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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED].
For fiscal year ended, SEPTEMBER 30, 1996 Commission file number 1-9965
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KEITHLEY INSTRUMENTS, INC.
(Exact name of registrant as
specified in its charter)
OHIO 34-0794417
- ---------------------------------------- -----------------------------------
(State of incorpoation or organization) (I.R.S. Employer Identification No.)
28775 AURORA ROAD, SOLON, OHIO 44139
- ---------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 248-0400
----------------------
Securities registered pursuant to Section 12(b) of the Act:
COMMON SHARES, WITHOUT PAR VALUE NEW YORK STOCK EXCHANGE
- -------------------------------- -------------------------------------
(Title of each class) (Name of exchange on which registered)
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
As of December 17, 1996 there were outstanding 4,656,850 Common Shares, without
par value, and 2,794,278 Class B Common Shares, without par value. At that
date, the aggregate market value of the Common Shares of the Registrant held by
non-affiliates was $42,227,722 and the aggregate market value of the Class B
Common Shares of the Registrant held by non-affiliates was $1,100,549 for a
total aggregate market value of all classes of Common Shares held by
non-affiliates of $43,328,271. While the Class B Common Shares are not listed
for public trading on any exchange or market system, shares of that class are
convertible into Common Shares at any time on a share-for-share basis. The
market values indicated were calculated based upon the last sale price of the
Common Shares as reported by the New York Stock Exchange on December 17, 1996,
which was $9.875. For purposes of this information, the 380,625 Common Shares
and 2,682,830 Class B Common Shares which were held by the officers and
Directors of the Company were deemed to be voting stock held by affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT Part of 10-K
- -------- ------------
1. Annual report to shareholders for the fiscal year ended September 30, 1996 Parts I and II
(only the portions listed in this report).
2. Proxy statement for the annual meeting of shareholders to be held on February 15, 1997 Part III
(only the portions listed in this report).
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KEITHLEY INSTRUMENTS, INC.
10-K ANNUAL REPORT
TABLE OF CONTENTS
PART I: PAGE
----
Item 1. Business 1
Item 2. Properties 9
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II:
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 13
PART III.
Item 10. Directors and Executive Officers of the Registrant 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and
Management 14
Item 13. Certain Relationships and Related Transactions 14
PART IV:
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K 15
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PART I.
ITEM 1 - BUSINESS.
General
Keithley Instruments, Inc. is a corporation which was founded in 1946
and organized under the laws of the State of Ohio on October 1, 1955. Its
principal executive offices are located at 28775 Aurora Road, Solon, Ohio
44139; telephone (216) 248-0400. References herein to the "Company" or
"Keithley" are to Keithley Instruments, Inc. and its subsidiaries unless the
context indicates otherwise.
Products
Keithley Instruments, Inc. provides instrumentation to semiconductor
manufacturers, medical equipment manufacturers, and growth segments of the
electronics industry. Scientists and engineers around the world use Keithley's
advanced hardware and software for measurement, test, data acquisition, and
control. Although the Company's products vary in capability, sophistication,
use, size and price, they basically test, measure, and analyze electrical and
physical properties. As such, the Company considers its business to be in a
single industry segment. For each of the last three fiscal years, more than
90% of the Company's revenue was derived from the sale of electronic test and
measurement instrumentation and data acquisition and analysis hardware and
software, which represents one class of similar products.
The operating units and product groups of the Company are described
below:
INSTRUMENTS DIVISION. The Instruments Division designs, develops,
manufactures and markets sensitive electronic instrumentation used in
production test and research for measuring a wide range of electrical
properties such as voltage, resistance, current, capacitance and charge.
Prices for the Instruments Division's products generally range from $1,000 to
$10,000 and included the following product groups:
Digital Multimeters. This product line includes a range of
instruments that are designed to cover measurements of voltage,
resistance, and current for production test, design and
development, and research applications. Each digital multimeter
has a computer interface for integration into automated test and
measurement systems. Typical applications include testing
electrical components such as resistor networks and thermistors,
and end products which include cellular telephones, computer disk
drives, and pace makers.
Sensitive Instruments. This product group includes electrometers,
picoammeters, sensitive digital voltmeters, micro-ohmmeters, and
certain other instruments which are distinguished by their extreme
sensitivity, resolution and accuracy as compared to the
capabilities of conventional meters. Sensitive instruments are
used by scientists, engineers, and researchers for the study of
materials, semiconductors, and superconductors. Typical customers
are industrial and government research laboratories, educational
institutions, and electronics manufacturers.
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Switches and Sources. Switching instruments are used to route
electrical signals in test systems to measurement and source
instrumentation. This allows many devices or test points to be
measured with a minimum number of instruments. Switch products
together with Sensitive, Digital Multimeter, Source, I-V and C-V
instruments can be integrated into computer-based systems to
provide flexible, automated testing and measurement. The switching
product line allows Keithley to provide a complete measurement
solution to customers in production test, semi-conductor
characterization, and materials research applications.
Sources generate the precise voltage and currents needed to test
electronic devices and investigate properties of materials. Source
products are sold to scientists and engineers in research,
semiconductor and electronic manufacturing markets, especially
where stable signals of low level current and voltage are needed.
These sources can be interfaced with computers as part of an
automated test system, or used manually on the laboratory bench.
Source Measure Units. These are programmable instruments capable
of sourcing and measuring voltage and current, thus replacing the
functionality of four instruments with one reliable, compact unit.
These versatile instruments cover a wide dynamic range of voltage
and current and their combination of high speed and resolution have
made these units ideal for high volume production testing of
electronic components for computers, automotive, and wireless
telecommunications products. The source measure units also provide
the measurement sensitivity needed for materials research and
semiconductor characterization applications.
C-V (Capacitance versus Voltage). C-V products include
high-frequency and quasistatic C-V meters, measurement and analysis
software, and computer-based test systems. C-V products are used
by scientists and engineers in semiconductor manufacturing
facilities, industrial and governmental research laboratories, and
educational institutions to research, develop, and characterize
semiconductor devices, materials and manufacturing processes.
SEMICONDUCTOR DIVISION. The Semiconductor Division designs, develops,
manufactures and markets automatic parametric test systems and process
monitoring solutions used by semiconductor manufacturers to measure various
electrical characteristics of semiconductor materials. Its products can be
found in semiconductor fabrication facilities throughout the world, and consist
of two main groups:
APT Products. The Company is one of the leading suppliers of these
automatic parametric test systems for semiconductor production
applications. In production, the systems allow manufacturers to
monitor quality control parameters during fabrication of integrated
circuits to improve manufacturing yields. In research, the systems
are used to analyze the characteristics of semiconductor materials
in the development of integrated circuit devices. The systems can
also be used to develop integrated circuit manufacturing processes.
A typical system incorporates Keithley instrumentation and software
and computer hardware manufactured by others. The
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system's major components are integrated, and in most cases,
customized to customer specification. Installation and servicing of
the equipment and software, and customer training are also provided.
Selling prices for these products generally range from $100,000 to
$250,000. In February 1996, Keithley purchased the principal assets
of Turner Engineering Technology (Turner). Turner developed wafer
test structures used for determining the quality of semiconductor
wafers at various stages of manufacturing. These test structures
will allow the company's APT systems to determine the quality of
both the wafer and the manufacturing process much earlier than with
previous test methods.
Oxide Monitoring System. Quantox(R) is the first product based on
the direct wafer measurement or non-contact technology licensed
from International Business Machines in May 1994. The measurement
data Quantox provides are used to detect and identify the types of
charges present on semiconductor wafers. Charge is a critical
indicator that tells the semiconductor production engineer whether
or not the manufacturing process is "in spec." This measurement is
made within minutes using Quantox, replacing a procedure that used
to take up to five days. During fiscal 1996 the company incurred
costs to develop and market Quantox, with the first revenues from
Quantox recognized in the third quarter of fiscal 1996. The
selling price for a Quantox unit is approximately $500,000
depending upon the options purchased.
RADIATION MEASUREMENTS DIVISION. The Radiation Measurements Division
designs, develops, manufactures and markets products and systems that
accurately measure the radiation emission levels of x-ray machines and nuclear
radiation sources and are used to calibrate radiation therapy and x-ray
equipment in hospitals and manufacturing processes. Customers include
hospitals, diagnostic x-ray equipment manufacturers, radiation researchers and
physicists and field service organizations. Selling prices for standard
products range from $500 to $10,500 per instrument, and products designed and
manufactured for specific customer applications sell for up to $100,000. In
December 1995, Keithley purchased the principal assets of International Sensor
Technology, Inc. (IST). IST pioneered the development of laser heating
technology in thermoluminescence dosimetry systems for personal radiation
protection. The Radiation Measurements Division is fulfilling current and
expected future contracts with the U.S. Navy and will commercialize the
technology over the next few years.
PC MEASUREMENTS DIVISION. This newly formed Division combines
Keithley MetraByte with the company's Network Measurements business. Keithley
MetraByte designs, develops, manufactures and markets a wide range of data
acquisition and analysis hardware and software products designed for use with
personal computers and workstations. These products are used in thousands of
applications worldwide wherever a number of variables must be monitored and
analyzed quickly. Selling prices for these products generally range from $100
to $3,000.
These products are marketed under the brand names Keithley MetraByte
and Acculex and are composed of the following product groups:
Plug-in data acquisition boards provide data acquisition
capabilities in the form of a board that is installed into a slot
of the computer. The Company offers a wide range
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of plug-in data acquisition boards in terms of the number of
channels, input ranges and sampling rates. They are marketed
worldwide to researchers and scientists engaged in laboratory
automation and experimentation, as well as to engineers involved
with process control and data collection applications. These
products are marketed primarily through direct marketing and
catalog mailings.
Software products are specialized personal computer-based
scientific data acquisition, analysis and graphics software
products. Scientists and engineers often combine Keithley software
together with data acquisition hardware or test and measurement
instrumentation of other manufacturers. The software products are
used with personal computers.
Acculex products include digital panel meters and panel printers.
These products display machine parameters, capture results for
permanent storage and enunciate alarms. These products are
marketed primarily through direct marketing and catalog mailings.
Distributed I/O products include Keithley's WORKHORSE and MetraBus
product offerings. These products are primarily used in industrial
monitoring and control applications.
Communication products include IEEE-488 bus interfaces and software
for interfacing computers with programmable measurement
instrumentation. These products are marketed through direct
marketing and catalog mailings.
Data Acquisition Instruments include personal computer-based
workstations that collect data from, and provide control over, a
variety of test and measurement modules. A typical workstation
consists of a standard software package and hardware external to
the personal computer that utilizes various plug-in module cards
that allow a user to customize the workstation for a specific
application, including research, product test and pilot plant
process monitoring.
Personal Computer Instrument Products (PCIP) are instruments
contained entirely on boards that fit into an expansion slot of
almost any personal computer. Included in the PCIP offering are a
digital multimeter, scanner oscilloscope, function generator and a
counter. Applications include bench top engineering and automatic
production testing. These products are marketed primarily through
direct marketing and catalog mailings.
The company's Network Measurements business recently introduced
SmartLink(TM), a new line of intelligent measurement modules that allow
laboratory-grade measurements virtually anywhere due to their small size. The
compact modules connect directly to a sensor or signal source creating no need
for extra hardware. Each module has on-board signal processing capabilities to
provide linearization, date/time stamping alarming. That allows them to
deliver useful information directly to a monitoring, control of data
acquisition system. Selling prices for these products generally range from
$1,000 to $2,250.
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AGENCY PRODUCTS. The Company markets and distributes certain products
manufactured by approximately nine test and measurement companies. These
products are marketed and distributed primarily by the Company's European
operations and are complementary to, but not competitive with, products
manufactured by the Company.
New Products During Fiscal Year 1996
Several new products were introduced during fiscal 1996 including the
following:
The Instruments Division introduced several new products including the
Model 2010 7-1/2-digit digital multimeter which rounds out the company's 2000
Series family. The Model 2400 digital source meter designed specifically for
the electronic component industry, is very suitable for a wide range of
electronics manufacturing applications.
The Semiconductor Division introduced several new products including
the Model S600 parametric test system which is expected to be available for
shipping the second half of fiscal 1997. The Division also acquired Turner
Engineering Technology, a company which specializes in accelerated test method
for determining the quality of semiconductor wafers at various stages of
manufacturing. Turner's line of Wafer- Level Reliability test structures and
software allow manufacturers to fully characterize the lifetime reliability of
their semiconductor wafers and have opened the door to incremental sales of the
company's parametric test systems.
The Radiation Measurements Division acquired International Sensor
Technology, Inc. (IST) during the year. The commercialization of IST's
patented technology, which provides increased speed and accuracy for personal
radiation protection, is another growth opportunity for the company in the
years ahead.
The PC Measurements Division introduced the new SmartLink(TM) modules
discussed previously, as well as several new Keithley MetraByte products
including the DAS-1700 line of PC plug-in data acquisition boards. All
DAS-1700 boards are supported by Windows 3.1X, 95 and NT drivers, so users can
migrate their existing data acquisition applications to new Windows
environments. The DAS-1700 series offers users a midrange data acquistion
board with many of the features and functions of higher-end systems at a much
lower cost. These boards are applied in industrial, product development,
educational and scientific/research organizations.
Geographic Markets and Distribution
During fiscal 1996, substantially all of the Company's products were
manufactured in Ohio and Massachusetts and were sold throughout the world in
many developed countries. The Company's principal markets are the United
States, Europe and the Pacific Basin. At the end of fiscal 1996, the company
announced that it would relocate its Keithley MetraByte operation to Solon,
Ohio during fiscal 1997.
In the United States, the Company's products are sold by the Company's
sales personnel, independent sales representatives and through direct marketing
and catalog mailings.
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United States sales offices are located in Solon, Ohio and Santa Clara,
California. The Company markets its products directly in European countries in
which it has a wholly owned sales subsidiary and through distributors in other
countries. European subsidiaries have sales and service offices located in or
near London, Munich, Paris, Amsterdam, Zurich and Milan. The Company also has
sales offices in Belgium, China and India. Sales in markets outside the above
names locations are made through independent sales representatives and
distributors. The Company's Japanese subsidiary supports independent sales
representatives and distributors in the Pacific Basin.
Sources and Availability of Raw Materials
The Company's products require a wide variety of electronic and
mechanical components, most of which are purchased. The Company has multiple
sources for the vast majority of the components and materials it uses; however,
there are some instances where the components are obtained from a sole-source
supplier. If a sole-source supplier ceased to deliver, the Company could
experience a temporary adverse impact on its operations; however, management
believes alternative sources could be developed quickly. Although shortages of
purchased materials and components have been experienced from time to time,
these items have generally been available to the Company as needed.
Patents
Electronic instruments of the nature the Company designs, develops and
manufactures can not generally be patented in their entirety. Although the
Company holds patents with respect to certain of its products, it does not
believe that its business is dependent to any material extent upon any single
patent or group of patents, because of the rapid rate of technological change
in the industry.
Seasonal Trends and Working Capital Requirements
Although the Company is not subject to significant seasonal trends,
its business is cyclical and is somewhat dependent upon the semiconductor
industry in particular. The Company does not have any unusual working capital
requirements.
Customers
The Company's customers generally are involved in engineering research
and development, product testing, electronic service or repair, and educational
and governmental research. During the fiscal year ended September 30, 1996 no
one customer accounted for more than 10% of the Company's sales. Management
believes that the loss of any one of its customers would not materially affect
the sales or net income of the Company.
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Backlog
The Company's backlog of unfilled orders amounted to approximately
$9,087,000 as of September 30, 1996 and approximately $11,284,000 as of
September 30, 1995. It is expected that the majority of the orders included in
the 1996 backlog will be delivered during fiscal 1997; however, the Company's
past experience indicates that a small portion of orders included in the
backlog may be canceled.
Competitive Conditions
The Company competes on the basis of quality, performance, service,
warranty and price, with quality and performance frequently being dominant.
There are many firms in the world engaged in the manufacture of electronic
measurement instruments, some of which are larger and have greater financial
resources than the Company. The Company's competitors vary between product
lines and certain manufacturers compete with the Company in multiple product
lines. The Company's principal competitors are Hewlett-Packard Company,
National Instruments, Inc., Fluke Corporation, Data Translation, Inc. and
Advantest Corporation.
Research and Development
The Company's engineering development activities are directed toward
the development of new products that will complement, replace or add to the
products currently included in the Company's product line. The Company does
not perform basic research, but on an ongoing basis utilizes new component and
software technologies in the development of its products. The highly technical
nature of the Company's products and the rapid rate of technological change in
the industry require a large and continuing commitment to engineering
development efforts. Product development expenses were $18,337,000 in 1996,
$15,385,000 in 1995 and $11,551,000 in 1994, or approximately 15%, 14% and 13%
of net sales, respectively, for each of the last three fiscal years. Research
contracts are not obtained from customers. As discussed earlier, during 1996
the Company acquired the principal assets of IST. IST's activities included a
government research and development contract for the Navy which was concluded
during 1996. The amount spent by the company on this contract was not
material. During fiscal 1994, the Company expensed $3,300,000 to acquire the
right to develop and commercialize direct wafer measurement technology from
International Business Machines.
Government Regulations
The Company believes that its current operations and its current uses
of property, plant and equipment conform in all material respects to applicable
laws and regulations. The Company has not experienced, nor does it anticipate,
any material claim or material capital expenditure in connection with
environmental laws and other regulations.
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Employees
As of September 30, 1996, the Company employed 716 persons, 107 of
whom were located outside the United States. None of the Company's employees
are covered under the terms of a collective bargaining agreement and the
Company believes that relations with its employees are good.
Foreign Operations and Export Sales
Information related to foreign and domestic operations and export
sales is incorporated by reference to Note J of the Notes to the Consolidated
Financial Statements on page 31 of the Company's 1996 Annual Report to
Shareholders, a copy of which is filed as Exhibit 13 to this report.
The Company has significant revenues from outside the United States
which increase the complexity and risk to the Company. These risks include
increased exposure to the risk of foreign currency fluctuations and the
potential economic and political impacts from conducting business in foreign
countries. With the exception of changes in the value of foreign currencies
which is not possible to predict, the Company believes that its foreign
subsidiaries and other larger international markets are in countries where the
economic and political climate is generally stable.
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ITEM 2 - PROPERTIES.
The Company believes that the facilities owned and leased by it are
well maintained, adequately insured and suitable for their present and intended
uses. Pertinent information concerning the principal properties of the Company
and its subsidiaries is as follows:
Type of Acreage (Land)
Owned Properties Facility Square Footage (Building)
- ---------------- -------- -------------------------
Location
--------
Solon, Ohio Executive offices,
Engineering, Manufacturing, 26.1 Acres
Marketing and Sales 125,000 square feet
Solon, Ohio Engineering, Manufacturing,
Marketing, Sales, Service and 7.0 Acres
Administration 76,000 square feet
Solon, Ohio Marketing and Administration, 5.5 Acres
Space is available for expansion with 50,000 square feet
the majority leased to other parties. (4,000 square feet
utilized by the Co.)
Lease
Type of Square Expiration
Leased Properties Facility Footage Date
- ----------------- -------- ------- -----------
Location
--------
Taunton, Manufacturing, Marketing,
Massachusetts Service and Administration 41,000 June 30, 1998
Taunton, Engineering, Sales
Massachusetts and Administration 31,000 June 30, 1998
Solon, Ohio Engineering, Manufacturing, 40,000 October 13, 2006
Marketing, Sales, Service
and Administration
Solon, Ohio Manufacturing, and 21,600 March 31, 2002
Administration
Santa Clara, Sales and Service 4,355 October 15, 1998
California
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Lease
Type of Square Expiration
Location Facility Footage Date
- -------- -------- ------- -----------
Munich, Sales, Service and 27,750 March 31, 2001;
Germany Administration renewable
London, England Sales and Service 5,600 July 24, 2009
Paris, France Sales and Service 3,456 June 30, 1998
Zurich, Sales and Service 3,229 September 30, 1997
Switzerland renewable
Amsterdam, Sales and Service 2,906 March 31, 2002
Netherlands
Milan, Sales and Service 2,691 August 31, 2001
Italy
ITEM 3 - LEGAL PROCEEDINGS.
The Company is not a party to any material litigation.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
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EXECUTIVE OFFICERS OF THE REGISTRANT:
The description of executive officers is included pursuant to
Instruction 3 to Section (b) of Item 401 of Regulation S-K under the Securities
and Exchange Act of 1934.
The following table sets forth the names of all executive officers of
the Company and certain other information relating to their position held with
the Company and other business experience.
Executive Officer Age Recent Business Experience
- ----------------- --- --------------------------
Joseph P. Keithley 48 Chairman of the Board of Directors since 1991, Chief
Executive officer since November 1993 and President
since May 1994. Vice Chairman of the Board of
Directors from 1988 to 1991. Executive Vice President
from 1989 to 1991.
Joseph F. Keithley 81 Founder of the Company in 1946; President to 1973,
Chairman of the Board of Directors from 1955 to 1991.
Philip R. Etsler 46 Vice President Human Resources of the Company since
1990. Director of Personnel from 1986 to 1990.
James B. Griswold 50 Secretary and a Director of the Company since 1988;
partner in the law firm of Baker & Hostetler from 1982
to present.
Hermann Hamm 57 Vice President of European Operations of the Company
since 1986.
Frederick R. Hume 53 Senior Vice President Strategic Planning and Technology
since November 1996. Previously Senior Vice President
Test Instrumentation Group from February 1993 to
October 1996. Vice President Test Instrumentation Group
from August 1992 to February 1993. Vice President
Instrument Division of the Company from May 1988 to
August 1992.
Mark J. Plush 47 Controller since 1982 and Officer of the Company since
1989.
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Executive Officer Age Recent Business Experience
- ----------------- --- --------------------------
Ronald M. Rebner 52 Vice President and Chief Financial Officer of the
Company since 1981.
Gabriel A. Rosica 56 Senior Vice President since February 1996. Previously
Chief Operating Officer of Bailey Controls Company from
August 1994 to January 1996 and Senior Vice President
of Systems Operations of Bailey Controls Company from
January 1992 to July 1994.
Terrence E. Sheridan 56 Vice President Radiation Measurements Division since
1978.
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PART II.
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
The information required by this Item is incorporated herein by
reference under the caption Stock Market Price and Cash Dividends appearing on
page 33 of the Keithley Instruments, Inc. 1996 Annual Report to Shareholders, a
copy of which is filed as Exhibit 13 to this Report.
The approximate number of shareholders of record of Common Shares and
Class B Common Shares, including those shareholders participating in the
Dividend Reinvestment Plan, as of December 17, 1996 was 1,950.
ITEM 6 - SELECTED FINANCIAL DATA.
The information required by this Item is incorporated herein by
reference to the eleven year summary, appearing on pages 34 and 35 of the
Keithley Instruments, Inc. 1996 Annual Report to Shareholders, a copy of which
is filed as Exhibit 13 to this Report.
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
The information required by this Item is incorporated herein by
reference to pages 23 through 25 of the Keithley Instruments, Inc. 1996 Annual
Report to Shareholders, a copy of which is filed as Exhibit 13 to this Report.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Consolidated Financial Statements, appearing on pages 20 through
22 and pages 25 through 31, the Unaudited Quarterly Results of Operations
appearing on page 33 of the Keithley Instruments, Inc. 1996 Annual Report to
Shareholders, together with the report thereon of Price Waterhouse LLP dated
November 14, 1996, appearing on page 32 of the Keithley Instruments, Inc.
Annual Report to Shareholders is filed as Exhibit 13 to this Report.
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
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PART III.
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this item relating to the Directors is
incorporated herein by reference to the information set forth under the caption
Election of Directors in the Company's Proxy Statement to be used in
conjunction with the February 15, 1997 Annual Meeting of Shareholders and filed
with the Securities and Exchange Commission pursuant to Section 14(a) of the
Securities Exchange Act of 1934. The information required for an
identification of executive officers is included on pages 11 and 12 of this
Form 10-K Annual Report.
ITEM 11 - EXECUTIVE COMPENSATION.
The information required by this item relating to executive
compensation is incorporated herein by reference to the information set forth
under the caption Executive Compensation and Benefits in the Company's Proxy
Statement to be used in conjunction with the February 15, 1997 Annual Meeting
of Shareholders and filed with the Securities and Exchange Commission pursuant
to Section 14(a) of the Securities Exchange Act of 1934.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item relating to security ownership
of certain beneficial owners and management is incorporated herein by reference
to the information set forth under the caption Principal Shareholders in the
Company's Proxy Statement to be used in conjunction with the February 15, 1997
Annual Meeting of Shareholders and filed with the Securities and Exchange
Commission pursuant to Section 14(a) of the Securities Exchange Act of 1934.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
James B. Griswold, a Director and nominee for Director, is a partner
in the law firm of Baker & Hostetler. Baker & Hostetler served as general
legal counsel to the Company during the fiscal year ended September 30, 1996
and is expected to render services in such capacity to the Company in the
future.
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PART IV.
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS OF THE COMPANY
The following documents are filed as part of this report:
1. Consolidated Balance Sheet as of September 30, 1996 and 1995.
2. Consolidated Statement of Income for each of the three years ended
September 30, 1996.
3. Consolidated Statement of Cash Flows for each of the three years ended
September 30, 1996.
4. Consolidated Statement of Earnings Reinvested in the Business for each of
the three years ended September 30, 1996.
5. Notes to Consolidated Financial Statements.
6. Report of Independent Accountants dated November 14, 1996.
(a)(2) FINANCIAL STATEMENT SCHEDULES
The following additional information should be read in conjunction with the
Consolidated Financial Statements of the Company described in Item 14(a)(1):
Schedule II Valuation and Qualifying Accounts
Schedules other than those listed above are omitted because they are not
required or not applicable, or because the information is furnished elsewhere
in the consolidated financial statements or the notes thereto.
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(A)(3) INDEX TO EXHIBITS
Page Number
Sequential
Exhibit Numbering
Number Exhibit System
- ------ ------- ------
3(a) Amended Articles of Incorporation, as amended on February 11, 1985.
(Reference is made to Exhibit 3(a) of the Company's Form 10 Registration
Statement (File No. 0-13648) as declared effective on July 31, 1985, which
Exhibit is incorporated herein by reference.)
--
3(b) Code of Regulations, as amended on February 11, 1985. (Reference is made to
Exhibit 3(b) of the Company's Form 10 Registration Statement (File No. 0-
13648) as declared effective on July 31, 1985, which Exhibit is incorporated
herein by reference.) --
3(c) Amended Articles of Incorporation, as amended on February 10, 1996.
(Reference is made to Exhibit 3(c) of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 1996 (File No. 1-9965), which
Exhibit is incorporated herein by reference.) --
4(a) Specimen Share Certificate for the Common Shares, without par value.
(Reference is made to Exhibit 4(a) of the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1988 (File No. 1-9965), which
Exhibit is incorporated herein by reference.) --
4(b) Specimen Share Certificate for the Class B Common Shares, without par value.
(Reference is made to Exhibit 4(b) of the Company's Form 10 Registration
Statement (File No. 0-13648) as declared effective on July 31, 1985, which
Exhibit is incorporated herein by reference.) --
*10(a) 1984 Stock Option Plan, adopted in February 1984. --
*10(c) 1984 Deferred Compensation Plan, adopted in February 1984. --
*Reference is made to the appropriate Exhibits of the Company's Form 10
Registration Statement (File No. 0-13648) as declared effected on July 31,
1985, which Exhibits are incorporated herein by reference.
16
19
Page Number
Sequential
Exhibit Numbering
Number Exhibit System
- ------ ------- ------
10(k) Employment Agreement with Joseph F. Keithley dated September 26, 1988.
(Reference is made to Exhibit 10(k) of the Company's Annual Report on Form
10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
is incorporated herein by reference.)
--
10(l) Employment Agreement with Joseph P. Keithley dated September 26, 1988.
(Reference is made to Exhibit 10(l) of the Company's Annual Report on Form
10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
is incorporated herein by reference.)
--
10(o) Form of Supplemental Executive Retirement Plan, adopted in January 1988.
(Reference is made to Exhibit 10(o) of the Company's Annual Report on Form
10-K for the year ended September 30, 1988 (File No. 1-9965), which Exhibit
is incorporated herein by reference.)
--
10(q) 1992 Stock Incentive Plan, adopted in December 1991. (Reference is made to
Exhibit 10(q) of the Company's Annual Report on form 10-K for the year ended
September 30, 1991 (File No. 1-9965) which Exhibit is incorporated herein by
reference.) --
10(r) 1992 Directors' Stock Option Plan, adopted in December 1991. (Reference is
made to Exhibit 10(r) of the Company's Annual Report on form 10-K for the
year ended September 30, 1991 (File No. 1-9965) which Exhibit is
incorporated herein by reference.) --
10(u) Credit Agreement dated as of May 31, 1994 by and among Keithley Instruments,
Inc. and certain borrowing subsidiaries and the Banks named herein, and NBD
Bank, N.A., as Agent. (Reference is made to Exhibit 10(u) of the Company's
Quarterly Report on form 10-Q for the quarter ended June 30, 1994 (File No.
1-9965) which Exhibit is incorporated herein by reference.)
--
17
20
Page Number
Sequential
Exhibit Numbering
Number Exhibit System
- ------ ------- ------
10(v) Contactless Testing Technology Licensing Agreement between International
Business Machines Corporation and Keithley Instruments, Inc., effective as
of May 26, 1994. (Reference is made to Exhibit 10(v) of the Company's
Annual Report on form 10-K for the year ended September 30, 1994 (File No.
1-9965) which Exhibit is incorporated herein by reference.)
--
10(x) 1996 Outside Directors Deferred Stock Plan. (Reference is made to Exhibit
10(x) of the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1996 (File No. 1-9965), which Exhibit is incorporated herein
by reference.) --
11 Statement Re Computation of Per Share Earnings. 24
13 Annual Report to Shareholders for the Fiscal Year Ended September 30, 1996. 25-59
21 Subsidiaries of the Company. 60
23 Consent of Experts. 61
27 Financial Data Schedule (EDGAR version only). --
ITEM 14(B) REPORTS ON FORM 8-K.
No reports on Form 8-K were filed during the last quarter of the Company's
fiscal year ended September 30, 1996.
ITEM 14(C) EXHIBITS: See "Index to Exhibits" at Item 14(a)(3) above.
ITEM 14(D) FINANCIAL STATEMENT SCHEDULES: Schedules required to be filed in
response to this portion of Item 14 are listed above in Item 14(a)(2).
18
21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Keithley Instruments, Inc.
(Registrant)
By: /s/ Joseph P. Keithley
---------------------------------
Joseph P. Keithley, (Chairman, President and Chief Executive Officer)
Date: December 7, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities on the date indicated.
Signature Title Date
- --------- ----- ----
/s/ Joseph P. Keithley Chairman of the Board of Directors, President and 12/7/96
- ----------------------- Chief Executive Officer
Joseph P. Keithley (Principal Executive Officer)
/s/ Joseph F. Keithley Founder and Director 12/7/96
- ------------------------------
Joseph F. Keithley
/s/ Ronald M. Rebner Vice President and Chief Financial Officer 12/7/96
- -------------------- (Principal Financial and Accounting Officer) and a
Ronald M. Rebner Director
/s/ Dr. Theodore M. Alfred Director 12/7/96
- --------------------------
Dr. Theodore M. Alfred
/s/ Brian R. Bachman Director 12/7/96
- --------------------
Brian R. Bachman
/s/ James T. Bartlett Director 12/7/96
- ---------------------
James T. Bartlett
/s/ Arden L. Bement, Jr. Director 12/7/96
- ------------------------
Dr. Arden L. Bement, Jr.
/s/ James B. Griswold Director 12/7/96
- ---------------------
James B. Griswold
/s/ Leon J. Hendrix, Jr. Director 12/7/96
- ------------------------
Leon J. Hendrix, Jr.
/s/ R. Elton White Director 12/7/96
- ------------------
R. Elton White
19
22
Report of Independent Accountants on
Financial Statement Schedule
To the Board of Directors of
Keithley Instruments, Inc.
Our audits of the consolidated financial statements referred to in our report
dated November 14, 1996 appearing on page 32 of the 1996 Annual Report to
Shareholders of Keithley Instruments, Inc., (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedule listed in
Item 14(a)(2) of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
PRICE WATERHOUSE LLP
Cleveland, Ohio
November 14, 1996
20
23
SCHEDULE II
KEITHLEY INSTRUMENTS, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In Thousands of Dollars)
Column A Column B Column C Column D Column E
- -------- -------- -------- -------- --------
Balance at Charged to Costs Balance at End
Description Beginning of Period and Expenses Deductions (1) of Period
- ----------- ------------------- ---------------- -------------- ---------
For the Year Ended
September 30, 1996:
Valuation allowance for
deferred tax assets $2,606 $467 $79 $2,994
For the Year Ended
September 30, 1995:
Valuation allowance for
deferred tax assets $3,330 $ 80 $ 804 $2,606
For the Year Ended
September 30, 1994:
Valuation allowance for
deferred tax assets $3,314 $ 548 $ 532 $3,330
(1) Represents utilization of foreign tax credits.
21