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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 18, 1997
================================================================================
REGISTRATION NO. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________________________
ACT MANUFACTURING, INC.
(Exact name of Registrant as specified in its charter)
MASSACHUSETTS 04-2777507
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
108 FOREST AVENUE
HUDSON, MASSACHUSETTS 01749
(508) 562-1200
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
________________________________________
JOHN A. PINO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
108 FOREST AVENUE
HUDSON, MASSACHUSETTS 01749
(508) 562-1200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________________________________
COPIES TO:
JOHN A. MELTAUS, ESQ.
Testa, Hurwitz & Thibeault, LLP
High Street Tower, 125 High Street
Boston, Massachusetts 02110
(617) 248-7000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering.[_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434 under
the Securities Act of 1933, check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE
TITLE OF SHARES TO BE AMOUNT TO BE PRICE PER OFFERING AMOUNT OF REGISTRATION
REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(2)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 190,546 $31.06 $5,918,835.13 $1,793.59
par value................... shares
===================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 under the Securities Act of 1933.
(2) Pursuant to Rule 457(c) of the Securities Act of 1933, the registration fee
has been calculated based upon the average of the high and low prices per
share of Common Stock reported on the Nasdaq National Market on June 12,
1997.
________________________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
_______________________
PROSPECTUS
190,546 SHARES
ACT MANUFACTURING, INC.
COMMON STOCK
_______________________
This Prospectus relates to the sale of up to an aggregate of 190,546 shares
(the "Shares") of the common stock, par value $.01 per share (the "Common
Stock"), of ACT Manufacturing, Inc., a Massachusetts corporation ("ACT" or the
"Company"), by a certain stockholder of the Company (the "Selling Stockholder").
The Selling Stockholder may sell the Shares from time to time at market prices
prevailing at the time of sale or at prices otherwise negotiated. The Selling
Stockholder and certain persons who purchase shares from it, including broker-
dealers acting as principals who may resell the Shares, may be deemed
"underwriters," as such term is defined in the Securities Act of 1933, as
amended (the "Securities Act"). See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares. The Company is responsible for the expenses incurred in connection with
the registration of the Shares. The Selling Stockholder will pay or assume
brokerage commissions or other similar charges incurred in the sale of the
Shares.
The Company's Common Stock is listed on the Nasdaq National Market under
the symbol "ACTM." The last reported sale price for the Common Stock on June
16, 1997 was $33.375 per share, as reported by the Nasdaq National Market.
_______________
AN INVESTMENT IN THESE SECURITIES INVOLVE CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 12.
_______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
_______________
The date of this Prospectus is June 18, 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048, and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission also maintains a World Wide Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at the
address "http://www.sec.gov." The Common Stock of the Company is listed on the
Nasdaq National Market. Reports, proxy statements and other information
concerning the Company may also be inspected at the offices of the National
Association of Securities Dealers, Inc. located at 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement") under the
Securities Act, with respect to the Common Stock offered hereby. This
Prospectus does not contain all information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information regarding the Company
and the Common Stock offered hereby, reference is hereby made to the
Registration Statement and to the exhibits and schedules filed therewith.
Statements contained in this Prospectus regarding the contents of any agreement
or other document filed as an exhibit to the Registration Statement are not
necessarily complete, and in each instance reference is made to the copy of such
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. The Registration Statement,
including the exhibits and schedules thereto, may be inspected at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and copies of all or any part thereof may be obtained
from such office upon payment of the prescribed fees.
The Company will provide without charge to each person to whom a Prospectus
is delivered, on the written or oral request of any such person, a copy of any
or all of the documents incorporated by reference herein (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
into such documents). Requests for such copies should be directed to Douglass
C. Greenlaw, Vice President of Finance and Administration and Chief Financial
Officer, ACT Manufacturing, Inc., 108 Forest Avenue, Hudson, Massachusetts
01749, telephone number (508) 562-1200.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act are incorporated in this Prospectus by reference (File No.
0-25560):
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
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3. The Company's Current Report on Form 8-K filed on June 17, 1997.
4. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed pursuant to Section
12(g) of the Exchange Act on February 15, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Shares, shall be deemed to be incorporated by reference in this
Prospectus and made a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be incorporated
by reference in this Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which is also deemed to be incorporated
by reference herein or in any prospectus supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
3
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THE COMPANY
ACT provides value-added, turnkey contract manufacturing services for
emerging and major original equipment manufacturers ("OEMs") in the commercial
electronics industry. The Company supplies OEMs with electronic interconnection
assemblies, including complex printed circuit board ("PCB") assemblies primarily
utilizing advanced surface mount technology ("SMT"), mechanical and molded cable
and harness assemblies, electro-mechanical sub-assemblies, and total system
assembly and integration. OEMs use the Company's assemblies in a wide range of
applications including local and wide area computer networking systems, computer
workstations and systems, mass data storage systems, telecommunications, and
medical and industrial control equipment. The Company delivers advanced
manufacturing and test engineering and responsive materials management together
with technologically-advanced, flexible and service-oriented manufacturing for
the complex, leading-edge products of its OEM customers throughout the full
product lifecycle.
The Company was incorporated in Massachusetts in 1982 under the name of
Advanced Cable Technologies, Inc. In December 1994, Automated Component
Technologies, Inc., a related company with common ownership, was merged into the
Company and the Company changed its name to ACT Manufacturing, Inc. The
Company's principal executive offices are located at 108 Forest Avenue, Hudson,
Massachusetts 01749, and its telephone number is (508) 562-1200.
ELECTRONIC CONTRACT MANUFACTURING INDUSTRY
The electronic contract manufacturing market was created in the 1960's
primarily to provide OEMs with additional manufacturing capacity during peak
production times when in-house manufacturing capabilities could not meet
production needs. Contract manufacturers typically were employed on a
consignment basis to provide assembly services only, while the OEM provided the
circuit and production designs, procured all components and performed final
product testing. Since the early 1980's, OEMs have increasingly relied on
turnkey contract manufacturers, in which the manufacturer directly sources all
or a substantial portion of the components necessary for product assembly. OEMs
are motivated to use turnkey contract manufacturers due to the increased capital
necessary to acquire modern, highly-automated manufacturing equipment, the
greater need for more sophisticated manufacturing processes, the OEMs' incentive
to reduce its component inventory, and the improved purchasing power, labor
efficiency and overall cost benefits of contract manufacturers. The Company
believes that many OEMs now view contract manufacturers as an integral part of
their manufacturing strategy rather than temporary manufacturing sources during
periods of peak production. More recently, OEMs have looked increasingly toward
turnkey contract manufacturers to provide an even broader scope of value-added
services, such as manufacturing engineering, just-in-time component and finished
product inventory management and various product assembly and test services.
This has enabled OEMs to focus their efforts, capital and personnel resources on
their core competencies such as product research and development, marketing,
sales and customer support.
The acceptance by OEMs of surface mount technology over pin-through-hole
("PTH") printed circuit board interconnection in the late 1980's has been a key
element in the increased reliance by OEMs on contract manufacturers who have
expertise and manufacturing capacity in advanced technology. PTH assembly
involves inserting electronic components, such as integrated circuits, with pins
or leads through pre-drilled holes in a printed circuit board and soldering the
pins to the electrical circuits. PTH technology allows circuits to be placed
only on one side of the circuit board. SMT technology, an advanced
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interconnection technology, was developed in response to the growing need for
electronic devices to contain greater numbers of components with increasing
functional density and interconnections. SMT is a largely automated process
that involves placing the semiconductor components directly on the surface of
both sides of a printed circuit board, thus providing benefits of reduced size,
enhanced signal speed and lower cost of assembly and testing resulting from less
manual labor than is required for the PTH process. SMT requires substantial
capital investment in expensive, highly-automated production equipment and
significant engineering expertise which generally can only be supported by high
utilization of this equipment.
Until the late 1970's, cable and harness assembly manufacturing followed
the prevailing OEM vertical integration strategy wherein substantially all
manufacturing was performed in-house. At that time, the outsourcing market for
cable and harness assemblies began to gain favor as OEMs realized the benefits
of external versus internal manufacturing. The ability of the contract cable
and harness assemblers to provide low cost assembly as a result of their lower
production and overhead costs and to produce high quality products resulted in
early market acceptance. Continued growth of the outsourced cable and harness
assembly market resulted in lower cable and connector costs as the contract
manufacturers' purchasing power grew. Today, OEMs continue to realize the
benefits of low cost and high quality manufacturing and further benefit from
manufacturing engineering services and advanced technology offered by contract
manufacturers.
The market for contract manufacturing services continues to expand as OEMs
begin to utilize the total system assembly and integration capabilities of
contract manufacturers. The production of electro-mechanical sub-assemblies and
development of test and product configuration capabilities will continue to
expand as contract manufacturers broaden their service offerings to the OEM
customer.
In today's environment of rapid technological change and high competition,
these OEMs are faced with increasingly shorter product life-cycles and have a
greater need to reduce the time it takes to bring a product to market. OEMs
also face increasing difficulties in planning, procuring and managing their
inventories efficiently, due to frequent design changes, short product life-
cycles, large investments in electronic components, component price
fluctuations, and the need to achieve economies of scale in materials
procurement. The OEMs' commercial electronics applications often include high
software functionality and value, causing many OEMs to focus their internal
resources primarily on software engineering. Due to the nature of their
businesses, many OEMs routinely make hardware and software upgrades to their
products to remain competitive in their product offerings and to enhance product
functionality and quality. In response to these pressures, this segment of the
OEM market requires a highly service-oriented and interactive relationship
between the OEM and its contract manufacturer in order to realize the time-to-
market, product cost savings, quality control and responsive production and
inventory requirements of these OEMs.
BUSINESS STRATEGY
The Company's strategy is to identify and develop strong, long-term
alliances with high-growth and market-leading OEMs of complex, leading-edge
products which require flexible, value-added manufacturing services. The
Company has invested in the capabilities to apply technologically-advanced
manufacturing and related services for the shorter and moderate-volume
production runs that are typically required in the OEM's rapidly changing
markets. The Company's goal is to provide its OEM partners with service-
oriented manufacturing solutions from the design phase through product maturity
and across product generations in order to attract the high-value, commercial
product manufacturing business of these OEMs.
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SERVICES PROVIDED BY THE COMPANY
The Company provides value-added, turnkey manufacturing services, including
advanced manufacturing and test engineering, materials management, and
manufacturing of electronic assemblies, including complex PCB assemblies, cable
and harness assemblies, electro-mechanical sub-assemblies, and total system
assembly and integration.
MANUFACTURING OF ELECTRONIC ASSEMBLIES
--------------------------------------
ACT offers manufacturing capabilities for PCB assemblies, cable and harness
assemblies, electro-mechanical sub-assemblies and total system assembly and
integration.
Printed Circuit Board Assemblies
--------------------------------
The Company's PCB assembly operations are oriented toward advanced
technology SMT applications. At the beginning of 1996, the Company added a fifth
Fuji SMT line. The Company also continues to support PTH technology and related
semi-automated and manual placement processes for existing and new applications
which require these technologies. ACT's manufacturing process is supported by
state-of-the-art, high-speed placement systems, screen printers, epoxy
dispensers, wave solderers, reflow and cleaning systems and a highly-trained and
experienced engineering and manufacturing workforce. ACT utilizes
environmentally clean, water-soluble and no-clean process technology which the
Company believes meets or exceeds all applicable environmental regulations.
ACT also provides testing services for substantially all completed PCB
assemblies in connection with the manufacturing process. In-circuit tests
verify that the components have been inserted properly and meet certain
functional standards and that the electrical circuits have been completed
properly. These tests are performed on industry standard testing equipment
using proprietary software developed either by the customer or the Company's
test engineers. In addition, using specialized testing equipment designed and
provided by the customer, the Company performs customized functional tests
designed to ensure that the PCB assembly will perform its intended functions.
Since defective components normally fail after a relatively short period of use,
normal process parameters require that certain PCB assemblies be subjected to
controlled environmental stresses, typically thermal or electrical stresses.
Cable and Harness Assemblies
----------------------------
ACT offers a wide range of custom manufactured cable and harness
assemblies for molded and mechanical applications. These assemblies include
ribbon, multiconductor, co-axial and fiber optic cable assemblies and discrete
wire harness assemblies. The Company uses advanced and diverse manufacturing
processes, in-line inspection and test and dedicated work cells to minimize work
in process time and focus on process efficiencies and quality. The cable and
harness assembly process is accomplished using both automated and semi-automated
preparation and insertion equipment and manual assembly techniques. ACT tests
substantially all of its cable and harness assemblies using automated test
equipment.
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Electro-Mechanical Sub-Assemblies and Total System Assembly and
---------------------------------------------------------------
Integration
- -----------
In response to the needs of its OEM customers, ACT offers products
which integrate its PCB and cable and harness assembly technologies into higher
level sub-assemblies and total system assembly and integration ("box build").
These products utilize the full range of the Company's service offerings. With
the addition in February 1996 of its Mansfield, Massachusetts manufacturing
facility, the Company has enhanced its service capabilities. This facility
offers full integration and test capability and repair capability, as well as
traditional PCB assembly capabilities
ADVANCED MANUFACTURING AND TEST ENGINEERING
-------------------------------------------
The Company provides its OEM partners with advanced manufacturing and
test engineering services during the design and implementation of new and
upgraded products, as well as throughout the manufacturing process. The
Company's engineering services are designed to ensure that OEM products are
rapidly brought to market and meet the market's expectation for quality.
The Company's advanced manufacturing engineers work closely with an
OEM's product designers at the early design stage in order to optimize the
hardware design in terms of manufacturability, testability, and product
reliability. The Company's advanced manufacturing engineers also participate in
the OEM's parts selection and materials utilization decisions at the design
stage in order to mitigate component availability issues which might arise
during the manufacturing cycle. The Company's engineers evaluate the ongoing
manufacturing process and recommend improvements to reduce manufacturing costs
or lead times, or to increase the quality of finished assemblies.
MATERIALS MANAGEMENT
--------------------
The Company is primarily a turnkey manufacturer, meaning the Company
directly sources all or a substantial portion of the components necessary for
its product assemblies. The Company procures components from a select group of
vendors which meet ACT's standards for timely delivery, high quality and cost
effectiveness. To help control inventory investment, components are generally
ordered when the Company has a purchase order or commitment from a customer to
purchase the completed assemblies. Material planning and procurement is
accomplished by the use of a state-of-the-art Materials Requirements Planning
(MRP) system. Communication with vendors is enhanced with the use of Electronic
Data Interchange (EDI) systems. Additionally, ACT uses just-in-time inventory
management techniques and manages its material pipelines and vendor base in
order to enable the Company's customers to increase or decrease volume
requirements within established frameworks.
MANUFACTURING PROCESS
The manufacturing process begins with the development of a complete
set of process documents. An inspection, test and quality control plan is
established to ensure quality while a material acquisition plan is developed to
ensure availability of supply and the timely delivery of components to the
manufacturing process. The Company analyzes each customer's materials
specifications to identify the suppliers from whom to purchase the materials.
The Company then plans and executes purchase orders and receives, inspects and
warehouses components, expedites critical components and delivers a complete set
of components to the production floor for assembly in sufficient time to meet
customer requirements. Labor efficiency and quality information is continuously
gathered and analyzed from the manufacturing processes
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to ensure that quality and time of delivery objectives are met. In certain
cases, the Company creates customized tooling and processes for individual
customer products which advantageously positions the Company to supply upgrades
and next generation products.
The Company employs just-in-time manufacturing, statistical process
control and total quality management during the manufacturing process. Just-in-
time manufacturing is a production technique which minimizes work-in-process
inventory and manufacturing cycle time while enabling the Company to deliver
products to customers in the quantities and within the time frame required.
Statistical process control is a set of analytical and problem-solving
techniques based on statistics and process capability measurements, through
which the Company can track process inputs and resulting quality and determine
whether a process is operating within specified limits. In order to effectively
utilize labor, manufacturing equipment, and associated overhead, shop floor
control and process routing techniques are utilized. Total quality management
is a management philosophy which seeks to impart high levels of quality in every
operation of the Company and is accomplished by the setting of quality
objectives for every operation, tracking performance against those objectives,
and identifying work flow and policy changes required to achieve higher quality
levels, all supported by the commitment of executive management to initiate
changes required to deliver higher quality. In November 1996, the Company's
manufacturing facilities and associated systems were recertified under ISO 9002
by TUV America, an internationally recognized standards organization.
Responsiveness to customers, particularly as to engineering changes
once manufacturing has commenced, is an important component of the Company's
flexible manufacturing approach. Many products manufactured by the Company are
in the early stages of their product life cycle and therefore may have many
design or engineering changes. Upon receiving an engineering change notice, the
Company identifies and manages the impact on the production process, current
inventory and open purchase orders. The Company maintains regular contact with
its customers to assure adequate information exchange, document control and
activities coordination necessary to support a high level of quality and on-time
delivery.
The Company has made significant investments in advanced manufacturing
technology, including computer-aided manufacturing and test equipment, process
technology, information processing technology, and enhanced SMT capabilities
such as ball-grid array.
CUSTOMERS, MARKETING AND SALES
The Company serves a wide range of businesses from emerging growth
companies to multinational corporations in a wide variety of markets including
local and wide area computer networking systems, computer workstations and
systems, mass data storage systems, telecommunications, and medical and
industrial control equipment. The Company's principal sources of new business
originate from expansion in the volume and scope of services provided to
existing customers, referrals from existing customers and suppliers, direct
sales through senior management and a direct sales organization, and sales
obtained by selected independent sales representative firms principally in the
Eastern U.S. and Canada.
In many cases, the Company's OEM customers utilize more than one
contract manufacturer across their product lines. The Company's goal is to be
the primary contract manufacturer for its OEM customers, and to attract the
OEMs' high-value, leading-edge products. The Company believes that its close
interaction with the design engineering personnel of its customers at the
product development stage, together with the Company's established materials
pipeline and prototype production experience, enables the Company to participate
in its customers' new product offerings. The Company assigns each customer
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a program manager whose responsibilities, as the primary contact into the
Company, include the development of the manufacturing relationship and the
assignment of Company resources to meet customer requirements.
The Company continues to focus on expanding and diversifying its
customer base to reduce dependence on any individual customer or industry
segment, and ACT is targeting emerging OEMs in high-growth industry segments.
Turnkey contract manufacturers generally face a long sales cycle and must
perform satisfactorily on a limited number of any OEM's assembly orders prior to
capturing significant orders from that OEM.
Cascade Communications Corp. ("Cascade Communications"), 3Com
Corporation ("3Com"), Motorola Corporation ("Motorola") and Bay Networks
Corporation ("Bay Networks") accounted for 20%, 17%, 13% and 13%, respectively,
of the Company's net sales for 1996. 3Com accounted for 41% of the Company's
net sales for 1995. Chipcom Corporation (acquired by 3Com in 1995) accounted
for 55% of the Company's net sales in 1994.
The Company generally warrants that its products will be free from
defects in workmanship for twelve months, and passes on to the customer any
warranties provided by component manufacturers and material suppliers to the
extent permitted. During the warranty period, the Company's warranty provides
that the Company will take action to repair or replace failed products. The
Company tests substantially all of its assemblies prior to shipment. In
addition, the Company's OEM customers generally test or have tested final
products on a sample basis prior to deployment in the field. The Company's
warranty costs have not been material to date.
COMPETITION
The Company operates in a highly competitive market. The Company's
competitors include large national or multi-national contract manufacturers,
regional and local contract manufacturers, and OEMs which continually evaluate
the relative benefits of manufacturing internally. The Company's major
competitors include Solectron Corporation, SCI Systems, Inc., Jabil Circuit,
Inc., Lockheed Martin Commercial Electronics, the DII Group, Group Technologies
Corporation, Benchmark Electronics, Inc. and Sanmina Corporation, as well as a
number of regional and local competitors. The Company faces competition in the
cable and harness assembly market primarily from Volex Interconnect Systems,
Inc., Berg Electronics, Inc., AMP, Inc. and Molex, Inc. The Company in the
future may face competition from OEMs which market contract manufacturing
services and from OEMs which have technology alliances or other corporate
partnering relationships.
The Company believes that competition is primarily based on
technology, service, manufacturing capability, quality, regional access, price,
reliability, timeliness in delivering finished products and flexibility in
adapting to customers' needs. The Company believes it competes favorably in
these areas. However, several of its competitors have greater manufacturing,
marketing and financial resources than the Company. In addition, the Company
may face competition from offshore manufacturers which have significantly lower
labor costs which may allow them to compete favorably on the basis of price.
9
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BACKLOG
The Company's backlog at December 31, 1996 was approximately $75.5
million compared to $59.6 million at December 31, 1995. Backlog consists of
firm purchase orders and commitments with delivery dates scheduled within the
next six months, the majority of which will be shipped within the next ninety
days. Variations in the size and delivery schedules of purchase orders received
by the Company, as well as changes in customers' delivery requirements, may
result in substantial fluctuations in backlog from period to period. Because
customers may cancel or modify orders and commitments without penalty, the
Company believes that backlog cannot be considered a meaningful indicator of
long-term future financial results.
GOVERNMENTAL REGULATION
The Company's operations are subject to certain federal, state and
local regulatory requirements relating to environmental, waste management and
health and safety matters. Management believes that the Company complies with
applicable regulations promulgated by the Occupational Safety and Health
Administration and the Environmental Protection Agency and corresponding state
agencies pertaining to health and safety in the workplace and the use, storage,
discharge and disposal of chemicals used in its manufacturing processes. The
current costs of compliance are not material to the Company. Nevertheless, no
assurances can be given that additional or modified requirements will not be
imposed in the future and, if so imposed, will not involve substantial
additional expenditures by the Company.
EMPLOYEES
At December 31, 1996, the Company had 799 employees, including 736 in
manufacturing and related activities and 63 in sales, marketing and
administrative activities. The employees of the Company are not represented by
a union and the Company has experienced no labor stoppages. The Company
considers its relations with its employees to be good.
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RECENT DEVELOPMENTS
Electronic Systems International Acquisition. On June 9, 1997, the
Company acquired substantially all of the assets of Electronic Systems
International ("ESI"), a division of ESI Acquisition Corporation, a Georgia
corporation, pursuant to an Asset Purchase Agreement dated as of June 5, 1997,
among the Company, ACT Acquisition Corp., a Massachusetts corporation and a
wholly-owned subsidiary of ACT, ESI Acquisition Corporation, and J. Randell
Hales, Lucinda H. Helms and Archie C. Burnham III (the "Acquisition"). ESI is
based in Norcross, Georgia. The purchase price of the Acquisition was: (i)
$10,000; (ii) the issuance to ESI of 190,546 shares of Common Stock; (iii) the
assumption of certain specified liabilities; and (iv) an aggregate of $250,000
in cash as consideration for non-competition agreements with certain principals
from ESI. The Acquisition has been accounted for under the purchase method of
accounting. The purchase price and terms for the transaction were determined in
arms-length negotiations. ESI provides contract electronic and
electro-mechanical manufacturing services to original equipment manufacturers
primarily in the Southeastern United States for the production of printed
circuit board assemblies, electronic subsystems and total system assembly
products. ESI's business will be carried on directly by the Company through its
wholly-owned subsidiary, ACT Acquisition Corp.
Pursuant to the Asset Purchase Agreement, the Company agreed to file
with the Commission a registration statement on Form S-3 (of which this
Prospectus is a part) to permit the public sale of the Shares by the Selling
Stockholder from time to time and to use its best efforts to keep the
Registration Statement effective until the earlier of the sale of the Shares
pursuant to the Registration Statement or 90 days after the effective date of
this Registration Statement. The Company will prepare and file such amendments
and supplements to the registration statement as may be necessary to keep it
effective until the earlier of the sale of all Shares pursuant to the
Registration Statement or until 90 days after the effective date of this
Registration Statement.
SignMax Limited Acquisition. In June 1997, the Company completed the
acquisition of SignMax Limited, a private limited company organized under the
laws of Ireland. SignMax Limited is based in Dublin, Ireland and provides
contract manufacturing services primarily for the production of cable and
harness assemblies.
These acquisitions, either individually or in the aggregate, are not
considered significant to the Company's financial statements.
11
<PAGE>
RISK FACTORS
In addition to the other information presented in this Prospectus and
the information incorporated in this Prospectus by reference, the following risk
factors should be considered carefully in evaluating the Company and its
business before purchasing the Common Stock offered hereby.
CUSTOMER AND INDUSTRY CONCENTRATION
-----------------------------------
For fiscal 1996, the Company's four largest customers accounted for
approximately 63% of net sales. Sales to Cascade Communications, 3Com, Bay
Networks and Motorola were approximately 20%, 17%, 13% and 13%, respectively, of
the Company's net sales for fiscal 1996. The Company's results will depend to a
significant extent on the success achieved by its OEM customers in marketing
their products and the Company's ability to diversify its customer base in order
to reduce its reliance on its major customers. There can be no assurance that
the Company's principal customers will continue to purchase products and
services from the Company at current levels. The loss of one or more major
customers, a significant reduction in purchases from such customers, or
developments adverse to the Company's customers or their products could have a
material adverse effect on the Company's results of operations. In addition,
while the Company has not experienced any difficulty in being paid by its major
customers in recent years, the Company could be adversely affected if a major
customer were unable or unwilling to pay for products and services.
The Company's customer base has historically been concentrated in a
limited number of industries, most of which are subject to high competition,
rapid technological changes and consequent product obsolescence. Developments
adverse to such industries could have a negative effect on the Company. The
industries served by the Company are also subject to economic cycles and have in
the past experienced, and are likely in the future to experience, recessionary
periods. A recessionary period affecting one or more of the industry segments
served by the Company could have a material adverse effect on the Company. In
addition, the Company's results of operations could be adversely affected due to
a slowing of the manufacturing outsourcing trend.
VARIABILITY OF CUSTOMER REQUIREMENTS; NATURE AND EXTENT OF CUSTOMER
-------------------------------------------------------------------
COMMITMENTS ON ORDERS
- ----------------------
The level and timing of orders placed by the Company's OEM customers
vary due to customer attempts to manage inventory, changes in the OEM's
manufacturing strategy and variation in demand for customer products due to,
among other things, introduction of new products, product life cycles,
competitive conditions or general economic conditions. The Company generally
does not obtain long-term purchase orders or commitments but instead works with
its customers to anticipate the future volume of orders. Based on such
anticipated future volumes, the Company makes other significant commitments
regarding the levels of business that it will seek and accept, the timing of
production schedules and the levels and utilization of personnel and other
resources. From time to time, the Company will purchase components without a
customer commitment to pay for them. A variety of conditions, both specific to
the individual customer and generally affecting the customer's industry, may
cause customers to cancel, reduce or delay orders that were either previously
made or anticipated. Generally, customers may cancel, reduce or delay purchase
orders and commitments without penalty. Significant cancellations, reductions or
delays in orders by a customer or group of customers could adversely affect the
Company's results of operations.
12
<PAGE>
FLUCTUATIONS IN OPERATING RESULTS
---------------------------------
The variability of the level and timing of orders from, and shipments
to, major customers may result in significant periodic and quarterly
fluctuations in the Company's results of operations. In addition to the
variability resulting from the short-term nature of its customers' commitments,
other factors have contributed, and may in the future contribute, to such
fluctuations. These factors include, among other things, customers' announcement
and introduction of new products or new generations of products, evolutions in
the life cycles of customers' products, timing of expenditures in anticipation
of future orders, effectiveness in managing manufacturing processes, changes in
cost and availability of labor and components, a shift in the Company's product
and service mix which results in fluctuating margins, and changes or anticipated
changes in economic conditions. Because the Company's operating expenses are
based on anticipated revenue levels and a high percentage of the Company's
operating expenses are relatively fixed, any unanticipated shortfall in revenue
in a quarter may have an adverse impact on the Company's results of operations
for that quarter. Results of operations in any period should not be considered
indicative of the results to be expected for any future period.
AVAILABILITY OF KEY COMPONENTS
-------------------------------
The Company and many of its customers rely on a single or limited
number of third-party suppliers for many components used in the assembly
process. Shortages of certain electronic components, including certain memory
modules and logic devices, have occurred from time to time. In addition, due to
the Company's utilization of just-in-time inventory techniques, the timely
availability of many components to the Company is dependent on the Company's
ability to continuously develop accurate forecasts of customer volume
requirements. Component shortages could result in manufacturing and shipping
delays or increased component prices which could have a material adverse effect
on the Company's results of operations. Because the Company purchases a
significant number of components manufactured in foreign countries, it is
subject to numerous risks, including economic disruptions, transportation delays
and interruptions, foreign exchange rate fluctuations, imposition of tariffs and
import and export controls and changes in governmental policies, any of which
could have a material adverse effect on the Company's business and results of
operations. The Company has historically been able to enter into advantageous
arrangements from time to time for the supply of certain limited availability
components. To the extent that the Company is unable to source key components
for the reasons cited above or otherwise, the Company's results of operations
could be materially adversely affected.
TECHNOLOGICAL CHANGE AND PROCESS DEVELOPMENT
---------------------------------------------
The market for the Company's manufacturing services is characterized
by rapidly changing technology and continuing process development. The continued
success of the Company's business will depend in large part upon its ability to
maintain and enhance its technological capabilities, develop and market
manufacturing services which meet changing customer needs and successfully
anticipate or respond to technological changes in manufacturing processes on a
cost-effective and timely basis. Although management believes that the Company's
operations utilize the assembly and testing technologies and equipment currently
required by the Company's customers, there can be no assurance that the
Company's process development efforts will be successful or that the emergence
of new technologies, industry standards or customer requirements will not render
the Company's technology, equipment or processes obsolete or uncompetitive. In
addition, to the extent that the Company determines that new assembly and
testing technologies and equipment are required to remain competitive, the
acquisition and implementation of such technologies and equipment are likely to
require significant capital investment by the Company.
13
<PAGE>
COMPETITION
------------
The commercial electronics contract manufacturing industry is a highly
competitive industry. The Company competes against numerous domestic and foreign
contract manufacturers. The Company's major competitors in the PCB assembly
business include Solectron Corporation, SCI Systems, Inc., Jabil Circuit, Inc.,
Lockheed Martin Commercial Electronics, the DII Group, Group Technologies
Corporation, Benchmark Electronics, Inc. and Sanmina Corporation. The Company
faces competition in the cable and harness assembly market primarily from Volex
Interconnect Systems, Inc., Berg Electronics, Inc., AMP, Inc. and Molex, Inc.
The Company also faces competition from a number of local and regional contract
manufacturers. In addition, current and prospective customers continually
evaluate the merits of manufacturing products internally and certain large OEMs
will from time to time offer contract manufacturing services in order to utilize
excess capacity. Certain of the Company's competitors have substantially greater
manufacturing, financial and marketing resources than the Company. The Company
may be operating at a cost disadvantage compared to manufacturers who have
greater direct buying power from component suppliers or who have lower cost
structures, particularly those with significant offshore operations. The Company
believes that the principal competitive factors in the segments of the contract
manufacturing industry in which it operates are technology, service,
manufacturing capability, quality, regional access, price, reliability,
timeliness and flexibility. There can be no assurance that competition from
existing or potential competitors will not have a material adverse effect on the
Company's results of operations.
MANAGEMENT OF GROWTH
---------------------
The Company has grown rapidly in recent years. A continuing period of
rapid growth could place a significant strain on the Company's management,
operations and other resources. The Company's ability to manage its growth will
require it to continue to invest in its operational, financial and management
information systems, and to retain, motivate and effectively manage its
employees. If the Company's management is unable to manage growth effectively,
the quality of the Company's services and products, its ability to retain key
personnel and its results of operations could be materially and adversely
affected.
DEPENDENCE UPON KEY PERSONNEL
------------------------------
The Company's continued success has been largely dependent upon the
skills and efforts of John A. Pino, its President and Chief Executive Officer,
and other key employees. None of the senior management or other key employees of
the Company is subject to any employment contract. The loss of services of any
of its officers or other key personnel could have an adverse effect on the
operations of the Company. In addition, continued growth and development of the
Company will require that, despite significant competition, it attract, motivate
and retain additional skilled and experienced personnel. There can be no
assurance that the Company will be able to attract, motivate and retain
personnel with the skills and experience needed to successfully manage the
Company's business and operations.
CONCENTRATION OF PRINTED CIRCUIT BOARD BUSINESS IN NORTHEASTERN UNITED
----------------------------------------------------------------------
STATES
- -------
The Company's PCB assemblies and related services are primarily
marketed and sold to customers operating in the Northeastern United States. The
Company attempts to mitigate any unique exposure to the Northeastern United
States economy by marketing to OEMs which deliver products to national and
international markets, but there can be no assurance that an economic downturn
or recession in the Northeastern United States would not have an adverse effect
on the Company.
14
<PAGE>
DIFFICULTY OF INTEGRATING ACQUIRED BUSINESSES
----------------------------------------------
The Company acquired substantially all of the assets of Electronic
Systems International on June 9, 1997. The contract manufacturing business of
ESI, which is based primarily in the Southeastern United States, is currently
being operated by ACT Acquisition Corp, a wholly-owned subsidiary of the
Company. In addition, the Company completed the acquisition of SignMax Limited
on June 10, 1997. SignMax Limited is based in Dublin, Ireland and is a contract
manufacturer primarily of cable and harness assemblies. The Company has limited
experience in integrating acquired companies into its operations, in expanding
the scope of operations of acquired businesses, and in operating in the
Southeastern United States or overseas. There can be no assurance that the key
employees and businesses of acquired companies will be successfully integrated
with the Company, that any acquired business will contribute significantly to
the Company's sales or earnings, or that sales and earnings of acquired
businesses will not be adversely effected by the integration process or other
factors. As a result of these acquisitions, the Company's ability to compete
successfully will depend in part on the ability of a limited number of key
executives to integrate Company management, manage geographically dispersed
operations, address the needs of the Company's expanded customer base and
respond to changes in the markets in which the Company operates. Therefore,
there can be no assurance that the Company will operate the acquired businesses
profitability during the next year or in the future. Accordingly, operating
expenses associated with the acquired business could have a material adverse
effect on the Company's business, financial condition and results of operations.
FUTURE ACQUISITIONS AND GEOGRAPHICAL EXPANSION
----------------------------------------------
The Company may expand into other geographical areas within the United
States and internationally by acquiring contract manufacturing businesses or by
establishing new manufacturing operations in such areas. The Company may compete
for acquisition and expansion opportunities with entities having significantly
greater resources than the Company. Any such transactions may result in
potentially dilutive issuance of equity securities, the incurrence of debt and
amortization expenses related to goodwill and other intangible assets, and other
costs and expenses, all of which could materially adversely affect the company's
financial results following such a transaction. Such transactions also involve
numerous business risks, including difficulties in the assimilation of the
operations, technologies and products of the acquired companies, the diversion
of management's attention from other business concerns and the potential loss of
key employees from the combined company. In the event that any such transaction
does occur, there can be no assurance as to the beneficial effect on the
Company's business and financial results.
ENVIRONMENTAL COMPLIANCE
-------------------------
The Company is subject to a variety of environmental regulations
relating to the use, storage, discharge and disposal of hazardous chemicals used
during its manufacturing process. A failure by the Company to comply with
present and future regulations could subject it to future liabilities or the
suspension of production. Such regulations could also restrict the Company's
ability to expand its facilities or could require the Company to acquire costly
equipment or to incur other significant expenses to comply with environmental
regulations.
15
<PAGE>
POSSIBLE VOLATILITY OF STOCK PRICE
----------------------------------
There has been significant volatility in the market price of
securities of high technology companies. Factors such as announcements of
technological innovations by the Company, its competitors and other third
parties, as well as quarterly variations in the Company's results of operations
and market conditions in the industry, may cause the market price of the
Company's Common Stock to fluctuate significantly. In addition, the public
stock markets have historically experienced extreme price and trading volume
volatility. This volatility has significantly affected the market prices of
securities of many technology companies for reasons frequently unrelated to the
operating performance of the specific companies. These broad market
fluctuations may adversely affect the market price of the Company's Common
Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares by the Selling Stockholder.
16
<PAGE>
SELLING STOCKHOLDER
The following table sets forth certain information regarding ownership
of the Shares as of June 18, 1997 and the number of Shares that may be offered
for the account of the Selling Stockholder or its distributees. All of the
shares offered hereby were acquired in connection with the ACT acquisition of
substantially all of the assets of the contract manufacturing business of ESI.
See "Plan of Distribution."
<TABLE>
<CAPTION>
Shares Shares Shares
Owned Prior to be Sold Owned
to the in the After the
Selling Stockholder Offering Offering/(1)/ Offering/(2)/
- ------------------- -------- -------- --------
=============================================================================
<S> <C> <C> <C>
ESI Acquisition
Corporation(3) 190,546 190,546 *
TOTAL 190,546 190,546
- -------------------------
*See Footnote 2 below
</TABLE>
(1) Assumes that all of the Shares owned by the Selling Stockholder
and offered under this Prospectus are sold during the distribution
period.
(2) Because the Selling Stockholder or its distributees may sell all
or any part of their Shares pursuant to this Prospectus, no estimate can
be given as to the number of Shares that will be held by the Selling
Stockholder upon termination of this offering. However, prior to the
offering the Selling Stockholder held approximately two percent (2%) of
ACT's outstanding shares of Common Stock, based on shares of Common Stock
outstanding as of May 9, 1997.
(3) The stockholders and their respective percentage ownership
interests of ESI are as follows: J. Randell Hales - 57.26%, Lucinda H.
Helms - 25.64%, and Archie C. Burnham III - 17.10%.
17
<PAGE>
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholder acting as principal for its own account. The Company is responsible
for the expenses incurred in connection with the registration of the Shares.
The Company will receive none of the proceeds from this offering. The Selling
Stockholder will pay or assume brokerage commissions or other charges and
expenses incurred in the sale of the Shares.
The distribution of the Shares by the Selling Stockholder is not
currently subject to any underwriting agreement. The Shares covered by this
Prospectus may be sold by the Selling Stockholder or its stockholders upon a
distribution of the Shares thereto. Such sales may be made at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, or at negotiated prices. Such sales
may be effected in the over-the-counter market, on the National Association of
Securities Dealers Automated Quotation System, on the Nasdaq National Market, or
on any exchange on which the Shares may then be listed. The Shares may be sold
by the Selling Stockholder through a "Designated Broker," which shall mean one
or more brokers or dealers selected by the Company, at least two of which shall
be Adams, Harkness & Hill and Robertson, Stephens & Company, LLC. The Shares
may be sold by one or more of the following: (a) one or more block trades in
which a Designated Broker so engaged will attempt to sell all or a portion of
the Shares held by the Selling Stockholder as agent but may position and resell
a portion of the block as principal to facilitate the transaction; (b) purchases
by a Designated Broker as principal and resale by such Broker for its account
pursuant to this Prospectus; (c) ordinary brokerage transactions and
transactions in which the Designated Broker solicits purchasers; (d) in
negotiated transactions; and (e) through other means. The Selling Stockholder
may effect such transactions by selling Shares to or through Designated Brokers,
and such Designated Brokers will receive compensation in negotiated amounts in
the form of discounts, concessions, commissions or fees from the Selling
Stockholder and/or the purchasers of the Shares for whom such broker-dealers may
act as agent or to whom they sell as principal, or both (which compensation to a
particular broker-dealer might be in excess of customary commissions). Such
Designated Brokers and the Selling Stockholder may be deemed to be
"underwriters" within the meaning of the Securities Act, in connection with such
sales, and any commissions received by such Designated Brokers may be deemed to
be underwriting compensation.
Any shares covered by the Prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Selling Stockholder is not restricted as to the price or prices at
which it may sell its Shares. Sales of such Shares at less than the market
prices may depress the market price of the Company's Common Stock. During the
effective time of this Prospectus, the Selling Stockholder has agreed to
potential restrictions on resale if notified by the Company of a potential
material event that could have a material effect on the Company's business and
financial condition. The period of restrictions on resale shall commence upon
such notice and end upon notice by the Company that such event either has been
disclosed to the public or no longer constitutes a potential material event,
provided, however, that such period of restrictions on resale shall not exceed
90 days. The Selling Stockholder is not restricted as to the number of Shares
which may be sold at any one time, and it is possible that a significant number
of Shares could be sold at the same time.
Boston EquiServe L.P., 150 Royall Street, Canton, Massachusetts 02021,
is the transfer agent for the Company's Common Stock.
18
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Shares are
being passed upon for the Company by Testa, Hurwitz & Thibeault, LLP, Boston,
Massachusetts.
EXPERTS
The financial statements and the related financial statement schedule
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
19
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------- --------------------------------------
<S> <C>
No person has been authorized to give 190,546 SHARES
any information or to make any
representation other than those
contained in this Prospectus and, if
given or made, such information or
representation must not be relied upon
as having been authorized by the ACT MANUFACTURING, INC.
Company, the Selling Stockholder or
any other person. This Prospectus
does not constitute an offer to sell
or a solicitation of an offer in any
jurisdiction in which such offer or
solicitation would be unlawful or to
any person to whom it is unlawful. COMMON STOCK
Neither the delivery of this
Prospectus nor any sale made hereunder
shall, under any circumstances, create
an implication that there has been no
change in the affairs of the Company
or that information contained herein
is correct as of any time subsequent
to this date hereof.
___________ __________
TABLE OF CONTENTS PROSPECTUS
Page __________
----
Available Information............ 2
Incorporation of Certain
Information by Reference........ 2
The Company...................... 4
Recent Developments.............. 11
Risk Factors..................... 12
Use of Proceeds.................. 16
Selling Stockholder.............. 17
Plan of Distribution............. 18 JUNE 18, 1997
Legal Matters.................... 19
Experts.......................... 19
- -------------------------------------- --------------------------------------
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses (other than underwriting discounts and commissions)
payable in connection with the sale of the Common Stock offered hereby are as
follows:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee $ 1,793.59
Nasdaq Filing Fee 3,810.92
Legal fees and expenses 20,000.00
Accounting fees and expenses 20,000.00
Blue Sky fees and expenses (including
legal fees) 2,000.00
Printing Fees 5,000.00
-----------
Total $52,604.51
</TABLE>
The Company will bear all expenses shown above.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 67 of Chapter 156B of the Massachusetts General Laws provides
that a corporation may indemnify its directors and officers to the extent
specified in or authorized by (i) the articles of organization, (ii) a by-law
adopted by the stockholders, or (iii) a vote adopted by the holders of a
majority of the shares of stock entitled to vote on the election of directors.
In all instances, the extent to which a corporation provides indemnification to
its directors and officers under Section 67 is optional. In its Amended and
Restated By-laws, the Registrant has elected to commit to provide
indemnification to its directors and officers in specified circumstances.
Generally, Article V, Section 2 of the Registrant's Amended and Restated By-laws
indemnifies directors and officers of the Registrant against liabilities and
expenses arising out of legal proceedings brought against them by reason of
their status as directors or officers or by reason of their agreeing to serve,
at the request of the Registrant, as a director or officer with another
organization. Under this provision, a director or officer of the Registrant
shall be indemnified by the Registrant for all costs and expenses (including
attorneys' fees), judgments, liabilities and amounts paid in settlement of such
proceedings, even if he is not successful on the merits, if he acted in good
faith in the reasonable belief that his action was in the best interests of the
Registrant. The Board of Directors may authorize advancing litigation expenses
to a director or officer at his request upon receipt of an undertaking by any
such director or officer to repay such expenses if it is ultimately determined
that he is not entitled to indemnification for such expenses.
Article 6 of the Registrant's Restated Articles of Organization
eliminates the personal liability of the Registrant's directors to the
Registration or its stockholders for monetary damages for breach of a director's
fiduciary duty, except to the extent Chapter 156B of the Massachusetts General
laws prohibits the elimination or limitation of such liability.
Reference is made to the Company's Second Restated Articles of
Organization filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1995 and the Company's Amended and Restated By-
laws filed as Exhibit 3.2 to the Company's Registration Statement on Form S-1
(No. 33-89532).
II-1
<PAGE>
The Company maintains director and officers liability insurance for
the benefit of its directors and certain of its officers.
ITEM 16. EXHIBITS.
4.1 Second Restated Articles of Organization of the Company (filed as
Exhibit 3.1 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1995 and incorporated herein by
reference)
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit
5.1)
24.1 Power of Attorney (included as part of the signature page to
this Registration Statement)
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-
effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in this Registration Statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which
was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in this Registration
Statement.
(2) That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report
II-2
<PAGE>
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where appropriate, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer, or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Hudson, Massachusetts on June 18, 1997.
ACT MANUFACTURING, INC.
By: /s/ John A. Pino
----------------------------------
John A. Pino,
President and Chief Executive
Officer
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of ACT Manufacturing, Inc., hereby
severally constitute and appoint John A. Pino and Douglass C. Greenlaw, and each
of them singly, our true and lawful attorneys, with full power to them and each
of them singly, to sign for us in our names in the capacities indicated below,
all pre-effective and post-effective amendments to this registration statement,
and generally do all things in our names and on our behalf in such capacities to
enable ACT Manufacturing, Inc. to comply with the provisions of the Securities
Act of 1933 and all requirements of the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title(s) Date
- --------- -------- ----
<S> <C> <C>
/s/ John A. Pino President, Chief Executive June 18, 1997
- --------------------------- Officer and Director (Principal
John A. Pino Executive Officer)
/s/ Douglass C. Greenlaw Vice President of Finance and June 18, 1997
- --------------------------- Administration and Chief
Douglass C. Greenlaw Financial Officer (Principal
Financial and Accounting Officer)
/s/ Edward T. Cuddy Director June 18, 1997
- ---------------------------
Edward T. Cuddy
/s/ Bruce R. Gardner Director June 18, 1997
- ---------------------------
Bruce R. Gardner
/s/ Donald G. Polich Director June 18, 1997
- ---------------------------
Donald G. Polich
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
----------- ----------------------
<S> <C>
4.1 Second Restated Articles of Organization of the
Company (filed as Exhibit 3.1 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1995 and incorporated herein by
reference)
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Testa, Hurwitz & Thibeault, LLP
(included in Exhibit 5.1)
24.1 Power of Attorney (included as part of the
signature page to this Registration Statement)
</TABLE>
<PAGE>
EXHIBIT 5.1
June 18, 1997
ACT Manufacturing, Inc.
108 Forest Avenue
Hudson, MA 01749
Re: S-3 Registration Statement
--------------------------
Ladies and Gentlemen:
We are counsel to ACT Manufacturing, Inc., a Massachusetts corporation
(the "Company"), and have represented the Company in connection with the
preparation and filing of the Company's Form S-3 Registration Statement (the
"Registration Statement"), covering the sale to the public of up to 190,546
shares of the Company's Common Stock, $.01 par value per share (the "Shares"),
being sold by a certain stockholder of the Company.
We have reviewed the corporate proceedings taken by the Board of
Directors of the Company with respect to the authorization and issuance of the
Shares. We have also examined and relied upon originals or copies, certified or
otherwise authenticated to our satisfaction, of all corporate records,
documents, agreements or other instruments of the Company and have made all
investigations of law and have discussed with the Company's officers all
questions of fact that we have deemed necessary or appropriate.
Based upon and subject to the foregoing, we are of the opinion that
the Shares are legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Prospectus
contained in the Registration Statement under the caption "Legal Matters."
Very truly yours,
TESTA, HURWITZ & THIBEAULT, LLP
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
ACT Manufacturing, Inc. on Form S-3 of our report dated February 14, 1997,
appearing in the Annual Report on Form 10-K of ACT Manufacturing, Inc. for the
year ended December 31, 1996 and to the reference to us under the heading
"Experts" in the Prospectus, which is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
June 17, 1997
