Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1997
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 0-25424
Semitool, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Montana 81-0384392
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
Semitool, Inc.
655 West Reserve Drive
Kalispell, Montana 59901
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (406)752-2107
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 __
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date:
Title Outstanding as of April 22, 1997
Common Stock 13,668,777
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
SEMITOOL, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 1997 and September 30, 1996
(Amounts in Thousands, Except for Share Amounts)
<CAPTION>
March 31, September 30,
ASSETS 1997 1996
---------------- ---------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,385 $ 3,058
Trade receivables, less allowance for doubtful accounts of $233 and $233 36,129 39,183
Inventories 45,557 36,909
Prepaid expenses and other current assets 1,854 2,323
Deferred income taxes 4,373 4,373
---------------- ---------------
Total current assets 92,298 85,846
Property, plant and equipment, net 27,166 26,337
Intangibles, less accumulated amortization of $1,167 and $899 1,664 1,581
Other assets, net 1,244 1,190
---------------- ---------------
Total assets $ 122,372 $ 114,954
================ ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable to bank $ 4,000 $ 4,000
Accounts payable 20,194 17,177
Accrued commissions 833 1,751
Accrued warranty and installation 9,012 7,997
Accrued payroll and related benefits 5,723 5,032
Other accrued liabilities 660 594
Customer advances 3,384 3,757
Income taxes payable 497 1,334
Long-term debt, due within one year 387 374
Payable to shareholder 17 33
---------------- ---------------
Total current liabilities 44,707 42,049
Long-term debt, due after one year 3,450 3,637
Deferred income taxes 1,265 1,265
---------------- ---------------
Total liabilities 49,422 46,951
---------------- ---------------
Contingency (Note 5)
Shareholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized,
no shares issued and outstanding -- --
Common stock, no par value, 30,000,000 shares authorized,
13,668,777 and 13,655,577 shares issued and outstanding 39,692 39,577
Retained earnings 33,258 28,426
---------------- ---------------
Total shareholders' equity 72,950 68,003
---------------- ---------------
Total liabilities and shareholders' equity $ 122,372 $ 114,954
================ ===============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
SEMITOOL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
for the three and six months ended March 31, 1997 and 1996
(Amounts in Thousands, Except for Per Share Amounts)
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
-------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 45,227 $ 43,574 $ 87,735 $ 81,623
Cost of sales 24,320 21,175 47,745 40,078
----------- ----------- ----------- -----------
Gross profit 20,907 22,399 39,990 41,545
----------- ----------- ----------- -----------
Operating expenses:
Selling, general and administrative 11,341 9,866 21,822 18,835
Research and development 5,315 4,629 10,303 8,547
----------- ----------- ----------- -----------
Total operating expenses 16,656 14,495 32,125 27,382
----------- ----------- ----------- -----------
Income from operations 4,251 7,904 7,865 14,163
Other income (expense), net (17) (56) (72) 39
------------ ----------- ----------- -----------
Income before income taxes 4,234 7,848 7,793 14,202
Provision for income taxes 1,608 2,902 2,961 5,255
----------- ----------- ----------- -----------
Net income $ 2,626 $ 4,946 $ 4,832 $ 8,947
=========== =========== =========== ===========
Net income per share $ 0.19 $ 0.36 $ 0.35 $ 0.64
=========== =========== =========== ===========
Weighted average common shares outstanding 13,809 13,866 13,768 13,882
=========== =========== =========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
SEMITOOL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
for the six months ended March 31, 1997 and 1996
(Amounts in Thousands)
<CAPTION>
Six Months Ended
March 31,
---------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
Operating activities:
Net income $ 4,832 $ 8,947
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Loss on sale of equipment 19 1
Depreciation and amortization 2,840 1,734
Deferred income tax benefit -- 33
Change in:
Trade receivables 3,054 (10,148)
Inventories (9,776) (14,626)
Prepaid expenses and other current assets 469 (338)
Other assets (207) 89
Accounts payable 3,017 9,214
Accrued commissions (918) (465)
Accrued warranty and installation 1,015 1,231
Accrued payroll and related benefits 691 (6,188)
Other accrued liabilities 66 248
Customer advances (373) (1,482)
Income taxes payable (837) (3,313)
Shareholder payable (16) (44)
--------------- ---------------
Net cash provided by (used in) operating activities 3,876 (15,107)
--------------- ---------------
Investing activities:
Proceeds from sale of marketable securities -- 4,010
Purchases of property, plant and equipment (2,156) (6,312)
Increase in intangible assets (351) (295)
Increase in covenant not to compete -- (1,200)
Proceeds from sale of equipment 17 361
--------------- ---------------
Net cash provided by (used in) investing activities (2,490) (3,436)
--------------- ---------------
Financing activities:
Proceeds from exercise of stock options 115 6
Borrowings under line of credit 17,865 20,655
Repayments under line of credit (17,865) (11,785)
Proceeds from long-term debt 11 --
Repayments of long-term debt (185) (744)
--------------- ---------------
Net cash provided by (used in) financing activities (59) 8,132
--------------- ---------------
Net increase (decrease) in cash and cash equivalents 1,327 (10,411)
Cash and cash equivalents at beginning of period 3,058 11,939
--------------- ---------------
Cash and cash equivalents at end of period $ 4,385 $ 1,528
=============== ===============
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
SEMITOOL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
The consolidated financial statements included herein have been prepared by
Semitool, Inc., (the Company) without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have been condensed or
omitted as permitted by such rules and regulations. The Company believes the
disclosures included herein are adequate; however, these consolidated statements
should be read in conjunction with the consolidated financial statements and the
notes thereto for the year ended September 30, 1996 previously filed with the
Securities and Exchange Commission on Form 10-K.
The financial information presented as of any date other than September 30, 1996
has been prepared from the books and records without audit. Financial
information as of September 30, 1996 has been derived from the audited financial
statements of the Company, but does not include all disclosures required by
generally accepted accounting principles. In the opinion of management, these
unaudited financial statements contain all of the adjustments (normal and
recurring in nature) necessary to present fairly the consolidated financial
position of the Company as of March 31, 1997, the consolidated results of
operations for the three and six month periods ended March 31, 1997 and 1996 and
the consolidated cash flows for the six month periods ended March 31, 1997 and
1996. The results of operations for the periods presented may not be indicative
of those which may be expected for the full year.
Note 2. Principles of Consolidation
The consolidated financial statements include the accounts of Semitool, Inc.,
and its wholly-owned subsidiaries. All significant intercompany and affiliated
accounts and transactions are eliminated in consolidation.
Note 3. Inventories
Inventories are summarized as follows (in thousands):
March 31, 1997 September 30, 1996
---------------------- ---------------------
Parts and raw materials $ 22,955 $ 18,157
Work-in-process 19,319 15,702
Finished goods 3,283 3,050
---------------------- ---------------------
$ 45,557 $ 36,909
====================== =====================
During the six months ended March 31, 1997 and 1996, $1,128,000 and $164,000,
respectively, of finished goods inventory was transferred to capitalized
equipment.
<PAGE>
Note 4. Income Taxes
The components of the Company's income tax provision (benefit) are as follows,
(in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
--------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Federal:
Current $ 1,381 $ 2,221 $ 2,452 $ 4,486
Deferred -- 345 -- 28
State:
Current 196 347 288 701
Deferred -- 54 -- 5
Foreign 31 (65) 221 35
----------- ----------- ----------- -----------
Total $ 1,608 $ 2,902 $ 2,961 $ 5,255
=========== =========== =========== ===========
</TABLE>
Components of the deferred tax assets and liabilities as of March 31, 1997 are
as follows, (in thousands):
<TABLE>
<CAPTION>
Assets Liabilities Total
-------------- -------------- -------------
<S> <C> <C> <C>
Accrued liabilities, principally
vacation and health insurance $ 709 $ -- $ 709
Accrued reserves, principally bad
debt, warranty and inventory 2,669 -- 2,669
Inventory capitalization 433 -- 433
Depreciation and software amortization (1,265) (1,265)
Foreign net operating loss carryforward 475 -- 475
Other 87 -- 87
-------------- -------------- -------------
Total $ 4,373 $ (1,265) $ 3,108
============== ============== =============
</TABLE>
Note 5. Contingency
A purported class action lawsuit brought by Dr. Stanley Bierman, IRA (Case No.
DV-96-124A) was filed February 26, 1996, in the Montana Eleventh Judicial
District Court, Flathead County, Kalispell, Montana against the Company and
certain of its officers and directors. The complaint includes allegations that
the Company issued misleading statements concerning its business and prospects.
The suit seeks compensatory damages and other relief as the court may find
appropriate. The Company believes the lawsuit to be without merit and intends to
contest the action vigorously. However, given the inherent uncertainty of
litigation, the early stage of discovery and insurance issues, there can be no
assurance that the ultimate outcome will be in the Company's favor, or that if
the ultimate outcome is not in the Company's favor, that such an outcome, the
diversion of management's attention, and any costs associated with the lawsuit,
will not have a material adverse effect on the Company's financial condition or
results of operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
CAUTION
Statements contained in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this report which are not
historical facts are forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended, and are subject to the
safe harbor provisions created by that statute. A forward-looking statement may
contain words such as "will continue to be," "will be," "continue to," "expect
to," "anticipates that," "to be" or "can impact." Management cautions that
forward-looking statements are subject to risks and uncertainties that could
cause the Company's actual results to differ materially from those projected in
such forward-looking statements. These risks and uncertainties include, but are
not limited to, the cyclical nature of the semiconductor industry in general,
lack of market acceptance for new products, decreasing demand for the Company's
existing products, impact of competitive products and pricing, product
development, commercialization and technological difficulties, capacity and
supply constraint difficulties and other risks detailed herein and in the
Company's other filings with the Securities and Exchange Commission (SEC). The
Company's future results will depend on its ability to continue to enhance its
existing products, and to develop and manufacture new products and to finance
such activities. There can be no assurance that the Company will be successful
in the introduction, marketing and cost-effective manufacture of any new
products or that the Company will be able to develop and introduce in a timely
manner new products or enhancements to its existing products and processes which
satisfy customer needs or achieve widespread market acceptance.
Shareholders or potential shareholders should read the "Risk Factors" section of
the Company's latest annual report on Form 10-K filed with the SEC in
conjunction with this quarterly report on Form 10-Q to better understand the
potential volatility of the Company's results and volatility in the Company's
common stock share price. The fact that some of the risk factors may be the same
or similar to the Company's past filings means only that the risks are present
in multiple periods. The Company believes that many of the risks detailed here
and in the Company's other SEC filings are part of doing business in the
semiconductor equipment industry and will likely be present in all periods
reported. The fact that certain risks are endemic to the industry does not
lessen the significance of the risk.
Shareholders or potential shareholders are also cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date of
this report. The Company undertakes no obligation to release revisions to
forward-looking statements to reflect subsequent events, changed circumstances,
or the occurrence of unanticipated events.
RESULTS OF OPERATIONS
SECOND QUARTER OF FISCAL 1997 COMPARED WITH SECOND QUARTER OF FISCAL 1996
Net Sales. Net sales consist of revenues from sales of equipment, spare parts
and service contracts. Net sales increased 3.8% to $45.2 million in the second
quarter of fiscal 1997 from $43.6 million for the same period in fiscal 1996.
Sales of the Company's automated batch chemical processing tools in the second
quarter of fiscal 1997 increased significantly compared to the same period in
fiscal 1996 and resulted in the overall gain in sales for the quarter.
<PAGE>
Gross Profit. Gross margin was 46.2% of net sales in the second quarter of
fiscal 1997 compared to 51.4% of net sales for the same period in fiscal 1996.
Cost associated with building new tool models was the most significant factor in
the decline in gross margin in the second quarter of fiscal 1997 from the same
period in fiscal 1996. Gross margin did improve in the second quarter of fiscal
1997 from the two preceding quarters. The Company's gross margin has been, and
will continue to be, affected by a variety of factors, including the mix and
average selling price of products sold, and the cost to manufacture, service and
support new and enhanced products.
Selling, General and Administrative. Selling, general and administrative (SG&A)
expenses were 25.1% of net sales in the second quarter of fiscal 1997 compared
to 22.6% of net sales for the same period in fiscal 1996. The Company's SG&A
expenses increased to $11.3 million in the second quarter of fiscal 1997 from
$9.9 million for the same period in fiscal 1996. The increase in SG&A expenses
reflects a broader range of equipment to market and service, costs associated
with additional sales and service personnel supporting the Asian market and
increased sales volume. A substantial portion of the Company's SG&A expense is
fixed in the short term.
Research and Development. Research and development (R&D) expenses consist of
salaries, project materials, laboratory costs, consulting fees and other costs
associated with the Company's research and development efforts. R&D expense was
$5.3 million (11.8% of net sales) in the second quarter of fiscal 1997 as
compared to $4.6 million (10.6% of net sales) for the same period in fiscal
1996. The increase in spending on research and development is primarily
associated with the Company's automated batch chemical processor, the fast ramp
vertical furnace and the single substrate processor.
The Company is committed to technology leadership in the semiconductor equipment
industry and expects to continue to fund R&D expenditures with a multiyear
perspective. The Company's research and development expenses have fluctuated
from quarter to quarter in the past. The Company expects such fluctuation to
continue in the future, both in absolute dollars and as a percentage of net
sales, primarily due to the timing of expenditures and fluctuations in the level
of net sales in a given quarter.
Other Income (Expense), Net. Other income (expense), net was a net expense of
$17,000 in the second quarter of fiscal 1997 compared a net expense of $56,000
for the same period in fiscal 1996. Interest expense exceeded interest income in
both periods.
Provision for Income Taxes. The provisions for income taxes for each of the
second fiscal quarters of 1997 and 1996 were $1.6 million and $2.9 million,
respectively. Income tax provisions are made based on the blended estimate of
federal, state and foreign effective income tax rates.
Backlog. The Company includes in its backlog those customer orders for which it
has received purchase orders or purchase order numbers and for which shipment is
scheduled within the next twelve months. Sales backlog was approximately $81.7
million at March 31, 1997 compared to $90.4 million at March 31, 1996 and $89.3
million at December 31, 1996.
Orders are generally subject to cancellation or rescheduling by customers with
limited or no penalty. As the result of tools ordered and shipped in the same
quarter, changes in customer delivery schedules, cancellations of orders and
delays in product shipments, the Company's backlog at any particular date is not
necessarily indicative of actual sales for any succeeding period.
<PAGE>
SIX MONTHS OF FISCAL 1997 COMPARED WITH SIX MONTHS OF FISCAL 1996
Net Sales. Net sales increased 7.5% to $87.7 million in the first half of fiscal
1997 from $81.6 million for the same period in fiscal 1996. Sales of the
Company's automated batch chemical processing tools increased significantly
compared to the prior year and resulted in the overall gain in sales for the
first half of fiscal 1997.
Gross Profit. Gross margin was 45.6% of net sales in the first half of fiscal
1997 compared to 50.9% of net sales for the same period in fiscal 1996. Cost
associated with building new tool models was the most significant factor in the
decline in gross margin in the first half of fiscal 1997 from the same period in
fiscal 1996. While the Company expects incremental improvements in gross margin,
the Company's gross margin has been, and will continue to be, affected by a
variety of factors, including the mix and average selling price of products
sold, and the cost to manufacture, service and support new and enhanced
products.
Selling, General and Administrative. SG&A expenses were 24.9% of net sales in
the first half of fiscal 1997 compared to 23.1% of net sales for the same period
in fiscal 1996. The Company's SG&A expense increased in absolute dollars to
$21.8 million in the first six months of fiscal 1997 from $18.8 million for the
same period in fiscal 1996. The 1.8% increase in SG&A expenses relative to net
sales consists of a 1.4% increase in sales and service expenses and a 0.4%
increase in administrative expenses.
Research and Development. R&D expense was $10.3 million (or 11.7% of net sales)
in the first half of fiscal 1997 as compared to $8.5 million (or 10.5% of net
sales) for the same period in fiscal 1996. The increase in spending on research
and development for the first six months of fiscal 1997 was primarily associated
with the Company's automated batch chemical processor, the fast ramp vertical
furnace and the single substrate processor.
Other Income (Expense), Net. Other income (expense), net was a net expense of
$72,000 in the first half of fiscal 1997 compared a net income of $39,000 for
the same period in fiscal 1996. Interest expense, net of interest income,
increased to $137,000 in the first half of fiscal 1997 from $53,000 in the same
period of fiscal 1996 accounting for the majority of the change.
Provision for Income Taxes. The provisions for income taxes for the first half
of 1997 and 1996 were $3.0 million and $5.3 million, respectively. Income tax
provisions are made based on the blended estimate of federal, state and foreign
effective income tax rates.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations was $3.9 million during the first six months of
fiscal 1997, compared to $15.1 million used in the same period in fiscal 1996.
Cash generated from net income and depreciation in the current fiscal year more
than offset increases in working capital. During the first half the Company's
inventory increased $8.6 million to $45.6 million. An increase of $4.8 million
in raw materials and a $3.6 million increase in work-in-process accounted for
most of the increase. The increase in raw materials is in preparation for higher
vertical furnace production in the third quarter, a change in manufacturing
methods related primarily to batch chemical process tools and additional
materials kept at service locations around the world for customer support. Over
70% of the increase in work-in-process is related to the Company's Magnum
automated batch chemical processor which is being produced in greater quantities
than six months ago. The Company believes that the only long term trend evident
in the inventory buildup is the need to keep substantial inventory at strategic
points around the world in order to respond rapidly to the service needs of its
<PAGE>
customers. The Company expects future working capital balances to fluctuate
based on net sales and the average cycle time of the specific equipment types
being manufactured.
Investing activities consisted primarily of $2.2 million of property and
equipment acquisitions. Financing activities included no new net borrowings
under the Company's $10.0 million revolving line of credit as that facility has
remained at $4.0 million outstanding for each of the last three quarters. As of
March 31, 1997, the Company's principal sources of liquidity consisted of
approximately $4.4 million of cash and cash equivalents, $6.0 million available
under the Company's $10.0 million revolving line of credit, and $15.0 million
under its long-term credit facility. Both credit facilities are with Seafirst
Bank and bear interest at the bank's prime lending rate. The revolving line of
credit expires on December 31, 1997 when all principal amounts owing are due.
The Company anticipates that it will be able to negotiate an extension of its
credit line to December 31, 1998 during the second half of fiscal 1997. The
long-term credit facility expires on December 31, 1998 with amounts outstanding
repayable in monthly principal and interest payments over a five-year period
ending December 2003.
The Company believes that cash and cash equivalents, funds generated from
operations, and borrowings under its line of credit agreements will be
sufficient to meet the Company's planned capital requirements for the balance of
the fiscal year. During the first half of fiscal 1997, the Company began
remodeling part of its facility in Cambridge, England in preparation for the
commencement of assembly operations at that location later in the year. Total
purchases of property, plant and equipment for fiscal 1997 are expected to be
approximately $9.0 million including the facility improvement in England, but
excluding any major facility expansion or addition in the United States. The
Company has formulated preliminary expansion plans which can be triggered
quickly should market conditions warrant. Any decision to implement a major
facility expansion, to add an additional facility, or any significant increase
in working capital needed to fund growth, could result in the Company effecting
additional equity or debt financing to fund that growth. The Company may, from
time to time, as market and business conditions warrant, invest in or acquire
complementary businesses, products or technologies. The Company may effect an
additional equity or debt financing to fund such activities. The sale of
additional equity securities or the issuance of equity securities in a business
combination could result in dilution to the Company's shareholders.
LITIGATION
A purported class action lawsuit brought by Dr. Stanley Bierman, IRA (Case No.
DV-96-124A) was filed February 26, 1996, in the Montana Eleventh Judicial
District Court, Flathead County, Kalispell, Montana against the Company and
certain of its officers and directors. The complaint includes allegations that
the Company issued misleading statements concerning its business and prospects.
The suit seeks compensatory damages and other relief as the court may find
appropriate. The Company believes the lawsuit to be without merit and intends to
contest the action vigorously. However, given the inherent uncertainty of
litigation, the early stage of discovery and insurance issues, there can be no
assurance that the ultimate outcome will be in the Company's favor, or that if
the ultimate outcome is not in the Company's favor, that such an outcome, the
diversion of management's attention, and any costs associated with the lawsuit,
will not have a material adverse effect on the Company's financial condition or
results of operations.
<PAGE>
NEW ACCOUNTING RULES ISSUED SUBSEQUENT TO SEPTEMBER 30, 1996
In February 1997, Statement of Financial Accounting Standards No. 128 (SFAS
128), "Earnings per Share" was issued. SFAS 128 establishes standards for
computing and presenting earnings per share (EPS) and simplifies the existing
standards. This standard replaces the presentation of primary EPS with a
presentation of basic EPS. It also requires the dual presentation of basic and
diluted EPS on the face of the income statement for all entities with complex
capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. SFAS 128 is effective for financial statements issued
for periods ending after December 15, 1997, including interim periods and
requires restatement of all prior-period EPS data presented. The Company does
not believe the application of this standard will have a material effect on the
presentation of its earning per share disclosures.
<PAGE>
SEMITOOL, INC.
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
A purported class action lawsuit brought by Dr. Stanley Bierman, IRA (Case No.
DV-96-124A) was filed February 26, 1996, in the Montana Eleventh Judicial
District Court, Flathead County, Kalispell, Montana against the Company and
certain of its officers and directors. The complaint includes allegations that
the Company issued misleading statements concerning its business and prospects.
The suit seeks compensatory damages and other relief as the court may find
appropriate. The Company believes the lawsuit to be without merit and intends to
contest the action vigorously. However, given the inherent uncertainty of
litigation, the early stage of discovery and insurance issues, there can be no
assurance that the ultimate outcome will be in the Company's favor, or that if
the ultimate outcome is not in the Company's favor, that such an outcome, the
diversion of management's attention, and any costs associated with the lawsuit,
will not have a material adverse effect on the Company's financial condition or
results of operations.
The Company and all the other defendants have filed a motion to dismiss certain
allegations on the basis that they are insufficient as a matter of Montana law.
The court has the motion to dismiss under submission. The plaintiff has filed a
motion for class certification. The Company and other defendants have opposed
the motion. The court has the motion to certify the class under submission.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Shareholders held on February 13, 1997, the
following proposals were adopted:
1. To elect five directors of the Company to serve until the 1998 Annual
Meeting of Shareholders or until their successors are elected and
qualified. All director nominees received votes which exceeded the minimum
number of votes to be elected. The table below summarizes voting results:
Votes Votes
For Withheld
Raymon F. Thompson 12,820,709 90,936
Howard E. Bateman 12,822,779 88,866
Richard A. Dasen 12,821,579 90,066
Daniel J. Eigeman 12,821,859 89,786
Calvin S. Robinson 12,820,642 91,003
2. To ratify and approve an amendment to the Amended and Restated Semitool,
Inc. 1994 Stock Option Plan, as amended to increase the number of shares of
Common Stock available for issuance thereunder by 200,000 shares from
900,000 shares to 1,100,000 shares.
For Against Abstain Broker Non-Vote
12,600,431 279,821 26,093 5,300
<PAGE>
3. To ratify the appointment of Coopers & Lybrand L.L.P. independent auditors
for the Company for the fiscal year ending September 30, 1997.
For Against Abstain
12,872,980 21,730 16,935
Item 5. Other Information
John W. Sullivan has resigned as the Company's Vice President - Finance and
Chief Financial Officer effective May 15, 1997. A search is being conducted for
a replacement.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(27) Financial Data Schedule for Form 10-Q dated March 31, 1997.
(99.1) Amended and Restated Semitool, Inc. 1994 Stock Option Plan.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three months ended
March 31, 1997.
<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.
SEMITOOL, INC.
Date: April 25, 1997 By /S/ John W. Sullivan
------------------------------------------
John W. Sullivan, Vice President, Finance,
and Chief Financial Officer
EXHIBIT 99.1
AMENDED AND RESTATED SEMITOOL, INC.
1994 STOCK OPTION PLAN
(as of February 13, 1997)
1. Establishment, Purpose, and Definitions.
(a) There is hereby adopted the 1994 Stock Option Plan (the "Plan") of
Semitool, Inc. (the "Company").
(b) The purpose of the Plan is to provide a means whereby eligible
individuals (as defined in Section 4, below) can acquire Common Stock of the
Company (the "Stock"). The Plan provides employees (including officers and
directors who are employees) of the Company and of its Affiliates an opportunity
to purchase shares of Stock pursuant to options which may qualify as incentive
stock options (referred to as "incentive stock options") under Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"), and employees,
officers, directors, independent contractors, and consultants of the Company and
of its Affiliates an opportunity to purchase shares of Stock pursuant to options
which are not described in Sections 422 or 423 of the Code (referred to as
"nonqualified stock options").
(c) The term "Affiliates" as used in the Plan means parent or
subsidiary corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.
2. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company (the "Board"). Subject to Section 2(e) below, the Board may delegate the
responsibility for administering the Plan to a committee, under such terms and
conditions as the Board shall determine (the "Committee"). The Committee shall
consist of two or more members of the Board or such lesser number of members of
the Board as permitted by Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended ("Rule 16b-3"). None of the members of the Committee
shall receive, while serving on the Committee, or during the one-year period
preceding appointment to the Committee, a grant or award of equity securities
under (i) the Plan or (ii) any other plan of the Company or its affiliates under
which the participants are entitled to acquire Stock (including restricted
Stock), stock options, stock bonuses, related rights or stock appreciation
rights of the Company or any of its affiliates, other than pursuant to the grant
of automatic options provided in Section 7 below and pursuant to transactions in
any such other plan which do not disqualify a director from being a
disinterested person under Rule 16b-3. The limitations set forth in this Section
2(a) shall automatically incorporate any additional requirements that may in the
future be necessary for the Plan to comply with Rule 16b-3. Members of the
Committee shall serve at the pleasure of the Board. The Committee shall select
one of its members as chairman, and shall hold meetings at such times and places
as it may determine. A majority of the Committee shall constitute a quorum and
acts of the Committee at which a quorum is present, or acts reduced to or
approved in writing by all the members of the Committee, shall be the valid acts
of the Committee. If the Board does not delegate administration of the Plan to
the Committee, then each reference in this Plan to "the Committee" shall be
construed to refer to the Board.
(b) Except for options granted to Non-Employee Directors pursuant to
Section 7, the Committee shall determine which eligible individuals (as defined
in Section 4, below) shall be granted options under the Plan, the timing of such
grants, the terms thereof (including any restrictions on the Stock), and the
number of shares subject to such options.
(c) Except for options granted to Non-Employee Directors pursuant to
Section 7, the Committee may amend the terms of any outstanding option granted
under this Plan, but any amendment which would adversely affect the optionee's
rights under an outstanding option shall not be made without the optionee's
written consent. The Committee may, with the optionee's written consent, cancel
any outstanding stock option or accept any outstanding stock option in exchange
for a new option.
(d) The Committee shall have the sole authority, in its absolute
discretion to adopt, amend, and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan, to construe and
interpret the Plan, the rules and the regulations, and the instruments
evidencing options or Stock granted under the Plan and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
All decisions, determinations, and interpretations of the Committee shall be
binding on all participants. Notwithstanding the foregoing, the Committee shall
not exercise any discretionary functions with respect to options granted to
Non-Employee Directors pursuant to Section 7.
(e) Notwithstanding the foregoing provisions of this Section 2, grants
of options to any "Covered Employee," as such term is defined by Section 162(m)
of the Code shall be made only by a subcommittee of the Committee which, in
addition to meeting other applicable requirements of this Section 2, is composed
solely of two or more "outside directors," within the meaning of Section 162(m)
of the Code and the regulations thereunder (the "Subcommittee") to the extent
necessary to qualify such grants as "performance-based compensation" under
Section 162(m). In the case of such grants to Covered Employees, references to
the "Committee" shall be deemed to be references to the Subcommittee as
specified above.
3. Stock Subject to the Plan.
(a) An aggregate of not more than 1,100,000 shares of Stock shall be
available for the grant of stock options under the Plan, of which not more than
90,000 shares shall be available for the grant of options under Section 7 of the
Plan. If an option is surrendered (except surrender for shares of Stock) or for
any other reason ceases to be exercisable in whole or in part, the shares which
were subject to such option but as to which the option had not been exercised
shall continue to be available under the Plan.
(b) If there is any change in the Stock subject to any option granted
under the Plan, through merger, consolidation, reorganization, recapitalization,
reincorporation, stock split, stock dividend (in excess of two percent), or
other change in the capital structure of the Company, appropriate adjustments
shall be made by the Committee in order to preserve but not to increase the
benefits to the individual, including adjustments to the number and kind of
shares and the price per share subject to outstanding options.
4. Eligible Individuals. The persons eligible to participate in the Plan
(other than pursuant to Section 7) are such employees, officers, independent
contractors, and consultants of the Company or an Affiliate as the Committee ,
in its discretion, shall designate from time to time. Notwithstanding the
foregoing, only employees of the Company or an Affiliate (including officers and
directors who are bona fide employees) shall be eligible to receive incentive
stock options. Except for grants pursuant to Section 7, Eligible Individuals
shall not include Non-Employee Directors.
5. The Option Price. The exercise price of each incentive stock option
shall be not less than the per share fair market value of the Stock subject to
such option on the date the option is granted. Except as provided in Section 7,
the exercise price of each nonqualified stock option shall be as determined by
the Committee. Notwithstanding the foregoing, (i) in the case of an incentive
stock option granted to a person possessing more than ten percent of the
combined voting power of the Company or an Affiliate, the exercise price shall
be not less than 110 percent of the fair market value of the Stock on the date
the option is granted. The exercise price of an option shall be subject to
adjustment to the extent provided in Section 3(b), above.
6. Terms and Conditions of Options.
(a) Each option granted pursuant to the Plan will be evidenced by a
written Stock Option Agreement executed by the Company and the person to whom
such option is granted.
(b) The Committee shall determine the term of each option granted
under the Plan; provided, however, that (i) the term of an incentive stock
option shall not be more than 10 years, (ii) in the case of an incentive stock
option granted to a person possessing more than ten percent of the combined
voting power of the Company or an Affiliate, the term of each incentive stock
option shall be no more than five years, and (iii) the term of an option granted
pursuant to Section 7 shall be as provided in Section 7.
(c) In the case of incentive stock options, the aggregate fair market
value (determined as of the time such option is granted) of the Stock with
respect to which incentive stock options are exercisable for the first time by
an eligible employee in any calendar year (under this Plan and any other plans
of the Company or its Affiliates) shall not exceed $100,000. Notwithstanding the
designation in an option agreement, to the extent that the $100,000 limit is
exceeded for any calendar year, the excess options shall be nonqualified stock
options.
(d) Except for grants to Non-Employee Directors pursuant to Section 7,
which shall be granted on the form of Stock Option Agreement attached hereto as
Exhibit A, the Stock Option Agreement may contain such other terms, provisions,
and conditions as may be determined by the Committee not inconsistent with this
Plan. If an option, or any part thereof is intended to qualify as an incentive
stock option, the Stock Option Agreement shall contain those terms and
conditions which are necessary to so qualify it.
(e) The maximum amount of Stock for which options may be granted
pursuant to any individual per calendar year under the Plan shall be 375,000
shares, subject to adjustment pursuant to Section 3(b). To the extent required
by Section 162(m) of the Code and the regulations thereunder, in applying the
foregoing limitation with respect to an employee, if any option is canceled, the
canceled option shall continue to count against the maximum number of shares for
which options may be granted to the employee under this Section 6(e). For this
purpose, the repricing of an option shall be treated as a cancellation of the
existing option and the grant of a new option.
7. Stock Options for Non-Employee Directors.
(a) Automatic Grant of Options. An option to purchase 3,000 shares of
Stock shall be granted ("Initial Grant") to each director who is not an employee
of the Company ("Non-Employee Director"), such Initial Grant to be made (i) to
the then existing Non-Employee Directors upon the closing of the Company's
initial public offering of its Stock in an underwriting pursuant to a
registration statement filed under the Securities Act of 1933 ("IPO") and (ii)
to other Non-Employee Directors elected or appointed to the Board after the IPO
upon the date each first becomes a Non-Employee Director of the Company.
Thereafter, immediately following each annual meeting of the Company's
stockholders, each Non-Employee Director who continues as a Non-Employee
Director following such annual meeting shall be granted an option to purchase
2,000 shares of Stock ("Subsequent Grant"); provided that no Subsequent Grant
shall be made to any Non-Employee Director who has not served as a director of
the Company and attended at least two (2) meetings of the Board of Directors, as
of the time of such annual meeting. Each such Subsequent Grant shall be made on
the date of the annual stockholders' meeting in question; provided, however,
that as to Subsequent Grants made to Non-Employee Directors in connection with
the Company's 1996 annual stockholders' meeting (the "1996 Annual Meeting"), (x)
Non-Employee Directors who have served as a director of the Company, as of the
time of the 1996 Annual Meeting, for at least one year, shall be granted an
option to purchase 1,500 shares of Stock on the date of the 1996 Annual Meeting
and shall be granted an option to purchase 500 shares of Stock on May 20, 1996,
and (y) Non-Employee Directors who have not served as a director of the Company
for at least one year, as of the time of such annual meeting, but have attended
at least two (2) meetings of the Board of Directors, as of the time of the 1996
Annual Meeting, shall be granted an option to purchase 2,000 shares of Stock on
May 20, 1996. If any option ceases to be exercisable in whole or in part, the
shares which were subject to such option but as to which the option had not been
exercised shall continue to be available under the Plan. All options granted to
Non-Employee Directors shall be nonqualified stock options.
(b) Option Exercise Price. The exercise price per share of Stock
covered by each option shall be the per-share fair market value of the Stock on
the date the option is granted; provided that the exercise price per share of
Stock covered by options constituting Initial Grants under Section 7(a)(i) above
shall be the per-share price to the public in the IPO; provided further,
however, that the exercise price per share of Stock covered by options granted
on May 20, 1996 under Section 7(a)(x) and (y) above shall be the lesser of the
per-share fair market value of the Stock on February 16, 1996 or the per-share
fair market value of the Stock on the date the option is granted. The exercise
price of an option granted under the Plan shall be subject to adjustment to the
extent provided in Section 3(b) hereof.
(c) Exercisability. Each Initial Grant shall vest and become
exercisable as of the date of grant. Each Subsequent Grant shall vest and become
exercisable as to 1/4 of the shares covered thereby on a quarterly basis on the
last day of each three-month period following the date of grant such that the
option will be fully exercisable twelve (12) months after its date of grant.
8. Use of Proceeds. Cash proceeds realized from the sale of Stock under the
Plan or pursuant to options granted under the Plan shall constitute general
funds of the Company.
9. Amendment, Suspension, or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the Plan as
it deems advisable; provided that such amendment, suspension or termination
complies with all applicable requirements of state and federal law, including
any applicable requirement that the Plan or an amendment to the Plan be approved
by the shareholders, and provided further that, except as provided in Section
3(b), above, the Board shall in no event amend the Plan in the following
respects without the consent of stockholders then sufficient to approve the Plan
in the first instance:
(i) To increase the maximum number of shares subject to incentive
stock options issued under the Plan; or
(ii) To change the designation or class of persons eligible to
receive incentive stock options under the Plan.
(b) No option may be granted nor any Stock issued under the Plan
during any suspension or after the termination of the Plan, and no amendment,
suspension, or termination of the Plan shall, without the affected individual's
consent, alter or impair any rights or obligations under any option previously
granted under the Plan. The Plan shall terminate with respect to the grant of
incentive stock options on the tenth anniversary of the date of adoption of the
Plan, unless previously terminated by the Board pursuant to this Section 9.
(c) Notwithstanding the provisions of Sections 9(a) and 9(b), above,
the provisions set forth in Section 7 of the Plan (and any other sections of the
Plan that affect the formula award terms of option grants to Non-Employee
Directors required to be specified in the Plan by Rule 16b-3) shall not be
amended periodically and in no event more than once every six months, other than
to comport with changes to the Code, the Employee Retirement Income Security Act
of 1974, as amended, or any applicable rules and regulations thereunder.
10. Assignability. To the extent required by Rule 16b-3, no option granted
pursuant to this Plan shall be transferable by the holder except by operation of
law or by will or the laws of descent and distribution; provided, that, if Rule
16b-3 is amended after the date of the Board's adoption of the Plan to permit
broader transferability of options under that Rule, (i) options granted under
Section 7 to Non-Employee Directors shall be transferable to the fullest extent
permitted by Rule 16b-3 as so amended, (ii) any other option shall be
transferable to the extent provided in the option agreement covering the option,
and the Committee shall have discretion to amend any such outstanding option to
provide for broader transferability of the option as the Committee may authorize
within the limitations of Rule 16b-3. Notwithstanding the foregoing, if required
by the Code, each incentive stock option under the Plan shall be transferable by
the optionee only by will or the laws of descent and distribution, and, during
the optionee's lifetime, shall be exercisable only by the optionee. In the event
of any Rule 16b-3 permitted transfer of an option hereunder, the transferee
shall be entitled to exercise the option in the same manner and only to the same
extent as the optionee (or his personal representative or the person who would
have acquired the right to exercise the option by bequest or intestate
succession) would have been entitled to exercise the option under Sections 6, 7
and 11 had the option not been transferred.
11. Payment Upon Exercise of Options.
(a) Payment of the purchase price upon exercise of any option granted
under this Plan shall be made in cash, by optionee's personal check, a certified
check, bank draft, or postal or express money order payable to the order of the
Company in lawful money of the United States (collectively, "Cash
Consideration"); provided, however, that, except for options granted under
Section 7, the Committee, in its sole discretion, may permit an optionee to pay
the option price in whole or in part (i) with shares of Stock owned by the
optionee or with shares of Stock withheld from the shares otherwise deliverable
to the optionee upon exercise of the option; (ii) by delivery on a form
prescribed by the Committee of an irrevocable direction to a securities broker
approved by the Committee to sell shares of Stock and deliver all or a portion
of the proceeds to the Company in payment for the Stock; (iii) by delivery of
the optionee's promissory note with such recourse, interest, security, and
redemption provisions as the Committee in its discretion determines appropriate;
or (iv) in any combination of the foregoing. The exercise price of any options
granted under Section 7 shall be paid in Cash Consideration, the consideration
specified in clauses (i) or (ii) of the preceding sentence, or in any
combination thereof. Any Stock used to exercise options shall be valued at its
fair market value on the date of the exercise of the option. In addition, the
Committee, in its sole discretion, may authorize the surrender by an optionee of
all or part of an unexercised option (excluding options granted under Section 7,
above) and authorize a payment in consideration thereof of an amount equal to
the difference between the aggregate fair market value of the Stock subject to
such option and the aggregate option price of such Stock. In the Committee's
discretion, such payment may be made in cash, shares of Stock with a fair market
value on the date of surrender equal to the payment amount, or some combination
thereof.
(b) In the event that the exercise price is satisfied by shares
withheld from the shares of Stock otherwise deliverable to the optionee, the
Committee may issue the optionee an additional option, with terms identical to
the option agreement under which the option was exercised, entitling the
optionee to purchase additional shares of Stock equal to the number of shares so
withheld but at an exercise price equal to the fair market value of the Stock on
the grant date of the new option; provided, however, that no such additional
options may be granted with respect to options granted pursuant to Section 7,
above. Any additional option shall be subject to the provisions of Section 6(e),
above.
12. Withholding Taxes.
(a) No Stock shall be delivered under the Plan to any participant
until the participant has made arrangements acceptable to the Committee (or in
the case of exercise of options granted to Named Executives, the Subcommittee)
for the satisfaction of federal, state, and local income and social security tax
withholding obligations, including, without limitation, obligations incident to
the receipt of Stock under the Plan or to the failure to satisfy the conditions
for treatment as incentive stock options under applicable tax law. Upon exercise
of a stock option the Company shall withhold from the optionee an amount
sufficient to satisfy federal, state and local income and social security tax
withholding obligations.
(b) In the event that such tax withholding is satisfied by the Company
or the optionee's employer withholding shares of Stock otherwise deliverable to
the optionee, the Committee may issue the optionee an additional option, with
terms identical to the option agreement under which the option was exercised,
entitling the optionee to purchase additional shares of Stock equal to the
number of shares so withheld but at an exercise price equal to the fair market
value of the Stock on the grant date of the new option; provided, however, that
no such additional options may be granted with respect to options granted
pursuant to Section 7, above. Any additional option shall be subject to the
provisions of Section 6(e), above.
13. Change in Control.
(a) For purposes of this Section 13, a "Change in Control" shall be
deemed to occur upon:
(i) The direct or indirect acquisition by any person or related
group of persons (other than an acquisition from or by the Company or by a
Company-sponsored employee benefit plan or by a person that directly or
indirectly controls, is controlled by, or is under common control with, the
Company) of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities Exchange Act of 1934, as amended) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company's
outstanding Stock;
(ii) A change in the composition of the Board over a period of
thirty-six (36) months or less such that a majority of the Board members cease,
by reason of one or more contested elections for Board membership or by one or
more actions by written consent of stockholders, to be comprised of individuals
who either (A) have been Board members continuously since the beginning of such
period or (B) have been elected or nominated for election as Board members
during such period by at least a majority of the Board members described in
clause (A) who were still in office at the time such election or nomination was
approved by the Board;
(iii) Approval by the Company's stockholders of a merger or
consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the
Company is incorporated;
(iv) Approval by the Company's stockholders of (A) the sale,
transfer or other disposition of all or substantially all of the assets of the
Company (including the capital stock of the Company's subsidiary corporations)
or (B) the complete liquidation or dissolution of the Company; or
(v) Approval by the Company's stockholders of any reverse merger
in which the Company survives as an entity but in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Company's outstanding securities are transferred to a person or persons
different from those who held such securities immediately prior to such merger.
(vi) For the purpose of this Section 13, "Approval by the
Company's Stockholders" shall mean approval by a majority of those shares of
Stock voting at a stockholder's meeting at which a quorum is present, excluding
shares beneficially owned (within the meaning of Rule 13d-3 under the Exchange
Act) by the Non-Employee Directors.
(b) Except for options granted to Non-Employee Directors under Section
7, the Committee may provide in any stock option agreement (or in an amendment
thereto) that, in the event of any Change in Control, any outstanding options
covered by such an agreement shall be fully vested, nonforfeitable and become
exercisable, as of the date of the Change in Control.
(c) If the Committee determines to incorporate a Change in Control
provision in any option agreement hereunder, the agreement shall provide that,
(i) in the event of a Change in Control described in clauses (i), (ii) and (v)
of paragraph (a) above, the option shall remain exercisable for the remaining
term of the option and (ii) in the event of a Change in Control described in
clauses (iii) or (iv) of paragraph (a) above, the option shall terminate as of
the effective date of the merger, disposition of assets, liquidation or
dissolution described therein.
(d) As to any options granted under Section 7 to Non-Employee
Directors, (i) in the event of a Change in Control described in clauses (i),
(ii) or (v) of paragraph (a) above, any such outstanding options under the Plan
shall become fully vested and remain exercisable for the remaining term of such
options and (ii) in the event of a Change in Control described in clauses (iii)
or (iv) of paragraph (a) above, outstanding options under the Plan shall
terminate as of the effective date of the merger, disposition of assets,
liquidation or dissolution described therein.
(e) Notwithstanding the foregoing provisions of this Section 13, an
outstanding option may not be accelerated under this Section 13 if and to the
extent (i) such option is, in connection with the transaction giving rise to a
Change of Control, either to be assumed by the successor or parent thereof or to
be replaced with a comparable option to purchase shares of the capital stock of
the successor corporation or parent thereof, or (ii) such option is to be
replaced with a cash incentive program of the successor corporation that
preserves the option spread existing at the time of the corporate transaction
giving rise to the Change of Control and provides for subsequent payment in
accordance with the same vesting schedule applicable to such option.
14. Stockholder Approval. The Plan and any options granted pursuant to
Section 7 and options granted to Covered Employees hereunder shall become
effective only upon approval by the holders of a majority of the Company's
shares voting (in person or by proxy) at a stockholders' meeting held within 12
months of the Board's adoption of the Plan. The Committee may grant stock
options under the Plan prior to the stockholders' meeting, but until stockholder
approval of the Plan is obtained, no such option shall be exercisable. In the
event that stockholder approval is not obtained within the period provided
above, all options described in this Section 14 previously granted above, shall
terminate.
15. Rule 16b-3 Compliance. Transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Board or
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Board or the Committee.
Moreover, in the event the Plan does not include a provision required by Rule
16b-3 to be stated therein in order to qualify the grants under Section 5 hereof
as grants under a non-discretionary formula under Rule 16b-3 such provision
(other than one relating to eligibility requirements, or the price and amount of
awards) shall be deemed automatically to be incorporated by reference into the
Plan with respect to grants of options to Non-Employee Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q AS
OF MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 4,385
<SECURITIES> 0
<RECEIVABLES> 36,362
<ALLOWANCES> 233
<INVENTORY> 45,557
<CURRENT-ASSETS> 92,298
<PP&E> 41,181
<DEPRECIATION> 14,015
<TOTAL-ASSETS> 122,372
<CURRENT-LIABILITIES> 44,707
<BONDS> 3,450
0
0
<COMMON> 39,692
<OTHER-SE> 33,258
<TOTAL-LIABILITY-AND-EQUITY> 122,372
<SALES> 86,700
<TOTAL-REVENUES> 87,735
<CGS> 47,566
<TOTAL-COSTS> 47,745
<OTHER-EXPENSES> 10,303
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182
<INCOME-PRETAX> 7,793
<INCOME-TAX> 2,961
<INCOME-CONTINUING> 4,832
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,832
<EPS-PRIMARY> 0.35
<EPS-DILUTED> 0.35
</TABLE>
