|
|
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
|
¨
|
Emerging growth company
|
¨
|
|
|
|
Part I
|
FINANCIAL INFORMATION
|
|
Financial Statements (Unaudited)
|
|
|
|
||
|
||
|
||
|
||
|
||
Part II
|
OTHER INFORMATION
|
|
(In thousands)
|
Dec 29, 2018
|
|
Mar 31, 2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
52,129
|
|
|
$
|
76,792
|
|
Short-term investments
|
123,081
|
|
|
47,121
|
|
||
Trade receivables, net of allowances of $176 and $832
|
55,557
|
|
|
63,044
|
|
||
Inventories, net
|
81,846
|
|
|
87,686
|
|
||
Shipped systems pending acceptance
|
2,693
|
|
|
4,734
|
|
||
Other current assets
|
6,077
|
|
|
5,493
|
|
||
Total current assets
|
321,383
|
|
|
284,870
|
|
||
Non-current assets:
|
|
|
|
||||
Property, plant and equipment (PP&E), net of accumulated depreciation of $86,504 and $83,159
|
25,623
|
|
|
22,025
|
|
||
Deferred income taxes, net
|
40,919
|
|
|
43,518
|
|
||
Goodwill
|
2,626
|
|
|
2,626
|
|
||
Acquired intangible assets, net of accumulated amortization of $23,837 and $22,766
|
4,099
|
|
|
5,169
|
|
||
Other assets
|
13,502
|
|
|
14,780
|
|
||
Total assets
|
$
|
408,152
|
|
|
$
|
372,988
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
27,505
|
|
|
$
|
37,354
|
|
Accrued liabilities
|
25,487
|
|
|
34,533
|
|
||
Deferred revenue
|
8,777
|
|
|
9,818
|
|
||
Total current liabilities
|
61,769
|
|
|
81,705
|
|
||
Non-current liabilities:
|
|
|
|
||||
Long-term debt
|
12,438
|
|
|
12,766
|
|
||
Income taxes payable
|
2,119
|
|
|
1,901
|
|
||
Other liabilities
|
7,447
|
|
|
10,258
|
|
||
Total liabilities
|
83,773
|
|
|
106,630
|
|
||
Commitments and contingencies (See Note 11: Commitments and Contingencies)
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, without par value; 1,000 shares authorized; no shares issued
|
—
|
|
|
—
|
|
||
Common stock, without par value; 100,000 shares authorized; 34,784 and 34,387 issued and outstanding
|
216,174
|
|
|
210,995
|
|
||
Retained earnings
|
109,176
|
|
|
54,816
|
|
||
Accumulated other comprehensive (loss) income
|
(971
|
)
|
|
547
|
|
||
Total shareholders’ equity
|
324,379
|
|
|
266,358
|
|
||
Total liabilities and shareholders’ equity
|
$
|
408,152
|
|
|
$
|
372,988
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands, except per share amounts)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Net sales:
|
|
|
|
|
|
|
|
||||||||
Systems
|
$
|
55,679
|
|
|
$
|
99,418
|
|
|
$
|
223,799
|
|
|
$
|
221,827
|
|
Services
|
12,263
|
|
|
11,422
|
|
|
40,684
|
|
|
32,664
|
|
||||
Total net sales
|
67,942
|
|
|
110,840
|
|
|
264,483
|
|
|
254,491
|
|
||||
Cost of sales:
|
|
|
|
|
|
|
|
||||||||
Systems
|
34,744
|
|
|
52,502
|
|
|
125,377
|
|
|
132,107
|
|
||||
Services
|
7,060
|
|
|
5,182
|
|
|
20,703
|
|
|
16,276
|
|
||||
Total cost of sales
|
41,804
|
|
|
57,684
|
|
|
146,080
|
|
|
148,383
|
|
||||
Gross profit
|
26,138
|
|
|
53,156
|
|
|
118,403
|
|
|
106,108
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
9,376
|
|
|
11,040
|
|
|
30,344
|
|
|
35,496
|
|
||||
Research, development and engineering
|
8,609
|
|
|
8,165
|
|
|
27,821
|
|
|
25,373
|
|
||||
Restructuring costs
|
—
|
|
|
706
|
|
|
—
|
|
|
4,079
|
|
||||
Merger and integration costs
|
4,277
|
|
|
—
|
|
|
4,277
|
|
|
—
|
|
||||
Total operating expenses
|
22,262
|
|
|
19,911
|
|
|
62,442
|
|
|
64,948
|
|
||||
Operating income
|
3,876
|
|
|
33,245
|
|
|
55,961
|
|
|
41,160
|
|
||||
Non-operating income:
|
|
|
|
|
|
|
|
||||||||
Interest and other income, net
|
1,985
|
|
|
789
|
|
|
2,820
|
|
|
376
|
|
||||
Total non-operating income
|
1,985
|
|
|
789
|
|
|
2,820
|
|
|
376
|
|
||||
Income before income taxes
|
5,861
|
|
|
34,034
|
|
|
58,781
|
|
|
41,536
|
|
||||
(Benefit from) provision for income taxes
|
(479
|
)
|
|
61
|
|
|
4,462
|
|
|
401
|
|
||||
Net income
|
$
|
6,340
|
|
|
$
|
33,973
|
|
|
$
|
54,319
|
|
|
$
|
41,135
|
|
Net income per share - basic
|
$
|
0.18
|
|
|
$
|
0.99
|
|
|
$
|
1.57
|
|
|
$
|
1.22
|
|
Net income per share - diluted
|
$
|
0.18
|
|
|
$
|
0.94
|
|
|
$
|
1.50
|
|
|
$
|
1.16
|
|
Weighted average number of shares - basic
|
34,769
|
|
|
34,224
|
|
|
34,623
|
|
|
33,839
|
|
||||
Weighted average number of shares - diluted
|
35,975
|
|
|
36,010
|
|
|
36,127
|
|
|
35,562
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Net income
|
$
|
6,340
|
|
|
$
|
33,973
|
|
|
$
|
54,319
|
|
|
$
|
41,135
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment, net of taxes of $13, $8, $270 and $8
|
(44
|
)
|
|
581
|
|
|
(1,528
|
)
|
|
969
|
|
||||
Benefit plan obligation, net of taxes of $(2), $(2), $(5) and $(7)
|
4
|
|
|
4
|
|
|
11
|
|
|
13
|
|
||||
Net unrealized loss on available-for-sale securities, net of taxes of $3, $0, $0 and $0
|
(11
|
)
|
|
(17
|
)
|
|
(1
|
)
|
|
(18
|
)
|
||||
Other comprehensive (loss) income:
|
(51
|
)
|
|
568
|
|
|
(1,518
|
)
|
|
964
|
|
||||
Comprehensive income
|
$
|
6,289
|
|
|
$
|
34,541
|
|
|
$
|
52,801
|
|
|
$
|
42,099
|
|
|
Three fiscal quarters ended
|
||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
54,319
|
|
|
$
|
41,135
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization, including acquired intangible amortization
|
6,528
|
|
|
6,523
|
|
||
Share-based compensation expense
|
4,868
|
|
|
3,510
|
|
||
Impairment of PP&E and other long-term assets due to restructuring
|
—
|
|
|
5,610
|
|
||
(Recovery of) provision for doubtful accounts
|
(550
|
)
|
|
603
|
|
||
Deferred income taxes
|
2,797
|
|
|
2
|
|
||
Loss on sale of PP&E
|
247
|
|
|
—
|
|
||
Impairment of inventory
|
—
|
|
|
8,248
|
|
||
Loss on disposal of property and equipment, net
|
—
|
|
|
101
|
|
||
Gain on sale of laser ablation assets
|
—
|
|
|
(917
|
)
|
||
Changes in operating accounts:
|
|
|
|
||||
Decrease (increase) in trade receivables, net
|
7,643
|
|
|
(35,271
|
)
|
||
Decrease (increase) in inventories
|
1,502
|
|
|
(24,402
|
)
|
||
Decrease (increase) in shipped systems pending acceptance
|
2,041
|
|
|
(67
|
)
|
||
Decrease in other current assets
|
518
|
|
|
1,489
|
|
||
(Decrease) increase in accounts payable and accrued liabilities
|
(21,579
|
)
|
|
36,963
|
|
||
Decrease in deferred revenue
|
(988
|
)
|
|
(2,730
|
)
|
||
Net cash provided by operating activities
|
57,346
|
|
|
40,797
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
||||
Purchase of investments
|
(155,020
|
)
|
|
(48,668
|
)
|
||
Proceeds from sales and maturities of investments
|
78,918
|
|
|
17,034
|
|
||
Purchase of property, plant and equipment
|
(6,670
|
)
|
|
(3,079
|
)
|
||
Proceeds from sale of laser ablation assets
|
1,638
|
|
|
2,999
|
|
||
Decrease (increase) in other assets
|
523
|
|
|
(4,646
|
)
|
||
Net cash used in investing activities
|
(80,611
|
)
|
|
(36,360
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
||||
Repayment of debt
|
(337
|
)
|
|
(321
|
)
|
||
Payment of withholding taxes on stock-based compensation
|
(951
|
)
|
|
(1,696
|
)
|
||
Proceeds from issuance of common stock
|
1,238
|
|
|
2,624
|
|
||
Net cash (used in) provided by financing activities
|
(50
|
)
|
|
607
|
|
||
Effect of exchange rate changes on cash
|
(1,337
|
)
|
|
562
|
|
||
NET CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(24,652
|
)
|
|
5,606
|
|
||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH AT BEGINNING OF PERIOD
|
77,885
|
|
|
57,732
|
|
||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD
|
$
|
53,233
|
|
|
$
|
63,338
|
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
|
|
|
||||
Cash paid for interest
|
$
|
(477
|
)
|
|
$
|
(496
|
)
|
Cash paid for income taxes
|
(1,766
|
)
|
|
(979
|
)
|
||
Income tax refunds received
|
34
|
|
|
67
|
|
||
Net increase (decrease) in PP&E and other assets related to transfers from inventory
|
3,990
|
|
|
(824
|
)
|
||
Non-cash additions to PP&E
|
1,537
|
|
|
483
|
|
Note 1
|
||
Note 2
|
||
Note 3
|
||
Note 4
|
||
Note 5
|
||
Note 6
|
||
Note 7
|
||
Note 8
|
||
Note 9
|
||
Note 10
|
||
Note 11
|
||
Note 12
|
||
Note 13
|
||
Note 14
|
||
Note 15
|
||
Note 16
|
||
Note 17
|
||
Note 18
|
||
Note 19
|
||
Note 20
|
(In thousands)
|
Dec 29, 2018
|
|
Mar 31, 2018
|
|
Dec 30, 2017
|
||||||
Cash and cash equivalents
|
$
|
52,129
|
|
|
$
|
76,792
|
|
|
$
|
62,251
|
|
Restricted cash included in other current assets
|
1,104
|
|
|
—
|
|
|
—
|
|
|||
Restricted cash included in other long-term assets
|
—
|
|
|
1,093
|
|
|
1,087
|
|
|||
Total cash, cash equivalents and restricted cash
|
$
|
53,233
|
|
|
$
|
77,885
|
|
|
$
|
63,338
|
|
•
|
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 29, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market securities
|
$
|
21,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,578
|
|
Total cash equivalents
|
$
|
21,578
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,578
|
|
Short term investments - available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury fund
|
$
|
26,910
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,910
|
|
Commercial paper
|
—
|
|
|
58,530
|
|
|
—
|
|
|
58,530
|
|
||||
Corporate bonds
|
—
|
|
|
37,641
|
|
|
—
|
|
|
37,641
|
|
||||
Total short-term investments - available for sale
|
$
|
26,910
|
|
|
$
|
96,171
|
|
|
$
|
—
|
|
|
$
|
123,081
|
|
Forward purchase or sale contracts:
|
|
|
|
|
|
|
|
||||||||
Japanese Yen
|
$
|
—
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
24
|
|
New Taiwan Dollar
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
||||
Korean Won
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Euro
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||
British Pound
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
Chinese Renminbi
|
—
|
|
|
(41
|
)
|
|
—
|
|
|
(41
|
)
|
||||
Singapore Dollar
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Total forward contracts
|
$
|
—
|
|
|
$
|
32
|
|
|
$
|
—
|
|
|
$
|
32
|
|
Deferred compensation plan assets:*
|
|
|
|
|
|
|
|
||||||||
Mutual funds and exchange traded funds
|
$
|
1,874
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,874
|
|
Money market securities
|
316
|
|
|
—
|
|
|
—
|
|
|
316
|
|
||||
Total deferred compensation plan assets
|
$
|
2,190
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,190
|
|
March 31, 2018
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market securities
|
$
|
41,752
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
41,752
|
|
U.S. treasury fund
|
2,500
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
||||
Commercial paper
|
—
|
|
|
3,498
|
|
|
—
|
|
|
3,498
|
|
||||
Corporate bonds
|
—
|
|
|
1,999
|
|
|
—
|
|
|
1,999
|
|
||||
Total cash equivalents
|
$
|
44,252
|
|
|
$
|
5,497
|
|
|
$
|
—
|
|
|
$
|
49,749
|
|
Short term investments - available for sale:
|
|
|
|
|
|
|
|
||||||||
U.S. treasury fund
|
$
|
10,458
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,458
|
|
Commercial paper
|
—
|
|
|
25,913
|
|
|
—
|
|
|
25,913
|
|
||||
Corporate bonds
|
—
|
|
|
10,750
|
|
|
—
|
|
|
10,750
|
|
||||
Total short-term investments - available for sale
|
$
|
10,458
|
|
|
$
|
36,663
|
|
|
$
|
—
|
|
|
$
|
47,121
|
|
Forward purchase or sale contracts:
|
|
|
|
|
|
|
|
||||||||
Japanese Yen
|
$
|
—
|
|
|
$
|
(23
|
)
|
|
$
|
—
|
|
|
$
|
(23
|
)
|
New Taiwan Dollar
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||
Korean Won
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
||||
Euro
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
British Pound
|
—
|
|
|
49
|
|
|
—
|
|
|
49
|
|
||||
Chinese Renminbi
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
||||
Singapore Dollar
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Total forward contracts
|
$
|
—
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
(6
|
)
|
Deferred compensation plan assets:*
|
|
|
|
|
|
|
|
||||||||
Mutual funds and exchange traded funds
|
$
|
1,841
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,841
|
|
Money market securities
|
207
|
|
|
—
|
|
|
—
|
|
|
207
|
|
||||
Total deferred compensation plan assets
|
$
|
2,048
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,048
|
|
|
|
|
Unrealized
|
|
|
||||||||||
December 29, 2018
|
Cost
|
|
Gain
|
|
Loss
|
|
Fair Value
|
||||||||
Available-for-sale securities (current):
|
|
|
|
|
|
|
|
||||||||
U.S. treasury fund
|
$
|
26,912
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
26,910
|
|
Commercial paper
|
58,530
|
|
|
—
|
|
|
—
|
|
|
58,530
|
|
||||
Corporate Bonds
|
37,675
|
|
|
—
|
|
|
(34
|
)
|
|
37,641
|
|
||||
Total investments (current)
|
$
|
123,117
|
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
123,081
|
|
Available-for-sale securities (non-current):
|
|
|
|
|
|
|
|
||||||||
Mutual funds, exchange traded funds and money market securities*
|
$
|
2,226
|
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
2,190
|
|
Total investments (non-current)
|
$
|
2,226
|
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
2,190
|
|
|
|
|
Unrealized
|
|
|
||||||||||
March 31, 2018
|
Cost
|
|
Gain
|
|
Loss
|
|
Fair Value
|
||||||||
Available-for-sale securities (current):
|
|
|
|
|
|
|
|
||||||||
U.S. treasury fund
|
$
|
12,975
|
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
$
|
12,958
|
|
Commercial paper
|
29,411
|
|
|
—
|
|
|
—
|
|
|
29,411
|
|
||||
Corporate bonds
|
12,768
|
|
|
—
|
|
|
(19
|
)
|
|
12,749
|
|
||||
Total investments (current)
|
$
|
55,154
|
|
|
$
|
—
|
|
|
$
|
(36
|
)
|
|
$
|
55,118
|
|
Available-for-sale securities (non-current):
|
|
|
|
|
|
|
|
||||||||
Mutual funds, exchange traded funds and money market securities*
|
$
|
1,881
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
$
|
2,048
|
|
Total investments (non-current)
|
$
|
1,881
|
|
|
$
|
167
|
|
|
$
|
—
|
|
|
$
|
2,048
|
|
(In thousands)
|
Dec 29, 2018
|
|
Mar 31, 2018
|
||||
Raw materials and purchased parts
|
$
|
58,855
|
|
|
$
|
52,591
|
|
Work-in-process
|
15,569
|
|
|
18,634
|
|
||
Finished goods
|
7,422
|
|
|
16,461
|
|
||
|
$
|
81,846
|
|
|
$
|
87,686
|
|
(In thousands)
|
Dec 29, 2018
|
|
Mar 31, 2018
|
||||
Demo and leased equipment, net
|
$
|
7,464
|
|
|
$
|
6,746
|
|
Long term deposits and non-trade receivables
|
2,830
|
|
|
3,232
|
|
||
Non-current restricted cash
|
—
|
|
|
1,093
|
|
||
Other non-current assets
|
3,208
|
|
|
3,709
|
|
||
|
$
|
13,502
|
|
|
$
|
14,780
|
|
(In thousands)
|
Dec 29, 2018
|
|
Mar 31, 2018
|
||||
Payroll-related liabilities
|
$
|
8,880
|
|
|
$
|
15,879
|
|
Product warranty accrual
|
5,387
|
|
|
4,646
|
|
||
Purchase order commitments and receipts
|
2,136
|
|
|
2,978
|
|
||
Customer deposits
|
1,051
|
|
|
2,214
|
|
||
Income taxes payable
|
648
|
|
|
1,152
|
|
||
Current portion, long-term debt
|
437
|
|
|
421
|
|
||
Other current liabilities
|
6,948
|
|
|
7,243
|
|
||
|
$
|
25,487
|
|
|
$
|
34,533
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Product warranty accrual, beginning
|
$
|
9,223
|
|
|
$
|
7,156
|
|
|
$
|
10,220
|
|
|
$
|
5,474
|
|
Warranty charges incurred, net
|
(2,683
|
)
|
|
(3,273
|
)
|
|
(7,026
|
)
|
|
(8,384
|
)
|
||||
Provision for warranty charges
|
1,975
|
|
|
5,067
|
|
|
5,321
|
|
|
11,860
|
|
||||
Product warranty accrual, ending
|
$
|
8,515
|
|
|
$
|
8,950
|
|
|
$
|
8,515
|
|
|
$
|
8,950
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Deferred revenue, beginning
|
$
|
8,551
|
|
|
$
|
16,369
|
|
|
$
|
10,514
|
|
|
$
|
15,397
|
|
Revenue deferred
|
9,982
|
|
|
20,009
|
|
|
38,266
|
|
|
66,661
|
|
||||
Revenue recognized
|
(9,628
|
)
|
|
(23,991
|
)
|
|
(39,875
|
)
|
|
(69,671
|
)
|
||||
Deferred revenue, ending
|
$
|
8,905
|
|
|
$
|
12,387
|
|
|
$
|
8,905
|
|
|
$
|
12,387
|
|
(In thousands)
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Principal maturities
|
$
|
471
|
|
|
$
|
492
|
|
|
$
|
518
|
|
|
$
|
543
|
|
|
$
|
570
|
|
(In thousands)
|
Dec 29, 2018
|
|
Mar 31, 2018
|
||||
Total debt outstanding
|
$
|
12,875
|
|
|
$
|
13,187
|
|
Less: Current portion, long-term debt
|
(437
|
)
|
|
(421
|
)
|
||
Long-term debt
|
$
|
12,438
|
|
|
$
|
12,766
|
|
|
Foreign currency translation adjustment
|
|
Accumulated other comprehensive income related to benefit plan obligation
|
|
Net unrealized loss on available-for-sale securities
|
|
Total
|
||||||||
Balance at March 31, 2018
|
$
|
590
|
|
|
$
|
(16
|
)
|
|
$
|
(27
|
)
|
|
$
|
547
|
|
Other comprehensive (loss) income before reclassifications and taxes
|
(1,798
|
)
|
|
16
|
|
|
(1
|
)
|
|
(1,783
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Tax effect
|
270
|
|
|
(5
|
)
|
|
—
|
|
|
265
|
|
||||
Other Comprehensive (loss) income
|
(1,528
|
)
|
|
11
|
|
|
(1
|
)
|
|
(1,518
|
)
|
||||
Balance at December 29, 2018
|
$
|
(938
|
)
|
|
$
|
(5
|
)
|
|
$
|
(28
|
)
|
|
$
|
(971
|
)
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Cost of sales
|
$
|
109
|
|
|
$
|
64
|
|
|
$
|
337
|
|
|
$
|
208
|
|
Selling, general and administrative
|
1,271
|
|
|
498
|
|
|
3,698
|
|
|
2,629
|
|
||||
Research, development and engineering
|
324
|
|
|
151
|
|
|
833
|
|
|
484
|
|
||||
Total share-based compensation expense
|
$
|
1,704
|
|
|
$
|
713
|
|
|
$
|
4,868
|
|
|
$
|
3,321
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Printed Circuit Board
|
$
|
9,457
|
|
|
$
|
76,933
|
|
|
$
|
114,610
|
|
|
$
|
161,305
|
|
Component Test
|
31,896
|
|
|
6,504
|
|
|
59,856
|
|
|
20,959
|
|
||||
Semiconductor
|
12,429
|
|
|
10,664
|
|
|
42,433
|
|
|
25,486
|
|
||||
Industrial Machining
|
1,897
|
|
|
5,317
|
|
|
6,900
|
|
|
14,077
|
|
||||
Service
|
12,263
|
|
|
11,422
|
|
|
40,684
|
|
|
32,664
|
|
||||
Net sales
|
$
|
67,942
|
|
|
$
|
110,840
|
|
|
$
|
264,483
|
|
|
$
|
254,491
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Point-in-time
|
$
|
62,607
|
|
|
$
|
104,202
|
|
|
$
|
246,561
|
|
|
$
|
237,022
|
|
Over-time
|
5,335
|
|
|
6,638
|
|
|
17,922
|
|
|
17,469
|
|
||||
Net sales
|
$
|
67,942
|
|
|
$
|
110,840
|
|
|
$
|
264,483
|
|
|
$
|
254,491
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Asia
|
$
|
56,748
|
|
|
$
|
103,069
|
|
|
$
|
232,448
|
|
|
$
|
233,685
|
|
Europe
|
6,127
|
|
|
5,340
|
|
|
17,490
|
|
|
11,269
|
|
||||
Americas
|
5,067
|
|
|
2,431
|
|
|
14,545
|
|
|
9,537
|
|
||||
Net sales
|
$
|
67,942
|
|
|
$
|
110,840
|
|
|
$
|
264,483
|
|
|
$
|
254,491
|
|
|
Total Expected Costs for the Plan
|
|
Costs Recognized from inception of the plan through the Quarter ended Dec 29, 2018
|
|
Remaining Costs to be Recognized Subsequent to Dec 29, 2018
|
||||||
Employee severance and related personnel costs
|
$
|
4,925
|
|
|
$
|
4,925
|
|
|
$
|
—
|
|
Site closure costs
|
1,516
|
|
|
1,516
|
|
|
—
|
|
|||
Current asset impairments and other gross profit charges
(1)
|
14,947
|
|
|
14,947
|
|
|
—
|
|
|||
Non-current asset impairments
|
3,033
|
|
|
3,033
|
|
|
—
|
|
|||
Other costs
|
239
|
|
|
239
|
|
|
—
|
|
|||
Total
|
$
|
24,660
|
|
|
$
|
24,660
|
|
|
$
|
—
|
|
|
Employee severance and related personnel costs
|
|
Site closure costs
|
|
Current asset impairments and other gross profit charges
|
|
Non-current asset impairments
|
|
Other Costs
|
|
Total
|
||||||||||||
Balance as of April 1, 2017
|
$
|
3,247
|
|
|
$
|
888
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,135
|
|
Costs incurred
|
1,337
|
|
|
627
|
|
|
13,278
|
|
|
1,657
|
|
|
175
|
|
|
17,074
|
|
||||||
Cash payments
|
(4,445
|
)
|
|
(1,515
|
)
|
|
(2,402
|
)
|
|
32
|
|
|
(175
|
)
|
|
(8,505
|
)
|
||||||
Non-cash items
|
—
|
|
|
—
|
|
|
(10,876
|
)
|
|
(1,689
|
)
|
|
—
|
|
|
(12,565
|
)
|
||||||
Balance as of March 31, 2018
|
$
|
139
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
139
|
|
Costs incurred
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Cash (payments) receipts
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58
|
)
|
||||||
Non-cash items
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance as of December 29, 2018
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
81
|
|
|
Fiscal quarter ended
|
|
Three fiscal quarters ended
|
||||||||||||
(In thousands, except per share data)
|
Dec 29, 2018
|
|
Dec 30, 2017
|
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||
Net income
|
$
|
6,340
|
|
|
$
|
33,973
|
|
|
$
|
54,319
|
|
|
$
|
41,135
|
|
Weighted average shares used for basic earnings per share
|
34,769
|
|
|
34,224
|
|
|
34,623
|
|
|
33,839
|
|
||||
Incremental diluted shares
|
1,206
|
|
|
1,786
|
|
|
1,504
|
|
|
1,723
|
|
||||
Weighted average shares used for diluted earnings per share
|
35,975
|
|
|
36,010
|
|
|
36,127
|
|
|
35,562
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.18
|
|
|
$
|
0.99
|
|
|
$
|
1.57
|
|
|
$
|
1.22
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.94
|
|
|
$
|
1.50
|
|
|
$
|
1.16
|
|
•
|
Total net sales decreased from the second quarter of fiscal 2019 by
21%
to
$67.9 million
in the
third quarter
of fiscal
2019
primarily driven by decreased sales in the PCB market due to a softening in demand for flex products as customers continue to absorb the significant level of shipments over the last two years. The declines in PCB market sales were partially offset by continued increases in sales to the Component Test market due to increased use of MLCC components, particularly in consumer electronics and automotive applications, which require our tools for processing.
|
•
|
Gross margin was
38.5%
in the
third quarter
of fiscal
2019
, down from 45.5% in the second quarter of fiscal 2019, primarily due to change in product mix and lower net sales.
|
•
|
Operating expenses were
$22.3 million
in the
third quarter
of fiscal
2019
, and represent a $2.4 million increase compared to the second quarter of fiscal 2019. The increase was primarily driven by $4.3 million of merger related costs such as legal and professional fees.
|
•
|
Net income was
$0.18
per diluted share, compared to $0.47 per share in the prior quarter, on lower sales and gross profit combined with higher operating expenses.
|
|
Fiscal quarter ended
|
||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
61.5
|
|
|
52.0
|
|
Gross profit
|
38.5
|
|
|
48.0
|
|
Selling, general and administrative
|
13.8
|
|
|
10.0
|
|
Research, development and engineering
|
12.7
|
|
|
7.4
|
|
Merger and integration costs
|
6.3
|
|
|
—
|
|
Restructuring costs
|
—
|
|
|
0.6
|
|
Operating income
|
5.7
|
|
|
30.0
|
|
Interest and other income (expense), net
|
2.9
|
|
|
0.7
|
|
Total non-operating income (loss)
|
2.9
|
|
|
0.7
|
|
Income before income taxes
|
8.6
|
|
|
30.7
|
|
Provision for income taxes
|
(0.7
|
)
|
|
—
|
|
Net income
|
9.3
|
%
|
|
30.7
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Printed Circuit Board
|
$
|
9,457
|
|
|
13.8
|
%
|
|
$
|
76,933
|
|
|
69.4
|
%
|
Component Test
|
31,896
|
|
|
46.9
|
|
|
6,504
|
|
|
6.0
|
|
||
Semiconductor
|
12,429
|
|
|
18.3
|
|
|
10,664
|
|
|
9.6
|
|
||
Industrial Machining
|
1,897
|
|
|
2.8
|
|
|
5,317
|
|
|
4.8
|
|
||
Service
|
12,263
|
|
|
18.0
|
|
|
11,422
|
|
|
10.3
|
|
||
Net sales
|
$
|
67,942
|
|
|
100.0
|
%
|
|
$
|
110,840
|
|
|
100.0
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Asia
|
$
|
56,748
|
|
|
83.6
|
%
|
|
$
|
103,069
|
|
|
93.0
|
%
|
Europe
|
6,127
|
|
|
9.0
|
|
|
5,340
|
|
|
4.8
|
|
||
Americas
|
5,067
|
|
|
7.5
|
|
|
2,431
|
|
|
2.2
|
|
||
Net sales
|
$
|
67,942
|
|
|
100.0
|
%
|
|
$
|
110,840
|
|
|
100.0
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Gross Profit
|
|
% of Net Sales
|
|
Gross Profit
|
|
% of Net Sales
|
||||||
Gross Profit
|
$
|
26,138
|
|
|
38.5
|
%
|
|
$
|
53,156
|
|
|
48.0
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Expense
|
|
% of Net Sales
|
|
Expense
|
|
% of Net Sales
|
||||||
Selling, general and administrative
|
$
|
9,376
|
|
|
13.8
|
%
|
|
$
|
11,040
|
|
|
10.0
|
%
|
Research, development and engineering
|
8,609
|
|
|
12.7
|
|
|
8,165
|
|
|
7.4
|
|
||
Restructuring costs
|
—
|
|
|
—
|
|
|
706
|
|
|
0.6
|
|
||
Merger and integration costs
|
4,277
|
|
|
6.3
|
|
|
—
|
|
|
—
|
|
||
Operating Expenses
|
$
|
22,262
|
|
|
32.8
|
%
|
|
$
|
19,911
|
|
|
18.0
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Non-Operating
Income |
|
% of Net Sales
|
|
Non-Operating
Income |
|
% of Net Sales
|
||||||
Interest and other income, net
|
$
|
1,985
|
|
|
2.9
|
%
|
|
$
|
789
|
|
|
0.7
|
%
|
Total non-operating income
|
$
|
1,985
|
|
|
2.9
|
%
|
|
$
|
789
|
|
|
0.7
|
%
|
|
Fiscal quarter ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Income Tax Benefit
|
|
Effective
Tax Rate
|
|
Income Tax Provision
|
|
Effective
Tax Rate
|
||||||
(Benefit from) provision for income taxes
|
$
|
(479
|
)
|
|
(8.2
|
)%
|
|
$
|
61
|
|
|
0.2
|
%
|
|
Three fiscal quarters ended
|
||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
55.2
|
|
|
58.3
|
|
Gross profit
|
44.8
|
|
|
41.7
|
|
Selling, general and administrative
|
11.5
|
|
|
13.9
|
|
Research, development and engineering
|
10.5
|
|
|
10.0
|
|
Merger and integration costs
|
1.6
|
|
|
—
|
|
Restructuring costs
|
—
|
|
|
1.6
|
|
Operating income
|
21.2
|
|
|
16.2
|
|
Interest and other income (expense), net
|
1.0
|
|
|
0.1
|
|
Total non-operating income (loss)
|
1.0
|
|
|
0.1
|
|
Income before income taxes
|
22.2
|
|
|
16.3
|
|
Provision for income taxes
|
1.7
|
|
|
0.1
|
|
Net income
|
20.5
|
%
|
|
16.2
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Printed Circuit Board
|
$
|
114,610
|
|
|
43.3
|
%
|
|
$
|
161,305
|
|
|
63.4
|
%
|
Component Test
|
59,856
|
|
|
22.6
|
|
|
20,959
|
|
|
8.2
|
|
||
Semiconductor
|
42,433
|
|
|
16.0
|
|
|
25,486
|
|
|
10.0
|
|
||
Industrial Machining
|
6,900
|
|
|
2.6
|
|
|
14,077
|
|
|
5.5
|
|
||
Service
|
40,684
|
|
|
15.4
|
|
|
32,664
|
|
|
12.8
|
|
||
Net sales
|
$
|
264,483
|
|
|
100.0
|
%
|
|
$
|
254,491
|
|
|
100.0
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Net Sales
|
|
% of Net Sales
|
|
Net Sales
|
|
% of Net Sales
|
||||||
Asia
|
$
|
232,448
|
|
|
87.9
|
%
|
|
$
|
233,685
|
|
|
91.8
|
%
|
Europe
|
17,490
|
|
|
6.6
|
|
|
11,269
|
|
|
4.4
|
|
||
Americas
|
14,545
|
|
|
5.5
|
|
|
9,537
|
|
|
3.7
|
|
||
Net sales
|
$
|
264,483
|
|
|
100.0
|
%
|
|
$
|
254,491
|
|
|
100.0
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Gross Profit
|
|
% of Net Sales
|
|
Gross Profit
|
|
% of Net Sales
|
||||||
Gross Profit
|
$
|
118,403
|
|
|
44.8
|
%
|
|
$
|
106,108
|
|
|
41.7
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Expense
|
|
% of Net Sales
|
|
Expense
|
|
% of Net Sales
|
||||||
Selling, general and administrative
|
$
|
30,344
|
|
|
11.5
|
%
|
|
$
|
35,496
|
|
|
13.9
|
%
|
Research, development and engineering
|
27,821
|
|
|
10.5
|
|
|
25,373
|
|
|
10.0
|
|
||
Restructuring costs
|
—
|
|
|
—
|
|
|
4,079
|
|
|
1.6
|
|
||
Merger and integration costs
|
4,277
|
|
|
1.6
|
|
|
—
|
|
|
—
|
|
||
Operating Expenses
|
$
|
62,442
|
|
|
23.6
|
%
|
|
$
|
64,948
|
|
|
25.5
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Non-Operating
Income
|
|
% of Net Sales
|
|
Non-Operating
Income
|
|
% of Net Sales
|
||||||
Interest and other income, net
|
$
|
2,820
|
|
|
1.0
|
%
|
|
$
|
376
|
|
|
0.1
|
%
|
Total non-operating income
|
$
|
2,820
|
|
|
1.0
|
%
|
|
$
|
376
|
|
|
0.1
|
%
|
|
Three fiscal quarters ended
|
||||||||||||
|
Dec 29, 2018
|
|
Dec 30, 2017
|
||||||||||
(In thousands, except percentages)
|
Income Tax Provision
|
|
Effective
Tax Rate
|
|
Income Tax Provision
|
|
Effective
Tax Rate
|
||||||
Provision for income taxes
|
$
|
4,462
|
|
|
7.6
|
%
|
|
$
|
401
|
|
|
1.0
|
%
|
•
|
If the Merger is not completed, and no other party is willing and able to acquire us at an equivalent price or higher, on terms acceptable to us, the share price of our common stock may decline;
|
•
|
We have incurred, and continue to incur, significant expenses for professional services in connection with the proposed Merger, for which we will have received little or no benefit if the Merger is not completed. Many of these fees and costs will be payable even if the Merger is not completed and may relate to activities that we would not have undertaken other than to complete the Merger;
|
•
|
A failed Merger may result in negative publicity and/or give a negative impression of us in the investment community or business community generally; and
|
•
|
If the Merger Agreement is terminated under specified circumstances, we may be required to pay MKS a $35.65 million termination fee.
|
•
|
diversion of significant management time and resources towards the completion of the Merger;
|
•
|
impairment of our ability to attract and retain key personnel;
|
•
|
difficulties maintaining relationships with employees, customers, and other business partners;
|
•
|
restrictions on the conduct of our business prior to the completion of the Merger, which prevent us from taking specified actions without the prior consent of MKS, which we might otherwise take in the absence of the Merger Agreement; and
|
•
|
potential litigation relating to the Merger and the related costs.
|
•
|
the timing of orders and terms or acceptance of product shipments by our customers;
|
•
|
the mix of products and services that we sell in a given quarter;
|
•
|
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;
|
•
|
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;
|
•
|
shipping delays and disruptions, including as a result of border controls;
|
•
|
retaliatory trade practices, trade tensions, and changes in or inconsistency in application of trading policies, regulatory requirements, export control regulations, tariffs and other barriers, the termination or renegotiation of existing trade agreements; and
|
•
|
difficulties in managing a global enterprise, including staffing, collecting accounts receivable, and managing suppliers, distributors and representatives.
|
•
|
exposure to local labor disputes, potential corruption, and noncompliance with labor laws and other laws governing employees;
|
•
|
unpredictable costs, redundancy costs and cost overruns for developing facilities and acquiring equipment;
|
•
|
challenges in 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 our customers may require;
|
•
|
our ability to bring up local suppliers to meet our quality and cycle-time needs;
|
•
|
rapidly changing business conditions that may require us to change or abandon plans before we fully implement them;
|
•
|
complexity of managing our financial reporting and internal controls and procedures; and
|
•
|
the ability to understand and comply with many different laws, infrastructures, ways of doing business, and surmount other challenges posed by distance and differences in language and culture.
|
•
|
increased costs in connection with integration of personnel, operations, technologies and products of the acquired businesses;
|
•
|
difficulties in implementation of our enterprise resource planning 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;
|
•
|
establishing satisfactory internal controls and accounting practices at the acquired company;
|
•
|
difficulties implementing internal manufacturing processes at the acquired company;
|
•
|
achieving our anticipated financial and operational performance for the acquired company or the performance of the combined company following the transaction;
|
•
|
acquiring unanticipated liabilities; and
|
•
|
potential litigations arising out of breach of contract terms.
|
•
|
Rule-making and additional technical guidance from the Department of Treasury, the FASB, and other relevant rule-making bodies continues to evolve and is likely to impact the treatment of the impact of the Tax Act.
|
•
|
Our assessment remains ongoing; therefore, the final impact of the Tax Act may differ due to changes in interpretations, assumptions and we are not able to fully quantify the impact on our condensed consolidated financial statements at this time.
|
•
|
Reaction to the new regulations by states and international trading partners is not yet clear, and could have a material impact on our business and results from operations.
|
|
Fiscal quarter ended
|
||||||||||||||||||||||
|
Jul 1, 2017
|
|
Sep 30, 2017
|
||||||||||||||||||||
(In thousands)
|
As reported
|
|
Adjustment
|
|
As Reclassified
|
|
As reported
|
|
Adjustment
|
|
As Reclassified
|
||||||||||||
Printed Circuit Board
|
$
|
52,318
|
|
|
$
|
(6,133
|
)
|
|
$
|
46,185
|
|
|
$
|
43,541
|
|
|
$
|
(5,354
|
)
|
|
$
|
38,187
|
|
Component Test
|
8,181
|
|
|
(733
|
)
|
|
7,448
|
|
|
7,677
|
|
|
(670
|
)
|
|
7,007
|
|
||||||
Semiconductor
|
6,737
|
|
|
(1,556
|
)
|
|
5,181
|
|
|
12,028
|
|
|
(2,387
|
)
|
|
9,641
|
|
||||||
Industrial Machining
|
5,448
|
|
|
(2,169
|
)
|
|
3,279
|
|
|
7,721
|
|
|
(2,240
|
)
|
|
5,481
|
|
||||||
Service
|
—
|
|
|
10,591
|
|
|
10,591
|
|
|
—
|
|
|
10,651
|
|
|
10,651
|
|
||||||
Net sales
|
$
|
72,684
|
|
|
$
|
—
|
|
|
$
|
72,684
|
|
|
$
|
70,967
|
|
|
$
|
—
|
|
|
$
|
70,967
|
|
|
Fiscal quarter ended
|
||||||||||||||||||||||
|
Dec 30, 2017
|
|
Mar 31, 2018
|
||||||||||||||||||||
(In thousands)
|
As reported
|
|
Adjustment
|
|
As Reclassified
|
|
As reported
|
|
Adjustment
|
|
As Reclassified
|
||||||||||||
Printed Circuit Board
|
$
|
83,799
|
|
|
$
|
(6,866
|
)
|
|
$
|
76,933
|
|
|
$
|
76,772
|
|
|
$
|
(5,876
|
)
|
|
$
|
70,896
|
|
Component Test
|
7,473
|
|
|
(969
|
)
|
|
6,504
|
|
|
9,459
|
|
|
(1,058
|
)
|
|
8,401
|
|
||||||
Semiconductor
|
12,351
|
|
|
(1,687
|
)
|
|
10,664
|
|
|
24,055
|
|
|
(1,693
|
)
|
|
22,362
|
|
||||||
Industrial Machining
|
7,217
|
|
|
(1,900
|
)
|
|
5,317
|
|
|
3,107
|
|
|
(1,244
|
)
|
|
1,863
|
|
||||||
Service
|
—
|
|
|
11,422
|
|
|
11,422
|
|
|
—
|
|
|
9,871
|
|
|
9,871
|
|
||||||
Net Sales
|
$
|
110,840
|
|
|
$
|
—
|
|
|
$
|
110,840
|
|
|
$
|
113,393
|
|
|
$
|
—
|
|
|
$
|
113,393
|
|
Date:
|
January 30, 2019
|
ELECTRO SCIENTIFIC INDUSTRIES, INC.
|
|
|
|
By:
|
/s/ Michael D. Burger
|
|
|
|
Michael D. Burger
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
By:
|
/s/ Allen Muhich
|
|
|
|
Allen Muhich
|
|
|
|
Vice President, Chief Financial Officer and Corporate Secretary
|
|
|
|
(Principal Financial 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/ 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/ Allen Muhich
|
Allen Muhich
|
Vice President, 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/ Allen Muhich
|
Allen Muhich
|
Vice President, Chief Financial Officer and
|
Corporate Secretary
|