Oregon
(State or jurisdiction of
incorporation or organization)
|
|
93-0822509
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
¨
|
|
Accelerated filer
ý
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
(Do not check if a smaller reporting company)
|
|
|
|
||
|
|
|
|
||
|
Unaudited condensed consolidated statements of operations for the three months end
ed March 31, 2013 and 2012
|
|
|
||
|
Unaudited condensed consolidated statement of comprehensive income for th
e three and six months ended March 31, 2013 and 2012
|
|
|
Unaudited condensed consolidated statements of cash flows for the
six months ended March 31, 2013 and 2012
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
|
|
March 31,
2013 |
|
September 30,
2012 |
||||
|
|
(in thousands)
|
||||||
Assets
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
19,245
|
|
|
$
|
23,755
|
|
Trade accounts receivable, net of allowance for doubtful accounts of $297 and $190, respectively
|
|
15,053
|
|
|
11,426
|
|
||
Inventories:
|
|
|
|
|
|
|
||
Raw materials
|
|
10,296
|
|
|
8,659
|
|
||
Work-in-process and sub-assemblies
|
|
13,011
|
|
|
8,656
|
|
||
Finished goods
|
|
11,945
|
|
|
5,851
|
|
||
Total inventories
|
|
35,252
|
|
|
23,166
|
|
||
Deferred income taxes
|
|
3,457
|
|
|
2,854
|
|
||
Prepaid expenses and other assets
|
|
3,334
|
|
|
2,992
|
|
||
Total current assets
|
|
76,341
|
|
|
64,193
|
|
||
Property, plant and equipment, net
|
|
18,100
|
|
|
18,370
|
|
||
Deferred income taxes
|
|
548
|
|
|
—
|
|
||
Goodwill
|
|
11,294
|
|
|
2,524
|
|
||
Investment in Proditec
|
|
1,148
|
|
|
1,153
|
|
||
Intangibles and other assets, net
|
|
11,271
|
|
|
115
|
|
||
Total
|
|
$
|
118,702
|
|
|
$
|
86,355
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
7,101
|
|
|
$
|
4,550
|
|
Accrued payroll liabilities and commissions
|
|
7,449
|
|
|
5,194
|
|
||
Customers' deposits
|
|
16,399
|
|
|
5,213
|
|
||
Accrued customer support and warranty costs
|
|
2,746
|
|
|
2,263
|
|
||
Customer purchase plans
|
|
1,409
|
|
|
956
|
|
||
Income taxes payable
|
|
1,133
|
|
|
2
|
|
||
Current portion of long-term debt
|
|
914
|
|
|
364
|
|
||
Other accrued liabilities
|
|
1,392
|
|
|
1,515
|
|
||
Total current liabilities
|
|
38,543
|
|
|
20,057
|
|
||
Long-term debt
|
|
5,941
|
|
|
4,833
|
|
||
Deferred income taxes
|
|
5,029
|
|
|
1,434
|
|
||
Other long-term liabilities
|
|
525
|
|
|
601
|
|
||
Shareholders' equity:
|
|
|
|
|
|
|
||
Common stock
|
|
29,382
|
|
|
21,806
|
|
||
Warrants
|
|
665
|
|
|
—
|
|
||
Retained earnings and other shareholders' equity
|
|
38,617
|
|
|
37,624
|
|
||
Total shareholders' equity
|
|
68,664
|
|
|
59,430
|
|
||
Total
|
|
$
|
118,702
|
|
|
$
|
86,355
|
|
See notes to unaudited condensed consolidated financial statements.
|
|
|
|
|
|
|
2013
|
|
2012
|
||||
|
|
(in thousands, except per share data)
|
||||||
Net sales
|
|
$
|
35,486
|
|
|
$
|
27,249
|
|
Cost of sales
|
|
22,673
|
|
|
19,332
|
|
||
Gross profit
|
|
12,813
|
|
|
7,917
|
|
||
Operating expenses:
|
|
|
|
|
|
|
||
Sales and marketing
|
|
4,740
|
|
|
4,558
|
|
||
Research and development
|
|
2,296
|
|
|
2,067
|
|
||
General and administrative
|
|
2,836
|
|
|
2,079
|
|
||
Amortization of intangibles
|
|
148
|
|
|
4
|
|
||
Total operating expenses
|
|
10,020
|
|
|
8,708
|
|
||
Gain on disposition of assets
|
|
29
|
|
|
1
|
|
||
Earnings (loss) from operations
|
|
2,822
|
|
|
(790
|
)
|
||
Other income (expense)
|
|
10
|
|
|
(277
|
)
|
||
Earnings (loss) before income taxes
|
|
2,832
|
|
|
(1,067
|
)
|
||
Income tax expense (benefit)
|
|
686
|
|
|
(341
|
)
|
||
Net earnings (loss)
|
|
$
|
2,146
|
|
|
$
|
(726
|
)
|
|
|
|
|
|
||||
Net earnings (loss) per share
|
|
|
|
|
|
|
||
- basic
|
|
$
|
0.38
|
|
|
$
|
(0.13
|
)
|
- diluted
|
|
$
|
0.38
|
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
||||
Shares used in per share calculations - basic
|
|
5,687
|
|
|
5,416
|
|
||
|
|
|
|
|
||||
Shares used in per share calculations - diluted
|
|
5,692
|
|
|
5,416
|
|
||
See notes to unaudited condensed consolidated financial statements.
|
|
|
|
|
|
|
2013
|
|
2012
|
||||
|
|
(in thousands, except per share data)
|
||||||
Net sales
|
|
$
|
55,339
|
|
|
$
|
53,221
|
|
Cost of sales
|
|
36,043
|
|
|
36,743
|
|
||
Gross profit
|
|
19,296
|
|
|
16,478
|
|
||
Operating expenses:
|
|
|
|
|
|
|
||
Sales and marketing
|
|
8,596
|
|
|
8,859
|
|
||
Research and development
|
|
4,033
|
|
|
4,066
|
|
||
General and administrative
|
|
4,965
|
|
|
4,545
|
|
||
Amortization of intangibles
|
|
152
|
|
|
8
|
|
||
Total operating expenses
|
|
17,746
|
|
|
17,478
|
|
||
Gain on disposition of assets
|
|
50
|
|
|
2
|
|
||
Earnings (loss) from operations
|
|
1,600
|
|
|
(998
|
)
|
||
Other income (expense)
|
|
(53
|
)
|
|
(427
|
)
|
||
Earnings (loss) before income taxes
|
|
1,547
|
|
|
(1,425
|
)
|
||
Income tax expense (benefit)
|
|
275
|
|
|
(456
|
)
|
||
Net earnings (loss)
|
|
$
|
1,272
|
|
|
$
|
(969
|
)
|
|
|
|
|
|
||||
Net earnings (loss) per share
|
|
|
|
|
|
|
||
- basic
|
|
$
|
0.23
|
|
|
$
|
(0.18
|
)
|
- diluted
|
|
$
|
0.23
|
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
||||
Shares used in per share calculations - basic
|
|
5,493
|
|
|
5,348
|
|
||
|
|
|
|
|
||||
Shares used in per share calculations - diluted
|
|
5,498
|
|
|
5,348
|
|
||
See notes to unaudited condensed consolidated financial statements.
|
|
|
|
|
|
|
Three Months Ending March 31,
|
|
Six Months Ending March 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
|
|
(in thousands)
|
|
(in thousands)
|
||||||||||||
Net earnings (loss)
|
|
$
|
2,146
|
|
|
$
|
(726
|
)
|
|
$
|
1,272
|
|
|
$
|
(969
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustment
|
|
(536
|
)
|
|
58
|
|
|
(481
|
)
|
|
(42
|
)
|
||||
Unrealized changes in fair value of derivatives
|
|
55
|
|
|
57
|
|
|
84
|
|
|
40
|
|
||||
Reclassification adjustment for foreign currency translation included in net earnings (loss)
|
|
—
|
|
|
209
|
|
|
—
|
|
|
209
|
|
||||
Income tax (expense) benefit related to items of comprehensive income (loss)
|
|
163
|
|
|
(111
|
)
|
|
135
|
|
|
(71
|
)
|
||||
Total comprehensive income (loss)
|
|
$
|
1,828
|
|
|
$
|
(513
|
)
|
|
$
|
1,010
|
|
|
$
|
(833
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
See notes to unaudited condensed consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
2012
|
||||
|
|
(in thousands)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
||||
Net earnings (loss)
|
|
$
|
1,272
|
|
|
$
|
(969
|
)
|
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
||
Gain on disposition of assets
|
|
(50
|
)
|
|
(2
|
)
|
||
Foreign currency exchange gain
|
|
(9
|
)
|
|
(2
|
)
|
||
Depreciation and amortization
|
|
2,162
|
|
|
1,808
|
|
||
Share based payments
|
|
549
|
|
|
503
|
|
||
Reclassification from other comprehensive income
|
|
—
|
|
|
209
|
|
||
Excess tax benefits from share based payments
|
|
(20
|
)
|
|
(27
|
)
|
||
Deferred income taxes
|
|
(1,103
|
)
|
|
213
|
|
||
Deferred rent
|
|
(12
|
)
|
|
(16
|
)
|
||
Bad debt expense
|
|
(5
|
)
|
|
(4
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
|
||
Trade accounts receivable
|
|
(2,997
|
)
|
|
(2,351
|
)
|
||
Inventories
|
|
(4,232
|
)
|
|
(878
|
)
|
||
Prepaid expenses and other current assets
|
|
236
|
|
|
(508
|
)
|
||
Income taxes receivable
|
|
280
|
|
|
263
|
|
||
Intangibles and other long term assets
|
|
(135
|
)
|
|
—
|
|
||
Accounts payable
|
|
472
|
|
|
(558
|
)
|
||
Accrued payroll liabilities and commissions
|
|
1,814
|
|
|
522
|
|
||
Customers’ deposits
|
|
9,461
|
|
|
(1,183
|
)
|
||
Accrued customer support and warranty costs
|
|
383
|
|
|
(564
|
)
|
||
Income taxes payable
|
|
1,101
|
|
|
(67
|
)
|
||
Other accrued liabilities
|
|
(34
|
)
|
|
(810
|
)
|
||
Other
|
|
3
|
|
|
(3
|
)
|
||
Cash provided by (used in) operating activities
|
|
9,136
|
|
|
(4,424
|
)
|
||
|
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
||
Proceeds from sale of property
|
|
67
|
|
|
8
|
|
||
Purchases of property, plant and equipment
|
|
(1,462
|
)
|
|
(1,180
|
)
|
||
Cash paid for the acquisition of Visys, net of cash acquired
|
|
(11,607
|
)
|
|
—
|
|
||
Cash used in investing activities
|
|
(13,002
|
)
|
|
(1,172
|
)
|
||
|
|
|
|
|
||||
See notes to unaudited condensed consolidated financial statements.
|
|
|
|
|
(Continued)
|
|
1.
|
Unaudited condensed consolidated financial statements
|
2.
|
Acquisition
|
Cash
|
|
$
|
13,200
|
|
Common shares of the company issued (600,000 shares)
|
|
7,326
|
|
|
Warrants issued (250,000)
|
|
728
|
|
|
Total
|
|
$
|
21,254
|
|
Cash
|
|
$
|
1,593
|
|
Accounts receivable
|
|
668
|
|
|
Inventory
|
|
8,250
|
|
|
Property and equipment
|
|
299
|
|
|
Other assets
|
|
848
|
|
|
Intangible assets (identifiable)
|
|
11,400
|
|
|
Current liabilities, including current portion of long term debt
|
|
(5,609
|
)
|
|
Long term debt
|
|
(1,372
|
)
|
|
Deferred taxes
|
|
(3,794
|
)
|
|
Total identifiable net assets
|
|
12,283
|
|
|
Goodwill
|
|
8,971
|
|
|
|
|
$
|
21,254
|
|
|
|
Amount
|
|
Average Life
|
||
|
|
(in thousands)
|
|
(Years)
|
||
Developed technology
|
|
$
|
5,000
|
|
|
8
|
Patents
|
|
3,300
|
|
|
16
|
|
Non-compete agreements
|
|
1,600
|
|
|
3
|
|
Trade name
|
|
1,000
|
|
|
8
|
|
Customer relationships
|
|
500
|
|
|
4
|
|
|
|
$
|
11,400
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended March 31,
|
|
Six Months Ended March 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net sales
|
|
$
|
37,609
|
|
|
$
|
29,190
|
|
|
$
|
60,105
|
|
|
$
|
58,332
|
|
Net earnings (loss)
|
|
$
|
2,619
|
|
|
$
|
(1,209
|
)
|
|
$
|
1,411
|
|
|
$
|
(1,303
|
)
|
Pro forma net earnings (loss) per share
|
|
$
|
0.43
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.24
|
|
|
$
|
(0.16
|
)
|
Pro forma weighted average shares outstanding
|
|
6,079
|
|
|
6,016
|
|
|
5,995
|
|
|
5,948
|
|
3.
|
Share-based compensation
|
|
|
Three months ended March 31,
|
|
Six months ended March 31,
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cost of goods sold
|
|
$
|
28
|
|
|
$
|
23
|
|
|
$
|
84
|
|
|
$
|
40
|
|
Operating expenses
|
|
241
|
|
|
277
|
|
|
465
|
|
|
463
|
|
||||
Total share-based compensation expense
|
|
$
|
269
|
|
|
$
|
300
|
|
|
$
|
549
|
|
|
$
|
503
|
|
4.
|
Earnings (loss) per share
|
|
|
For the three months ended
March 31, 2013 |
|
For the three months ended
March 31, 2012 |
||||||||||||||||||
|
|
Earnings
|
|
Shares
|
|
Per-Share
Amount |
|
Loss
|
|
Shares
|
|
Per-Share
Amount |
||||||||||
Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss)
|
|
$
|
2,146
|
|
|
5,687
|
|
|
$
|
0.38
|
|
|
$
|
(726
|
)
|
|
5,416
|
|
|
$
|
(0.13
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock options
|
|
—
|
|
|
4
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Warrants
|
|
—
|
|
|
1
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss) plus assumed conversions
|
|
$
|
2,146
|
|
|
5,692
|
|
|
$
|
0.38
|
|
|
$
|
(726
|
)
|
|
5,416
|
|
|
$
|
(0.13
|
)
|
|
|
For the six months ended
March 31, 2013 |
|
For the six months ended
March 31, 2012 |
||||||||||||||||||
|
|
Earnings
|
|
Shares
|
|
Per-Share
Amount |
|
Loss
|
|
Shares
|
|
Per-Share
Amount |
||||||||||
Basic EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss)
|
|
$
|
1,272
|
|
|
5,493
|
|
|
$
|
0.23
|
|
|
$
|
(969
|
)
|
|
5,348
|
|
|
$
|
(0.18
|
)
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock options
|
|
—
|
|
|
5
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Warrants
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Diluted EPS:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings (loss) plus assumed conversions
|
|
$
|
1,272
|
|
|
5,498
|
|
|
$
|
0.23
|
|
|
$
|
(969
|
)
|
|
5,348
|
|
|
$
|
(0.18
|
)
|
|
|
Three months ended
March 31, |
|
Six months ended
March 31, |
||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Common shares from:
|
|
|
|
|
|
|
|
|
||||
Assumed exercise of stock options
|
|
10,000
|
|
|
35,000
|
|
|
15,000
|
|
|
35,000
|
|
Warrants
|
|
—
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
5.
|
Other comprehensive income
|
6.
|
Income taxes
|
7.
|
Derivative instruments
|
8.
|
Fair value measurements
|
•
|
Level 1 – Quoted prices for identical instruments in active markets.
|
•
|
Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.
|
•
|
Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.
|
|
|
Fair Value Measurements at March 31, 2013
(in thousands) |
||||||||||||
Description
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Assets/
Liabilities at Fair Value |
||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||
Interest rate swap
|
|
—
|
|
|
$
|
(416
|
)
|
|
—
|
|
|
$
|
(416
|
)
|
Forward exchange contracts
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
9.
|
Financing arrangements
|
10.
|
Contractual guarantees and indemnities
|
|
|
Six months ended March 31,
|
||||||
|
|
2013
|
|
2012
|
||||
Beginning balance
|
|
$
|
2,030
|
|
|
$
|
2,423
|
|
Warranty costs incurred
|
|
(1,561
|
)
|
|
(1,276
|
)
|
||
Warranty expense accrued
|
|
1,809
|
|
|
673
|
|
||
Translation adjustments
|
|
(6
|
)
|
|
(13
|
)
|
||
Acquired balance
|
|
107
|
|
|
—
|
|
||
Ending balance
|
|
$
|
2,379
|
|
|
$
|
1,807
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
•
|
changes in general economic conditions and disruption in financial markets may adversely affect the business of our customers and our business and results of operations;
|
•
|
ongoing uncertainty and volatility in the financial markets related to the U.S. budget deficit, the European sovereign debt crisis and the state of the U.S. economic recovery may adversely affect our operating results;
|
•
|
economic conditions in the food processing industry, either globally or regionally, may adversely affect our revenues;
|
•
|
the loss of any of our significant customers could reduce our revenues and profitability;
|
•
|
significant investments in unsuccessful research and development efforts could materially adversely affect our business;
|
•
|
industry consolidation could increase competition in the food processing equipment industry;
|
•
|
we are subject to price competition that may reduce our profitability;
|
•
|
the significance of major orders could result in significant fluctuation in quarterly operating results;
|
•
|
the failure of our independent sales representatives to perform as expected would harm our net sales;
|
•
|
we may make acquisitions that could disrupt our operations and harm our operating results;
|
•
|
our international operations subject us to a number of risks that could adversely affect our revenues, operating results and growth;
|
•
|
fluctuations in foreign currency exchange rates could result in unanticipated losses that could adversely affect our liquidity and results of operations;
|
•
|
advances in technology by competitors may adversely affect our sales and profitability;
|
•
|
our existing and new products may not compete successfully in either current or new markets, which would adversely affect our sales and operating results;
|
•
|
our expansion into new markets, increasingly complex projects and applications, and integrated product offerings could increase our cost of operations and reduce gross margins and profitability;
|
•
|
our potential inability to obtain products and components from suppliers would adversely affect our ability to manufacture and market our products;
|
•
|
our information systems, computer equipment and information databases are critical to our business operations, and any damage or disruptions could adversely affect our business and results of operations;
|
•
|
our potential inability to retain and recruit experienced management and other key personnel, or the loss of key management personnel, may adversely affect our business and prospects for growth;
|
•
|
the potential inability to protect our intellectual property, especially as we expand geographically, may adversely affect our competitive advantage;
|
•
|
intellectual property-related litigation expenses and other costs resulting from infringement claims asserted against us by third parties may adversely affect our results of operations and our customer relations;
|
•
|
our dependence on certain suppliers may leave us temporarily without adequate access to raw materials or products;
|
•
|
our operating results are seasonal and may further fluctuate due to severe weather conditions affecting the agricultural industry in various parts of the world;
|
•
|
the limited availability and possible cost fluctuations of materials used in our products could adversely affect our gross margins;
|
•
|
compliance with recently-passed health care legislation and increases in the cost of providing health care plans to our employees may adversely affect our business;
|
•
|
our reported results may be affected adversely by the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements, which could require us to incur substantial additional expenses; and
|
•
|
compliance with changing regulation of corporate governance and public disclosure will result in additional expenses to us and pose challenges for our management.
|
•
|
Revenue recognition
|
•
|
Allowances for doubtful accounts
|
•
|
Valuation of inventories
|
•
|
Long-lived assets
|
•
|
Allowances for warranties
|
•
|
Accounting for income taxes
|
|
|
|
|
Payments due by period (in thousands)
|
||||||||||||||||
Contractual Obligations
(1)
|
|
Total
|
|
Less than 1 year
|
|
1 – 3 years
|
|
4 – 5 years
|
|
After 5 years
|
||||||||||
Long-term debt
|
|
$
|
6,855
|
|
|
$
|
914
|
|
|
$
|
1,615
|
|
|
$
|
1,337
|
|
|
$
|
2,989
|
|
Interest on long-term debt
(2)
|
|
1,439
|
|
|
282
|
|
|
453
|
|
|
309
|
|
|
395
|
|
|||||
Operating leases
|
|
4,511
|
|
|
1,193
|
|
|
1,582
|
|
|
605
|
|
|
1,131
|
|
|||||
Purchase obligations
(3)
|
|
2,666
|
|
|
1,866
|
|
|
800
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual cash obligations
|
|
$
|
15,471
|
|
|
$
|
4,255
|
|
|
$
|
4,450
|
|
|
$
|
2,251
|
|
|
$
|
4,515
|
|
(1)
|
We also have $76,000 of contractual obligations related to uncertain tax positions for which the timing and amount of payment cannot be reasonably estimated due to the nature of the uncertainties and the unpredictability of jurisdictional examinations in relation to the statute of limitations.
|
(2)
|
Includes the effect of the interest-rate swap agreement that fixes the interest rate at 4.27%.
|
(3)
|
Purchase obligations are commitments to purchase certain materials and supplies which will be used in the ordinary course of business.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
•
|
Translation adjustments of $(318,000), net of income tax, were recognized as a component of comprehensive income as a result of converting the Euro denominated balance sheets of Key Technology B.V. and Suplusco Holding B.V. and Visys NV into U.S. dollars and, to a lesser extent, the Australian dollar balance sheets of Key Technology Australia Pty Ltd., the Peso balance sheet of Productos Key Mexicana, S. de R.L. de C.V., and the Singapore dollar balance sheet of Key Technology Asia-Pacific Pte. Ltd.
|
•
|
Foreign exchange gains of $9,000, net of the effects of forward exchange contracts settled during the period, were recognized in the other income and expense section of the consolidated statement of operations as a result of conversion of Euro and other foreign currency denominated receivables, intercompany loans, and cash carried on the balance sheet of the U.S. operations, as well as the result of the conversion of other non-functional currency receivables, payables and cash carried on the balance sheets of the European, Australian, Mexican, and Singapore operations.
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|
|||||
January 1-31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
|
|
February 1-28, 2013
|
|
3,631
|
|
|
12.18
|
|
|
—
|
|
|
|
|
||
March 1-31, 2013
|
|
2,892
|
|
|
12.33
|
|
|
—
|
|
|
|
|
||
Total
|
|
6,523
|
|
|
$
|
12.25
|
|
|
—
|
|
|
429,202
|
|
(2)
|
(1)
|
Includes shares of restricted stock surrendered to satisfy tax withholding obligations by plan participants under the 2003 Restated Employees’ Stock Incentive Plan. The shares were subsequently canceled.
|
(2)
|
We initiated a stock repurchase program effective May 30, 2012. We are authorized to purchase up to 500,000 shares of our common stock under the program. The timing of any repurchases and the exact number of shares of common stock to be purchased will be determined by us and will depend on market conditions and other factors. We anticipate the program will be funded from cash on hand and cash generated from operations. The program does not incorporate a fixed expiration date.
|
ITEM 6.
|
EXHIBITS
|
|
|
KEY TECHNOLOGY, INC.
|
|
|
(Registrant)
|
|
|
|
Date:
|
May 9, 2013
|
By
/s/ John J. Ehren
|
|
|
John J. Ehren
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Date:
|
May 9, 2013
|
By
/s/ James R. Brausen
|
|
|
James R. Brausen
|
|
|
Corporate Controller and
Principal Financial Officer/Principal Accounting Officer
|
|
|
(Principal Financial Officer)
|
KBC Bank
|
LIMBURG CORPORATE CENTRE
|
|
KC3255 – ILGATLAAN 9 box B3 – 3500 HASSELT - BELGIUM
|
727-8514772-74/014/046/002 8-11-2012 blad 1 van 4
|
12/11/2012
|
1
|
KBC Bank
|
LIMBURG CORPORATE CENTRE
|
|
KC3255 – ILGATLAAN 9 box B3 – 3500 HASSELT – BELGIUM
|
727-8514772-74/014/046/002 8-11-2012 blad 1 van 4
|
12/11/2012
|
2
|
KBC Bank
|
LIMBURG CORPORATE CENTRE
|
|
KC3255 – ILGATLAAN 9 box B3 – 3500 HASSELT – BELGIUM
|
-
|
the pledge of the business (floating charge) in the amount of 100 000.00 euros in principal, established on 24 June 2005;
|
-
|
the pledge of the business (floating charge) in the amount of 100 000.00 euros in principal, established on 15 November 2005;
|
-
|
the pledge of the business (floating charge) in the amount of 250 000.00 euros in principal, established on 8 September 2011;
|
-
|
the power of attorney (mandate) to establish a pledge of the business in the amount of 900 000.00 euros in principal, granted on 20 May 2009, together with a prohibition against alienating or pledging the business or granting power of attorney to that end.
|
•
|
The
tangible net worth ratio
of the borrowers must always amount to
at least
25 %
and will be calculated as follows (the figures used must be taken from the annual accounts without the plus or minus sign):
|
•
|
The
debt ratio
of the borrowers
may not exceed
3 and will be calculated as follows (the figures used must be taken from the annual accounts without the plus or minus sign):
|
727-8514772-74/014/046/002 8-11-2012 blad 1 van 4
|
12/11/2012
|
3
|
KBC Bank
|
LIMBURG CORPORATE CENTRE
|
|
KC3255 – ILGATLAAN 9 box B3 – 3500 HASSELT – BELGIUM
|
727-8514772-74/014/046/002 8-11-2012 blad 1 van 4
|
12/11/2012
|
4
|
KBC Bank
|
LIMBURG CORPORATE CENTRE
|
|
KC3255 – ILGATLAAN 9 box B3 – 3500 HASSELT – BELGIUM
|
Signature of the bank
|
|
Signatures of the borrowers
|
|
|
If the borrower is a legal person, please state the name and job title of the signatory.
|
/s/ Marc Ceyssens
|
/s/ Patrick Torfs
|
/s/ Bert Peelaers
|
Marc Ceyssens
|
Patrick Torfs
|
Bert Peelaers
|
Relationship Manger
|
General Manage
|
Director Operations
|
Limburg Corporate Centre
|
Limburg Corporate Centre
|
Visys NV
|
727-8514772-74/014/046/002 8-11-2012 blad 1 van 4
|
12/11/2012
|
5
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Key Technology, Inc. (the “registrant”) for the period ended
March 31, 2013
;
|
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(s) 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(s) 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 controls over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Key Technology, Inc. (the “registrant”) for the period ended
March 31, 2013
;
|
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(s) 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(s) 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 controls over financial reporting.
|
(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.
|
(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.
|