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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) November 19, 1998
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PRI Automation, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Massachusetts 0-24934 04-2495703
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
805 Middlesex Turnpike, Billerica, Massachusetts 01821-3986
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (978)670-4270
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Not Applicable
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(Former Name or Former Address, If Changed Since Last Report)
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ITEM 5. Other Events.
On November 19, 1998, the Registrant announced in a press release its
financial operating results for the fiscal quarter ended September 30, 1998 and
for the fiscal year then ended.
On November 24, 1998, the Registrant also announced in a press release that
it has reached a definitive agreement to acquire Promis Systems Corporation
Ltd., a Canadian corporation.
Copies of the press releases are attached as Exhibits 99.1 & 99.2,
respectively, to this Current Report on Form 8-K.
ITEM 7. Exhibits.
Exhibit
Number Description
- ------- -----------
99.1 Press Release dated November 19, 1998, entitled "PRI Automation
Reports Fourth-Quarter and Fiscal 1998 Results"
99.2 Press Release dated November 24, 1998, entitled "PRI Automation
to Acquire Promis Systems"
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.
PRI AUTOMATION, INC.
Date: November 24, 1998 By: /s/ Stephen D. Allison
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Stephen D. Allison
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated November 19, 1998, entitled "PRI Automation
Reports Fourth-Quarter and Fiscal 1998 Results"
99.2 Press Release dated November 24, 1998, entitled "PRI Automation
to Acquire Promis Systems"
<PAGE>
EXHIBIT 99.1
BILLERICA, Mass.--November 19, 1998--PRI Automation, Inc. (NASDAQ:PRIA), the
leader in semiconductor factory automation, today reported financial results for
the fourth quarter and fiscal year ended September 30, 1998.
"Our results for the fourth quarter and the fiscal year reflect the impact of
the prolonged downturn in the industry," noted Mitch Tyson, president and chief
executive officer, PRI Automation. "But we believe that this may be the bottom
of the cycle and that business conditions are beginning to improve."
Net revenue for the fiscal year was $178.2 million, compared with $213.2
million a year earlier, a decline of 16%. Excluding special charges and adjusted
on a pro forma basis, to reflect the conversion of Equipe Technologies from an
S-corporation to a C-corporation for income tax purposes, net income for the
year was $0.7 million, or $0.04 per share, compared with the prior year's net
income of $22.9 million, or $1.14 per share. Net revenue for the fourth quarter
was $27.6 million, compared with $63.6 million for the fourth quarter of fiscal
1997. Excluding special charges, the company reported a net loss for the quarter
of $4.0 million, or $(0.20) per share on a diluted basis. This compared with net
income of $6.9 million, or $0.34 per share, for the same period last year on a
pro forma basis, for the conversion of Equipe Technologies' tax status.
Sequentially, cash and marketable securities rose from $39.1 million to $48.2
million during the fourth quarter.
In the fourth quarter, the company recorded special charges of $7.0
million, net of taxes, or $(0.36) per share, for costs related to inventory and
warranty provisions, severance compensation, and plant consolidations. For the
fiscal year, the company recorded special charges of $25.8 million, net of
taxes--$12.8 million related to the acquisition of Interval Logic and Equipe
Technologies, and $13.0 million related to restructuring and other activities.
"We are continuing to improve our cash position and reduce our cost structure
as we develop our next-generation products, expand our wafer flow solutions, and
strengthen our position for the upturn," said Tyson. "During this period we have
been able to gain market share and believe that we are positioned to be stronger
and more profitable when the recovery comes."
Tyson continued, "Our Factory Automation Systems division has not lost a
single factory automation order in the past year, and we have grown our
worldwide market share, most notably in Taiwan and Singapore, where we are now
the factory automation supplier of choice for the world's leading foundries. We
are seeing increased activity among our reticle management systems as fabs
increase the number and volume of reticles they must handle. Our Interval Logic
subsidiary is shipping its advanced planning and scheduling software, and
customers will soon be benefiting from the productivity gains these solutions
bring to capacity planning and work-flow scheduling. The Equipe division is
growing its share in the vacuum wafer-handling market by winning new customer
orders for its vacuum cluster platform products."
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Tyson concluded, "We believe that we are seeing an increase in business
activity in both 200mm and 300mm sectors and we hope this activity will lead to
an improvement in bookings and revenue in our FY'99."
About PRI Automation
PRI Automation, Inc., with headquarters in Billerica, Massachusetts, is the
leading global supplier of advanced factory automation systems that enhance the
competitiveness of semiconductor manufacturers and OEM equipment suppliers. PRI
is the only company to provide a tightly integrated and flexible hardware and
software solution that optimizes the flow of wafers throughout the fab. The
company currently has more than 1,600 systems installed at approximately 100
locations worldwide.
For more information, visit PRI's Web site at http://www.pria.com
This release includes forward-looking statements, including, without
limitation, statements concerning the company's future revenues and expenses,
management's plans and objectives for future operations, the effect of any
consolidation or restructuring of operations on the company's future
profitability and the effects of a continued downturn in the semiconductor
manufacturing industry, and other matters not limited to historical facts. These
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or implied by
such statements. Such risks and uncertainties include (i) the cyclicality of the
semiconductor industry and the effects of a prolonged downturn in such industry,
(ii) uncertainties affecting Asian markets and currencies, (iii) the effects of
possible delays in the expected transition to 300mm wafer technology, (iv) the
difficulty of reducing costs and expenses to the extent necessary in light of
current business levels, and other factors identified in the company's annual
report on Form 10-K for fiscal year 1997 and its quarterly reports on Form 10-Q
for fiscal year 1998, as filed with the Securities and Exchange Commission. The
company assumes no obligation to update this information.
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PRI AUTOMATION, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
9/30/98 9/30/97 9/30/98 9/30/97
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<S> <C> <C> <C> <C>
Net revenue $ 27,635 $ 63,613 $178,193 $213,159
Cost of revenue 28,597(1) 34,956 121,727(1) 118,263
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Gross (loss) profit (962) 28,657 56,466 94,896
Operating expenses:
Research and development 8,927 8,952 37,137 29,214
Selling, general and
administrative 5,930 9,340 33,198 31,332
Acquired in-process
research and development -- -- 8,417 --
Merger costs and
special charges 1,638 -- 10,591 --
Total operating expenses 16,495 18,292 89,343 60,546
Operating (loss) profit (17,457) 10,365 (32,877) 34,350
Other income (expense), net 582 383 1,049 1,204
(Loss) income before
income taxes (16,875) 10,748 (31,828) 35,554
(Benefit) provision for
income taxes (5,906) 2,514 (7,886) 8,982
Net (loss) income $(10,969) $ 8,234 $(23,942) $ 26,572
Net (loss) income
per common share:
Basic $ (0.56) $ 0.43 $ (1.22) $ 1.39
Diluted $ (0.56) $ 0.40 $ (1.22) $ 1.32
Weighted average
shares outstanding:
Basic 19,755 19,316 19,607 19,162
Diluted 19,755 20,417 19,607 20,137
</TABLE>
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PRO FORMA NET INCOME PER COMMON SHARE
-------------------------------------
(To reflect the conversion of Equipe Technologies from
an S-corporation to a C-corporation for income tax purposes)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
9/30/97 9/30/98 9/30/97
<S> <C> <C> <C>
Historical net income (loss) $ 8,234 $(23,942) $ 26,572
Adjustment to Equipe
income tax expense (1,333) (1,156) (3,639)
Pro forma net income (loss) $ 6,901 $(25,098) $ 22,933
Pro forma net income
(loss) per common share:
Basic $ 0.36 $ (1.28) $ 1.20
Diluted $ 0.34 $ (1.28) $ 1.14
</TABLE>
(1) Includes special charges of $9.1M in fiscal Q4 and $14.0M for
fiscal 1998.
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PRI AUTOMATION, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 30,
1998 1997
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<S> <C> <C>
ASSETS
Cash and investments $ 48,208 $ 32,532
Accounts receivable, net 24,887 71,549
Contracts in progress 9,017 15,463
Inventories 27,494 34,117
Other current assets 14,724 3,670
Property and equipment, net 17,122 12,794
Other assets 3,125 2,354
Total assets $144,577 $172,479
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $ 11,955 $ 21,564
Accrued expenses and other
liabilities 22,615 23,370
Total liabilities 34,570 44,934
Stockholders' equity 110,007 127,545
Total liabilities and
stockholders' equity $144,577 $172,479
</TABLE>
Contact:
PRI Automation Inc.
Stephen D. Allison, 978/670-4270 ext. 3129 (CFO)
or
Demer IR Counsel, Inc.
Mary McGowan, 925/938-2678
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EXHIBIT 99.2
PRI AUTOMATION TO ACQUIRE PROMIS SYSTEMS
- - SEMICONDUCTOR MANUFACTURERS TO BENEFIT FROM INTEGRATED WAFER-FLOW SOLUTION -
BILLERICA, MA -- NOVEMBER 24, 1998 -- PRI AUTOMATION, INC. (NASDAQ: PRIA), the
leader in semiconductor factory automation, today announced that it has reached
a definitive agreement to acquire PROMIS SYSTEMS CORPORATION LTD. (TSE: PSW),
the leading developer of Manufacturing Execution Systems (MES) for semiconductor
and precision electronics manufacturers. The acquisition, which will be
accounted for as a pooling of interests, is expected to be completed during the
first quarter of 1999, subject to, among other things, regulatory approvals and
approval of the shareholders of Promis Systems Corporation Ltd.
Under the terms of the definitive agreement, PRI will acquire Promis in a stock-
for-stock acquisition. The price per share will be fixed at CDN$6.65, as long as
PRI Automation's average stock price during a period prior to closing is within
a specified collar. At Monday's closing prices, the exchange ratio was 0.1691
shares of PRI stock for each share of Promis stock.
In connection with the execution of the definitive agreement, Promis granted PRI
a contingent option to purchase up to 19.9% of the common shares of Promis at a
price of US$4.29 (CDN$6.65) per share. The option would only become exercisable
if the definitive agreement is terminated in certain circumstances.
Mitch Tyson, president and chief executive officer of PRI Automation said, "The
acquisition of Promis Systems significantly enhances PRI Automation's wafer flow
solution. Promis Systems brings market leadership, a strong technology direction
in Promis Encore!(R), and proven software management expertise. Consistent with
our established strategy, we now offer the only comprehensive, integrated wafer
logistics solution. This capability enables semiconductor manufacturers to
further increase profitability by reducing cycle times, accelerating fab start-
up, and improving manufacturing flexibility."
"We believe this transaction is the best way to maximize value for shareholders
and customers of Promis Systems," said Ian McKinnon, president and chief
executive officer of Promis Systems. "PRI is now extraordinarily well positioned
to serve the semiconductor industry worldwide with:
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. Leadership customers in every segment of the market including Logic,
Foundry/ASIC, DRAM, assembly and test
. Increased expertise including over 250 software professionals
. The only comprehensive wafer flow solution with leading products in MES,
Automated Material Handling Systems (AMHS), Advanced Planning and
Scheduling (APS), and tool automation, and
. An expanded direct sales and support presence in every major market
worldwide.
Simply put, only PRI is able to deliver an integrated wafer logistics management
system that optimizes overall factory effectiveness." Ian McKinnon will become
vice president and general manager of PRI's Software Division, based in Toronto,
and will be responsible for all of the company's software products, including
TransNet ™, PRI's material control software, and the Leverage suite of
advanced planning and scheduling software products from Interval Logic, a
subsidiary of PRI. In his new role, McKinnon will report directly to Mitch
Tyson.
DAN HUTCHESON, PRESIDENT OF VLSI RESEARCH commenting on the announcement stated,
"This acquisition makes a lot of sense and addresses the goals regarding factory
integration outlined in the 1997 SIA Roadmap. PRI has been very clear about its
vision of delivering complete factory automation solutions, and the acquisition
of Promis Systems supports that strategy. This is a great combination of two
industry leaders, coming together to offer their customers more value."
MOVING UP THE VALUE CHAIN
PRI's integrated wafer flow solution, including Promis Systems' MES software,
manages and enhances all of the manufacturing systems -- whether information or
automation--from the tools to the Enterprise Resource Planning system. With
access to real-time operational data through PROMIS(R) and the ability to
develop workflow schedules through Leverage™ for Scheduling, PRI can now
optimize wafer flows based on real-time shop floor events.
Mitchell Weiss, vice president strategy and technology, PRI Automation said,
"Our strategy is to offer a comprehensive wafer logistics management system
delivering `out-of-the-box' integration of MES, scheduling, planning, material
control software, and automated material handling systems. By orchestrating
wafer logistics for our customers, we enable them to focus on the critical
issues of product and process optimization."
ABOUT PROMIS SYSTEMS
Promis Systems develops and markets manufacturing execution systems and
automation solutions to semiconductor and precision electronics manufacturers
worldwide. MES systems plan, monitor, automate, and control production. MES
systems contain and control the key process and routing data in the factory,
with its overriding mission of ensuring coordination among all the elements of
manufacturing: labor, equipment, tooling (reticles, for example),
processes/specifications, and materials. The PROMIS(R) software application and
its modules, combined with the Promis Encore! suite of plug-and-play Windows NT
products, provide a robust MES and automation framework for semiconductor and
precision electronics manufacturing. Promis products are installed at over 270
of the world's leading manufacturing sites in 25 countries. The Company is
headquartered in Toronto, Ontario, Canada, and maintains sales and support
offices through North America, Europe, and Asia Pacific. For more information
visit the Promis Systems Web site at WWW.PROMIS.COM.
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ABOUT PRI AUTOMATION
PRI Automation, Inc., headquartered in Billerica, Massachusetts, is a leading
global supplier of advanced factory automation systems that enhance the
competitiveness of semiconductor manufacturers and OEM process tool
manufacturers. PRI is the only company to provide a tightly integrated and
flexible hardware and software solution that optimizes the flow of wafers
throughout the fab. The company currently has thousands of systems installed at
approximately one hundred locations throughout the world.
THIS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, INCLUDING, WITHOUT LIMITATION,
STATEMENTS CONCERNING THE COMPANY'S FUTURE REVENUES AND EXPENSES, MANAGEMENT'S
PLANS AND OBJECTIVES FOR FUTURE OPERATIONS, THE EFFECT OF ANY CONSOLIDATION OR
RESTRUCTURING OF OPERATIONS ON THE COMPANY'S FUTURE PROFITABILITY AND THE
EFFECTS OF A CONTINUED DOWNTURN IN THE SEMICONDUCTOR MANUFACTURING INDUSTRY, AND
OTHER MATTERS NOT LIMITED TO HISTORICAL FACTS. THESE FORWARD-LOOKING STATEMENTS
ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. SUCH RISKS AND
UNCERTAINTIES INCLUDE, BUT ARE NOT LIMITED TO (I) UNCERTAINTY THAT THE
ACQUISITION WILL BE COMPLETED AND THAT, IF COMPLETED, WILL PRODUCE THE BENEFITS
AND SYNERGIES THAT PRI EXPECTS, (II) THE CYCLICALITY OF THE SEMICONDUCTOR
INDUSTRY AND THE POSSIBILITY OF A PROLONGED DOWNTURN IN SUCH INDUSTRY, (III)
UNCERTAINTIES AFFECTING ASIAN MARKETS AND CURRENCIES, (IV) THE EFFECTS OF
POSSIBLE DELAYS IN THE EXPECTED TRANSITION TO 300MM WAFER TECHNOLOGY, (V) THE
DIFFICULTY OF REDUCING COSTS AND EXPENSES TO THE EXTENT NECESSARY IN LIGHT OF
CURRENT BUSINESS LEVELS, AND OTHER FACTORS IDENTIFIED IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR FISCAL YEAR 1997 AND ITS QUARTERLY REPORTS ON FORM 10-Q
FOR FISCAL YEAR 1998, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
COMPANY ASSUMES NO OBLIGATION TO UPDATE THIS INFORMATION.
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NOTE TO EDITORS: When referring to the Company, please use Promis Systems, or
Promis Systems Corporation. When referring to the products, please use PROMIS
(all caps) and/or Promis Encore! (with exclamation point).
PROMIS and Promis Encore! are registered trademarks of Promis Systems
Corporation. TransNet is a trademark of PRI Automation, Inc. Leverage and
Leverage for Scheduling are trademarks of Interval Logic Corporation. All other
trademarks are those of their respective owners.
For Information Contact:
PRI Automation
805 Middlesex Turnpike
Tel: 978-670-4270
FAX: 978-663-5800
Internet: [email protected]
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