U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 2003
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from to
COMMISSION FILE NUMBER 001-16611
Mykrolis Corporation
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
04-3536767
(I.R.S. Employer Identification No.)
129 Concord Road
Billerica, Massachusetts 01821
(Address of principal executive offices)
(978) 436-6500
Registrant’s telephone number, include 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 and 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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes x No ¨
The Company had 39,791,931 shares of common stock outstanding as of May 1, 2003.
INDEX TO FORM 10-Q
| Page No. | ||||
| Part I. |
3 | |||
| Item 1. |
3 | |||
| Consolidated Statements of Operations—Three Months Ended March 29, 2003 and March 31, 2002 |
3 | |||
| Consolidated Balance Sheets—March 29, 2003 and December 31, 2002 |
4 | |||
| 5 | ||||
| Consolidated Statements of Cash Flows—Three Months Ended March 29, 2003 and March 31, 2002 |
6 | |||
| 7 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
13 | ||
| Item 3. |
19 | |||
| Item 4. |
19 | |||
| Part II. |
20 | |||
| Item 1. |
20 | |||
| Item 6. |
20 | |||
| 21 | ||||
| Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||||
| Exhibits |
||||
| Exhibit 99.1 Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 301 of the Sarbanes-Oxley Act of 2002 |
||||
| Exhibit 99.2 Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 301 of the Sarbanes-Oxley Act of 2002 |
2
Item 1. Condensed Financial Statements
Consolidated Statements of Operations
(In thousands except per share data)
(Unaudited)
| Three Months Ended |
||||||||
| March 29, 2003 |
March 31, 2002 |
|||||||
| Net sales |
$ |
40,508 |
|
$ |
35,708 |
| ||
| Cost of sales |
|
23,976 |
|
|
24,617 |
| ||
| Gross Profit |
|
16,532 |
|
|
11,091 |
| ||
| Research and development expenses |
|
4,484 |
|
|
4,338 |
| ||
| Selling, general and administrative expenses |
|
16,352 |
|
|
17,846 |
| ||
| Operating loss |
|
(4,304 |
) |
|
(11,093 |
) | ||
| Other income, net |
|
660 |
|
|
52 |
| ||
| Loss before income taxes |
|
(3,644 |
) |
|
(11,041 |
) | ||
| Income tax expense |
|
1,713 |
|
|
1,400 |
| ||
| Net loss |
$ |
(5,357 |
) |
$ |
(12,441 |
) | ||
| Basic and diluted loss per share |
$ |
(0.13 |
) |
$ |
(0.32 |
) | ||
| Shares used in computing basic and diluted loss per share: |
|
39,725 |
|
|
39,500 |
| ||
The accompanying notes are an integral part of the consolidated financial statements.
3
Consolidated Balance Sheets
(In thousands except share data)
| March 29, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) |
||||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
71,957 |
|
$ |
74,085 |
| ||
| Accounts receivable (less allowance for doubtful accounts of $1,198 at March 29, 2003 and $1,224 at December 31, 2002) |
|
39,114 |
|
|
39,971 |
| ||
| Inventories |
|
40,615 |
|
|
41,821 |
| ||
| Deferred income taxes |
|
786 |
|
|
786 |
| ||
| Assets held for sale |
|
0 |
|
|
72 |
| ||
| Other current assets |
|
4,005 |
|
|
4,088 |
| ||
| Total current assets |
|
156,477 |
|
|
160,823 |
| ||
| Restricted cash |
|
1,611 |
|
|
1,608 |
| ||
| Property, plant and equipment, net |
|
73,003 |
|
|
74,833 |
| ||
| Deferred income taxes |
|
5,400 |
|
|
5,400 |
| ||
| Goodwill, net |
|
14,454 |
|
|
14,454 |
| ||
| Other intangible assets (less accumulated amortization of $21,319 at March 29, 2003 and $20,947 at December 31, 2002) |
|
4,577 |
|
|
4,949 |
| ||
| Other assets |
|
5,627 |
|
|
5,122 |
| ||
| Total assets |
$ |
261,149 |
|
$ |
267,189 |
| ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Current portion of capital lease obligation |
$ |
78 |
|
$ |
78 |
| ||
| Accounts payable |
|
14,441 |
|
|
10,288 |
| ||
| Accrued income taxes |
|
10,903 |
|
|
9,416 |
| ||
| Accrued expenses |
|
19,122 |
|
|
24,756 |
| ||
| Total current liabilities |
|
44,544 |
|
|
44,538 |
| ||
| Long-term portion of capital lease obligation |
|
112 |
|
|
131 |
| ||
| Other liabilities |
|
9,790 |
|
|
9,815 |
| ||
| Minority interest |
|
84 |
|
|
61 |
| ||
| Commitments and contingencies (note 13) |
|
— |
|
|
— |
| ||
| Shareholders’ equity: |
||||||||
| Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding |
|
— |
|
|
— |
| ||
| Common stock, par value $.01 per share, 250,000,000 shares authorized; 39,726,510 and 39,723,648 shares issued and outstanding, respectively |
|
397 |
|
|
397 |
| ||
| Additional paid-in capital |
|
320,079 |
|
|
320,061 |
| ||
| Accumulated deficit |
|
(98,708 |
) |
|
(93,351 |
) | ||
| Accumulated other comprehensive loss |
|
(15,149 |
) |
|
(14,463 |
) | ||
| Total shareholders’ equity |
|
206,619 |
|
|
212,644 |
| ||
| Total liabilities and shareholders’ equity |
$ |
261,149 |
|
$ |
267,189 |
| ||
The accompanying notes are an integral part of the consolidated financial statements.
4
Consolidated Statements of Shareholders’ Equity
and Comprehensive Income (Loss)
(In thousands)
| Common Shares |
Additional Paid-In Capital |
Shareholder’s Net Investment |
Accumulated Deficit |
Accumulated Other Comprehensive Income (Loss) |
Total Shareholders’ Equity |
Comprehensive Income (Loss) |
||||||||||||||||||||||
| Shares |
Amount |
|||||||||||||||||||||||||||
| Balance December 31, 2001 |
39,500 |
|
395 |
|
326,618 |
|
|
— |
|
(61,590 |
) |
|
(21,876 |
) |
|
243,547 |
|
|||||||||||
| Stock-based compensation |
|
— |
|
1,103 |
|
|
— |
|
— |
|
|
— |
|
|
1,103 |
|
||||||||||||
| Net transfers to Millipore Corporation |
|
— |
|
(9,518 |
) |
|
— |
|
— |
|
|
— |
|
|
(9,518 |
) |
||||||||||||
| Issuance of common stock-employee stock purchase plan and exercise of stock options |
224 |
|
2 |
|
1,858 |
|
|
— |
|
— |
|
|
— |
|
|
1,860 |
|
|||||||||||
| Comprehensive income (loss) : |
||||||||||||||||||||||||||||
| Net loss |
|
— |
|
— |
|
|
— |
|
(31,761 |
) |
|
— |
|
|
(31,761 |
) |
|
(31,761 |
) | |||||||||
| Foreign currency translations |
|
— |
|
— |
|
|
— |
|
— |
|
|
7,413 |
|
|
7,413 |
|
|
7,413 |
| |||||||||
| Comprehensive loss |
$ |
(24,348 |
) | |||||||||||||||||||||||||