<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
- --------------------------------------------------------------------------------
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-26274
- --------------------------------------------------------------------------------
INTEGRATED MEASUREMENT SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0840631
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9525 S.W. GEMINI DRIVE, BEAVERTON, OR 97008
(Address of principal executive offices) (zip code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (503) 626-7117
- --------------------------------------------------------------------------------
NO CHANGE
Former name, former address, and former
fiscal year, if changed since last report
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
----- -----
At April 30, 1997, there were 7,477,893 shares of Integrated Measurement
Systems, Inc. common stock, $0.01 par value, outstanding.
(Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.)
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
INDEX TO FORM 10-Q
PART I FINANCIAL INFORMATION PAGE NUMBER
- ------------------------------------ -----------
Item 1. Financial Statements
Statements of Income for the three months
ended March 31, 1997 and 1996 3
Balance Sheets as of March 31, 1997 and December 31, 1996 4
Statements of Cash Flows for the three months
ended March 31, 1997 and 1996 5
Notes to the Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition 8-11
PART II OTHER INFORMATION
- --------------------------------
Item 2. Changes in Securities. 12
Item 6. Exhibits and Reports on Form 8-K. 12
SIGNATURES 13
- ----------
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTEGRATED MEASUREMENTS SYSTEMS, INC.
STATEMENTS OF INCOME
(In thousands, except net income per share)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
Product sales $ 10,745 $ 9,170
Service and other sales 2,535 2,745
------- -------
Net sales 13,280 11,915
------- -------
Cost of product sales 3,804 3,213
Cost of service and other sales 874 1,195
------- -------
Total cost of sales 4,678 4,408
------- -------
Gross margin 8,602 7,507
Operating expenses:
Research, development and engineering 1,900 1,988
Selling, general and administrative 4,019 3,448
------- -------
Total operating expenses 5,919 5,436
------- -------
Operating income 2,683 2,071
Other income, net 192 101
------- -------
Income before income taxes 2,875 2,172
Provision for income taxes 1,050 826
------- -------
Net income $ 1,825 $ 1,346
------- -------
------- -------
Net income per share $ 0.25 $ 0.19
------- -------
------- -------
Weighted average number of common and common
equivalent shares outstanding 7,376 6,922
------- -------
------- -------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS
3
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
BALANCE SHEETS
(In thousands, except per share data)
As of As of
March 31, December 31,
1997 1996
---- ----
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 24,800 $ 9,545
Trade receivables, less allowance for
doubtful accounts of $489 and $489 12,571 11,352
Receivable from Cadence, net 1,763 2,125
Inventories, net 8,383 7,940
Deferred income taxes 1,690 1,690
Prepaid expenses and other current assets 1,358 1,118
------- -------
Total current assets 50,565 33,770
Property, plant and equipment, net 5,800 5,924
Service spare parts, net 2,634 2,567
Software development costs, net 1,413 1,446
Other assets, net 787 607
------- -------
Total assets $ 61,199 $ 44,314
------- ------
------- ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,140 $ 2,251
Accrued compensation 1,842 2,036
Accrued warranty 472 500
Deferred revenue 2,245 1,727
Income taxes payable 665 979
Other current liabilities 970 750
Capital lease obligations - current 201 247
------- -------
Total current liabilities 8,535 8,490
Deferred income taxes 417 417
Capital lease obligations, net of current portion 247 278
Deferred compensation 331 270
Shareholders' equity:
Preferred stock, $.01 par value, authorized
10,000,000 shares; none issued and outstanding - -
Common stock, $.01 par value, authorized
15,000,000 shares; issued and outstanding 75 67
7,477,377 and 6,726,257
Additional paid-in capital 37,653 22,676
Retained earnings 13,941 12,116
------- -------
Total shareholders' equity 51,669 34,859
------- -------
Total liabilities and shareholders' equity $ 61,199 $ 44,314
------- -------
------- -------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS.
4
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers $ 13,187 $ 11,293
Interest received 200 110
Payments to suppliers (5,279) (5,230)
Payments to employees (5,401) (4,389)
Income taxes paid (354) (5)
Other taxes paid (271) (424)
Interest paid (11) (14)
---------- ----------
Net cash provided by operating activities 2,071 1,341
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (360) (1,036)
Purchases of long-term investments (61) --
Additions to service spare parts (309) ( 23)
Software development costs (148) (170)
---------- ----------
Net cash used in investing activities (878) (1,229)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under capital leases (76) (60)
Net proceeds from secondary offering 13,626 --
Proceeds from employee stock option exercises 512 4
Net cash provided by (used in) financing activities 14,062 (56)
Net increase in cash and cash equivalents 15,255 56
Beginning cash and cash equivalents balance 9,545 8,930
---------- ----------
Ending cash and cash equivalents balance $ 24,800 $ 8,986
---------- ----------
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,825 $ 1,346
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 956 1,007
Net change in payable to or receivable from Cadence 458 224
Increase in trade receivables (1,219) (1,242)
Increase in inventories (443) (790)
Decrease (increase) in prepaid expenses
and other current assets (240) 1
Increase in current tax liability 696 691
(Decrease) increase in accounts payable
and accrued liabilities (541) 545
Increase in deferred compensation 61 --
(Decrease) increase in deferred revenue 518 (441)
------ ------
Net cash provided by operating activities $ 2,071 $ 1,341
------ ------
------ ------
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Purchase of assets through capital lease $ -- $ 29
------ ------
------ ------
Tax benefit from stock option transactions $ 1,010 $ 626
------ ------
------ ------
SEE ACCOMPANYING NOTES TO UNAUDITED FINANCIAL STATEMENTS.
5
<PAGE>
INTEGRATED MEASUREMENT SYSTEMS, INC.
NOTES TO THE FINANCIAL STATEMENTS
(In thousands)
(Unaudited)
(1) BASIS OF PRESENTATION
The interim financial statements included herein have been prepared,
without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the management of the Company believe that the disclosures are
adequate to make the information presented not misleading. Interim
financial statements are by necessity somewhat tentative; judgments
are used to estimate interim amounts for items that are normally
determinable only on an annual basis. The financial information as of
December 31, 1996 is derived from the Company's audited financial
statements.
The interim period information presented herein includes normally
recurring adjustments which are, in the opinion of the management of
the Company, only necessary for a fair statement of the results of
the respective interim periods. Results of operations for interim
periods are not necessarily indicative of results to be expected for
an entire year.
(2) INVENTORIES
Inventories, consisting principally of computer hardware, electronic
sub-assemblies and test equipment, are valued at standard costs which
approximate the lower of cost (first-in, first-out) or market. Costs
utilized for inventory valuation purposes include material, labor and
manufacturing overhead. Inventories consists of the following:
March 31, December 31,
1997 1996
Raw Materials. . . . . . . . . . . . $ 4,946 $ 4,098
Work-in-progress . . . . . . . . . . 3,048 2,912
Finished Goods . . . . . . . . . . . . 389 930
---------- ----------
$ 8,383 $ 7,940
---------- ----------
---------- ----------
6
<PAGE>
(3) EARNINGS PER SHARE
Net income per common and common equivalent share, as presented on the
accompanying Statements of Income is calculated by dividing net income
by the weighted average number of common stock and common stock
equivalents outstanding during the period, calculated using the
treasury stock method in accordance with APB Opinion 15, "Earnings per
Share." The Company's common stock equivalents consist of dilutive
shares issuable upon the exercise of outstanding common stock options.
In February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share," superseding Opinion 15. SFAS 128 requires
the calculation and disclosure of Basic Earnings per Share and Diluted
Earnings per Share, effective for both interim and annual periods ending
after December 15, 1997. Basic earnings per share are computed by
dividing net income by the weighted average number of shares of common
stock outstanding during the period. Diluted earnings per share are
computed by dividing net income by the weighted average number of
shares of common stock and common stock equivalents outstanding during
the period, calculated using the treasury stock method as defined in
SFAS 128. In accordance with the provisions of SFAS No. 128, the
Company is providing pro forma disclosure of the effects of this
accounting change on reported earnings per share (EPS) data as follows:
Three months ended,
March 31,
1997 1996
---- ----
Primary EPS as reported. . . . . . . . $ 0.25 $ 0.19
Effect of SFAS No. 128 . . . . . . . . 0.01 0.01
-------- ---------
Basic EPS as restated . . . . . . . . $ 0.26 $ 0.20
-------- ---------
-------- ---------
Primary EPS as reported. . . . . . . . $ 0.25 $ 0.19
Effect of SFAS No. 128 . . . . . . . . -- 0.01
--------- ---------
Diluted EPS as restated . . . . . . . $ 0.25 $ 0.20
--------- ---------
--------- ---------
Weighted average common shares
outstanding for
Basic EPS. . . . . . . . . . . . . 7,066 6,700
Common stock options issuable under
treasury stock method . . . . . . 310 190
--------- ---------
Weighted average common and common
equivalent
shares outstanding for Diluted EPS. 7,376 6,890
--------- ---------
--------- ---------
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(All numerical references are in thousands, except for percentages and per share
data)
THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS
QUARTERLY REPORT, AS WELL AS THE COMPANY'S FINANCIAL STATEMENTS AND THE NOTES
THERETO, AND THE MANAGEMENT DISCUSSION AND ANALYSIS PRESENTED IN THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996. THIS QUARTERLY
REPORT, INCLUDING THE FOLLOWING DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTAINS CERTAIN STATEMENTS, TREND ANALYSIS AND OTHER
INFORMATION THAT CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT, WHICH MAY INVOLVE RISKS AND
UNCERTAINTIES. SUCH FORWARD LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO,
STATEMENTS INCLUDING THE WORDS "ANTICIPATE," "BELIEVE," "PLAN," "ESTIMATE,"
"EXPECT," "INTEND" AND OTHER SIMILAR EXPRESSIONS. THE COMPANY'S ACTUAL RESULTS
COULD DIFFER MATERIALLY FROM THOSE DISCUSSED HEREIN DUE TO NUMEROUS FACTORS
INCLUDING, BUT NOT LIMITED TO, THOSE DISCUSSED IN THE FOLLOWING DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, AS WELL AS THOSE
DISCUSSED ELSEWHERE HEREIN AND IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE YEAR ENDED DECEMBER 31, 1996.
RESULTS OF OPERATIONS
NET SALES
Net sales of $13,280 for the three-month period ended March 31, 1997 reflected
an increase of $1,365 or 11% from the first quarter of 1996.
The increase in net sales reflects growth in net sales of the Company's MSTS-TM-
Test Stations, which generated 18% of net sales during the first quarter of
1997, compared to 6% of net sales in the first quarter 1996. Also contributing
to this net sales growth were additional sales of the Company's ATS-TM- FT Test
Stations, which contributed 35% and 29% of net sales during the first three
months of 1997 and 1996, respectively, and Virtual Test Software and related
services, which generated 10% of net sales during the first quarter of 1997,
compared to 8% for the first quarter of 1996. Product sales increased 17% in
the first quarter of 1997, as compared to the first quarter of 1996, primarily
due to the increase is sales of the Company's ATS FT Test Stations and Virtual
Test Software discussed above. Service and other sales decreased 8% in the
first three months of 1997, from the same period in 1996, reflecting less
revenue from refurbishment services, partially offset by increased sales of
Virtual Test Software related services.
During the first quarter of 1997, the Company introduced TestDirect-TM-, a new
digital Virtual Test productivity tool for mixed-signal test. TestDirect
provides test engineers with an automated tool for generating test patterns for
automated test equipment from the designer's original simulation environment.
This process shortens the overall product development cycle, and improves
customers' time-to-market. First customer shipment of beta version TestDirect
occurred during the first quarter of 1997. Also introduced during the first
quarter of 1997 was the new XTS Test Station, which extends the pin count of the
Company's ATS Test Stations to a new high of 576 I/O pins. Actual net sales to
be realized in future periods from these new products are subject to many risks,
as discussed below under "Future Operating Results."
Sales to the Company's largest customer, Intel, amounted to 28% and 47% of net
sales, respectively, during the first three months of 1997 and 1996,
respectively. This level of sales to Intel during the first quarter of 1996
reflected Intel's high pent-up demand for the Company's ATS FT Test Stations,
which were introduced late in 1995, during the first half of 1996. Customers
individually providing less than 10% of net sales generated the remaining 72%
and 53% of the Company's net sales for the first quarters of 1997 and 1996,
respectively.
GROSS MARGIN
The Company's gross margin of $8,602 in the first quarter of 1997 increased 15%
from $7,507 for the same period of 1996. As a percentage of net sales, gross
margin increased to 65% for the three months ended March 31, 1997
8
<PAGE>
from 63% for the three months ended March 31, 1996. The two percentage-point
increase reflects the benefits of an increase in the proportion of the sales
mix coming from higher-margin Virtual Test software and related services
during the first three months of 1997 as compared to the first three months
of 1996. The gross margins for the Company's Test Stations were 63% for the
first quarter of 1997, compared to 64% for the same period of 1996. The
Company's systems service business yielded gross margin of 61% during the
first three months of 1997, up from 49% during the first quarter of 1996,
reflecting the impact of the cumulative depreciation adjustment of the
Company's service parts recorded during the first quarter of 1996. Sales of
the Company's Virtual Test software and related services yielded gross
margins of 81% during the first quarter of 1996, and are expected to provide
upward support for the Company's future overall gross margin percentage, if
the proportion of net sales contributed by Virtual Test Software and related
services continues to increase.
OPERATING EXPENSES
Research, development and engineering expenses decreased slightly to $1,900 for
the three months ended March 31, 1997 from $1,988 for the first quarter of 1996.
Research, development and engineering expenses amounted to 14% of net sales in
the three months ended March 31, 1997, compared to 17% in the three months ended
March 31, 1996. The decrease was principally attributable to non-recurring
expenses for materials associated with development of certain of the Company's
new and future products during the first quarter of 1996.
Selling, general and administrative expenses of $4,019 for the first quarter
of 1997 increased 17% from $3,448 for the first quarter of 1996. As a
percentage of net sales, selling, general and administrative expense
increased to 30% in the three months ended March 31, 1997 from 29% in the
three months ended March 31, 1996. The increases in selling, general and
administrative expenses, both in absolute dollar amounts and as a percent of
net sales, reflect additional commissions on increased revenues, and other
expense increases associated with higher headcount in the Company's direct
sales function for the Company's Test Station and Virtual Test Software
products and services.
OTHER INCOME, NET
Other income, net, increased to $192 in the three months ended March 31, 1997,
from $101 in the quarter ended March 31, 1996, reflecting interest income
generated on higher cash balances resulting from the net proceeds of the
Company's secondary public offering of common stock completed in February 1997,
as well as cash generated by operating activities during the past year.
INCOME TAXES
The Company's effective tax rate was 36.5% for the three-month period ended
March 31, 1997 and 38% for the three months ended March 31, 1996. The reduction
in the effective tax rate reflects the recognition of research and development
tax credits during the first quarter of 1997. No research and development tax
credits were recognized in the effective rate for the first quarter of 1996 as
legislative renewal of the law providing for such credits was delayed beyond the
preparation of the first quarter 1996 financial statements.
NET INCOME
As a result of the various factors discussed above, net income for the first
quarter of 1997 increased 36% to $1,825 or $0.25 per share compared to $1,346 or
$0.19 per share for the corresponding period in 1996.
FUTURE OPERATING RESULTS
Like most high technology and high growth companies, the Company faces certain
business risks that could have adverse effects on the Company's results of
operations, including, but not limited to the following. Sales of the Company's
products to a limited number of customers is expected to continue to account for
a significant percentage of net sales over the foreseeable future. The Company
purchases some key components from sole or single source vendors for which
alternative sources are not currently available. The Company is dependent on
high-dollar customer orders, deriving a substantial portion of its net sales
from the sale of Test Stations which typically
9
<PAGE>
range in price from $0.2 to $1.2 million per unit and may be priced as high
as $1.8 million for a single unit. A substantial portion of the Company's
net sales are typically realized in the last few weeks of each quarter. As a
result, the timing of the receipt and shipment, and the magnitude of the
sales price, of a single order can have a significant impact on the Company's
net sales and results of operations for a particular quarter and the
Company's quarterly net sales and results of operations may be negatively
impacted if an order is received too late in a given quarter to permit
product shipment and the recognition of revenue during that quarter. A
significant portion of the Company's operating expenses are relatively fixed
and planned expenditures are based, in part, on anticipated orders. In
addition, the need for continued expenditures for research, development and
engineering makes it difficult to reduce expenses in a particular quarter if
the Company's sales goals for that quarter are not met. The inability to
reduce the Company's expenses quickly enough to compensate for any revenue
shortfall would magnify the adverse impact of such revenue shortfall on the
Company's results of operations. The first quarter of each year typically
reflects seasonally slower order input than other quarters. As a result of
this seasonality, the Company used backlog to achieve the net sales reported
herein for the first quarter of 1997. The Company's future operating results
and financial condition are also subject to influences driven by rapid
technological changes, a highly competitive industry, a lengthy sales cycle,
and the cyclical nature of general economic conditions.
Future operating results will depend on many factors, including demand for the
Company's products, the introduction of new products by the Company and by its
competitors, industry acceptance of Virtual Test software, the level and timing
of available shippable orders and backlog, and the business risks discussed
above. There can be no assurance that the Company's net sales will grow or that
such growth will be sustained in future periods or that the Company will remain
profitable in any future period.
Results of operations for the periods discussed above should not be considered
indicative of the results to be expected for any future period, and fluctuations
in the operating results may also result in fluctuations in the market price of
the Company's common stock.
The Company has thus far avoided any material adverse impact on its results of
operations resulting from the risks discussed above. However, no assurance can
be given that such risks will not affect the Company's financial position or
results of operations in the future.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company's principal sources of liquidity consisted of
cash and cash equivalents of approximately $24.8 million, and funds available
under an existing bank line of credit of $10.0 million.
The Company generated positive cash flows from operating activities for the
three months ended March 31, 1997 of $2,071 compared to $1,341 million for the
same period last year. This increase is the net result of higher collections
from customers as net sales increase, partially offset by higher payments for
suppliers, employees, and income taxes.
The Company's trade receivables have increased to $12.6 million from $11.4
million since December 31, 1996, reflecting the effect of receiving and shipping
significant orders late in the first quarter of 1997, as well as extended
payment terms granted to certain customers during the fourth quarter of 1996.
Inventories have grown by $443 during the first quarter of 1997, reflecting
purchases of safety stock for certain critical parts, and of parts associated
with the introduction of the Company's MSTS Test Stations. The decrease in
accounts payable and accrued liabilities since December 31, 1996 reflects a
reduction in purchases of equipment in the first quarter of 1997 compared to the
fourth quarter of 1996, as well as the timing of payment processing at the end
of March 1997. The increase in deferred revenue reflects the ending of
extended warranty periods for certain of the Company's Test Stations sold
during 1996, and the invoicing of annual maintenance fees for future periods.
During the first quarter of 1997, the Company invested $360 in property, plant
and equipment, as necessary to develop and distribute new and enhanced Test
Station and Virtual Test products. Capitalization of software development costs
of $148 during the first quarter of 1997 was slightly lower than related
amortization of $181.
10
<PAGE>
The Company completed a secondary public offering of its Common Stock in
February, 1997, yielding net proceeds, after payment of underwriting commissions
and expenses associated with the offering, of approximately $13.4 million. As
of March 31, 1997, approximately $260 of these costs remained to be paid and are
reflected in Other Current Liabilities in the accompanying Balance Sheets.
During the first quarter of 1997, the Company realized reductions in current tax
liabilities of $1,010 resulting from the benefit of tax deductions of employee
gains upon exercise of stock options. Of this amount, $908 resulted from
exercise stock options of Cadence Design Systems, Inc. (Cadence), the Company's
former majority shareholder. The remaining $102 resulted from the exercise of
employee stock options for the purchase of the Company's Common Stock. The
noncash benefit of the stock option deduction is reflected as an increase to
Additional Paid-in Capital in the accompanying Balance Sheets. The employee
gains are not expenses of the Company for financial reporting purposes, and the
exercise of Cadence stock options does not increase the number of shares of the
Company's Common Stock outstanding. The tax benefits realized from the stock
option deduction are expected to decrease in the future as employee holdings of
Cadence stock options decline due to option exercises and cancellations. The
timing and magnitude of this decrease in tax benefits is uncertain as the number
of employee stock options which are exercised, and the amount of gains realized
upon exercise, will be determined by fluctuations in the market value of Cadence
common stock. Such future decreases in the tax benefits from the stock option
deduction will increase the amount of the Company's income tax payments and
will, consequently, reduce the Company's net cash flows from operating
activities.
The Company believes that cash on hand and cash generated from operations, as
well as cash available from the Company's existing $10.0 million short-term line
of credit, will be sufficient to meet the Company's working capital and other
cash requirements for at least the next twelve months. Company management is
continually evaluating opportunities to develop and introduce new products, and
to acquire complementary businesses or technologies. At present, the Company
has no understandings, commitments or agreements with respect to any such
opportunities. Any transactions resulting from such opportunities, if
consummated, may require the use of some of the Company's cash or necessitate
funding from other sources.
11
<PAGE>
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
During the quarter ended March 31, 1997, the Company made no sales of
securities that were not registered under the Securities Act of 1933.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (exhibit reference numbers refer to Item 601 of
Regulation S-K)
27. Financial Data Schedule
(b) Reports on Form 8-K:
One report on Form 8-K was filed on March 25, 1997 and is incorporated
herein by reference. The contents of the report are summarized below:
On March 25, 1997, Integrated Measurement Systems, Inc. announced the
introduction of a new Test Station that extends the maximum pin count
of the ATS-TM- Advanced Digital Test Station series to a new high of
576 I/O pins.
On March 31, 1997, Integrated Measurement Systems, Inc. introduced
TestDirectTM, a new digital Virtual Test productivity tool for
mixed-signal test.
On April 2, 1997, Integrated Measurement Systems, Inc. announced the
introduction of two new e-series data modules designated the 100e for
100 MHz operation and 200e for 200 MHz operation. Developed for use
with the ATS-TM-, XTS-TM- and MSTS-TM- Test Stations, the new higher
speed e-modules build upon the 60e price/performance standard announced
at ITC, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on May 7, 1997.
INTEGRATED MEASUREMENT SYSTEMS, INC.
(Registrant)
/s/ SAR RAMADAN
---------------------
Sar Ramadan
Chief Financial Officer
(on behalf of the Registrant and as Principal Financial Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE INCOME STATEMENT FOR THE THREE-MONTH PERIOD
ENDED MARCH 31, 1997, AND THE BALANCE SHEET AS OF MARCH 31, 1997,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 24,800
<SECURITIES> 0
<RECEIVABLES> 13,060
<ALLOWANCES> 489
<INVENTORY> 8,383
<CURRENT-ASSETS> 50,565
<PP&E> 15,262
<DEPRECIATION> 9,462
<TOTAL-ASSETS> 61,199
<CURRENT-LIABILITIES> 8,535
<BONDS> 247
0
0
<COMMON> 75
<OTHER-SE> 51,594
<TOTAL-LIABILITY-AND-EQUITY> 61,199
<SALES> 10,745
<TOTAL-REVENUES> 13,280
<CGS> 3,804
<TOTAL-COSTS> 4,678
<OTHER-EXPENSES> 5,919
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11
<INCOME-PRETAX> 2,875
<INCOME-TAX> 1,050
<INCOME-CONTINUING> 1,825
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,825
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
