|
|
FORM 10-Q
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
ELECTRO SCIENTIFIC INDUSTRIES, INC.
|
||
|
|
|
Oregon
|
|
93-0370304
|
(State or other jurisdiction of incorporation
or organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
13900 N.W. Science Park Drive, Portland, Oregon
|
|
97229
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
¨
|
|
Accelerated filer
|
ý
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
Part I
|
FINANCIAL INFORMATION
|
|
Financial Statements (Unaudited)
|
|
|
|
||
|
||
|
||
|
||
|
||
Part II
|
OTHER INFORMATION
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
44,891
|
|
|
$
|
42,413
|
|
Short-term investments
|
6,301
|
|
|
15,252
|
|
||
Trade receivables, net of allowances of $685 and $1,039
|
27,644
|
|
|
42,770
|
|
||
Inventories, net
|
58,830
|
|
|
60,470
|
|
||
Shipped systems pending acceptance
|
3,983
|
|
|
1,181
|
|
||
Other current assets
|
5,903
|
|
|
5,340
|
|
||
Total current assets
|
147,552
|
|
|
167,426
|
|
||
Non-current assets:
|
|
|
|
||||
Property, plant and equipment, net of accumulated depreciation of $111,811 and $107,910, (PP&E)
|
23,660
|
|
|
24,543
|
|
||
Non-current deferred income taxes, net
|
836
|
|
|
914
|
|
||
Goodwill
|
9,352
|
|
|
7,445
|
|
||
Acquired intangible assets, net of accumulated amortization of $21,979 and $21,146
|
9,611
|
|
|
7,146
|
|
||
Other assets
|
17,025
|
|
|
12,626
|
|
||
Total assets
|
$
|
208,036
|
|
|
$
|
220,100
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
14,345
|
|
|
$
|
16,061
|
|
Accrued liabilities
|
16,015
|
|
|
18,334
|
|
||
Deferred revenue
|
10,822
|
|
|
6,373
|
|
||
Total current liabilities
|
41,182
|
|
|
40,768
|
|
||
Non-current liabilities:
|
|
|
|
||||
Income taxes payable
|
1,048
|
|
|
1,266
|
|
||
Deferred income tax liability, net
|
218
|
|
|
234
|
|
||
Other liabilities
|
6,085
|
|
|
7,801
|
|
||
Total liabilities
|
48,533
|
|
|
50,069
|
|
||
Commitments and contingencies (See
Note 13 "Commitments & Contingencies"
)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, without par value; 1,000 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common stock, without par value; 100,000 shares authorized; 33,151 and 31,613 issued and outstanding
|
204,859
|
|
|
195,024
|
|
||
Accumulated deficit
|
(43,485
|
)
|
|
(23,998
|
)
|
||
Accumulated other comprehensive loss
|
(1,871
|
)
|
|
(995
|
)
|
||
Total shareholders’ equity
|
159,503
|
|
|
170,031
|
|
||
Total liabilities and shareholders’ equity
|
$
|
208,036
|
|
|
$
|
220,100
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands, except per share amounts)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Systems
|
$
|
25,427
|
|
|
$
|
31,282
|
|
|
$
|
85,069
|
|
|
$
|
98,914
|
|
Services
|
8,352
|
|
|
12,060
|
|
|
26,036
|
|
|
33,991
|
|
||||
Total net sales
|
33,779
|
|
|
43,342
|
|
|
111,105
|
|
|
132,905
|
|
||||
Cost of sales:
|
|
|
|
|
|
|
|
||||||||
Systems
|
17,283
|
|
|
20,292
|
|
|
53,851
|
|
|
63,922
|
|
||||
Services
|
5,048
|
|
|
5,329
|
|
|
14,018
|
|
|
17,464
|
|
||||
Total cost of sales
|
22,331
|
|
|
25,621
|
|
|
67,869
|
|
|
81,386
|
|
||||
Gross profit
|
11,448
|
|
|
17,721
|
|
|
43,236
|
|
|
51,519
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
13,280
|
|
|
12,468
|
|
|
38,917
|
|
|
37,619
|
|
||||
Research, development and engineering
|
7,868
|
|
|
7,778
|
|
|
23,258
|
|
|
24,706
|
|
||||
Acquisition and integration costs
|
31
|
|
|
—
|
|
|
366
|
|
|
194
|
|
||||
Restructuring costs
|
321
|
|
|
1,944
|
|
|
321
|
|
|
2,597
|
|
||||
Net operating expenses
|
21,500
|
|
|
22,190
|
|
|
62,862
|
|
|
65,116
|
|
||||
Operating loss
|
(10,052
|
)
|
|
(4,469
|
)
|
|
(19,626
|
)
|
|
(13,597
|
)
|
||||
Non-operating income:
|
|
|
|
|
|
|
|
||||||||
Interest and other income, net
|
34
|
|
|
67
|
|
|
162
|
|
|
68
|
|
||||
Total non-operating income
|
34
|
|
|
67
|
|
|
162
|
|
|
68
|
|
||||
Loss before income taxes
|
(10,018
|
)
|
|
(4,402
|
)
|
|
(19,464
|
)
|
|
(13,529
|
)
|
||||
(Benefit from) provision for income taxes
|
(325
|
)
|
|
184
|
|
|
22
|
|
|
681
|
|
||||
Net loss
|
$
|
(9,693
|
)
|
|
$
|
(4,586
|
)
|
|
$
|
(19,486
|
)
|
|
$
|
(14,210
|
)
|
Net loss per share - basic
|
$
|
(0.29
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
Net loss per share - diluted
|
$
|
(0.29
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
Weighted average number of shares - basic
|
32,919
|
|
|
31,495
|
|
|
32,379
|
|
|
31,355
|
|
||||
Weighted average number of shares - diluted
|
32,919
|
|
|
31,495
|
|
|
32,379
|
|
|
31,355
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Net loss
|
$
|
(9,693
|
)
|
|
$
|
(4,586
|
)
|
|
$
|
(19,486
|
)
|
|
$
|
(14,210
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of taxes of $0, $0, $0 and $0
|
(745
|
)
|
|
(68
|
)
|
|
(884
|
)
|
|
(793
|
)
|
||||
Accumulated other comprehensive income related to benefit plan obligation, net of taxes of $(5), $(2), $(7) and $(7)
|
5
|
|
|
4
|
|
|
14
|
|
|
12
|
|
||||
Net unrealized loss on available-for-sale securities, net of taxes of $0, $0, $0 and $0
|
(2
|
)
|
|
2
|
|
|
(6
|
)
|
|
1
|
|
||||
Other comprehensive loss:
|
(742
|
)
|
|
(62
|
)
|
|
(876
|
)
|
|
(780
|
)
|
||||
Comprehensive loss
|
$
|
(10,435
|
)
|
|
$
|
(4,648
|
)
|
|
$
|
(20,362
|
)
|
|
$
|
(14,990
|
)
|
|
Three fiscal quarters ended
|
||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net loss
|
$
|
(19,486
|
)
|
|
$
|
(14,210
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
5,424
|
|
|
5,659
|
|
||
Amortization of acquired intangible assets
|
832
|
|
|
1,047
|
|
||
Share-based compensation expense
|
5,118
|
|
|
3,939
|
|
||
Loss on disposition of property, plant and equipment, net
|
52
|
|
|
788
|
|
||
(Benefit from) provision for doubtful accounts
|
(341
|
)
|
|
127
|
|
||
Charges for write-off of damaged product
|
946
|
|
|
—
|
|
||
Decrease (increase) in deferred income taxes
|
37
|
|
|
(71
|
)
|
||
Changes in operating accounts, net of acquisitions:
|
|
|
|
||||
Decrease in trade receivables, net
|
15,258
|
|
|
8,593
|
|
||
Increase in inventories
|
(3,259
|
)
|
|
(7,046
|
)
|
||
(Increase) decrease in shipped systems pending acceptance
|
(2,802
|
)
|
|
1,342
|
|
||
(Increase) decrease in other current assets
|
(738
|
)
|
|
1,967
|
|
||
(Decrease) increase in accounts payable and accrued liabilities
|
(5,189
|
)
|
|
10,531
|
|
||
Increase (decrease) in deferred revenue
|
4,449
|
|
|
(4,668
|
)
|
||
Net cash provided by operating activities
|
301
|
|
|
7,998
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of investments
|
(331,343
|
)
|
|
(320,581
|
)
|
||
Proceeds from sales and maturities of investments
|
339,691
|
|
|
306,423
|
|
||
Purchase of property, plant and equipment
|
(3,408
|
)
|
|
(2,740
|
)
|
||
Proceeds from sale of property, plant and equipment
|
7
|
|
|
2
|
|
||
Cash paid for business acquisitions, net of cash acquired
|
(2,010
|
)
|
|
—
|
|
||
Increase in other assets
|
(120
|
)
|
|
(133
|
)
|
||
Net cash provided by (used in) investing activities
|
2,817
|
|
|
(17,029
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Payment of withholding taxes on stock-based compensation
|
(801
|
)
|
|
(645
|
)
|
||
Proceeds from issuance of common stock
|
1,043
|
|
|
1,056
|
|
||
Net cash provided by financing activities
|
242
|
|
|
411
|
|
||
Effect of exchange rate changes on cash
|
(882
|
)
|
|
(303
|
)
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
2,478
|
|
|
(8,923
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
42,413
|
|
|
50,994
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
44,891
|
|
|
$
|
42,071
|
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
||||
Cash paid for interest
|
$
|
(30
|
)
|
|
$
|
(57
|
)
|
Cash paid for income taxes
|
(504
|
)
|
|
(799
|
)
|
||
Income tax refunds received
|
45
|
|
|
140
|
|
||
Net increase in PP&E and other assets related to transfers from inventory
|
5,414
|
|
|
2,988
|
|
||
Non-cash additions to PP&E
|
205
|
|
|
160
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Cost of sales
|
$
|
142
|
|
|
$
|
103
|
|
|
$
|
398
|
|
|
$
|
347
|
|
Selling, general and administrative
|
1,391
|
|
|
832
|
|
|
3,573
|
|
|
2,291
|
|
||||
Research, development and engineering
|
285
|
|
|
188
|
|
|
656
|
|
|
613
|
|
||||
Total share-based compensation expense
|
$
|
1,818
|
|
|
$
|
1,123
|
|
|
$
|
4,627
|
|
|
$
|
3,251
|
|
•
|
Level 1
, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities;
|
•
|
Level 2
, defined as inputs that are observable either directly or indirectly such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and other inputs that can be corroborated by observable market data; and
|
•
|
Level 3
, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
|
December 31, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market securities
|
$
|
3,370
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,370
|
|
Commercial paper
|
—
|
|
|
11,196
|
|
|
—
|
|
|
11,196
|
|
||||
Total cash equivalents
|
$
|
3,370
|
|
|
$
|
11,196
|
|
|
$
|
—
|
|
|
$
|
14,566
|
|
Short term investments - available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury fund
|
$
|
1,003
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,003
|
|
Commercial paper
|
—
|
|
|
4,295
|
|
|
—
|
|
|
4,295
|
|
||||
Government agencies
|
—
|
|
|
1,003
|
|
|
—
|
|
|
1,003
|
|
||||
Total short-term investments - available for sale
|
$
|
1,003
|
|
|
$
|
5,298
|
|
|
$
|
—
|
|
|
$
|
6,301
|
|
|
|
|
|
|
|
|
|
||||||||
Forward purchase or (sale) contracts:
|
|
|
|
|
|
|
|
||||||||
Japanese Yen
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
New Taiwan Dollar
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Korean Won
|
—
|
|
|
48
|
|
|
—
|
|
|
48
|
|
||||
Euro
|
—
|
|
|
158
|
|
|
—
|
|
|
158
|
|
||||
British Pound
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
(33
|
)
|
||||
Chinese Renminbi
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Singapore Dollar
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total forward contracts
|
$
|
—
|
|
|
$
|
159
|
|
|
$
|
—
|
|
|
$
|
159
|
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan assets:*
|
|
|
|
|
|
|
|
||||||||
Mutual funds and exchange traded funds
|
$
|
2,316
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,316
|
|
Money market securities
|
785
|
|
|
—
|
|
|
—
|
|
|
785
|
|
||||
Total deferred compensation plan assets
|
$
|
3,101
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,101
|
|
April 2, 2016
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market securities
|
$
|
4,643
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,643
|
|
Commercial paper
|
—
|
|
|
12,140
|
|
|
—
|
|
|
12,140
|
|
||||
Total cash equivalents
|
$
|
4,643
|
|
|
$
|
12,140
|
|
|
$
|
—
|
|
|
$
|
16,783
|
|
Short term investments - available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury fund
|
$
|
1,003
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,003
|
|
Commercial paper
|
—
|
|
|
997
|
|
|
—
|
|
|
997
|
|
||||
Government agencies
|
—
|
|
|
13,252
|
|
|
—
|
|
|
13,252
|
|
||||
Total short-term investments - available for sale
|
$
|
1,003
|
|
|
$
|
14,249
|
|
|
$
|
—
|
|
|
$
|
15,252
|
|
|
|
|
|
|
|
|
|
||||||||
Forward purchase or (sale) contracts:
|
|
|
|
|
|
|
|
||||||||
Japanese Yen
|
$
|
—
|
|
|
$
|
(31
|
)
|
|
$
|
—
|
|
|
$
|
(31
|
)
|
New Taiwan Dollar
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Korean Won
|
—
|
|
|
129
|
|
|
—
|
|
|
129
|
|
||||
Euro
|
—
|
|
|
(367
|
)
|
|
—
|
|
|
(367
|
)
|
||||
Chinese Renminbi
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Singapore Dollar
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||
Total forward contracts
|
$
|
—
|
|
|
$
|
(245
|
)
|
|
$
|
—
|
|
|
$
|
(245
|
)
|
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan assets:*
|
|
|
|
|
|
|
|
||||||||
Mutual funds and exchange traded funds
|
$
|
1,916
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,916
|
|
Money market securities
|
588
|
|
|
—
|
|
|
—
|
|
|
588
|
|
||||
Total deferred compensation plan assets
|
$
|
2,504
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,504
|
|
|
|
|
Unrealized
|
|
|
||||||||||
December 31, 2016
|
Cost
|
|
Gain
|
|
Loss
|
|
Fair Value
|
||||||||
Available-for-sale securities (current):
|
|
|
|
|
|
|
|
||||||||
Government agencies
|
$
|
1,003
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,003
|
|
Commercial paper
|
15,491
|
|
|
—
|
|
|
—
|
|
|
15,491
|
|
||||
Total investments (current)
|
$
|
16,494
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,494
|
|
Available-for-sale securities (non-current):
|
|
|
|
|
|
|
|
||||||||
Mutual funds, exchange traded funds and money market securities*
|
$
|
3,046
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
3,101
|
|
Total investments (non-current)
|
$
|
3,046
|
|
|
$
|
55
|
|
|
$
|
—
|
|
|
$
|
3,101
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Unrealized
|
|
|
||||||||||
April 2, 2016
|
Cost
|
|
Gain
|
|
Loss
|
|
Fair Value
|
||||||||
Available-for-sale securities (current):
|
|
|
|
|
|
|
|
||||||||
Commercial paper
|
$
|
13,137
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13,137
|
|
Government agencies
|
13,247
|
|
|
5
|
|
|
—
|
|
|
13,252
|
|
||||
Total investments (current)
|
$
|
26,384
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
26,389
|
|
Available-for-sale securities (non-current):
|
|
|
|
|
|
|
|
||||||||
Mutual funds, exchange traded funds and money market securities*
|
$
|
2,507
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
2,504
|
|
Total investments (non-current)
|
$
|
2,507
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
2,504
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
Raw materials and purchased parts
|
$
|
40,405
|
|
|
$
|
38,957
|
|
Work-in-process
|
14,196
|
|
|
14,270
|
|
||
Finished goods
|
4,229
|
|
|
7,243
|
|
||
|
$
|
58,830
|
|
|
$
|
60,470
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
Current trade accounts receivable, net
|
$
|
27,644
|
|
|
$
|
42,770
|
|
Non-current trade accounts receivable
|
90
|
|
|
320
|
|
||
|
$
|
27,734
|
|
|
$
|
43,090
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
Prepaid expenses
|
$
|
3,411
|
|
|
$
|
2,747
|
|
Value added tax receivable
|
1,538
|
|
|
1,353
|
|
||
Other
|
954
|
|
|
1,240
|
|
||
|
$
|
5,903
|
|
|
$
|
5,340
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
Consignment and demo equipment, net
|
$
|
11,130
|
|
|
$
|
7,242
|
|
Long term deposits
|
2,627
|
|
|
2,543
|
|
||
Non-current trade accounts receivable, net
|
90
|
|
|
320
|
|
||
Other non-current assets
|
3,178
|
|
|
2,521
|
|
||
|
$
|
17,025
|
|
|
$
|
12,626
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
Payroll-related liabilities
|
$
|
4,860
|
|
|
$
|
5,717
|
|
Product warranty accrual
|
4,136
|
|
|
3,666
|
|
||
Customer deposits
|
2,364
|
|
|
1,731
|
|
||
Purchase order commitments and receipts
|
1,256
|
|
|
2,588
|
|
||
Professional fees payable
|
914
|
|
|
1,052
|
|
||
Restructuring costs payable
|
620
|
|
|
757
|
|
||
Other current liabilities
|
1,865
|
|
|
2,823
|
|
||
|
$
|
16,015
|
|
|
$
|
18,334
|
|
(In thousands)
|
December 31, 2016
|
|
April 2, 2016
|
||||
Deferred compensation
|
$
|
3,101
|
|
|
$
|
2,504
|
|
Product warranty accrual
|
775
|
|
|
2,068
|
|
||
Other non-current liabilities
|
2,209
|
|
|
3,229
|
|
||
|
$
|
6,085
|
|
|
$
|
7,801
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Product warranty accrual, beginning
|
$
|
5,521
|
|
|
$
|
4,451
|
|
|
$
|
5,734
|
|
|
$
|
3,342
|
|
Warranty charges incurred, net
|
(1,674
|
)
|
|
(2,057
|
)
|
|
(4,988
|
)
|
|
(5,604
|
)
|
||||
Provision for warranty charges
|
1,064
|
|
|
2,292
|
|
|
4,165
|
|
|
6,948
|
|
||||
Product warranty accrual, ending
|
$
|
4,911
|
|
|
$
|
4,686
|
|
|
$
|
4,911
|
|
|
$
|
4,686
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Deferred revenue, beginning
|
$
|
11,583
|
|
|
$
|
12,662
|
|
|
$
|
7,685
|
|
|
$
|
12,376
|
|
Revenue deferred
|
9,075
|
|
|
13,868
|
|
|
28,547
|
|
|
47,459
|
|
||||
Revenue recognized
|
(9,440
|
)
|
|
(18,822
|
)
|
|
(25,014
|
)
|
|
(52,127
|
)
|
||||
Deferred revenue, ending
|
$
|
11,218
|
|
|
$
|
7,708
|
|
|
$
|
11,218
|
|
|
$
|
7,708
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands, except per share data)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Net loss
|
$
|
(9,693
|
)
|
|
$
|
(4,586
|
)
|
|
$
|
(19,486
|
)
|
|
$
|
(14,210
|
)
|
Weighted average shares used for basic earnings per share
|
32,919
|
|
|
31,495
|
|
|
32,379
|
|
|
31,355
|
|
||||
Weighted average shares used for diluted earnings per share
|
32,919
|
|
|
31,495
|
|
|
32,379
|
|
|
31,355
|
|
||||
Net loss per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(0.29
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
Diluted
|
$
|
(0.29
|
)
|
|
$
|
(0.15
|
)
|
|
$
|
(0.60
|
)
|
|
$
|
(0.45
|
)
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Component Processing
|
$
|
28,084
|
|
|
$
|
37,511
|
|
|
$
|
96,952
|
|
|
$
|
108,549
|
|
Micromachining
|
5,695
|
|
|
5,831
|
|
|
14,153
|
|
|
24,356
|
|
||||
|
$
|
33,779
|
|
|
$
|
43,342
|
|
|
$
|
111,105
|
|
|
$
|
132,905
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Component Processing
|
$
|
11,234
|
|
|
$
|
17,969
|
|
|
$
|
45,004
|
|
|
$
|
45,466
|
|
Micromachining
|
415
|
|
|
1,482
|
|
|
262
|
|
|
8,617
|
|
||||
Corporate and other
|
(201
|
)
|
|
(1,730
|
)
|
|
(2,030
|
)
|
|
(2,564
|
)
|
||||
|
$
|
11,448
|
|
|
$
|
17,721
|
|
|
$
|
43,236
|
|
|
$
|
51,519
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
December 31, 2016
|
|
January 2, 2016
|
|
December 31, 2016
|
|
January 2, 2016
|
||||||||
Asia
|
$
|
26,015
|
|
|
$
|
33,278
|
|
|
$
|
92,184
|
|
|
$
|
103,843
|
|
Americas
|
6,210
|
|
|
7,589
|
|
|
11,464
|
|
|
20,750
|
|
||||
Europe
|
1,554
|
|
|
2,475
|
|
|
7,457
|
|
|
8,312
|
|
||||
|
$
|
33,779
|
|
|
$
|
43,342
|
|
|
$
|
111,105
|
|
|
$
|
132,905
|
|
Restructuring & cost management amounts payable as of April 2, 2016
|
$
|
757
|
|
Employee severance and related benefits:
|
|
||
Cash payments
|
(297
|
)
|
|
Restructuring & cost management amounts payable as of December 31, 2016
|
$
|
460
|
|
|
Fiscal quarter ended
|
||||
|
December 31, 2016
|
|
January 2, 2016
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
66.1
|
|
|
59.1
|
|
Gross profit
|
33.9
|
|
|
40.9
|
|
Selling, general and administrative
|
39.3
|
|
|
28.8
|
|
Research, development and engineering
|
23.3
|
|
|
17.9
|
|
Acquisition and integration costs
|
0.1
|
|
|
—
|
|
Restructuring costs
|
1.0
|
|
|
4.5
|
|
Operating loss
|
(29.8
|
)
|
|
(10.3
|
)
|
Interest and other income, net
|
0.1
|
|
|
0.1
|
|
Total non-operating income
|
0.1
|
|
|
0.1
|
|
Loss before income taxes
|
(29.7
|
)
|
|
(10.2
|
)
|
(Benefit from) provision for income taxes
|
(1.0
|
)
|
|
0.4
|
|
Net loss
|
(28.7
|
)%
|
|
(10.6
|
)%
|
|
Fiscal quarter ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Component Processing
|
|
|
|
|
|
|
|
||||||
Interconnect Products (IP)
|
$
|
15,987
|
|
|
47.3
|
%
|
|
$
|
22,824
|
|
|
52.6
|
%
|
Semiconductor Products (SP)
|
6,690
|
|
|
19.8
|
|
|
11,384
|
|
|
26.3
|
|
||
Component Test Products (CTP)
|
5,407
|
|
|
16.0
|
|
|
3,303
|
|
|
7.6
|
|
||
|
$
|
28,084
|
|
|
83.1
|
%
|
|
$
|
37,511
|
|
|
86.5
|
%
|
Micromachining
|
|
|
|
|
|
|
|
||||||
Micromachining Products (MP)
|
$
|
5,695
|
|
|
16.9
|
%
|
|
$
|
5,831
|
|
|
13.5
|
%
|
Net Sales
|
$
|
33,779
|
|
|
100.0
|
%
|
|
$
|
43,342
|
|
|
100.0
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Asia
|
$
|
26,015
|
|
|
77.0
|
%
|
|
$
|
33,278
|
|
|
76.8
|
%
|
Americas
|
6,210
|
|
|
18.4
|
|
|
7,589
|
|
|
17.5
|
|
||
Europe
|
1,554
|
|
|
4.6
|
|
|
2,475
|
|
|
5.7
|
|
||
Net Sales
|
$
|
33,779
|
|
|
100.0
|
%
|
|
$
|
43,342
|
|
|
100.0
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Gross Profit
|
|
% of Net Sales
|
|
Gross Profit
|
|
% of Net Sales
|
||||||
Component Processing
|
$
|
11,234
|
|
|
40.0
|
%
|
|
$
|
17,969
|
|
|
47.9
|
%
|
Micromachining
|
415
|
|
|
7.3
|
|
|
1,482
|
|
|
25.4
|
|
||
Corporate and other
|
(201
|
)
|
|
(0.6
|
)
|
|
(1,730
|
)
|
|
(4.0
|
)
|
||
Gross Profit
|
$
|
11,448
|
|
|
33.9
|
%
|
|
$
|
17,721
|
|
|
40.9
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Expense
|
|
% of Net Sales
|
|
Expense
|
|
% of Net Sales
|
||||||
Selling, general and administrative
|
$
|
13,280
|
|
|
39.3
|
%
|
|
$
|
12,468
|
|
|
28.8
|
%
|
Research, development and engineering
|
7,868
|
|
|
23.3
|
|
|
7,778
|
|
|
17.9
|
|
||
Acquisition and integration costs
|
31
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||
Restructuring costs
|
321
|
|
|
1.0
|
|
|
1,944
|
|
|
4.5
|
|
||
Operating Expenses
|
$
|
21,500
|
|
|
63.6
|
%
|
|
$
|
22,190
|
|
|
51.2
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Interest and Other (Expense) Income, net
|
|
% of Net Sales
|
|
Interest and Other (Expense) Income, net
|
|
% of Net Sales
|
||||||
Interest and other income, net
|
$
|
34
|
|
|
0.1
|
%
|
|
$
|
67
|
|
|
0.1
|
%
|
Total non-operating income
|
$
|
34
|
|
|
0.1
|
%
|
|
$
|
67
|
|
|
0.1
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Income Tax Benefit
|
|
Effective
Tax Rate
|
|
Income Tax Provision
|
|
Effective
Tax Rate
|
||||||
(Benefit from) provision for income taxes
|
$
|
(325
|
)
|
|
3.2
|
%
|
|
$
|
184
|
|
|
(4.2
|
)%
|
|
Three fiscal quarters ended
|
||||
|
December 31, 2016
|
|
January 2, 2016
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
61.1
|
|
|
61.2
|
|
Gross profit
|
38.9
|
|
|
38.8
|
|
Selling, general and administrative
|
35.0
|
|
|
28.3
|
|
Research, development and engineering
|
20.9
|
|
|
18.6
|
|
Acquisition and integration costs
|
0.3
|
|
|
0.1
|
|
Restructuring costs
|
0.3
|
|
|
2.0
|
|
Operating loss
|
(17.7
|
)
|
|
(10.2
|
)
|
Interest and other income, net
|
0.1
|
|
|
0.1
|
|
Total non-operating income
|
0.1
|
|
|
0.1
|
|
Loss before income taxes
|
(17.5
|
)
|
|
(10.2
|
)
|
Provision for income taxes
|
0.1
|
|
|
0.5
|
|
Net loss
|
(17.5
|
)%
|
|
(10.7
|
)%
|
|
Three fiscal quarters ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Component Processing
|
|
|
|
|
|
|
|
||||||
Interconnect Products (IP)
|
$
|
60,432
|
|
|
54.4
|
%
|
|
$
|
64,969
|
|
|
48.9
|
%
|
Semiconductor Products (SP)
|
21,521
|
|
|
19.4
|
|
|
29,288
|
|
|
22.0
|
|
||
Component Test Products (CTP)
|
14,999
|
|
|
13.5
|
|
|
14,292
|
|
|
10.8
|
|
||
|
$
|
96,952
|
|
|
87.3
|
%
|
|
$
|
108,549
|
|
|
81.7
|
%
|
Micromachining
|
|
|
|
|
|
|
|
||||||
Micromachining Products (MP)
|
$
|
14,153
|
|
|
12.7
|
%
|
|
$
|
24,356
|
|
|
18.3
|
%
|
Net Sales
|
$
|
111,105
|
|
|
100.0
|
%
|
|
$
|
132,905
|
|
|
100.0
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Asia
|
$
|
92,184
|
|
|
83.0
|
%
|
|
$
|
103,843
|
|
|
78.1
|
%
|
Americas
|
11,464
|
|
|
10.3
|
|
|
20,750
|
|
|
15.6
|
|
||
Europe
|
7,457
|
|
|
6.7
|
|
|
8,312
|
|
|
6.3
|
|
||
Net Sales
|
$
|
111,105
|
|
|
100.0
|
%
|
|
$
|
132,905
|
|
|
100.0
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Gross Profit
|
|
% of Net Sales
|
|
Gross Profit
|
|
% of Net Sales
|
||||||
Component Processing
|
$
|
45,004
|
|
|
46.4
|
%
|
|
$
|
45,466
|
|
|
41.9
|
%
|
Micromachining
|
262
|
|
|
1.9
|
|
|
8,617
|
|
|
35.4
|
|
||
Corporate and other
|
(2,030
|
)
|
|
(1.8
|
)
|
|
(2,564
|
)
|
|
(1.9
|
)
|
||
Gross Profit
|
$
|
43,236
|
|
|
38.9
|
%
|
|
$
|
51,519
|
|
|
38.8
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Expense
|
|
% of Net Sales
|
|
Expense
|
|
% of Net Sales
|
||||||
Selling, general and administrative
|
$
|
38,917
|
|
|
35.0
|
%
|
|
$
|
37,619
|
|
|
28.3
|
%
|
Research, development and engineering
|
23,258
|
|
|
20.9
|
|
|
24,706
|
|
|
18.6
|
|
||
Acquisition and integration costs
|
366
|
|
|
0.3
|
|
|
194
|
|
|
0.1
|
|
||
Restructuring costs
|
321
|
|
|
0.3
|
|
|
2,597
|
|
|
2.0
|
|
||
Operating Expenses
|
$
|
62,862
|
|
|
56.6
|
%
|
|
$
|
65,116
|
|
|
49.0
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Non-Operating Income (Expense)
|
|
% of Net Sales
|
|
Non-Operating Income (Expense)
|
|
% of Net Sales
|
||||||
Interest and other income, net
|
$
|
162
|
|
|
0.1
|
%
|
|
$
|
68
|
|
|
0.1
|
%
|
Total non-operating income
|
$
|
162
|
|
|
0.1
|
%
|
|
$
|
68
|
|
|
0.1
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
December 31, 2016
|
|
January 2, 2016
|
||||||||||
(In thousands, except percentages)
|
Income Tax Provision
|
|
Effective
Tax Rate
|
|
Income Tax Provision
|
|
Effective
Tax Rate
|
||||||
Provision for income taxes
|
$
|
22
|
|
|
(0.1
|
)%
|
|
$
|
681
|
|
|
(5.0
|
)%
|
•
|
changes in the timing of orders and terms or acceptance of product shipments by our customers;
|
•
|
changes in the mix of products and services that we sell;
|
•
|
timing and market acceptance of our new product introductions; and
|
•
|
delays or problems in the planned introduction of new products, or in the performance of any such products following delivery to customers.
|
•
|
periodic local or geographic economic downturns and unstable political conditions;
|
•
|
price and currency exchange controls;
|
•
|
fluctuation in the relative values of currencies;
|
•
|
difficulty in repatriating money, whether as a result of tax laws or otherwise;
|
•
|
difficulties protecting intellectual property;
|
•
|
compliance with labor laws and other laws governing employees;
|
•
|
local labor disputes;
|
•
|
shipping delays and disruptions;
|
•
|
changes in trading policies, regulatory requirements, tariffs and other barriers, or the termination or renegotiation of existing trade agreement;
|
•
|
impact of changes in immigration or other policies impacting our ability to attract, hire, and retain key talent; and
|
•
|
difficulties in managing a global enterprise, including staffing, collecting accounts receivable, and managing suppliers, distributors and representatives.
|
•
|
recent and potential future tightening of immigration and travel controls may adversely affect the residence status of non-U.S. engineers and other key technical employees in our U.S. facilities, our ability to hire new non-U.S. employees in such facilities or our ability to bring our non-US employees into the U.S. for business related activities;
|
•
|
more frequent instances of shipping delays;
|
•
|
demand for our products may not increase or may decrease; and
|
•
|
our customers or suppliers may experience financial difficulties or cease operations.
|
•
|
challenges in designing facilities that can be scaled for future expansion, replicating current processes and bringing new facilities up to full operation;
|
•
|
unpredictable costs, redundancy costs and cost overruns for developing facilities and acquiring equipment;
|
•
|
building local management teams, technical personnel and other staff for functions that we have not previously conducted outside of the United States;
|
•
|
technical obstacles such as poor production or process yield and loss of quality control during the ramp of a new facility;
|
•
|
re-qualifications and other procedures that may be required by our customers;
|
•
|
our ability to bring up local suppliers to meet our quality and cycle-time needs;
|
•
|
our ability to reduce costs in the United States as we add costs elsewhere;
|
•
|
rapidly changing business conditions that may require plans to be changed or abandoned before they are fully implemented; and
|
•
|
challenges posed by distance and by differences in language and culture.
|
•
|
difficulties and increased costs in connection with integration of personnel, operations, technologies and products of the acquired businesses;
|
•
|
difficulties in implementation of our enterprise resource planning (ERP) system into the acquired company’s operations;
|
•
|
diversion of management’s attention from other operational matters;
|
•
|
the potential loss of key employees of the acquired company;
|
•
|
lack of synergy or inability to realize expected synergies resulting from the acquisition;
|
•
|
the inability to successfully enter new markets expected to result from the acquisition;
|
•
|
acquired assets becoming impaired as a result of technological advancements or worse-than-expected performance by the acquired company;
|
•
|
difficulties establishing satisfactory internal controls and accounting practices at the acquired company;
|
•
|
difficulties implementing internal manufacturing processes at the acquired company;
|
•
|
risks related to the culture, language, and local practices of the acquired company;
|
•
|
risks and uncertainties relating to the performance of the combined company following the transaction; and
|
•
|
acquiring unanticipated liabilities for which we will not be indemnified.
|
•
|
variations in operating results from quarter to quarter;
|
•
|
changes in earnings estimates by analysts or our failure to meet analysts’ expectations;
|
•
|
changes in the market price per share of our public company customers;
|
•
|
market conditions in the consumer electronics, semiconductor and other industries into which we sell products;
|
•
|
general economic conditions;
|
•
|
political changes, hostilities or natural disasters;
|
•
|
low trading volume of our common stock;
|
•
|
the number of analysts covering our common stock;
|
•
|
being added or removed from market indices;
|
•
|
policies of institutional investors restricting or prohibiting investments in stock with a market price below certain thresholds;
|
•
|
stock price volatility based on one or a few investors buying or selling a large number of shares over days or weeks, due to relatively low volumes of trading in our stock; and
|
•
|
the number of firms making a market in our common stock.
|
3.1
|
|
Third Restated Articles of Incorporation, as amended. Incorporated by reference to Exhibit 3.1 of the Company's Annual Report on Form 10-K for the fiscal year ended April 3, 2010.
|
3.2
|
|
2009 Amended and Restated Bylaws, as amended. Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on March 26, 2015
|
10.1
|
|
Time-Based Restricted Stock Unit Agreement between the Company and Michael Burger, dated as of October 3, 2016
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document *
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document *
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document *
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document *
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document *
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document *
|
Date:
|
February 7, 2017
|
ELECTRO SCIENTIFIC INDUSTRIES, INC.
|
|
|
|
By:
|
/s/ Michael D. Burger
|
|
|
|
Michael D. Burger
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Paul Oldham
|
|
|
|
Paul Oldham
|
|
|
|
Senior Vice President of Administration, Chief Financial Officer and Corporate Secretary
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
A.
|
Primary Beneficiary(ies)
|
B.
|
Secondary Beneficiary(ies)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Electro Scientific Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Michael D. Burger
|
Michael D. Burger
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Electro Scientific Industries, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Paul Oldham
|
Paul Oldham
|
Senior Vice President of Administration,
|
Chief Financial Officer and Corporate Secretary
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Michael D. Burger
|
Michael D. Burger
|
President and Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ Paul Oldham
|
Paul Oldham
|
Senior Vice President of Administration,
|
Chief Financial Officer and Corporate Secretary
|