Form 10-Q
UNITED STATES
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 June 30, 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 August 05, 1997
Common Stock 13,697,227
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
<TABLE>
SEMITOOL, INC.
CONSOLIDATED BALANCE SHEETS
June 30, 1997 and September 30, 1996
(Amounts in Thousands, Except for Share Amounts)
<CAPTION>
June 30, September 30,
ASSETS 1997 1996
---------------- ---------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 4,784 $ 3,058
Trade receivables, less allowance for doubtful accounts of $233 and $233 34,221 39,183
Inventories 49,711 36,909
Prepaid expenses and other current assets 1,591 2,323
Deferred income taxes 4,373 4,373
---------------- ---------------
Total current assets 94,680 85,846
Property, plant and equipment, net 28,662 26,337
Intangibles, less accumulated amortization of $1,293 and $899 1,739 1,581
Other assets, net 1,240 1,190
---------------- ---------------
Total assets $ 126,321 $ 114,954
================ ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Note payable to bank $ 9,000 $ 4,000
Accounts payable 14,462 17,177
Accrued commissions 1,575 1,751
Accrued warranty and installation 9,518 7,997
Accrued payroll and related benefits 5,960 5,032
Other accrued liabilities 661 594
Customer advances 2,241 3,757
Income taxes payable 1,549 1,334
Long-term debt, due within one year 391 374
Payable to shareholder 5 33
---------------- ---------------
Total current liabilities 45,362 42,049
Long-term debt, due after one year 3,467 3,637
Deferred income taxes 1,265 1,265
---------------- ---------------
Total liabilities 50,094 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,
13,669,677 and 13,655,577 shares issued and outstanding 39,699 39,577
Retained earnings 36,528 28,426
---------------- ---------------
Total shareholders' equity 76,227 68,003
---------------- ---------------
Total liabilities and shareholders' equity $ 126,321 $ 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 nine months ended June 30, 1997 and 1996
(Amounts in Thousands, Except for Per Share Amounts)
<CAPTION>
Three Months Ended Nine Months Ended
June 30, June 30,
-------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 49,480 $ 41,053 $ 137,215 $ 122,676
Cost of sales 26,319 21,067 74,064 61,145
----------- ----------- ----------- -----------
Gross profit 23,161 19,986 63,151 61,531
----------- ----------- ----------- -----------
Operating expenses:
Selling, general and administrative 12,677 10,079 34,499 28,914
Research and development 5,154 5,145 15,457 13,692
----------- ----------- ----------- -----------
Total operating expenses 17,831 15,224 49,956 42,606
----------- ----------- ----------- -----------
Income from operations 5,330 4,762 13,195 18,925
Other income (expense), net (56) (127) (128) (88)
----------- ----------- ----------- -----------
Income before income taxes 5,274 4,635 13,067 18,837
Provision for income taxes 2,004 1,715 4,965 6,970
----------- ----------- ----------- -----------
Net income $ 3,270 $ 2,920 $ 8,102 $ 11,867
=========== =========== =========== ===========
Net income per share $ 0.24 $ 0.21 $ 0.59 $ 0.86
=========== =========== =========== ===========
Weighted average common shares outstanding 13,791 13,862 13,775 13,875
=========== =========== =========== ===========
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 nine months ended June 30, 1997 and 1996
(Amounts in Thousands)
<CAPTION>
Nine Months Ended
June 30,
---------------------------------
1997 1996
--------------- ---------------
<S> <C> <C>
Operating activities:
Net income $ 8,102 $ 11,867
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
(Gain) loss on sale of equipment (2) 1
Depreciation and amortization 4,272 2,807
Deferred income tax benefit -- (3)
Change in:
Trade receivables 4,962 (4,953)
Inventories (14,219) (18,785)
Prepaid expenses and other current assets 732 (868)
Other assets (279) 89
Accounts payable (2,715) 9,358
Accrued commissions (176) (681)
Accrued warranty and installation 1,521 1,892
Accrued payroll and related benefits 928 (5,961)
Other accrued liabilities 67 (469)
Customer advances (1,516) (1,099)
Income taxes payable 215 (2,659)
Shareholder payable (28) (111)
--------------- ---------------
Net cash provided by (used in) operating activities 1,864 (9,575)
--------------- ---------------
Investing activities:
Proceeds from sale of marketable securities -- 4,010
Purchases of property, plant and equipment (4,600) (8,418)
Increase in intangible assets (552) (550)
Increase in covenant not to compete -- (1,200)
Proceeds from sale of equipment 45 389
--------------- ---------------
Net cash provided by (used in) investing activities (5,107) (5,769)
--------------- ---------------
Financing activities:
Proceeds from exercise of stock options 122 29
Borrowings under line of credit 44,155 36,625
Repayments under line of credit (39,155) (30,425)
Proceeds from long-term debt 128 --
Repayments of long-term debt (281) (833)
--------------- ---------------
Net cash provided by (used in) financing activities 4,969 5,396
--------------- ---------------
Net increase (decrease) in cash and cash equivalents 1,726 (9,948)
Cash and cash equivalents at beginning of period 3,058 11,939
--------------- ---------------
Cash and cash equivalents at end of period $ 4,784 $ 1,991
=============== ===============
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 United States Securities and Exchange Commission (SEC).
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 SEC 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 June 30, 1997, the consolidated results of
operations for the three and nine month periods ended June 30, 1997 and 1996 and
the consolidated cash flows for the nine month periods ended June 30, 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):
June 30, 1997 September 30, 1996
---------------------- ---------------------
Parts and raw materials $ 23,231 $ 18,157
Work-in-process 22,044 15,702
Finished goods 4,436 3,050
---------------------- ---------------------
$ 49,711 $ 36,909
====================== =====================
During the nine months ended June 30, 1997 and 1996, $1,417,000 and $861,000,
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 Nine Months Ended
June 30, June 30,
--------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Federal:
Current $ 2,209 $ 1,631 $ 4,662 $ 6,117
Deferred -- (33) -- (3)
State:
Current 260 144 548 846
Deferred -- (3) -- --
Foreign (465) (24) (244) 10
----------- ----------- ----------- -----------
Total $ 2,004 $ 1,715 $ 4,966 $ 6,970
=========== =========== =========== ===========
</TABLE>
Components of the deferred tax assets and liabilities as of June 30, 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 United States 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
THIRD QUARTER OF FISCAL 1997 COMPARED WITH THIRD QUARTER OF FISCAL 1996
Net Sales. Net sales consist of revenues from sales of equipment, spare parts
and service contracts. Net sales increased 20.5% to $49.5 million in the third
quarter of fiscal 1997 from $41.1 million for the same period in fiscal 1996.
Sales of the Company's automated batch chemical processing tools and vertical
furnaces in the third 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. Sales of the Company's non-automated tools during the quarter were down
when compared to the prior year.
Gross Profit. Gross margin was 46.8% of net sales in the third quarter of fiscal
1997 compared to 48.7% of net sales for the same period in fiscal 1996. Cost
associated with building new tool models and product mix were the most
significant factors in the decline in gross margin in the third quarter of
fiscal 1997 from the same period in fiscal 1996. Gross margin did improve in the
third 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 25.6% of net sales in the third quarter of fiscal 1997 compared to
24.6% of net sales for the same period in fiscal 1996. The Company's SG&A
expenses increased to $12.7 million in the third quarter of fiscal 1997 from
$10.1 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 and domestic
markets 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
$5.2 million (10.4% of net sales) in the third quarter of fiscal 1997 as
compared to $5.1 million (12.5% of net sales) for the same period in fiscal
1996.
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
$56,000 in the third quarter of fiscal 1997 compared to a net expense of
$127,000 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
third fiscal quarters of 1997 and 1996 were $2.0 million and $1.7 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 $77.6
million at June 30, 1997 compared to $110.0 million at June 30, 1996 and $89.3
million at December 31, 1996. This decrease is reflective of the overall
industry decline in demand for semiconductor equipment and the effects of
increased net sales mentioned above.
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.
NINE MONTHS OF FISCAL 1997 COMPARED WITH NINE MONTHS OF FISCAL 1996
Net Sales. Net sales increased 11.9% to $137.2 million in the first nine months
of fiscal 1997 from $122.7 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 nine months of fiscal 1997. Sales of the Company's other products were
flat or declined compared to the prior nine months.
Gross Profit. Gross margin was 46.0% of net sales in the first nine months of
fiscal 1997 compared to 50.2% 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 nine months 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 25.1% of net sales in
the first nine months of fiscal 1997 compared to 23.6% of net sales for the same
period in fiscal 1996. The Company's SG&A expense increased in absolute dollars
to $34.5 million in the first nine months of fiscal 1997 from $28.9 million for
the same period in fiscal 1996. The 1.5% increase in SG&A expenses relative to
net sales consists of a 1.7% increase in sales and service expenses offset by a
0.2% decrease in administrative expenses.
Research and Development. R&D expense was $15.5 million (or 11.3% of net sales)
in the first nine months of fiscal 1997 as compared to $13.7 million (or 11.2%
of net sales) for the same period in fiscal 1996. The increase in spending on
R&D for the first nine 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
$128,000 in the first nine months of fiscal 1997 compared to a net expense of
$88,000 for the same period in fiscal 1996. Interest expense, net of interest
income, increased to $246,000 in the first nine months of fiscal 1997 from
$227,000 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 nine
months of 1997 and 1996 were $5.0 million and $7.0 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 $1.9 million during the first nine months of
fiscal 1997, compared to $9.6 million used in the same period in fiscal 1996.
Cash generated from net income and depreciation and amortization in the current
fiscal year more than offset increases in working capital. During the first nine
months of fiscal 1997 the Company's inventory increased $12.8 million to $49.7
million. An increase of $5.1 million in raw materials and a $6.3 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 that is
anticipated in the fourth quarter (although there can be no assurance that an
increase in sales of vertical furnaces in the fourth quarter will be realized),
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. 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
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 $4.6 million of property, plant and
equipment acquisitions. Financing activities included new net borrowings under
the Company's $10.0 million revolving line of credit. As of June 30, 1997, the
Company's principal sources of liquidity consisted of approximately $4.8 million
of cash and cash equivalents, $1.0 million available under the Company's $10.0
million revolving line of credit, and $15.0 million under its second line of
credit. The $15.0 million line of credit allows borrowings to be converted to
long-term debt if the Company chooses to do so. 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. Total purchases of property, plant and equipment for fiscal
1997 are expected to be approximately $9.0 million including a facility
improvement in England, but excluding any major facility expansion or addition
in the United States. The Company has formulated preliminary facility 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.
<PAGE>
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.
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.
In June 1997, Statement of Financial Accounting Standards No. 130 (SFAS 130),
"Reporting Comprehensive Income" was issued. SFAS 130 establishes standards for
reporting and display of comprehensive income and its components in a full set
of general purpose financial statements. SFAS 130 is effective for fiscal years
beginning after December 15, 1997 and requires restatement of earlier periods
presented. Management is currently evaluating the requirements of SFAS 130.
<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 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 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(3.3) Amended Bylaws of Semitool, Inc.
(27) Financial Data Schedule for Form 10-Q dated June 30, 1997.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three months ended
June 30, 1997.
<PAGE>
SIGNATURE
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.
(Registrant)
Date: August 12, 1997 By /s/ Larry Viano
--------------------------------------
Larry Viano
Controller and Treasurer
(Duly Authorized Officer and Principal
Financial Officer)
EXHIBIT 3.3
AMENDED BYLAWS
OF
SEMITOOL, INC.
(April 8, 1997)
ARTICLE I.
Offices
The principal office of the corporation in the State of Montana shall
be located in the City of Kalispell, County of Flathead. The corporation may
have such other offices, either within or without the State of Montana as the
Board of Directors may designate or as the business of the corporation may
require from time to time.
The registered office of the corporation required by the Montana
Business Corporation Act to be maintained in the State of Montana may be, but
need not be, identical with the principal office in the State of Montana, and
the registered agent and the address of the registered office may be changed
from time to time by the Board of Directors.
ARTICLE II.
Shareholders
Section 1. Annual Meeting. The annual meeting of the shareholders shall
be held in the month of February, beginning with the year 1996, and at such
date, and at such hour, and at such place as shall be determined by the Board of
Directors, and such meeting shall be held for the purpose of electing directors
and for the transaction of such other business as may come before the meeting.
If the election of directors shall not be held on the date designated by the
action of the Board of Directors at the annual meeting of the shareholders, or
at any adjournment thereof, the Board of Directors shall cause the election to
be held at a special annual meeting of the shareholders as soon thereafter as
conveniently may be and as determined by the Board of Directors in accordance
with the statutes of the State of Montana.
Section 2. Special Meetings. Special meetings of the shareholders for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the President, Vice President, Secretary, or by the Board of Directors, or by
the holders of not less than one-fourth of all shares entitled to vote at the
meeting.
Section 3. Place of Meeting. The Board of Directors may designate any
place either within or without the State of Montana, as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A Waiver of Notice signed by all shareholders entitled to vote at a meeting may
designate any place, either within or without the State of Montana, as the place
for the holding of such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the registered office
of the corporation in the State of Montana.
Section 4. Notice of Meeting. Written or printed notice stating the
place, day and hour of the meeting and, in case of a special meeting the purpose
or purposes for which the meeting is called, shall be delivered not less than
ten (10) nor more than sixty (60) days before the date of the meeting, either
personally or by mail, by or at the direction of the President, or the
Secretary, or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such notice shall be deemed
to be delivered when deposited in the Unites States mail, addressed to the
shareholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
corporation may provide that the stock transfer books shall be closed for a
stated period, but not to exceed, in any case, sixty (60) days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of the shareholders, such books
shall be closed for a period of at least ten (10) days immediately preceding
such meeting and not to exceed sixty (60) days preceding such meeting. In lieu
of closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than sixty (60) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date on which the
particular action requiring such determination of shareholders is to be taken.
If the stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to receive payment of a dividend, the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 6. Voting Right. The officer or agent having charge of the
stock transfer books for shares of the corporation shall make, at least ten (10)
days before each meeting of the stockholders, a complete list of the
shareholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each, which list, for a period of ten (10) days prior to such meeting,
shall be kept on file at the registered office of the corporation and shall be
subject to inspection by any shareholder at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting and shall be subject to the inspection of any shareholder during the
whole time of the meeting. The original stock transfer book shall be prima facie
evidence as to who are the shareholders entitled to examine such list or
transfer books or to vote at any meeting of shareholders.
Section 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of the shareholders, but in no event shall a
quorum consist of less than one-third (1/3) of the shares entitled to vote at
the meeting. If a meeting cannot be organized because a quorum has not attended,
those present may adjourn the meeting from time to time until a quorum is
present, at which time any business may be transacted that may have been
transacted at the meeting as originally called. The shareholders present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 8. Voting of Shares. Subject to the provisions of Section 10 of
this Article II, each outstanding share shall be entitled to one vote, and each
fractional share shall be entitled to a corresponding fractional vote, on each
matter submitted to a vote at a meeting of shareholders. Neither treasury shares
nor shares of its own stock held by the corporation in a fiduciary capacity nor
shares held by another corporation if a majority of the shares entitled to vote
for the election of director of such other corporation is held by the
corporation shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time.
Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of the trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the corporation or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
Section 9. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
Section 10. Cumulative Voting. At each election for directors every
shareholder entitled to vote at such election shall have the right to vote, in
person or by proxy, the number of shares and fractional shares owned by him for
as many persons as there are directors to be elected and for whose election he
has a right to vote, or to cumulate his votes by giving a candidate as many
votes as the number of such directors multiplied by the number of his shares
including fractional shares shall equal, or by distributing such votes and
fractional votes on the same principal among any number of candidates.
ARTICLE III.
Board of Directors
Section 1. General Powers. The business and affairs of the corporation
shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number of directors
of the corporation shall be five (5). Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified. Directors need not be residents of the State of Montana
or shareholders of the corporation.
Section 3. Annual Meeting. The annual meeting of the Board of Directors
shall be held without other notice than this Bylaw immediately after, and at the
same place as, the annual meeting of shareholders.
Section 3a. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such time as shall be determined by the President or
by resolution of the Board. No notice need be given of meetings held pursuant to
the determination by the President or by resolution of the Board.
Section 4. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place, either within or without the State of Montana, as the place
for holding any special meeting of the Board of Directors called by them.
Section 5. Notice. Notice of any Special Meeting shall be given at
least two (2) days previously thereto by written notice delivered personally,
mailed or faxed to each director at his business address, or by telegram. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail so addressed, with postage prepaid thereon. If notice is given by
fax, the notice shall be deemed to be delivered when the fax is sent to the fax
number maintained in the records of the corporation for each director. If notice
be given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive notice of
any meeting. The attendance of a director at a meeting shall constitute a waiver
of notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. The notice is not required to
describe the purpose of the meeting.
Section 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but if less than such
majority is present at the meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Vacancies. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors.
Section 8. Compensation. By resolution of the Board of Directors,
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and non-employee directors may be paid an annual
retainer plus a fixed sum for attendance at each meeting of the Board of
Directors. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.
ARTICLE IV.
Officers
Section 1. Number. The officers of the corporation shall be a
President, one or more Vice Presidents (the number, qualification and titles
thereof to be determined by the Board of Directors from time to time), a
Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers, assistant officers, and agents as may be
necessary may be elected or appointed by the Board of Directors. Any two or more
offices may be held by the same person, except the offices of President and
Secretary.
Section 2. Election and Term of Office. The officers of the corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not in itself
create contract rights.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. President. The President shall be the principal executive
officer of the corporation and, subject to the control of the Board of Directors
shall, in general, supervise and control all of the business and affairs of the
corporation. He shall, when present, preside at all meetings of the shareholders
and of the Board of Directors. He may sign, with the Secretary or any other
proper officer of the corporation thereunto authorized by the Board of
Directors, certificates for shares of the corporation, any deeds, mortgages,
bonds, contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these
Bylaws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and, in general, shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
Section 6. Vice President. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated at the time of their election, or in the absence of any designation,
then in the order of their election) shall perform the duties of the President,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the President.
Section 7. Secretary. The Secretary shall: (a) keep the minutes of the
shareholders and the Board of Directors' meetings in one or more books provided
for that purpose; (b) see that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and see that the seal of
the corporation is affixed to all documents, the execution of which on behalf of
the corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the
Secretary by such shareholder; (e) sign with the President, or a Vice President,
certificates for shares of the corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general charge
of the stock transfer books of the corporation; and (g) in general, perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
Section 8. Treasurer. The Treasurer shall have charge and supervision
and be responsible for all funds and securities of the corporation and shall
have charge and supervision of the deposits of all monies due and payable to the
corporation from any source whatsoever in such banks or depositories as shall be
selected by the Board of Directors, and shall, in general, perform all the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
Section 9. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries shall exercise the duties of the Secretary and those
duties incident to the office of the Secretary when the Secretary is absent or
not available and such other duties as shall be assigned by the President or by
the Board of Directors. The Assistant Treasurers shall perform those duties
incident to the office of Treasurer and those assigned to the Treasurer in the
absence or unavailability of the Treasurer and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
ARTICLE V.
Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing shares of
the corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary. The names and
addresses of the persons to whom the shares represented thereby are issued, with
the number of shares and dates of issue, shall be entered on the stock transfer
books of the corporation. All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated certificate, a
new one may be issued therefor upon such terms and indemnity to the corporation
as the Board of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the corporation shall be deemed by
the corporation to be the owner thereof for all purposes.
Section 3. Sale of Stock by a Stockholder. It is intended that this
shall be a closed corporation and that by becoming holders of the common or
voting stock of this corporation, each holder thereof agrees that he will not
sell his stock in the open market or to the public without having first offered
the same to the existing holders of the issued and outstanding stock of the
corporation.
In case any stockholder owning voting stock of this corporation shall
decide to sell any or all of the shares of such stock owned by him, he shall
file with the Secretary a written statement of the number of shares he desires
to sell and price asked for same. The Secretary shall present said statement to
the Board of Directors at a meeting called within five (5) days after such
statement is received by him and the Board of Directors shall cause a notice in
writing of such statement to be given to each shareholder of record. Each such
shareholder shall have the right to purchase such number of shares of stock so
offered for sale as the number of shares of voting stock owned by him bears to
the number of such shares issued and outstanding; and in case that he desires to
purchase such shares shall so signify such desire by filing with the Secretary a
written statement within ten (10) days after mailing of the notice to him as
above provided.
Any holder of such common or voting stock not having filed such notice
of his desire to purchase any of the said shares of stock shall, after the
expiration of said ten-day period, lose his right to purchase the same, and the
remaining shareholders may file a written statement as to their desire to
purchase any of the said shares of stock offered for sale at any time within ten
(10) days after the expiration of said first ten-day period, and in case more
than one such shareholder shall desire to purchase said stock, said stock shall
be divided among them in proportion to the number of shares held by them. Should
the corporation and the holders of the issued and outstanding stock of the
corporation have entered into a stock purchase agreement or any agreement
relating to the sale of the corporate stock of any of the stockholders, the
provisions of such stock purchase agreement and the sale price of said stock as
provided in said stock purchase agreement shall control over the terms and
provisions of this Section 3.
ARTICLE VI.
Fiscal Year
The fiscal year of the corporation shall begin on the 1st day of
October and end on the 30th day of September in each year.
ARTICLE VII.
Dividends
The Board of Directors may from time to time declare, and the
corporation may pay dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law.
ARTICLE VIII.
Seal
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation and the words "Corporate Seal".
ARTICLE IX.
Waiver of Notice
Whenever any notice is required to be given to any shareholder or
director of the corporation under the provisions of these Bylaws or under the
provisions of the Montana Business Corporation Act, a waiver therefor in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
ARTICLE X.
Action Without a Meeting
Any action required to be taken at a meeting of the shareholders or
directors of the corporation or any action which may be taken at a meeting of
the shareholders or directors, may be taken without a meeting if a consent, in
writing, setting forth the action so taken, shall be signed by all the
shareholders or directors entitled to vote with respect to the subject matter
thereof. Such consent shall have the same effect as a unanimous vote and may be
stated in any articles or documents filed with the Secretary of State under the
Montana Business Corporation Act.
<PAGE>
ARTICLE XI.
Amendments
These Amended Bylaws may be altered, amended or repealed and new Bylaws
may be adopted by the Board of Directors at any regular or special meeting of
the Board of Directors.
We, the undersigned, being all of the directors of SEMITOOL, INC., do
hereby formally and regularly adopt, ratify and sign the foregoing Amended
Bylaws as the Bylaws of this corporation for the guidance of the corporation and
regulation of its business and as evidence of such adoption and ratification, we
do hereby set our hands this 8th day of April, 1997.
/s/ R. Thompson /s/ C. S. Robinson
- ------------------------ -----------------------
Raymon F. Thompson C.S. Robinson
/s/ Daniel Eigeman /s/ Richard Dasen
- ------------------------ -----------------------
Daniel Eigeman Richard Dasen
/s/ Howard Bateman
- ------------------------
Howard Bateman
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q AS
OF JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,784
<SECURITIES> 0
<RECEIVABLES> 34,454
<ALLOWANCES> 233
<INVENTORY> 49,711
<CURRENT-ASSETS> 94,680
<PP&E> 43,102
<DEPRECIATION> 14,440
<TOTAL-ASSETS> 126,321
<CURRENT-LIABILITIES> 45,362
<BONDS> 3,467
0
0
<COMMON> 39,699
<OTHER-SE> 36,528
<TOTAL-LIABILITY-AND-EQUITY> 126,321
<SALES> 135,788
<TOTAL-REVENUES> 137,215
<CGS> 73,738
<TOTAL-COSTS> 74,064
<OTHER-EXPENSES> 15,457
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 308
<INCOME-PRETAX> 13,067
<INCOME-TAX> 4,965
<INCOME-CONTINUING> 8,102
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,102
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59
</TABLE>
