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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT
FOR 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
KLA-TENCOR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 000-09992 04-2564110
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION
INCORPORATION NUMBER)
------------------------
160 RIO ROBLES
SAN JOSE, CALIFORNIA 95134
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(408) 468-4200
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
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The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report on Form 8-K dated
May 2, 1997 as set forth in the pages attached hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following financial statements and exhibits are filed as part of this
Report, where indicated.
(a) Financial statements of business acquired, prepared pursuant to Rule
3-05 of Regulation S-X:
Financial statements for the period ended December 31, 1996 are
incorporated by reference to the Annual Report on Form 10-K filed by
Tencor Instruments on March 10, 1997 (File No. 000-20007).
The following Unaudited Condensed Consolidated Interim Financial Statements
of Tencor Instruments are included herein:
Condensed Consolidated Interim Balance Sheets at March 31, 1997 and
December 31, 1996.
Condensed Consolidated Interim Statements of Operations for the three
months ended March 31, 1997 and 1996.
Consolidated Interim Statements of Cash Flows for the three months
ended March 31, 1997 and 1996.
Notes to Condensed Consolidated Interim Financial Statements.
(b) Pro forma financial information required pursuant to Article 11 of
Regulation S-X:
Unaudited Pro Forma Combined Condensed Balance Sheets at March 31,
1997 and June 30, 1996.
Unaudited Pro Forma Combined Condensed Statement of Operations for the
years ended June 30, 1996, 1995 and 1994, and the nine month periods
ended March 31, 1997 and 1996.
Notes to Unaudited Pro Forma Combined Condensed Financial Statements.
(c) Exhibits in accordance with Item 601 of Regulation S-K:
EXHIBIT NO. DESCRIPTION
----------- -----------------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization, dated as of January 14, 1997, among KLA
Instruments Corporation, Tiger Acquisition Corp. and Tencor Instruments.
(Incorporated herein by reference to Registrant's Current Report on Form 8-K
filed on January 22, 1997, File No. 000-09992.)
2.2 Form of Agreement of Merger between Tencor Instruments and Tiger Acquisition
Corp. (Incorporated herein by reference to Registrant's Current Report on
Form 8-K filed on May 2, 1997, File No. 000-09992.)
2
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ ------------------------------------------------------------------------------
2.1 Agreement and Plan of Reorganization, dated as of January 14, 1997, among KLA
Instruments Corporation, Tiger Acquisition Corp. and Tencor Instruments
(incorporated herein by reference to Registrant's Current Report on Form 8-K
filed on January 22, 1997, File No. 000-09992).
2.2 Form of Agreement of Merger between Tencor Instruments and Tiger Acquisition
Corp. (incorporated herein by reference to Registrant's Current Report on Form
8-K filed on May 2, 1997, File No. 000-09992).
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KLA-TENCOR CORPORATION
By: /s/ JON D. TOMPKINS
------------------------------------
Jon D. Tompkins
Chief Executive Officer
Dated: May 20, 1997
4
TENCOR INSTRUMENTS
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
--------------------
1997 1996
------- --------
Revenues................................................................ $94,585 $106,283
Cost of goods sold...................................................... 41,783 40,847
------- --------
Gross profit............................................................ 52,802 65,436
------- --------
Operating expenses:
Research and development.............................................. 12,390 10,995
Marketing and selling................................................. 15,115 16,120
General and administrative............................................ 7,068 6,952
------- --------
Total operating expenses...................................... 34,573 34,067
------- --------
Income from operations.................................................. 18,229 31,369
Other income, net....................................................... 2,539 1,293
------- --------
Income before income taxes.............................................. 20,768 32,662
Provision for income taxes.............................................. 7,477 12,411
------- --------
Net income.............................................................. $13,291 $ 20,251
======= ========
Net income per share.................................................... $ 0.41 $ 0.64
Weighted average common shares and equivalents.......................... 32,813 31,721
See accompanying notes to consolidated interim financial statements.
5
TENCOR INSTRUMENTS
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
ASSETS
MARCH 31, 1997 DECEMBER 31, 1996
-------------- -----------------
Current assets:
Cash and cash equivalents................................... $168,796 $ 141,407
Short-term investments...................................... 62,488 82,370
Accounts receivable, net.................................... 97,976 87,623
Inventories................................................. 47,427 51,668
Deferred income taxes....................................... 19,056 19,056
Prepaid expenses and other assets........................... 7,149 10,165
-------- ---------
Total current assets................................ 402,892 392,289
Property and equipment, net................................... 44,071 41,601
Other assets.................................................. 41,052 50,529
-------- ---------
Total assets........................................ $488,015 $ 484,419
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable............................................... $ 27,039 $ 28,162
Accounts payable............................................ 10,294 11,936
Accrued liabilities......................................... 48,967 54,525
Income taxes payable........................................ 25,463 23,428
-------- ---------
Total current liabilities........................... 111,763 118,051
-------- ---------
Long-term obligations......................................... 1,106 1,335
-------- ---------
Shareholders' equity:
Common stock................................................ 155,558 152,756
Retained earnings........................................... 213,315 200,024
Accumulated unrealized gain on investments, net............. 9,043 14,602
Cumulative translation adjustment........................... (2,770) (2,349)
-------- ---------
Total shareholders' equity.......................... 375,146 365,033
-------- ---------
Total liabilities and shareholders' equity.......... $488,015 $ 484,419
======== =========
See accompanying notes to consolidated interim financial statements.
6
TENCOR INSTRUMENTS
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(IN THOUSANDS)
(UNAUDITED)
THREE MONTHS ENDED
MARCH 31,
---------------------
1997 1996
-------- --------
Cash flows from operating activities:
Net income........................................................... $ 13,291 $ 20,251
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization..................................... 1,208 2,290
Retirement of assets.............................................. 2,771 --
Changes in assets and liabilities:
Accounts receivable............................................. (9,052) 3,048
Inventories..................................................... 3,096 (11,648)
Prepaid expenses and other assets............................... (1,438) (1,338)
Accounts payable................................................ (1,586) (1,266)
Accrued liabilities............................................. (5,367) 3,292
Income taxes payable............................................ 6,349 6,872
-------- --------
Net cash provided by operating activities.................... 9,272 21,501
-------- --------
Cash flows from investing activities:
Purchases of property and equipment.................................. (5,988) (7,105)
Purchases of short-term investments.................................. (266,952) (13,891)
Proceeds from sale of short-term investments......................... 286,978 18,632
-------- --------
Net cash provided by (used in) investing activities.......... 14,038 (2,364)
-------- --------
Cash flows from financing activities:
Issuance of common stock, net........................................ 1,973 1,010
Repurchase of common stock........................................... -- (5,456)
Proceeds from debt obligations....................................... 7,354 7,379
Payments under debt obligations...................................... (6,705) (5,548)
-------- --------
Net cash provided by (used in) financing activities.......... 2,622 (2,615)
-------- --------
Effect of exchange rate changes on cash................................ 1,457 1,220
-------- --------
Net increase in cash and cash equivalents.............................. 27,389 17,742
Cash and cash equivalents at beginning of period....................... 141,407 86,944
-------- --------
Cash and cash equivalents at end of period............................. $168,796 $104,686
======== ========
Supplemental cash flow disclosures:
Income taxes paid.................................................... $ 597 $ 5,370
Interest paid........................................................ $ 226 $ 438
See accompanying notes to consolidated interim financial statements.
7
TENCOR INSTRUMENTS
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The unaudited condensed consolidated interim financial statements included
herein have been prepared by Tencor Instruments ("Tencor"), without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted as permitted by such rules and regulations.
Tencor believes the disclosures included herein are adequate; however, these
condensed consolidated interim financial statements should be read in
conjunction with the audited financial statements and the notes thereto for the
year ended December 31, 1996, included in Tencor's Annual Report on Form 10-K.
In the opinion of management, these unaudited condensed consolidated
financial statements of Tencor and its subsidiaries contain all of the
adjustments necessary to present fairly the financial position of Tencor at
March 31, 1997, the results of their operations, changes in shareholders' equity
and cash flows for the periods presented. The results of operations for the
periods presented may not be indicative of those which may be expected for the
full year.
NOTE 2. INVENTORIES
Inventories consist of the following (in thousands):
MARCH 31, DECEMBER 31,
1997 1996
--------- ------------
Raw materials........................................ $24,537 $ 26,010
Work-in-process...................................... 12,261 15,100
Finished goods....................................... 10,629 10,558
------- -------
$47,427 $ 51,668
======= =======
NOTE 3. EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share." The Statement
redefines earnings per share under generally accepted accounting principles, and
would have been effective for the Company's fiscal year ending December 31,
1997. Under the new standard, primary earnings per share is replaced by basic
earnings per share and fully diluted earnings per share is replaced by diluted
earnings per share. If the Company had adopted this Statement for the three
month periods ended March 31, 1997 and 1996, the Company's earnings per share
would have been as follows:
THREE MONTHS ENDED
---------------------------------
MARCH 31, 1997 MARCH 31, 1996
-------------- --------------
Earnings per share:
Basic........................................... $ 0.43 $0.66
Diluted......................................... $ 0.41 $0.64
8
TENCOR INSTRUMENTS
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED)
NOTE 4. FACTORING ARRANGEMENTS
The Company's Japanese subsidiary has entered into an agreement with a bank
to sell, with recourse, certain of its trade receivables. The amount of proceeds
received was the yen equivalent of approximately $7.6 million for the three
month period ended March 31, 1997. As of March 31, 1997, the yen equivalent of
approximately $15.8 million of the factored trade receivables remains
uncollected by the bank.
9
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited pro forma combined condensed financial statements
of KLA-Tencor Corporation ("KLA-Tencor") have been prepared to give effect to
the merger between Tencor and a wholly-owned subsidiary of KLA Instruments
Corporation ("KLA") (the "Merger"), using the pooling of interests method of
accounting.
The unaudited pro forma combined condensed balance sheets as of June 30,
1996 and March 31, 1997 gives effect to the Merger as if it had occurred on June
30, 1996, and combines the unaudited condensed consolidated balance sheets of
KLA and the balance sheets of Tencor as of June 30, 1996 and March 31, 1997.
The unaudited pro forma combined condensed statements of operations combine
the historical consolidated statements of operations of KLA and Tencor for each
of the years in the three-year period ended June 30, 1996 and the nine months
ended March 31, 1996 and 1997, in each case as if the Merger had occurred at the
beginning of the earliest period presented.
KLA and Tencor estimate that they will incur direct transaction costs of
approximately $45 million associated with the Merger, which will be charged to
operations upon consummation of the Merger. This is a preliminary estimate only
and is therefore subject to change. There can be no assurance that KLA-Tencor
will not incur additional charges to reflect costs associated with the Merger or
that management will be successful in its efforts to integrate the operations of
the two companies.
Such unaudited pro forma combined condensed financial information is
presented for illustrative purposes only and is not necessarily indicative of
the financial position or results of operations that would have actually been
reported had the Merger occurred at the beginning of the periods presented, nor
is it necessarily indicative of future financial position or results of
operations. These unaudited pro forma combined condensed financial statements
are based upon the respective historical consolidated financial statements of
KLA and Tencor and should be read in conjunction with the respective historical
consolidated financial statements and notes thereto of KLA and Tencor included
in the Joint Proxy Statement/Prospectus and do not incorporate any benefits from
cost savings or synergies of operations of the combined company.
10
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
MARCH 31, 1997
(IN THOUSANDS)
ASSETS
PROFORMA
KLA TENCOR ADJUSTMENTS COMBINED
-------- -------- ----------- ----------
Current assets:
Cash and cash equivalents................... $149,573 $168,796 $ -- $ 318,369
Short-term investments...................... 11,003 62,488 -- 73,491
Accounts receivable, net.................... 122,027 97,976 -- 220,003
Inventories................................. 118,289 47,427 -- 165,716
Deferred income taxes....................... 27,909 19,056 -- 46,965
Other current assets........................ 14,756 7,149 -- 21,905
-------- -------- --------- ----------
Total current assets................ 443,557 402,892 -- 846,449
Land, property and equipment, net............. 73,428 44,071 -- 117,499
Marketable securities......................... 257,795 27,798 -- 285,593
Other assets.................................. 13,512 13,254 -- 26,766
-------- -------- --------- ----------
Total assets........................ $788,292 $488,015 $ -- $1,276,307
======== ======== ========= ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable............................... $ 2,115 $ 27,039 $ -- $ 29,154
Accounts payable............................ 19,732 10,294 -- 30,026
Income taxes payable........................ 34,762 25,463 -- 60,225
Other current liabilities................... 113,725 48,967 -- 162,692
-------- -------- --------- ----------
Total current liabilities........... 170,334 111,763 -- 282,097
-------- -------- --------- ----------
Deferred income taxes......................... 6,316 -- -- 6,316
Long-term obligations......................... -- 1,106 -- 1,106
-------- -------- --------- ----------
Shareholders' equity:
Common stock and additional paid-in
capital.................................. 285,377 155,558 -- 440,935
Retained earnings........................... 328,789 213,315 -- 542,104
Treasury stock.............................. (581) -- -- (581)
Net unrealized gain (loss) on investments... (1,181) 9,043 -- 7,862
Cumulative translation adjustment........... (762) (2,770) -- (3,532)
-------- -------- --------- ----------
Total shareholders' equity.......... 611,642 375,146 -- 986,788
-------- -------- --------- ----------
Total liabilities and shareholders'
equity............................ $788,292 $488,015 $ -- $1,276,307
======== ======== ========= ==========
11
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
June 30, 1996
(In thousands)
ASSETS
PRO FORMA PRO FORMA
KLA TENCOR ADJUSTMENTS COMBINED
-------- -------- ----------- ----------
Current assets:
Cash and cash equivalents.................. $109,404 $ 92,300 $ -- $ 201,704
Short-term investments..................... 14,279 94,012 -- 108,291
Accounts receivable........................ 203,470 106,607 -- 310,077
Inventories................................ 132,377 65,426 -- 197,803
Deferred income taxes...................... 27,246 8,869 -- 36,115
Other current assets....................... 6,783 4,055 -- 10,838
-------- -------- --------- ----------
Total current assets............... 493,559 371,269 -- 864,828
Land, property and equipment, net.......... 71,825 33,012 -- 104,837
Marketable securities...................... 137,728 24,056 -- 161,784
Other assets............................... 9,660 11,438 -- 21,098
-------- -------- --------- ----------
$712,772 $439,775 $ -- $1,152,547
======== ======== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable.............................. $ 3,111 $ 32,714 $ -- $ 35,825
Accounts payable........................... 27,330 17,488 -- 44,818
Income taxes payable....................... 34,595 5,321 -- 39,916
Other current liabilities.................. 104,167 48,214 -- 152,381
-------- -------- --------- ----------
Total current liabilities.......... 169,203 103,737 -- 272,940
-------- -------- --------- ----------
Deferred income taxes........................ 6,320 -- -- 6,320
Long-term obligations........................ -- 2,288 -- 2,288
-------- -------- --------- ----------
Stockholders' equity:
Common stock and additional paid-in
capital................................. 227,943 149,068 -- 427,011
Retained earnings.......................... 259,777 177,533 -- 437,310
Treasury stock............................. (581) -- -- (581)
Net unrealized gain (loss) on
investments............................. (131) 9,334 -- 9,203
Cumulative translation adjustments......... 241 (2,185) -- (1,944)
-------- -------- --------- ----------
Total stockholders' equity......... 537,249 333,750 -- 870,999
-------- -------- --------- ----------
$712,772 $439,775 $ -- $1,152,547
======== ======== ========= ==========
12
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS ENDED
MARCH 31,
---------------------
1997 1996
-------- --------
Net Sales.............................................................. $755,641 $792,528
-------- --------
Costs and expenses:
Cost of sales........................................................ 347,343 336,123
Engineering, research and development................................ 96,240 84,278
Selling, general and administrative.................................. 160,643 152,233
Restructuring and other charges...................................... 8,500 --
-------- --------
Total costs and expenses..................................... 612,726 572,634
-------- --------
Income from operations................................................. 142,915 219,894
Interest income and other, net......................................... 18,693 14,428
-------- --------
Income before income taxes............................................. 161,608 234,322
Provision for income taxes............................................. 56,814 88,140
-------- --------
Net income............................................................. $104,794 $146,182
======== ========
Net income per share................................................... $ 1.23 $ 1.73
======== ========
Shares used in computing net income per share.......................... 85,149 84,264
======== ========
See Notes to Unaudited Pro Forma Combined Condensed Financial Statements
13
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED JUNE 30,
------------------------------------
1994 1995 1996
-------- -------- ----------
Net sales................................................. $376,454 $695,950 $1,094,492
-------- -------- ----------
Costs and expenses:
Cost of sales........................................... 190,903 299,571 469,681
Engineering, research and development................... 42,784 73,945 115,920
Selling, general and administrative..................... 84,683 140,585 212,625
Write-off of acquired in-process technology............. -- 25,240 --
Restructuring and other charges......................... 2,300 -- --
-------- -------- ----------
Total costs and expenses........................ 320,670 539,341 798,226
-------- -------- ----------
Income from operations.................................... 55,784 156,609 296,266
Interest income and other, net............................ 1,195 10,417 17,834
-------- -------- ----------
Income before income taxes................................ 56,979 167,026 314,100
Provision for income taxes................................ 16,536 62,215 117,466
-------- -------- ----------
Net income................................................ $ 40,443 $104,811 $ 196,634
======== ======== ==========
Net income per share...................................... $ 0.59 $ 1.34 $ 2.34
======== ======== ==========
Shares used in computing net income per share............. 69,076 78,427 84,195
======== ======== ==========
14
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
1. PERIODS PRESENTED
KLA's fiscal year ends on June 30. Tencor's fiscal year ends on December
31. The unaudited pro forma combined condensed statements of operations combine
the results of operations of KLA for each of the three years in the period ended
June 30, 1994, 1995 and 1996 and the nine months ended March 31, 1997 and 1996
with the results of Tencor for the same periods. The unaudited pro forma
combined condensed balance sheet is based upon the historical balance sheet data
of KLA and Tencor as of March 31, 1997.
2. PRO FORMA NET INCOME PER SHARE
The unaudited pro forma combined net income per share is based upon the
weighted average number of common and common equivalent shares outstanding of
KLA and Tencor for each period using an exchange ratio of one share of KLA
Common Stock for each share of Tencor Common Stock.
3. CONFORMING ADJUSTMENTS AND INTERCOMPANY TRANSACTIONS
There are no material intercompany transactions included in the unaudited
pro forma combined condensed financial statements. There were no material
adjustments required to conform the accounting policies of KLA ant Tencor.
4. TRANSACTION COSTS
Total costs associated with the Merger are expected to be approximately $45
million. This amount is a preliminary estimate only and is, therefore, subject
to change. These expenses will be charged against net income in the fourth
quarter of fiscal 1997. Accordingly, the effects of these expenses have not been
reflected in these unaudited pro forma combined condensed interim financial
statements.
15