Based in Nagoya, Mecs is
one of Japan's leading suppliers of robotic systems used to automate
sophisticated semiconductor and flat panel display manufacturing equipment.
Such transaction was reported by Asyst on a Form 8-K report filed on April 7,
2000, as amended on June 6, 2000. Asyst is further amending such report on Form
8-K for the purpose of filing additional financial statements required to be
filed with such reports, as requested by the staff.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of businesses acquired
Audited Consolidated Financial Statements of Mecs Corporation as of and for the
year ended March 31, 1999.
Unaudited Condensed Consolidated Financial Statements of Mecs Corporation as of
and for the nine months ended December 31, 1999 and 1998.
(b) Pro forma financial information
Unaudited Pro Forma Condensed Combined Balance Sheet of Asyst Technologies, Inc.
and Mecs Corporation as of December 31, 1999.
Unaudited Pro Forma Combined Statements of Operations of Asyst Technologies,
Inc. and Mecs Corporation for the nine months ended December 31, 1999 and for
the year ended March 31, 1999.
Unaudited Notes to Pro Forma Combined Financial Statements of Asyst
Technologies, Inc.
(c) Exhibits
Exhibit No. Description
----------- -----------
2.1* Agreement for Sale and Purchase of Common Stock, dated as of
September 27, 1999, between the Registrant and MECS
Corporation.
2.2* Amendemnt Agreement, dated as of March 23, 2000.
4.1* Reference is made to Exhibits 2.1 and 2.2.
99.1* Press release announcing the minority ownership position in
MECS.
99.2* Press release announcing the majority ownership position in
MECS.
_______________
* Previously filed.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ASYST TECHNOLOGIES, INC.
By: /s/ Mihir Parikh
--------------------------------
Mihir Parikh
Chief Executive Officer
2
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of
Mecs Corporation:
Nagoya, Japan
We have audited the accompanying consolidated balance sheet of Mecs Corporation
and subsidiaries (the "Company") as of March 31, 1999, and the related
consolidated statements of operations, shareholders' deficit, and cash flows for
the year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.
Except as discussed in the following paragraph, we conducted our audit in
accordance with generally accepted auditing standards in the United States of
America. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
Net current assets of discontinued operations in the accompanying consolidated
balance sheet as of March 31, 1999, includes (Yen)231,437 thousand, and
Discontinued Operations in the accompanying statement of operations for the year
ended March 31, 1999, includes (Yen)107,606 thousand, related to Intertec Inc.,
a subsidiary sold on December 28, 1999. We were engaged to audit the
consolidated financial statements subsequent to the sale of Intertec. The buyer
has not agreed to provide us access to books and records of Intertec, and we
were not able to satisfy ourselves as to the net current assets or the income
from discontinued operations of Intertec Inc., by other auditing procedures.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we been able to obtain sufficient
evidence regarding the net assets, and income from discontinued operations, the
financial statements referred to in the first paragraph above present fairly, in
all material respects, the financial position of the Company as of March 31,
1999, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles in the United
States of America.
DELOITTE TOUCHE TOHMATSU
May 26, 2000
3
<PAGE>
MECS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
Thousands of U.S.
Thousands of Yen Dollars (Note 1)
----------------- ----------------
<S> <C> <C>
ASSETS
Current Assets:
Cash (Yen) 776,266 $ 6,415
Time deposits (Note 5) 196,268 1,622
Trade receivables-
Notes (Note 5) 624,816 5,164
Accounts 801,089 6,621
Allowance for doubtful receivables (33,512) (277)
Inventories (Note 3) 1,206,796 9,974
Prepaid expenses and other 61,721 510
Net current assets of discontinued operations (Notes 10 and 15) 228,348 1,887
---------- -------
Total current assets 3,861,792 31,916
---------- -------
Property and Equipment (Notes 4 and 5):
Land 248,700 2,055
Building and improvement 1,299,365 10,739
Machinery and equipment 477,127 3,943
---------- -------
2,025,192 16,737
Accumulated depreciation (939,573) (7,765)
---------- -------
Property and equipment, net 1,085,619 8,972
---------- -------
Investments and Other Assets:
Securities investments (Note 6) 13,530 112
Investments in and advances to affiliated companies (Note 7) 633,600 5,236
Other assets 87,586 724
Allowance for doubtful receivables (644,743) (5,328)
---------- -------
89,973 744
---------- -------
Total (Yen) 5,037,384 $ 41,632
========== =======
(Continued)
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these statements.
<PAGE>
MECS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
<TABLE>
<CAPTION>
Thousands of U.S.
Thousands of Yen Dollars (Note 1)
---------------- -----------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Short-term debt (Notes 5 and 8) (Yen) 2,138,000 $ 17,669
Current portion of long-term debt (Notes 5 and 8) 141,321 1,168
Trade notes and accounts payable 1,731,721 14,312
Advances from customers 388,176 3,208
Other current liabilities 334,953 2,768
----------- --------
Total current liabilities 4,734,171 39,125
----------- --------
Long-term Liabilities:
Long-term debt, net of current portion
(Notes 5 and 8) 645,399 5,334
Other long-term liabilities (Note 9) 228,308 1,887
----------- --------
Total long-term liabilities 873,707 7,221
----------- --------
Minority Interest 15,224 126
----------- --------
Commitments and Contingent Liabilities (Note 12)
Shareholders' Deficit (Note 13):
Common stock, par value (Yen)50 per share;
Authorized - 17,736,000 shares
Outstanding - 5,270,400 shares 928,700 7,675
Additional paid-in capital 737,200 6,093
Legal reserve 127,135 1,051
Accumulated deficit (2,370,924) (19,594)
Accumulated other comprehensive loss (7,829) (65)
----------- --------
Total shareholders' deficit (585,718) (4,840)
----------- --------
Total (Yen) 5,037,384 $ 41,632
=========== ========
(Concluded)
</TABLE>
The accompanying notes to consolidated financial statements are
an integral part of these statements.
<PAGE>
MECS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Thousands of U.S.
Thousands of Yen Dollars Note 1
---------------- -----------------
<S> <C> <C>
Net Sales (Yen) 4,641,919 $ 38,363
Cost of Sales 4,198,208 34,696
Impairment of Long-Lived Assets (Note 4) 446,716 3,692
---------- ----------
Gross loss (3,005) (25)
Selling, General and Administrative Expenses 1,223,958 10,115
Research and Development 44,274 366
---------- ----------
Total operating expenses 1,268,232 10,481
---------- ----------
Operating loss (1,271,237) (10,506)
---------- ----------
Other Income (Expenses):
Interest expense (47,896) (396)
Other, net 50,528 418
---------- ----------
Other income, net 2,632 22
---------- ----------
Loss from Consolidated Operations before Income Taxes and Minority
Interest (1,268,605) (10,484)
---------- ----------
Income Taxes (Note 11):
Current (51,780) (428)
Deferred - -
---------- ----------
Total (51,780) (428)
---------- ----------
Loss from Consolidated Operations (1,320,385) (10,912)
---------- ----------
Minority Interests in Net Loss of Consolidated Subsidiaries 19 -
---------- ----------
Loss from Consolidated Companies (1,320,366) (10,912)
---------- ----------
Equity in Loss of Affiliated Companies (56,078) (464)
---------- ----------
Net Loss from Continuing Operations (1,376,444) (11,376)
---------- ----------
Discontinued Operations (Note 10):
Income from operations, net of applicable income taxes 101,662 840
Loss on disposal, net of applicable income taxes (15,651) (129)
---------- ----------
86,011 711
---------- ----------
Net Loss (Yen) (1,290,433) $ (10,665)
========== ==========
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
6
<PAGE>
MECS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Thousands of U.S.
Thousands of Yen Dollars (Note 1)
---------------- -----------------
<S> <C> <C>
Common Stock:
Balance, beginning of year (Yen) 928,700 $ 7,675
---------- --------
Balance, end of year (Yen) 928,700 $ 7,675
========== ========
Additional Paid-in Capital:
Balance, beginning of year (Yen) 737,200 $ 6,093
---------- --------
Balance, end of year (Yen) 737,200 $ 6,093
========== ========
Legal Reserve:
Balance, beginning of year (Yen) 124,500 $ 1,029
Transfer to legal reserve 2,635 22
---------- --------
Balance, end of year (Yen) 127,135 $ 1,051
========== ========
Accumulated Deficit:
Balance, beginning of year (Yen)(1,051,503) $ (8,690)
Net loss (1,290,433) (10,665)
Dividend paid (26,353) (217)
Transfer to legal reserve (2,635) (22)
---------- --------
Balance, end of year (Yen)(2,370,924) $(19,594)
========== ========
Accumulated Other Comprehensive Income (Loss):
Balance, beginning of year (Yen) 25,443 $ 210
Other comprehensive loss (33,272) (275)
---------- --------
Balance, end of year (Yen) (7,829) $ (65)
========== ========
</TABLE>
MECS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
Thousands of U.S.
Thousands of Yen Dollars (Note 1)
---------------- -----------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss
(Yen)(1,290,433) $ (10,665)
Adjustments to reconcile net loss to net cash used in operating activities:
Income from operations of discontinued operations (101,662) (840)
Loss from disposal of discontinued operations 15,651 129
Change in net current assets of discontinued operations 98,934 818
Depreciation and amortization expenses 98,312 812
Impairment of long-lived assets 446,716 3,692
Increase in loss valuation allowances 112,943 933
Change in current assets and liabilities:
Trade receivables 508,041 4,199
Other receivables 105,268 870
Inventories 453,446 3,747
Trade payables (108,426) (896)
Advances from customers (806,712) (6,667)
Other, net 97,303 805
--------- -------
Net cash used in operating activities (370,619) (3,063)
--------- -------
Cash Flows from Investing Activities:
Collection of loans receivable 86,314 713
Net decrease in time deposits 66,108 546
Other, net 55,709 461
--------- -------
Net cash provided by investing activities 208,131 1,720
--------- -------
Cash Flows from Financing Activities:
Net increase in short-term debt, 500,000 4,132
Proceeds form long-term debt 185,420 1,532
Repayment of long-term debt (142,900) (1,181)
Cash dividends paid (26,353) (217)
--------- -------
Net cash provided by financing activities 516,167 4,266
--------- -------
Effect of Exchange Rate Changes on Cash (Yen) (31,063) $ (257)
--------- -------
Net Change in Cash 322,616 2,666
Cash, Beginning of Year 453,650 3,749
--------- -------
Cash, End of Year (Yen) 776,266 $ 6,415
========= =======
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for-
Interest (Yen) 45,019 $ 372
Income taxes 36,670 303
</TABLE>
The accompanying notes to consolidated financial statements are an integral part
of these statements.
7
<PAGE>
MECS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 1999
1. BASIS OF PRESENTING FINANCIAL STATEMENTS
Mecs Corporation (Mecs) is a Japanese corporation engaged in the manufacture of
robotic systems used to automate sophisticated semiconductor and flat panel
display manufacturing equipment. Mecs primarily markets its systems in Japan,
Taiwan, and Korea.
The accompanying consolidated financial statements are stated in Japanese yen,
the currency of the country in which Mecs is incorporated and principally
operates. The translation of Japanese yen amounts with respect to March 31,
1999 is included solely for the convenience of readers outside Japan and have
been made at the rate of (Yen)121 = $1, the approximate rate of exchange on
March 31, 1999. Such translation should not be construed as a representation
that the Japanese yen amounts could be converted into United States dollars at
the above or any other rate.
The accompanying consolidated financial statements have been prepared on the
basis of accounting principles generally accepted in the United States of
America. In certain respects, effect has been given in the consolidated
financial statements to adjustments that have not been entered in the companies'
general books of account, which are maintained principally in accordance with
accounting practices prevailing in the countries of incorporation. The major
adjustments include accruals for certain expenses, pension cost and liabilities,
valuation of securities and the recognition of capital leases.
Business and Credit Concentration
The Company's three largest customers accounted for 14.6%, 8.5% and 7.0% of
sales during the year ended March 31, 1999. The Company reviews a customer's
credit history before extending credit and continuously evaluates its accounts
receivable for collectability. The Company establishes an allowance for
doubtful accounts based upon factors surrounding the credit risk of specific
customers, historical trends, and other information. To reduce credit risk, the
Company generally requires a down payment on international sales.
2. SIGNIFICANT ACCOUNTING AND REPORTING POLICIES
Consolidation and Investment in affiliated companies
The consolidated financial statements include the accounts of Mecs Corporation
and its majority-owned subsidiaries (the "Company"). Affiliated companies
consist of companies owned 20% to 50%. Investments in affiliated companies are
accounted for by the equity method of accounting. All significant intercompany
balances and transactions have been eliminated in consolidation. The accounts
of certain subsidiaries have been included on the basis of financial
information as of December 31, 1998. The ownership of other interest holders is
reflected as minority interest.
8
<PAGE>
Foreign Currency Translation
Foreign currency financial statements have been translated in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 52, "Foreign Currency
Translation." Pursuant to this statement, the assets and liabilities of foreign
subsidiaries and affiliated companies are translated into Japanese yen at the
year-end exchange rate. All income and expense accounts are translated at
average rates of exchange. The resulting translation adjustments are included
in accumulated other comprehensive loss.
Foreign currency receivables and payables are translated into Japanese yen at
year-end exchange rates and resulting exchange gains or losses are recognized in
earnings, which totaled (Yen)729 thousand ($6 thousand) for the year ended March
31, 1999.
Cash flow information
For the purposes of statement of cash flows, the Company does not consider short
term investments, such as time deposits, to be cash equivalents.
Allowance for doubtful receivables
An allowance for doubtful receivables is established in amounts considered to be
appropriate based primarily upon the companies' past credit loss experience and
an evaluation of potential losses in the receivables outstanding.
Inventories
Inventories are mainly stated at the lower of average cost or market Inventory
costs include raw materials, labor and manufacturing overhead.
Depreciation
Depreciation of property and equipment is computed principally under the
declining-balance method for assets held by the parent company and domestic
subsidiaries and under the straight-line method for assets held by foreign
subsidiaries, based on the estimated useful lives of the assets.
Securities Investments
As of March 31, 1999, the Company's long-term securities investments include
equity securities. Such investments have been classified as "available-for-
sale" and are carried at fair value, with unrealized holding gains and losses,
net of taxes, included in accumulated other comprehensive loss in shareholders'
deficit. There have been no declines in value that are considered to be other
than temporary as of March 31, 1999.
9
<PAGE>
Employees' benefit plans
Pension costs, with certain minor exceptions, have been determined in accordance
with the provisions of SFAS No. 87, "Employees' Accounting for Pensions."
Revenue Recognition
Revenues are generally recognized upon delivery and acceptance of products by
the customers, as such sales depend on customer approval.
Research and Development and Advertising Costs
Expenses relating to research and development activities are charged to income
as incurred and totaled (Yen)44,274 thousand ($366 thousand) for the year ended
March 31, 1999.
Advertising costs are charged to income as incurred, and totaled (Yen) 36,038
thousand ($297 thousand) for the year ended March 31, 1999.
Income Taxes
In accordance with SFAS No.109, "Accounting for Income Taxes", the Company
follows an asset and liability approach for financial accounting and reporting
for income taxes. No provision for income taxes is recognized on undistributed
earnings of subsidiaries where the parent company considers that such earnings
are reinvested or would not, under the present Japanese tax laws, be subject to
additional taxation should they be distributed as dividends.
Disclosures About Fair Value of Financial Instruments
The carrying amounts of cash and cash equivalents and accrued liabilities
approximate fair value because of the short-term maturities of these financial
instruments. The carrying amounts of long-term debt approximate their fair
values based on interest rates currently available to the Company for borrowings
with similar terms and maturities.
Impairment of Long-Lived Assets
The Company reviews its long-lived assets to be held and used for possible
impairment, based on the undiscounted cash flows expected to be generated
therefrom, whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Any impaired assets are
recorded at the lower of their carrying amount or fair value. Long-lived assets
to be disposed of are reported at the lower of their carrying amount or fair
value less cost to sell.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the consolidated financial
10
<PAGE>
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
New Accounting Standards
In June 1998, the Financial Accounting Standards Board, ("FASB"), issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities", ("FAS 133"). This statement establishes a
new model for accounting for derivatives and hedging activities. Under FAS 133,
all derivatives must be recognized as assets and liabilities and measured at
fair value. In July 1999, the FASB issued Statement of Accounting Standards No.
137 "Accounting for Derivative Instruments and Hedging Activities- Deferral of
the Effective Date of FASB Statement No. 133" which defers the effective date to
the Company's first quarter of 2001. The adoption of FAS 133 is not expected to
have a significant impact on the Company'sconsolidated financial position or
results of operations, or cash flows.
In January 1999, the American Institute of Certified Public Accountants issued
Statement of Position No. 98-9, ("SOP 98-9"), "Modification of SOP 97-2,
'Software Revenue Recognition,' with Respect to Certain Transactions." This SOP
extends the deferral of the application of certain provisions of SOP 97-2 to
thefirst quarter of the Company's fiscal 2000. The adoption of SOP 98-9 is not
expected to have a significant impact on the Company's consolidated financial
position, results of operations, or cash flows
3. INVENTORIES
As of March 31, 1999 inventories were comprised of the following:
Thousands of Thousands of
Yen U.S. Dollars
------------- ------------
Finished goods (Yen) 106,632 $ 881
Work in process 1,022,394 8,450
Raw materials and parts 77,770 643
---------- -------
(Yen) 1,206,796 $ 9,974
========== =======
4. IMPAIRMENT OF LONG-LIVED ASSETS
In accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of" ("SFAS No. 121") the Company
recorded a non-cash pre-tax charge of (Yen)446,716 thousand ($3,692 thousand)
related to property and equipment. This change reduced substantially all
property and equipment of Mecs to their fair value, determined based on an
independent appraisal. Factors leading to impairment were a combination of
historical losses, anticipated future losses and inadequate cash flows.
11
<PAGE>
5. PLEDGED ASSETS
As of March 31, 1999, assets pledged as collateral for short-term debt and long-
term debt are as follows:
<TABLE>
<CAPTION>
Thousands of Thousands of
Yen U.S. Dollars
--------------- ------------
<S> <C> <C>
Time deposits (Yen) 196,268 $ 1,622
Trade notes receivable 503,732 4,163
Property, plant and equipment (net of accumulated
depreciation) 668,436 5,524
Land 248,700 2,055
--------- --------
Total (Yen) 1,617,136 $ 13,364
========= ========
</TABLE>
The above pledged assets were classified by type of liabilities to which they
relate as follows:
<TABLE>
<CAPTION>
Thousands of Thousands of
Yen U.S. Dollars
--------------- ------------
<S> <C> <C>
Liabilities appearing in the Consolidated Balance Sheet as:
Short-term debt (Yen) 1,883,000 $15,562
Long-term debt 480,000 3,967
--------- -------
Total (Yen) 2,363,000 $19,529
========= =======
</TABLE>
6. SECURITIES INVESTMENTS
As of March 31, 1999, securities investments consisted of equity securities
classified as available-for-sale, with a cost of (Yen)14,082 thousand ($116
thousand) and unrealized holding losses of (Yen)552 thousand ($4 thousand).
7. INVESTMENTS IN AND ADVANCES TO AFFILIATED COMPANIES
At March 31, 1999, investments in and advances to affiliated companies were
comprised of the following:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
1999 1999
------------ ------------
Investments in capital stock (Yen) 8,380 $ 69
Advances 625,220 5,167
------- ------
Total (Yen) 633,600 $5,236
======= ======
12
<PAGE>
Summarized financial information for affiliated companies at March 31, 1999 and
for the year then ended is as follows:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Current assets (Yen) 854,556 $ 7,062
Net property, plant and equipment 30,574 253
Other assets 10,285 85
------- -------
Total assets (Yen) 895,415 $ 7,400
------- -------
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Current liabilities (Yen) 971,747 $ 8,031
Noncurrent liabilities 665,220 5,498
Shareholders' deficit (741,552) (6,129)
--------- -------
Total liabilities and shareholders' deficit (Yen) 895,415 $ 7,400
--------- -------
Thousands of Thousands of
Yen U.S. Dollars
------------- ------------
Net sales (Yen)1,141,906 $ 9,437
--------- -------
Net loss (Yen) (85,350) (705)
--------- -------
Account balances and transactions with affiliated companies at March 31, 1999
are presented below:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Advances (Yen) 625,220 $ 5,167
--------- -------
Accounts payable, trade (Yen) 479,476 $ 3,963
--------- -------
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Purchases (Yen)1,090,114 $ 9,009
--------- -------
Other Income, net (Yen) 20,892 $ 173
--------- -------
8. SHORT-TERM AND LONG-TERM DEBT
Short-term debt consisted primarily of borrowings from banks. As of March 31,
1999, the weighted average interest rate on the borrowings was 1.6%.
Certain subsidiaries of the Company had unused lines of credit for the short-
term borrowings amounting to (Yen)57,000 thousand ($471 thousand) as of March
31, 1999.
13
<PAGE>
As of March 31, 1999, long-term debt consisted of the following:
<TABLE>
<CAPTION>
Thousands of Thousands of
Yen U.S. Dollars
-------------- ------------
<S> <C> <C>
1.4% secured straight bonds due in fiscal 2001 (Yen) 480,000 $ 3,967
1.7% - 1.9% unsecured loans from banks and due in
fiscal 2000 through 2004 217,420 1,797
Capital lease obligations 89,300 738
-------- ------
Total 786,720 6,502
Less current portion included 141,321 1,168
-------- ------
(Yen) 645,399 $ 5,334
======== ------
</TABLE>
The aggregate annual maturities of long-term debt subsequent to March 31, 2000,
are summarized below:
Thousands of Thousands of
Year ending March 31, Yen U.S. Dollars
---------------------------- ------------ ------------
2001 (Yen) 554,883 $ 4,586
2002 37,994 314
2003 31,072 257
2004 21,450 177
------- ---------
(Yen) 645,399 $ 5,334
------- ---------
As of March 31, 1999, the aggregate cost and related accumulated depreciation of
capitalized leased assets included in property and equipment were as follows:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Aggregate cost (Yen) 188,300 $1,556
Accumulated depreciation (99,400) (821)
9. PENSION PLANS
The Company has a trusted non-contributory welfare pension plan covering
substantially all of its employees. The plan provides benefits based upon
length of service and compensation at the time of retirement or termination.
The Company's funding policy is to contribute monthly the amounts actuarially
determined that would provide sufficient assets for projected benefit
obligations. The plan's assets are invested primarily in interest-bearing
securities and marketable equity securities.
14
<PAGE>
Net periodic pension cost included the following components:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Service cost-benefit earned during the year (Yen) 10,657 $ 8
Interest cost on projected benefit obligation 1,122 9
Expected return on plan assets (321) (2)
Recognized actuarial gain (87) (1)
------ ---
Net periodic pension cost (Yen) 11,371 $94
------ ---
The following table set forth changes in the projected benefit obligation and
fair value of plan assets, and a reconciliation of the funded status of the
plans at March 31, 1999:
<TABLE>
<CAPTION>
Thousands of Thousands of
Yen U.S. Dollars
-------------- -------------
<S> <C> <C>
Change in projected benefit obligation:
Projected benefit obligation at beginning of year (Yen) 32,071 $ 265
Service cost 10,657 88
Interest cost 1,122 9
Actuarial loss (538) (4)
------ ------
Projected benefit obligation at end of year (Yen) 43,312 $ 358
------ ------
Change in plan assets:
Fair value of plan assets at beginning of year (Yen) 9,728 $ 80
Actual return on plan assets (37) (-)
Employer contributions 2,045 17
------ ------
Fair value of plan assets at end of year (Yen) 11,736 $ 97
------ ------
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Reconciliation of funded status and net amount recognized
in the consolidated balance sheet:
Funded status (Yen)(31,575) $(261)
Unrecognized net actuarial loss (179) (1)
------------ -----
Net amount recognized (Yen)(31,754) $(262)
============ =====
Amounts recognized in the consolidated balance sheet
consist of:
Accrued pension liability (Yen)(31,754) $(262)
------------ -----
Net amount recognized (Yen)(31,754) $(262)
============ =====
Actuarial assumptions:
Discount rate 3.5%
Assumed rate of increase in future compensation levels 3.7%
</TABLE>
15
<PAGE>
Expected long-term rate on plan assets 3.3%
Accumulated benefit obligation of the plan was (Yen)40,292 thousand ($333
thousand) as of March 31, 1999.
10. DISCONTINUED OPERATIONS
During the year ended March 31, 2000, subsequent to the current fiscal year, the
Company sold its subsidiaries, Mecs Medical Inc., Mecs System Inc., and Intertec
Inc. These subsidiaries have been accounted for as discontinued operations in
the accompanying consolidated financial statements. The net assets of these
subsidiaries at March 31, 1999 consisted primarily of trade receivables and
inventories.
Net sales applicable to the discontinued operations totaled (Yen)1,803,720
thousand ($14,907 thousand ) during the year ended March 31,1999. The Company
recorded total gains from discontinued operations of (Yen)86,011 thousand ($711
thousand), net of income tax of (Yen)11,272 thousand ($93 thousand), which
consisted of income from operations of (Yen)101,662 thousand ($840 thousand) and
losses from disposals of (Yen)15,651 thousand ($129 thousand) for the year ended
March 31, 1999.
Net current assets of discontinued operations and income from discontinued
operations, net of applicable income taxes, in the accompanying consolidated
financial statements include amount for Intertec Inc. of (Yen)231,437 thousand
($1,913 thousand) and (Yen)107,606 thousand ($889 thousand), net of income tax
expenses of (Yen)10,841 thousand ($90 thousand), respectively. The sale of
Intertec Inc. was completed on December 28, 1999 for proceeds of (Yen)128,640
thousand ($1,063 thousand). The Company's initial investment in Intertec was
(Yen)40,200 thousand ($332 thousand).
11. INCOME TAXES
Income (loss) before income taxes and the provision for income taxes for the
year ended March 31, 1999 were as follows:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Income (loss) before income taxes:
Domestic (Yen) (1,295,491) $(10,706)
Foreign 26,886 222
---------- --------
(Yen) (1,268,605) $(10,484)
---------- --------
Provision for income taxes:
Current:
Domestic (Yen) 38,737 $ 320
Foreign 13,043 108
---------- --------
51,780 428
---------- --------
Deferred:
Domestic - -
Foreign - -
---------- --------
- -
---------- --------
Consolidated provision for
income taxes (Yen) 51,780 $ 428
---------- --------
The Company's provision for income taxes differs from the expected tax benefit
amount, determined by applying the normal statutory income tax rate of 46.7% to
the loss before income taxes, primarily as a result of the application of a
valuation allowance against deferred tax assets.
Effective April 1, 1999, the normal statutory income tax rate decreased from
46.7% to 41.4% in accordance with a change in the Japanese corporate income tax
law. The effect of the changes in the tax rate on the balance of deferred tax
assets reduced the net deferred tax assets by approximately (Yen)56,810 thousand
($470 thousand) as of March 31, 1999, which was fully offset by a corresponding
change in the valuation allowance
16
<PAGE>
Significant components of the deferred income tax assets and liabilities as of
March 31, 1999 were as follows:
Thousands of Thousands of
Yen U.S. Dollars
------------ ------------
Deferred tax assets:
Accounts receivable allowance (Yen) 194,116 $ 1,604
Inventory reserves 270,382 2,235
Impairment of long-lived assets 184,225 1,523
Net operating loss carryforwards 334,972 2,768
Accrued warranty 30,514 252
Estimated loss on contracts 37,528 310
Other temporary differences 59,541 492
---------- -------
Total deferred income tax assets 1,111,278 9,184
Valuation allowance (1,111,278) (9,184)
---------- -------
Deferred tax asset (Yen) - $ -
---------- -------
The valuation allowance was established to reduce the deferred tax assets to the
amount that is expected to be realized. The net change in the total valuation
allowance for the year ended March 31, 1999 was an increase of (Yen)539,762
thousand ($4,461 thousand).
At March 31, 1999, the Company had net operating loss carryforwards of
approximately (Yen)812,247 thousand ($6,713 thousand) available to offset future
federal taxable income in the Companies consolidated income tax returns through
2004.
As of March 31, 1999, the amount of undistributed earnings of foreign
subsidiaries on which a deferred tax liability has not been recorded in the
accompanying consolidated balance sheet aggregated (Yen)28,361 thousand ($234
thousand). Determination of the deferred tax liability related to the
undistributed earnings of foreign subsidiaries is not practicable.
12. COMMITMENTS AND CONTINGENT LIABILITES
At March 31,1999, the Company was contingently liable as guarantor of
indebtedness of an affiliated company in the amount of (Yen)770,000 thousand
($6,364 thousand).
The Company and consolidated subsidiaries made rental payments of (Yen)19,200
thousand ($159 thousand) under noncancelable operating lease agreements for
offices, warehouses, automobiles and office equipment during the year ended
March 31, 1999.
17
<PAGE>
The minimum future rental payments required under noncancelable operating lease
agreements as of March 31, 1999 were as follows:
Thousands of Thousands of
Year ending March 31, Yen U.S. Dollars
----------------------- ------------ ------------
2000 (Yen) 19,200 $ 159
2001 19,200 159
2002 19,200 159
2003 9,300 77
------- ----
(Yen) 66,900 $ 554
13. SHAREHOLDERS' DEFICIT
The Japanese Commercial Code (the "Code") provides that an amount equal to at
least 10% of cash dividends paid and other cash outlays resulting from
appropriation of retained earnings with respect to each fiscal period be
transferred to the legal reserve until such reserve equals 25% of the stated
capital. This reserve and additional paid-in capital are not available for
dividends but may be used to reduce a deficit by resolution of the shareholders
or may be capitalized by resolution of the Board of Directors.
14. ACCUMULATED OTHER COMPREHENSIVE LOSS
Other comprehensive loss consisted of foreign currency translation adjustments,
with no related tax benefit or expense. Unrealized holding gains or losses on
securities investments were insignificant as of March 31, 1999.
15. SUBSEQUENT EVENT
The Company sold its subsidiaries, Intertec Inc., Mecs Systems Inc., and Mecs
Medical Inc., in December 1999, January 2000, and January 2000, respectively,
and sold its investment in Technowave Inc., an affiliate, in March 2000. The
subsidiaries and affiliate were sold for the aggregate amount of (Yen)138,160
thousand ($1,142 thousand). Intertec Inc., Mecs Systems Inc., and Mecs Medical
Inc., are accounted for as discontinued operations in the accompanying
consolidated financial statements (Note 10).
On April 20, 1999, Mecs purchased the remaining 55% of the common stock of
Mecs Hatta Inc. that it did not already own, in exchange for (Yen)20,000
thousand ($163 thousand) in cash. As a result of this transaction, Mecs Hatta
Inc., became a wholly-owned subsidiary of Mecs, and changed its name to Mecs
Material Inc., as of May 6, 1999.
On March 23, 2000, Asyst Technologies, Inc. ("Asyst"), a California corporation,
completed the second phase of its acquisition of a majority interest in Mecs by
acquiring an additional 68.7 percent of the common stock of MECS in exchange for
$9.8 million in cash. Originally announced on September 22, 1999, the
transaction was structured as a staged acquisition, with Asyst acquiring 9.9
percent of the common stock of Mecs in exchange for $1.5 million in cash. Under
the terms of the purchase agreement, Asyst agreed to move to a majority
ownership position upon attainment by Mecs of certain business objectives and
has the right to purchase 100 percent of the outstanding common stock of Mecs.
18
page 18
<PAGE>
MECS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
(Unaudited)
Thousands of U.S.
Thousands of Yen Dollars
---------------- -----------------
ASSETS
Current assets:
Cash Yen 403,851 $ 3,959
Time deposits 233,755 2,292
Trade receivables-
Notes 564,691 5,536
Accounts 947,669 9,291
Allowance for doubtful receivables (9,419) (91)
Inventories 796,950 7,813
Prepaid expenses and other 178,181 1,746
---------- --------
Total current assets 3,115,678 30,546
---------- --------
Property and equipment:
Land 477,725 4,683
Building and improvement 1,539,159 15,090
Machinery and equipment 469,941 4,607
---------- --------
2,486,825 24,380
Accumulated depreciation (1,489,227) (14,600)
---------- --------
Property and equipment, net 997,598 9,780
---------- --------
Investments and Other Assets:
Securities investments 24,059 236
Other assets 95,948 941
---------- --------
120,007 1,177
---------- --------
Yen 4,233,283 $ 41,503
========== ========
See accompanying notes to condensed consolidated financial statements.
page 19
<PAGE>
MECS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
Thousands of Thousands of U.S.
Yen Dollars
------------ -----------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Short-term debt Yen 2,250,588 $ 22,065
Current portion of long-term debt 129,244 1,267
Trade notes and accounts payable 1,182,737 11,595
Advances from customers 88,493 868
Other current liabilities 356,418 3,494
----------- --------
Total current liabilities 4,007,480 39,289
----------- --------
Long-term Liabilities:
Long-term debt, net of current portion 855,144 8,384
Other long-term liabilities 43,072 422
----------- --------
Total long-term liabilities 898,216 8,806
----------- --------
Minority Interests 13,747 135
----------- --------
Shareholders' Deficit:
Common stock, par value Yen 50 per share;
Authorized - 21,081,600 shares
Outstanding - 5,270,400 shares 928,700 9,105
Additional paid-in capital 737,200 7,227
Legal reserve 127,135 1,246
Accumulated deficit (2,460,926) (24,127)
Accumulated other comprehensive loss (18,269) (178)
----------- --------
Total shareholders' deficit (686,160) (6,727)
----------- --------
Yen 4,233,283 $ 41,503
=========== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
20
<PAGE>
MECS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
AND 1998(Unaudited)
<TABLE>
<CAPTION>
1999 1998
----------------------------------- ---------------------------------
Thousands of
Thousands of Yen U.S. Dollars Thousands of Yen U.S. Dollars
---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
Net Sales Yen 4,394,258 $ 43,081 Yen 3,635,753 $ 31,343
Cost of Sales 3,778,052 37,040 3,337,799 28,774
---------------- ------------ ---------------- ------------
Gross Profit 616,206 6,041 297,954 2,569
Research and Development 32,407 318 48,872 422
Selling, General and Administrative Expenses 631,298 6,189 866,402 7,469
---------------- ------------ ---------------- ------------
Operating Loss (47,499) (466) (617,320) (5,322)
---------------- ------------ ---------------- ------------
Other Income (Expenses):
Interest income 14,049 138 15,066 130
Interest expense (42,787) (419) (33,949) (293)
Other, net (93,315) (915) 5,639 49
---------------- ------------ ---------------- ------------
Total 122,053 (1,196) (13,244) (114)
---------------- ------------ ---------------- ------------
Loss from Consolidated Operations before
Provision for Income Taxes, Minority
Interest and Equity Earnings (169,552) (1,662) (630,564) (5,436)
---------------- ------------ ---------------- ------------
Provision for Income Taxes:
Current 6,310 62 12,973 112
Deferred - - - -
---------------- ------------ ---------------- ------------
Total 6,310 62 12,973 112
---------------- ------------ ---------------- ------------
Loss from Continuing Operations Before
Minority Interest and Equity Earnings (175,862) (1,724) (643,537) (5,548)
---------------- ------------ ---------------- ------------
Minority Interest in Income of
Consolidated Subsidiaries 1,477 15 (4,400) (38)
---------------- ------------ ---------------- ------------
Loss from Continuing Operations before
Equity Earnings (174,385) (1,709) (647,937) (5,586)
---------------- ------------ ---------------- ------------
Equity in Earnings of Affiliated Companies 645 6 (15,579) (134)
---------------- ------------ ---------------- ------------
Net Loss from Continuing Operations (173,740) (1,703) (663,516) (5,720)
---------------- ------------ ---------------- ------------
Discontinued Operations:
Income from operations, net of
applicable income taxes 2,785 27 64,508 556
Gain on disposal, net of applicable
income taxes 80,953 794 - -
---------------- ------------ ---------------- ------------
Net Loss Yen (90,002) $ (882) Yen (599,008) $ (5,146)
================ ============ ================ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
page 21
<PAGE>
MECS CORPORATION AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
AND 1998(Unaudited)
<TABLE>
<CAPTION>
1999 1998
------------------------------- -----------------------------
Thousands of Thousands of Thousands of Thousands of
Yen U.S. Dollars Yen U.S. Dollars
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss Yen (90,002) $ (882) (599,008) (5,164)
Adjustments to reconcile net loss to net
cash provided by operating
activities-
Income from discontinued operations (2,785) (27) (64,508) (556)
Gain from discontinued operations (80,953) (794) - -
Change in net current assets of discontinued operation 312,086 3,059 95,428 823
Depreciation and amortization expenses 89,710 879 66,721 575
Change in provision for doubtful accounts (16,808) (165) 47,536 410
Excess of equity in losses of unconsolidated affiliates - - (25,525) (220)
Estimated retirement and termination allowances 9,013 88 15,902 137
Write-down of inventories (87,000) (853) (80,250) (692)
Change in current assets and liabilities-
Trade receivables 368,594 3,614 103,042 888
Accrued liabilities (27,349) (268) 109,395 943
Inventories 580,335 5,690 787,321 6,787
Trade payables (677,087) (6,638) (483,300) (4,166)
Advances from customers (326,014) (3,196) (838,920) (7,232)
Income tax payables (32,247) (316) (17,494) (151)
Other, net 67,379 661 64,689 558
------------ ------------ ----------- ------------
Net cash provided by operating activities 86,872 852 (818,971) (7,060)
------------ ------------ ----------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in cash and cash equivalents by the acquisition 224,755 2,204 - -
Purchase of property and equipment, net (33,125) (325) (4,681) (41)
Purchase of investments 451,993 4,431 26,550 229
Decrease in time deposits (37,487) (368) 74,235 640
Other, net (5,336) (52) 72,235 623
------------ ------------ ----------- ------------
Net cash provided by investing activities 600,800 5,890 168,339 1,451
------------ ------------ ----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in borrowings, net (1,049,864) (10,293) 683,372 5,891
Cash dividend paid - - (26,352) (227)
------------ ------------ ----------- ------------
Net cash used in financing activities (1,049,864) (10,293) 657,020 5,664
------------ ------------ ----------- ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH Yen (10,223) $ (100) (18,668) (161)
============ ============ =========== ============
NET CHANGE IN CASH AND CASH EQUIVALENTS (372,415) (3,651) (12,280) (106)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 776,266 7,610 453,650 3,911
------------ ------------ ----------- ------------
CASH AND CASH EQUIVALENTS,
END OF PERIOD Yen 403,851 $ 3,959 441,370 3,805
============ ============ =========== ============
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for
Interest Yen 40,047 $ 393
Income taxes 35,035 343
</TABLE>
See accompanying notes to condensed consolidated financial statements
page 22
<PAGE>
MECS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
(Unaudited)
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements include the
accounts of Mecs Corporation ("Mecs"), a Japanese corporation, and its majority-
owned subsidiaries. Affiliated companies consist of companies owned 20% to 50%.
Investments in affiliated companies are accounted for by the equity method of
accounting. All significant intercompany balances and transactions have been
eliminated in consolidation. The accounts of certain subsidiaries have been
included on the basis of financial information as of December 31, 1998 and 1997.
The ownership of other interest holders is reflected as minority interest. These
condensed consolidated financial statements have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission and, therefore,
do not include all information and footnotes necessary for presentation of
financial position, results of operations and cash flows required by accounting
principles generally accepted in the United States. In certain respects, effect
has been given to adjustments that have not been entered in the companies'
general books of account, which are maintained principally in accordance with
accounting practices prevailing in the countries of incorporation.
The unaudited condensed consolidated financial statements are stated in Japanese
yen, the currency of the country in which Mecs is incorporated and principally
operates. The translation of Japanese yen amounts with respect to December 31,
1999 and 1998 is included solely for the convenience of readers outside Japan
and have been made at the rate of Yen 102 = US$1 and Yen 116 = US$1, the rate
of exchange on December 31, 1999 and 1998. Such translation should not be
construed as a representation that the Japanese yen amounts could be converted
into Unites States dollars at the above or any other rate.
While the financial information furnished is unaudited, the condensed
consolidated financial statements included reflect all adjustments (consisting
only of normal recurring adjustments) which Mecs considers necessary for the
fair presentation of the results of operations for the interim period covered
and of the financial condition of Mecs at the date of the interim balance sheet.
The results for the interim period are not necessarily indicative of the results
for the entire year. The condensed consolidated financial statements should be
read in connection with the Mecs consolidated financial statements for the year
ended March 31, 1999 included under Item 7 (a) in this Report on Form 8-K.
ACQUISITION BY ASYST
On March 23, 2000, Asyst Technologies, Inc. ("Asyst"), a California corporation,
completed the second phase of its acquisition of a majority interest in Mecs by
acquiring an additional 68.7 percent of the common stock of MECS in exchange
for $9.8 million in cash. Originally announced on September 22, 1999, the
transaction was structured as a staged acquisition, with Asyst acquiring 9.9
percent of the common stock of Mecs in exchange for $1.5 million in cash. Under
the terms of the purchase agreement, Asyst agreed to move to a majority
ownership position upon attainment by Mecs of certain business objectives and
has the right to purchase 100 percent of the outstanding common stock of Mecs.
page 23
<PAGE>
DISCONTINUED OPERATIONS
During the nine months ending December 31, 1999, the Company sold its
subsidiary, Intertec Inc. This subsidiary has been accounted for as discontinued
operations in the accompanying consolidated financial statements.
Net sales applicable to the discontinued operations totaled (Yen)1,352,000
thousand ($13,263 thousand ) during the nine months ending December 31, 1999.
The Company recorded total gains from discontinued operations of (Yen)83,738
thousand ($821 thousand), net of income tax of (Yen)8,454 thousand ($83
thousand), which consisted of income from operations of (Yen)2,785 thousand ($27
thousand) and gain from disposals of (Yen)80,953 thousand ($794 thousand) for
the nine months ending December 31, 1999.
The subsidiaries were sold for in the aggregate amount of (Yen)128,640 thousand
($1,261 thousand).
page 24
<PAGE>
UNAUDITED PRO FORMA FINANCIAL INFORMATION
On March 23, 2000, Asyst Technologies, Inc. ("Asyst") completed the second phase
of its acquisition of a majority interest in Mecs Corporation, a Japanese
corporation ("Mecs") by acquiring an additional 68.7 percent of the common
stock of MECS in exchange for $9.8 million in cash, excluding transaction costs
of approximately $800,000. Originally announced on September 22, 1999, the
transaction was structured as a staged acquisition, with Asyst acquiring 9.9
percent of the common stock of Mecs in exchange for $1.5 million in cash,
excluding transaction costs of approximately $300,000. Under the terms of the
purchase agreement, Asyst agreed to move to a majority ownership position upon
attainment by Mecs of certain business objectives and has the right to purchase
100 percent of the outstanding common stock of Mecs.
The following unaudited pro forma combined financial statements give effect to
the acquisition under the purchase method of accounting. The pro forma combined
balance sheet assumes the acquisition took place on December 31, 1999 and
combines Asyst's unaudited consolidated balance sheet with Mecs's unaudited
consolidated balance sheet at that date. The pro forma combined statements of
operations assume that the acquisition took place as of the beginning of each of
the periods presented and combine Asyst's consolidated statement of operations
for the year ended March 31, 1999 and Asyst's unaudited consolidated statement
of operations for the nine months ended December 31, 1999 with the consolidated
statement of operations of Mecs for the year ended March 31, 1999 and the
unaudited consolidated statement of operations of Mecs for the nine months ended
December 31, 1999. The charge of $884,000 resulting from purchased in-process
research and development costs has been reflected in shareholders' equity in the
pro forma combined balance sheet at December 31, 1999. This charge has been
excluded from the pro forma combined statements of operations for the year ended
March 31, 1999 and for the nine months ended December 31, 1999. The balance
sheet of Asyst at December 31, 1999 includes the initial investment made in Mecs
and transaction costs incurred of $1.8 million.
These pro forma combined financial statements should be read in conjunction with
the historical consolidated financial statements and the related notes of Asyst,
which were previously reported in Asyst's 1999 Annual Report to Shareholders and
Asyst's Quarterly Report on Form 10-Q for the fiscal quarter ended December 31,
1999, and of Mecs (see Item 7(a)). Certain historical information of Mecs has
been classified to conform to the classification of Asyst.
The unaudited pro forma adjustments are based upon preliminary estimates and
certain assumptions that management of Asyst believes are reasonable in the
circumstances. The actual adjustments may be revised upon completion of the
purchase price allocation. Other than to reflect the actual operating results
of Mecs for the three months ended March 31, 2000, which will have an impact
on purchase price allocation, management of Asyst does not believe that actual
adjustments will be materially different from the preliminary estimates.
The pro forma information is presented for illustrative purposes only and is not
necessarily indicative of operating results or financial position that would
have occurred if the acquisition had been consummated as of the dates indicated,
nor is it necessarily indicative of future operating results or financial
position.
page 25
<PAGE>
ASYST TECHNOLOGIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1999
(Unaudited, In thousands)
<TABLE>
<CAPTION>
Pro forma
Asyst Mecs Adjustments Pro forma Combined
--------- ---------- ------------- --------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 95,291 $ 3,959 $ (9,843) (1) $ 89,407
Short-term investments 11,960 2,292 14,252
Accounts receivable, net 44,911 9,200 54,111
Inventories 34,616 7,813 42,429
Deferred tax asset 16,238 - 16,238
Prepaid expenses and other current
assets 7,063 8,116 15,179
--------- ---------- ------------- --------------------
Total current assets 210,079 31,380 (9,843) 231,616
--------- ---------- ------------- --------------------
Property and equipment, net 15,181 9,780 24,961
Other assets, net 20,117 - 16,746 (2) 35,044
(1,819) (3)
--------- ---------- ------------- --------------------
$245,377 $ 41,160 $ 5,084 $291,621
========= ========== ============= ====================
LIABILITY AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ - $ 1,267 $ 1,267
Short term loans and notes payable - 22,065 22,065
Accounts payable 22,554 11,595 34,149
Accrued liabilities and other current 13,260 3,286 (1,545) (4) 15,787
liabilities 786 (5)
Income taxes payable 685 - 685
Customer deposits 3,521 868 4,389
--------- ---------- ------------- --------------------
Total current liabilities 40,020 39,081 (759) 78,342
--------- ---------- ------------- --------------------
Long term debt, net of current portion - 8,384 8,384
Other long term liabilities - 422 422
--------- ---------- ------------- --------------------
Total liabilities 40,020 47,887 (759) 87,148
--------- ---------- ------------- --------------------
Shareholders' equity:
Common stock 222,657 16,332 (16,332) (4) 222,657
Retained earnings ( deficit) (17,300) (23,059) 23,059 (4) (18,184)
(884) (2)
--------- ---------- ------------- --------------------
Total shareholders' equity
(deficit) 205,357 (6,727) 5,843 204,473
--------- ---------- ------------- --------------------
$245,377 $ 41,160 $ 5,084 $291,621
========= ========== ============= ====================
</TABLE>
See accompanying notes to pro forma combined financial statements.
page 26
<PAGE>
ASYST TECHNOLOGIES, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 1999
( Unaudited, In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro forma Pro forma
Asyst Mecs Adjustments Combined
----------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
Net sales $ 92,948 $ 38,363 $131,311
Cost of sales 59,895 38,388 98,283
----------- ------------ ------------- -----------
Gross profit (loss) 33,053 (25) - 33,028
----------- ------------ ------------- -----------
Operating expenses
Research and development 18,027 366 18,393
Selling, general and administrative 41,859 10,115 51,974
Goodwill amortization - - 2,392 (6) 2,392
In-process research and
development of acquired business 7,100 7,100
Restructuring charge 5,542 - 5,542
----------- ------------ ------------- -----------
Total operating expenses 72,528 10,481 2,392 85,401
----------- ------------ ------------- -----------
Operating loss (39,475) (10,506) (2,392) (52,373)
Other income, net 1,737 (442) 1,295
----------- ------------ ------------- -----------
Loss before provision (benefit) for taxes (37,738) (10,948) (2,392) (51,078)
Provision (benefit) for income taxes (10,807) 428 (7) (10,379)
----------- ------------ ------------- -----------
Net loss $(26,931) $(11,376) $ (2,392) $(40,699)
=========== ============ ============= ===========
Basic and diluted earnings (loss) per share $ (2.30) $ (3.47)
=========== ===========
Shares used in per share calculation
of basic and diluted earnings
(loss) per share 11,730 11,730
=========== ===========
</TABLE>
See accompanying notes to pro forma combined financial statements.
page 27
<PAGE>
ASYST TECHNOLOGIES, INC.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
(Unaudited, In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro forma Pro forma
Asyst Mecs Adjustments Combined
--------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Net sales $131,598 $43,081 $174,679
Cost of sales 72,672 37,040 109,712
--------- ---------- ------------ ----------
Gross profit 58,926 6,041 - 64,967
--------- ---------- ------------ ----------
Operating expenses:
Research and development 13,989 318 14,307
Selling, general and administrative 37,814 6,189 44,003
Goodwill amortization 1,880 - 1,794 (6) 3,674
In-process research and
development of acquired
businesses and product line 4,000 - 4,000
--------- ---------- ------------ ----------
Total operating expenses 57,683 6,507 1,794 65,984
--------- ---------- ------------ ----------
Operating income (loss) 1,243 (466) (1,794) (1,017)
Other income (expense), net 1,088 (1,175) (87)
--------- ---------- ------------ ----------
Income before provision for income taxes 2,331 (1,641) (1,794) (1,104)
Provision for income taxes 2,124 62 (7) 2,186
--------- ---------- ------------ ----------
Net Income (loss) $ 207 $(1,703) $ (1,794) $ (3,290)
========= ========== ============ ==========
Basic earnings (loss) per share $ 0.01 $ (0.12)
========= ==========
Diluted earnings (loss) per share $ 0.01 $ (0.12)
========= ==========
Shares used in per share calculation of:
Basic earnings per share 26,358 26,358
========= ==========
Diluted earnings per share 29,312 26,358
========= ==========
</TABLE>
See accompanying notes to pro forma combined financial statements.
page 28
<PAGE>
ASYST TECHNOLOGIES, INC.
NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
(1) Represents cash used on the acquisition date to fund the second acquisition
payment, which aggregated approximately $9,843,000, excluding transaction
costs of approximately $786,000, to acquire the additional 68.7 percent of
the common stock of Mecs.
(2) To reflect the estimated valuation adjustments of Mecs assets and
liabilities resulting from the preliminary allocation of the purchase price.
The aggregate purchase price (including acquisition costs, initial
investment and the second investment) is estimated to be approximately
$12,448,000; the excess of purchase price over net liabilities acquired is
estimated at $16,746,000 (excess of cost over net liabilities acquired is
being amortized by the straight-line method over seven years). The purchase
price allocation includes in-process research and development costs of
$884,000 charged to operations at the time of the acquisition as the
acquired research and development had not yet reached technological
feasibility and Asyst could not foresee any future alternative use.
The purchase accounting adjustments reflect the fair value of assets and
liabilities acquired based on management's evaluation of the assets and
liabilities. At this time, the net book value of property, land and
equipment is estimated to approximate fair value. Other than to reflect the
actual operating results of Mecs for the three months ended March 31, 2000,
management of Asyst does not believe that actual adjustments will be
materially different from the preliminary estimates.
(3) To reflect the elimination of Asyst's initial investment and related
transaction costs of $1,819,000 to acquire 9.9 percent of the common stock
of Mecs.
(4) To reflect the 21.4 percent ($1,545,000) of the net liabilities to minority
interest and to eliminate the Mecs common stock of $16,332,000 and the Mecs
accumulated deficit of $23,059,000.
(5) To accrue additional transaction costs incurred, but not paid of $786,000 as
of the closing of the transaction.
(6) To reflect amortization of the excess of cost over net liabilities acquired
assuming the acquisition had taken place on the first day of the period
presented. Excess of cost over net liabilities acquired is being amortized
by the straight-line method over seven years.
(7) There is no income tax effects of the pro forma adjustments as the goodwill
amortization charge relating to the acquisition has been treated as non-
deductible for tax purposes.
page 29
