TRIKON TECHNOLOGIES INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[Mark One]

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2004

¨	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 0-26482

TRIKON TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Delaware		95-4054321
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Ringland Way, Newport, South Wales NP18 2TA, United Kingdom
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 44-1633-414-000

Not Applicable

Former name, former address and former fiscal year, if changed since last report

Indicate by check whether the registrant (1) has filed all reports required to be filed by Sections 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 ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes x No ¨

As of July 23, 2004, the total number of outstanding shares of the Registrant’s common stock was 15,750,410.

Trikon Technologies, Inc.

INDEX


		PAGE NUMBER
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)

	Condensed Consolidated Balance Sheets at June 30, 2004 and December 31, 2003	3

	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2004 and June 30, 2003	4

	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2004 and June 30, 2003	5

	Notes to Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21

Item 4.	Controls and Procedures	21

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	22

Item 2.	Changes in Securities and Use of Proceeds	22

Item 3	Defaults Upon Senior Securities	22

Item 4.	Submission of Matters to a Vote of Security Holders	22

Item 5.	Other Information	22

Item 6.	Exhibits and Reports on Form 8-K	22

SIGNATURES		23

Exhibits

31.1	Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule15d-14(a) of the Exchange Act

31.2	Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act

32.1	Certification of Chief Executive Officer furnished pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S. C. 1350)

32.2	Certification of Chief Financial Officer furnished pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C 1350)

Trikon Technologies, Inc.

PART 1 - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	June 30, 2004			December 31, 2003
	(Unaudited)			(Note A)
Assets
Current assets:
Cash and cash equivalents	$	22,253		$	31,646
Accounts receivable, net		8,756			11,287
Inventories, net		15,657			15,257
Prepaid and other current assets		2,568			4,855

Total current assets		49,234			63,045
Property, equipment and leasehold improvements, net		15,127			16,896
Demonstration systems, net		2,501			2,814
Other assets		382			374

Total assets	$	67,244		$	83,129

Liabilities and shareholders’ equity
Current liabilities:
Short term borrowing	$	9,050		$	—
Accounts payable and accrued expenses.		6,318			5,785
Current portion of long-term debt		334			11,736
Deferred revenue		2,240			5,803
Other current liabilities		2,192			2,635
Accrued expenses.		1,963			1,399
Warranty and related expenses.		1,055			1,285

Total current liabilities		23,152			28,643

Long-term debt less current portion		71			188
Other non-current liabilities .		835			928

	$	24,058		$	29,759

Shareholders’ equity:
Preferred Stock:
Authorized shares — 20,000,000
Issued and outstanding — Nil at June 30, 2004 and December 31, 2003	$	—		$	—
Common Stock, $0.001 par value:
Authorized shares — 50,000,000
Issued and outstanding — 15,750,410 at June 30, 2004 and 15,635,888 at December 31, 2003		261,411			261,217
Accumulated other comprehensive loss		2,050			1,833
Accumulated deficit		(220,275	)		(209,680	)

Total shareholders’ equity		43,186			53,370

Total liabilities and shareholders’ equity	$	67,244		$	83,129

See Notes to Unaudited Condensed Consolidated Financial Statements.

Trikon Technologies, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share data)


	Three Months Ended						Six Months Ended
	June 30, 2004			June 30, 2003			June 30, 2004			June 30, 2003
	June 30, 2004			June 30, 2003			June 30, 2004			June 30, 2003
Revenues:
Product revenues	$	10,106		$	5,967		$	16,844		$	11,071
Licence revenues		66			49			109			49

		10,172			6,016			16,953			11,120

Costs and expenses:
Cost of goods sold		7,549			4,804			12,892			9,144
Research and development		2,304			2,323			4,845			4,641
Selling, general and administrative		4,784			5,420			10,179			10,220
Settlement of pension liabilities and related expenses		—			2,017			—			2,723

		14,637			14,564			27,916			26,728

Loss from operations		(4,465	)		(8,548	)		(10,963	)		(15,608	)
Foreign currency (losses) gains		(264	)		433			359			155
Interest income, net		63			112			129			210

Loss before income tax charge		(4,666	)		(8,003	)		(10,475	)		(15,243	)
Income tax charge		(55	)		(134	)		(120	)		(158	)

Net loss	$	(4,721	)	$	(8,137	)	$	(10,595	)	$	(15,401	)

Loss per share data:
Basic:	$	(0.30	)	$	(0.60	)	$	(0.67	)	$	(1.17	)
Diluted:	$	(0.30	)	$	(0.60	)	$	(0.67	)	$	(1.17	)
Weighted average common shares used in the calculation:
Basic:		15,745			13,494			15,723			13,187
Diluted:		15,745			13,494			15,723			13,187

See Notes to Unaudited Condensed Consolidated Financial Statements.

Trikon Technologies, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Six Months Ended
	June 30, 2004			June 30, 2003
	June 30, 2004			June 30, 2003
Operating Activities
Net loss.	$	(10,595	)	$	(15,401	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property plant and equipment		2,726			2,422
Amortization of deferred compensation		—			569
(Loss) gain on disposal of property plant and equipment		(13	)		9
Provision for losses on accounts receivable		4			111
Changes in operating assets and liabilities:
Accounts receivable		2,527			(84	)
Inventories (including demonstration systems)		(87	)		1,613
Other current assets		2,379			570
Accounts payable and other liabilities		471			(83	)
Income tax payable		(139	)		—
Pension obligations		—			1,470
Deferred revenue		(3,563	)		440

Net cash used in operating activities		(6,290	)		(8,364	)
Investing Activities
Purchases of property, equipment and leasehold improvements		(1,107	)		(268	)
Proceeds from sale of property, plant and equipment		371			—
Other assets and liabilities		(101	)		(37	)

Net cash used in investing activities		(837	)		(305	)
Financing Activities
Issuance of common stock		194			15
Borrowings under short term loan		9,050			—
Repayments under bank credit lines		(11,188	)		(4,038	)
Payments on capital lease obligations		(331	)		(339	)

Net cash used in financing activities		(2,275	)		(4,362	))

Effect of exchange rate changes in cash		9			803

Net decrease in cash and cash equivalents		(9,393	)		(12,228	)
Cash and cash equivalents at beginning of period		31,646			42,557

Cash and cash equivalents at end of period	$	22,253		$	30,329

See Notes to Unaudited Condensed Consolidated Financial Statements.

Trikon Technologies, Inc.

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