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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 5, 1998
Registration No. 333-44237
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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ALPHA INDUSTRIES, INC.
(Exact Name Of Registrant As Specified In Its Charter)
DELAWARE 04-2302115
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
20 SYLVAN ROAD, WOBURN, MASSACHUSETTS 01801 (617) 935-5150
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
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STEVEN R. LONDON, ESQUIRE
BROWN, RUDNICK, FREED & GESMER
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
(617) 856-8200
(Name, Address, Including Zip Code, And Telephone Number,
Including Area Code, Of Agent For Service)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
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SUBJECT TO COMPLETION, DATED MARCH 5, 1998
PROSPECTUS
50,000 SHARES
ALPHA INDUSTRIES, INC.
COMMON STOCK
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All of the 50,000 shares of Common Stock, $.25 par value (the "Common
Stock") of Alpha Industries, Inc. (the "Company") covered by this Prospectus are
issued and outstanding shares which may be offered and sold, from time to time,
by a certain stockholder of the Company (the "Selling Stockholder"). See
"Selling Stockholder."
The Common Stock of the Company is traded on the American Stock Exchange
under the symbol "AHA". On February 26, 1998, the last reported sale price on
the American Stock Exchange for the Common Stock was $15.9375 per share.
The Selling Stockholder has advised the Company that it may sell, from
time to time, all or part of the shares covered by this Prospectus through any
of several methods, including ordinary brokerage transactions or block
transactions on the American Stock Exchange at market prices, or in privately
negotiated transactions at prices agreed upon by the parties. See "Plan of
Distribution."
The Company will not receive any proceeds from the sale of the shares
covered by this Prospectus. The Selling Stockholder has agreed to reimburse the
Company for all expenses incurred in effecting the registration of such shares,
including all registration and filing fees, and legal and accounting fees for
counsel to the Company. The Selling Stockholder will bear all brokerage or
underwriting expenses or commissions, if any, applicable to the shares.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
RELEVANT TO AN INVESTMENT IN THE SHARES OF COMMON STOCK.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is March 5, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, NW, Room 1024, Judiciary Plaza, Washington, D.C. 20549, and at the
Commission's Regional Offices at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048, at prescribed rates. In addition, such reports, proxy statements
and information are available through the Commission's Electronic Data Gathering
and Retrieval System at the Commission's Web Site at http://www.sec.gov. The
Company's Common Stock is traded on the American Stock Exchange, and reports,
proxy statements and certain other information concerning the Company can also
be inspected at the offices of the American Stock Exchange, 20 Broad Street, New
York, New York 10005.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933 with respect to the Common Stock being
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in such
Registration Statement and the exhibits thereto to which reference is hereby
made. The statements in this Prospectus as to the contents of such Registration
Statement are qualified in their entirety by such reference. The Registration
Statement, together with its exhibits, may be inspected without charge at the
Public Reference Section of the Commission in Washington, D.C. at the address
noted above, and copies of all or any part thereof may be obtained from the
Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission pursuant to the Exchange
Act are incorporated herein by reference: (1) the Company's Annual Report on
Form 10-K for the fiscal year ended March 30, 1997; (2) the Company's Quarterly
Reports on Form 10-Q for the fiscal quarters ended June 29, 1997, September 28,
1997 and December 28, 1997; (3) the Company's Proxy Statement used in connection
with the Company's Annual Meeting of Stockholders held on September 8, 1997; and
(4) the description of the Company's Common Stock contained in the Company's
Registration Statement on Form S-3 (Registration No. 33-63857).
All reports and other documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the Common Stock
hereunder shall be deemed to be incorporated by reference herein and to be a
part hereof from the date of the filing of such reports and documents. The
Company will furnish without charge to each person, including any beneficial
owner, to whom this Prospectus is delivered, upon written or oral request of
such person, a copy of any or all of the documents referred to above, excluding
exhibits thereto. Requests for such documents should be submitted in writing to
the Corporate Secretary at the corporate headquarters of the Company at 20
Sylvan Road, Woburn, Massachusetts 01801, or by telephone at (781) 935-5150.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is (or is deemed to be)
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the Registration Statement or this
Prospectus.
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THE COMPANY
The Company designs and manufactures a broad range of radio frequency,
microwave frequency and millimeter wave frequency integrated circuits, ceramic
products, discrete semiconductors, and microwave and millimeter wave components
and subsystems for wireless communications applications. These applications
include cellular telephones, world-wide personal communications services and
personal communications networks, pagers, specialized mobile radio, wireless
data services and global positioning systems. The Company utilizes proprietary
gallium arsenide, ceramic and silicon process technologies to address the needs
of wireless communications original equipment manufacturers for smaller, less
expensive and more power efficient products.
The Company is a Delaware corporation which was organized in 1962. The
Company's principal offices are located at 20 Sylvan Road, Woburn, Massachusetts
01801 and its telephone number is (617) 935-5150.
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating the Company and
its business before purchasing any of the shares of Common Stock offered hereby.
HISTORY OF OPERATING LOSSES; REPOSITIONING OF COMPANY'S BUSINESS
The Company has incurred net losses in three of its last five fiscal
years. During the fiscal year ended March 30, 1997, the Company sustained a net
loss of approximately $15.6 million. The Company's losses in the last fiscal
year were largely the result of an industry-wide over-supply of cellular
telephones and related equipment, especially in the North American cellular
telephone market, as well as operational difficulties at Trans-Tech, Inc., the
Company's ceramic component subsidiary. There can be no assurance that the
Company's effort to reposition itself as a supplier of advanced products to
wireless communications markets will be successful. If revenues from commercial
wireless customers do not continue to grow, or grow less rapidly than expected,
the Company's operating results could be materially and adversely affected.
VARIABILITY OF OPERATING RESULTS
The Company's quarterly and annual results have varied in the past and may
vary significantly in the future due to a number of factors, including:
cancellation or delay of customer orders; market acceptance of the Company's or
its customers' products; variations in manufacturing yields; timing of
announcement and introduction of new products by the Company and its
competitors; changes in revenue and product mix; competition; changes in
manufacturing capacity and variations in the utilization of this capacity;
variations in average selling prices; variations in operating expenses; the long
sales cycles associated with the Company's customer specific products; the
timing and level of product and process development costs; cyclicality of the
semiconductor and ceramic industries; the timing and level of
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nonrecurring engineering revenues and expenses relating to customer specific
products; and changes in inventory levels. Any unfavorable changes in these or
other factors could have a material adverse effect on the Company's operating
results. The Company's expense levels are based, in part, on its expectations as
to future revenue, and certain of these expenses, particularly those relating to
the Company's capital equipment and manufacturing overhead, are relatively fixed
in nature. As a result of the relatively fixed nature of certain of the
Company's expenses, operating results would be disproportionately and adversely
affected by a reduction in revenue. The Company expects that its operating
results will continue to fluctuate in the future as a result of these and other
factors.
CUSTOMER CONCENTRATION
Historically, a significant portion of the Company's sales in each fiscal
period has been concentrated among a limited number of customers. This trend is
accelerating, and in recent periods sales to the Company's major customers as a
percentage of total sales have increased. In fiscal 1997, the Company's direct
sales to Motorola, Inc. ("Motorola"), Nokia OY AB ("Nokia"), L.M. Ericsson
Telefonaktiebolaget ("Ericsson") and Lucent Technologies Inc. ("Lucent") and
their suppliers in the aggregate accounted for approximately 26% of the
Company's sales, with Motorola accounting for approximately 11% of sales. For
the nine months ended December 28, 1997, the Company's direct sales to Motorola
accounted for approximately 24% of the Company's sales during such period. The
Company does not generally enter into long-term contracts with its customers,
and when it does, the contract is generally terminable for the convenience of
the customer. In the event of an early termination or discontinuance of a
contract by one of the Company's major customers, it is unlikely that the
Company will be able to identify an alternative purchaser for that product. The
Company's business, financial condition and operating results have been
materially and adversely affected in the past by the failure of anticipated
orders to materialize and by deferrals or cancellations of orders. If the
Company were to lose one of these major customers, or if orders by a major
customer otherwise were to decrease, the Company's business, financial condition
and operating results would be materially and adversely affected.
DEPENDENCE ON CUSTOMER SPECIFIC PRODUCTS
Most of the Company's products are designed to be incorporated into
specific end-user products. In light of short product life cycles in the
wireless communications industry, the Company's future success depends upon its
ability to select customer specific development projects which will result in
sufficient production volume to enable the Company to recover its development
costs and realize a profit on the project. There can be no assurance that the
Company will be able to select such customer specific projects, or that the
Company's products will be designed into such projects. In addition, OEMs
require that their suppliers design and manufacture components very quickly.
There can be no assurance that the Company will be able to design, manufacture
in large volumes and deliver to its customers high quality, reliable products
within the required time period. In the past, the Company experienced delays in
the production of MMICs, ceramic products and discrete semiconductors under
major contracts with major OEM customers. For example, in fiscal 1996, the
Company experienced delays in the production of ceramic products under a major
contract with Motorola. The Company's ceramic
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filter experienced mechanical difficulty on a new manufacturing line at
Motorola, which delayed the production of the filters. As a result, Motorola
deferred production deliveries under this contract. There can be no assurance
that similar problems will not recur in the future. Any such problems could have
a material and adverse effect on the Company's operating results.
PRODUCT AND PROCESS DEVELOPMENT AND TECHNOLOGICAL CHANGE
The wireless communications industry is characterized by frequent new
product introductions, evolving industry standards, rapid changes in product and
process technologies and new materials and designs. The Company believes that
its future success will depend upon its ability to continue to improve its
product and process technologies and develop new technologies.
The success of the Company's new products is dependent upon many factors,
including factors that are outside the Company's control. These factors include:
the Company's ability to anticipate market requirements in its product
development efforts; market acceptance and continued commercial success of OEM
products for which the Company's products have been designed; the ability to
adapt to technological changes and to support established and emerging industry
standards; successful and timely completion of product development and
commercialization; the ability to maintain acceptable wafer fabrication and
ceramic process yields and manufacturing yields generally; and the ability to
offer new products at competitive prices. No assurance can be given that the
Company's product and process development efforts will be successful or that the
Company's new products or those of its customers will achieve or sustain market
acceptance. In addition, the wireless communications industry is characterized
by end-user demands for increased functionality at ever lower prices. To remain
competitive, the Company must obtain yield and productivity improvements and
costs reductions and must introduce new products which incorporate advanced
features and which therefore can be sold at higher average selling prices. To
the extent that such cost reductions and new product introductions do not occur
in a timely manner or the Company's or its customers' products do not achieve
market acceptance, the Company's operating results could be materially and
adversely affected.
The Company produces its GaAs integrated circuits using a MESFET process.
The Company believes that this process is currently the industry standard, but
other process technologies, such as GaAs pHEMT and GaAs HBT, which may offer
higher efficiencies at comparable costs, may become commercially feasible in the
near future. The Company is currently investing in processes that it believes
will allow it to deliver components with efficiencies and capabilities that will
address the demands of the market. However, there can be no assurance that the
Company's preparations for such a technological change will be successful or
that it will be able to deliver products that meet such market demands and the
alternatives offered by other component suppliers. The failure of the Company to
do so could materially and adversely affect the Company's operating results.
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MANUFACTURING RISKS: PRODUCT QUALITY, PERFORMANCE AND RELIABILITY
The manufacturing processes for the Company's products, in particular its
GaAs monolithic integrated circuits ("MMICs"), are highly complex and precise,
requiring advanced and costly equipment, and are being modified continually in
an effort to improve yields and product performance. The Company expects that
its customers will continue to establish demanding specifications for quality,
performance and reliability that must be met by the Company's products. The
Company has limited experience in high volume manufacturing of certain GaAs
MMICs and ceramic products for certain high volume commercial applications. The
Company has encountered and may in the future encounter development and
manufacturing delays, has from time to time failed and may in the future fail to
meets its customers' contractual specifications, and one or more of its products
have contained and may in the future contain undetected defects or failures when
first introduced or after commencement of commercial shipments. If such delays,
defects or failures occur, the Company could experience lost revenue, resulting
from delays in or cancellations or rescheduling of orders or shipments, product
returns or discounts, or could experience increased costs, including product or
process redesign, warranty expense or costs associated with customer support,
any of which could have a material adverse effect on the Company's operating
results. There can be no assurance that the Company will not in the future
experience significant product quality, performance or reliability problems.
ADOPTION OF GAAS COMPONENTS BY OEMS
Silicon semiconductor technologies are the dominant process technologies
for certain integrated circuits and these technologies continue to improve in
performance. Many of the Company's OEM customers utilize silicon devices and
currently are using or evaluating the use of GaAs. To date, certain OEMs have
been reluctant to utilize GaAs technologies because of perceived risks relating
to GaAs technology, including a lack of experience in designing systems with
GaAs products, unfamiliar and more expensive manufacturing processes and
uncertainties about the relative cost effectiveness of GaAs products compared to
silicon devices. There can be no assurance that GaAs technology will achieve
widespread market acceptance.
The production of GaAs integrated circuits is more costly than the
production of silicon devices. This cost differential relates primarily to
higher costs of the raw wafer material, lower production yields associated with
the relatively immature GaAs technology and higher unit costs associated with
lower production volumes. The Company believes its costs of producing GaAs
integrated circuits will continue to exceed the costs associated with the
production of silicon devices. As a result, the Company must offer devices which
provide superior performance to that of silicon for specific applications in
order to be competitive with silicon devices. There can be no assurance that the
Company can continue to identify markets which require performance superior to
that offered by silicon solutions, or that the Company will continue to offer
products which provide sufficiently superior performance to offset the cost
differential.
MANAGEMENT OF GROWTH
The growth in the Company's business, and its continuing transition from
military to commercial sales, has placed, and is expected to continue to place,
a significant strain on the
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Company's personnel, management and other resources. The Company has recently
hired, and will be required to hire in the future, additional key employees. In
order to manage any future growth effectively, the Company will, among other
things, be required to continue to improve its manufacturing facilities;
attract, train, motivate and manage employees successfully; and continue to
improve its operational and financial systems. There can be no assurance that
the Company will be successful in these respects. The Company anticipates that
any future growth of its business will require increased utilization of the
Company's manufacturing capacity in Woburn, Massachusetts, including increasing
the number of shifts, during which its manufacturing facilities are operational.
Further, any such future growth could require improvement or expansion of the
Company's existing manufacturing facilities. Expansion or upgrade of the
Company's manufacturing facilities will entail substantial capital expenditures.
Lead times for certain capital equipment are long, and modification of the
Company's facilities and installation of such equipment is a complex process
which could disrupt the Company's facilities and installation of such equipment
is a complex process which could disrupt the Company's ongoing manufacturing
operations. Delays in increasing its manufacturing capacity could limit the
ability of the Company to respond to the rapid design and production cycles
required by its customers. Moreover, there can be no assurance that the Company
will be able to secure sources of capital adequate to fund the necessary
expenditures. The Company could experience product quality, performance or
reliability problems and development and manufacturing delays in connection with
any such increase in utilization of such expansion or upgrade of the Company's
manufacturing capacity. The occurrence of any such problems or the inability of
the Company otherwise to manage any future growth effectively could materially
and adversely affect the Company's operating results.
ENVIRONMENTAL REGULATIONS
The Company is subject to a variety of federal, state and local laws,
rules and regulations related to the use, handling discharge or disposal of
toxic, volatile or other hazardous chemicals used in its manufacturing process
and to the presence of hazardous chemicals on properties owned or operated by
the Company. The failure to comply with present or future environmental
regulations could result in substantial fines being imposed on the Company,
suspension of production or a cessation of operations. The Company has been
engaged in environmental assessment and remediation activities at its Adamstown,
Maryland facility since 1989, due to contamination of groundwater at such
facility. In 1989, the Company entered into a consent decree with the State of
Maryland Department of Environmental Protection pursuant to which it had until
1995 operated a groundwater remediation system. Based on continued satisfactory
groundwater test results, the Company suspended groundwater monitoring in 1997
and has applied for permission to remove the monitoring wells. In addition, the
Company has been notified by federal and state environmental agencies of its
potential liability with respect to one Superfund site, to which small
quantities of the Company's hazardous waste were shipped. There can be no
assurance that any liability concerning the Superfund site will not have a
material adverse effect on the Company. However, the Company believes that its
volumetric contribution of waste to the Superfund site is de minimis and that
the extent of its liability with respect to this site is not likely to be
material. The Company settled another similar Superfund site claim during the
fiscal year ended March 30, 1997 for a nominal amount. The Company
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could be required to acquire significant equipment, or incur substantial other
expenses in order to comply with environmental regulations. Any failure by the
Company to comply with applicable law in the use, handling or disposal of
hazardous substances or in management of real property could subject the Company
to substantial future liabilities.
DEPENDENCE ON KEY PERSONNEL
The Company's future success depends in large part on the continued
service of its key technical, marketing and management personnel, and on its
ability to identify, attract and retain qualified technical personnel,
particularly highly skilled design, process and test engineers involved in the
manufacture of existing products and the development of new products and
processes The competition for such personnel is intense, and the loss of key
employees could have a material adverse effect on the Company.
CYCLICALITY OF THE COMPANY'S MARKETS
While the semiconductor and ceramic markets have in the past experienced
overall growth, they have historically been characterized by wide fluctuations
in product supply and demand. From time to time, these industries have also
experienced significant downturns, often in connection with, or in anticipation
of, maturing product cycles and declines in general economic conditions. These
downturns have been characterized by diminished product demand, production
overcapacity and subsequent accelerated price erosion, and in some cases have
lasted for extended periods of time. The Company's business may in the future be
materially and adversely affected by industry-wide fluctuations. The Company's
continued success will depend in large part on the continued growth of the
wireless communications industry. Certain of the Company's major OEM customers
have experienced fluctuations in demand for certain of their cellular products.
No assurance can be given that the Company will not be adversely affected in the
future by cyclical conditions in the wireless communications industry.
LIMITED SOURCES OF MATERIALS AND SERVICES
The Company currently procures certain components and services for its
products from single or limited sources. For example, the Company currently
procures GaAs substrates, a critical raw material, from only two sources. In
addition, excluding the GaAs wafers it produces internally, the Company
outsources the fabrication of GaAs wafers to a single external foundry. Further,
the Company currently procures silicon substrates for semiconductors and certain
chemical powders for ceramic manufacturing from single sources. The Company
purchases these materials and services on a purchase order basis, does not carry
significant inventories and does not have any long-term supply contracts with
its source vendors. The inability of the Company to obtain these materials in
required quantities would result in significant delays or reductions in product
shipments, which would materially and adversely affect the Company's operating
results. The Company from time to time experiences delays in receiving products
from certain of its vendors and no assurance can be given that similar problems
will not recur. If the Company were to change certain of its vendors, the
Company would be required to requalify the components supplied by such vendors.
Requalification could prevent or delay product shipments, which would materially
and adversely affect the Company's operating results. Additionally,
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prices could increase significantly in connection with changes of vendors. The
Company's reliance on single and limited sources involves several additional
risks, including reduced control over the price, timely delivery, reliability
and quality of the components. Any inability of the Company to obtain timely
deliveries of materials of acceptable quality, or a significant increase in the
prices of materials, could materially and adversely affect the Company's
operating results.
DEPENDENCE ON ASSEMBLY SUBCONTRACTORS
The Company uses assembly subcontractors located outside the United States
to package and wirebond certain large volume orders of integrated circuits. The
Company attempts to maintain more than one qualified service supplier for each
assembly process, but has been unable at times to achieve this goal because of
minimum volume requirements, service quality issues or other factors. The
Company has, from time to time, experienced problems procuring assembly
services, and no assurance can be given that similar problems will not recur.
The Company's inability to obtain sufficient high quality and timely assembly
service, or the loss of any of its current assembly vendors, would result in
delays or reductions in product shipment, and/or reduced product yields, any of
which would materially and adversely affect the Company's operating results.
COMPETITION
Wireless communications markets are intensely competitive and are
characterized by rapid technological change, rapid product obsolescence and
price erosion. Currently, the Company competes primarily with manufacturers of
high performance GaAs, MMICs, discrete silicon semiconductors, ceramic filters
and other ceramic products and microwave and millimeter wave components and
subsystems. The Company expects increased competition both from existing
competitors and others which may enter these markets, as well as potential
future competition from companies which may offer new or emerging technologies,
such as surface acoustic wave filters, silicon germanium and other silicon
technologies. In addition, many of the Company's customers, particularly its
largest customers, have or could acquire the capability to develop or
manufacture products competitive with those that have been or may be developed
or manufactured by the Company. The Company's future operating results may
depend in part upon the extent to which these customers elect to purchase from
outside sources rather than develop and manufacture their own systems. A number
of the Company's competitors have significantly greater financial, technical,
manufacturing and marketing resources than the Company. The ability of the
Company to compete successfully depends in part upon the ability of the Company
to develop price competitive, high quality solutions for OEMs and the extent to
which customers select the Company's products over competitors' products for
their systems. There can be no assurance that the Company will be able to
compete successfully in the future.
GOVERNMENT CONTRACTS
Although the Company has reduced its dependence upon sales to the United
States and foreign governments, a significant portion of the Company's revenues
continue to be derived from such sales. The Company estimates that approximately
29%, 24%, and 21% of the Company's new orders were derived from United States
and foreign military and defense related
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sources in fiscal 1995, 1996, and 1997, respectively. Significant reductions or
delays in procurements of the Company's products by the United States or any
foreign government would have a material adverse effect on the Company's
operating results. Generally, the United States Government and its contractors
and subcontractors may terminate their contracts with the Company for cause or
for convenience, upon certain terms and conditions. The Company has in the past
experienced termination of government contracts. There can be no assurance that
termination of contracts will not occur in the future. Termination of government
contracts or subcontracts having a significant dollar value would have a
material adverse effect on the Company's operating results.
GOVERNMENTAL REGULATION OF COMMUNICATIONS INDUSTRY
The wireless communications industry is heavily regulated. The sale of
equipment by OEMs who purchase the Company's products may be materially and
adversely affected by governmental regulatory policies, the imposition of common
carrier tariffs or taxation of telecommunications services. The delays inherent
in the governmental approval process may in the future cause the cancellation,
postponement or rescheduling of the installation of wireless communications
systems. These delays may have a material adverse effect on the Company's
operating results.
DIFFICULTY IN PROTECTING INTELLECTUAL PROPERTY
The Company's ability to compete is affected by its ability to protect its
proprietary information. The Company relies primarily on trade secret laws,
confidentiality procedures and licensing arrangements to protect its
intellectual property rights. In addition, where appropriate, the Company seeks
patent protection. The Company currently has patents granted and pending in the
United States, and intends to seek further patents on its technology. There can
be no assurance that patents will issue from any of the Company's pending or any
future applications or that any claims allowed from such applications will be of
sufficient scope or strength, or be issued in all countries where the Company's
products can be sold, to provide meaningful protection or any commercial
advantage to the Company. Also, competitors of the Company may be able to design
around the Company's patents. The laws of certain foreign countries in which the
Company's products are or may be developed, manufactured or sold may not protect
the Company's products or intellectual property rights to the same extent as do
the laws of the United States and thus make the possibility of piracy of the
Company's technology and products more likely. Although the Company intends to
defend its intellectual property, there can be no assurance that the steps taken
by the Company to protect its proprietary information will be adequate to
prevent misappropriation of its technology or that the Company's competitors
will not independently develop technologies that are substantially equivalent or
superior to the Company's technology.
INTELLECTUAL PROPERTY CLAIMS
The semiconductor industry is characterized by vigorous protection and
pursuit of intellectual property rights, which has resulted in significant and
often protracted and expensive litigation. Although there are currently no
pending intellectual property claims or litigation against
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the Company, the Company from time to time may be notified of claims that the
Company may be infringing patents or other intellectual property rights owned by
third parties. If it is necessary or desirable, the Company may seek licenses
under patents or other intellectual property rights asserted by others, or may
attempt to develop non-infringing technology. However, there can be no assurance
that licenses will be offered or that the terms of any offered licenses will be
acceptable to the Company, or that the Company will be successful in developing
non-infringing technology. The failure to obtain a license from a third party
for technology used by the Company could cause the Company to incur substantial
liabilities and to suspend the manufacture of products. Furthermore, the Company
may initiate claims or litigation against third parties for infringement of the
Company's proprietary rights, or to establish the validity of the Company's
proprietary rights. Litigation by or against the Company could result in
significant expense to the Company and divert the efforts of the Company's
technical and management personnel, whether or not such litigation results in a
favorable determination for the Company. In the event of an adverse result in
any such litigation, the Company could be required to pay substantial damages,
cease the manufacture, use and sale of infringing products, expend significant
resources to develop non-infringing technology, discontinue the use of certain
processes or obtain licenses to the infringing technology. There can be no
assurance that the Company would be successful in such development or that such
licenses would be available on reasonable terms, and any such development or
license could require expenditures by the Company of substantial time and other
resources. In the event that any third party makes a successful claim against
the Company or its customers, and a license is not made available to the Company
on commercially reasonable terms, the Company's business, financial condition
and operating results would be adversely affected.
RISKS OF INTERNATIONAL SALES
Sales outside of the United States were approximately $23.3 million, $30.8
million and $32.1 million in fiscal 1995, 1996 and 1997, respectively.
International sales involve a number of inherent risks, including imposition of
government controls, currency exchange fluctuations, potential insolvency of
international distributors and representatives, reduced protection for
intellectual property rights in some countries, the impact of recessionary
environments in economies outside the United States, political instability and
generally longer receivables collection periods, as well as tariffs and other
trade barriers. In addition, due to the technological advantage provided by GaAs
in many military applications, a substantial portion of the Company's sales
outside of North America must be licensed by the Bureau of Export Administration
of the United States Department of Commerce or the Office of Defense Trade
Controls of the United States Department of State. Although to date the Company
has experienced no difficulty in obtaining these licenses, failure to obtain
such licenses in the future could have a material adverse effect on the
Company's operating results. Furthermore, because most of the Company's foreign
sales are denominated in United States dollars, the Company's products become
less price competitive in countries whose currencies decline in value against
the dollar. There can be no assurance that these factors will not have an
adverse effect on the Company's future international sales and, consequently, on
the Company's business, operating results and financial condition.
-11-
13
IMPEDIMENTS TO CHANGES IN CONTROL
The Company's Restated Certificate of Incorporation and Amended and
Restated Bylaws include certain provisions that may have the effect of
discouraging or preventing a change in control of the Company. These provisions
could limit the price that stockholders of the Company might receive in the
future for shares of the Common Stock.
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of the shares of Common Stock has recently been and is
likely to continue to be highly volatile and materially affected by factors such
as fluctuations in the Company's operating results, announcements of
technological innovations or new products by the Company or its competitors,
governmental regulatory action, developments with respect to patents or
proprietary rights, general market conditions and other factors. In addition,
the stock market has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. In the event that in some future quarter the Company's net sales or
operating results were to be below the expectations of public market securities
analysts and investors, the price of the Company's Common Stock could be
materially and adversely affected.
USE OF PROCEEDS
The proceeds from the sale of the shares of Common Stock offered hereby
will be the property of the Selling Stockholder and will be used by it in its
discretion. No part of the proceeds will be received by the Company.
SELLING STOCKHOLDER
Silicon Valley Bancshares (the "Selling Stockholder") is selling the
shares of Common Stock offered hereby. The 50,000 shares of Common Stock are
issuable upon exercise by the Selling Stockholder of a certain Stock Purchase
Warrant dated April 1, 1994 (the "Warrant"). Under the terms of the Warrant, in
the event that the Company registers any of its securities under the Securities
Act of 1933, as amended (the "Act"), the Selling Stockholder has the right to
require the Company to register the shares issuable pursuant to the Warrant,
subject to certain limitations, as set forth in the Warrant. Although the
Company is not otherwise currently registering any of its securities under the
Act, the Company has agreed to register the shares issued under the Warrant
pursuant to an informal agreement with the Selling Stockholder. Silicon Valley
Bank, an affiliate of the Selling Stockholder, received the Warrant in
connection with a loan from Silicon Valley Bank to the Company. Silicon Valley
Bank recently transferred the Warrant to the Selling Stockholder. The Company
currently has a $7.5 million working capital line of credit from Silicon Valley
Bank and another bank which expires in September 1999. The Company has not
received any consideration from the Selling Stockholder or its affiliates for
its agreement to register the 50,000 shares of Common Stock issuable upon
exercise of the Warrant, although the Selling Stockholder has agreed to
reimburse the Company for its costs and expenses in connection with such
registration. As of March 5, 1998, a total of 50,000 shares of Common Stock
were beneficially owned by the Selling Stockholder, all of
-12-
14
which may be offered by the Selling Stockholder under this Prospectus. This
information is based upon information received from or on behalf of the Selling
Stockholder.
PLAN OF DISTRIBUTION
The price and manner of sale of the shares of Common Stock to be offered
hereunder are in the sole discretion of the Selling Stockholder. The shares of
Common Stock offered hereby may be offered through any of several methods, such
as ordinary brokerage transactions or block transactions on the American Stock
Exchange at market prices, or in privately negotiated transactions at prices
agreed upon by the parties. Neither the Company nor, to the knowledge of the
Company, the Selling Stockholder, has any agreement, arrangement or
understanding with any broker or dealer entered into prior to the effective date
of the Registration Statement of which this Prospectus is a part with respect to
the sale of the Common Stock offered hereby.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for the
Company by Messrs. Brown, Rudnick, Freed & Gesmer, One Financial Center, Boston,
Massachusetts 02111. Certain members of such firm beneficially own a nominal
number of shares of Common Stock.
EXPERTS
The consolidated financial statements and schedule of the Company
appearing in its Annual Report on Form 10-K for the year ended March 30, 1997,
have been audited by KPMG Peat Marwick LLP, independent auditors, as set forth
in their report included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon authority of such firm as experts in
accounting and auditing.
-13-
15
================================================================================
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or the Selling Stockholder. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than those specifically offered hereby or of any securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make an offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances create an implication
that the information herein is correct as of any time subsequent to its date.
---------------------
TABLE OF CONTENTS
---------------------
PAGE
Available Information............................................. 2
The Company....................................................... 3
Risk Factors...................................................... 3
Use of Proceeds................................................... 12
Selling Stockholder............................................... 12
Plan of Distribution.............................................. 13
Legal Matters..................................................... 13
Experts........................................................... 13
================================================================================
================================================================================
50,000 SHARES
ALPHA INDUSTRIES, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
March 5, 1998
================================================================================
-14-
16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the fees and expenses payable in
connection with the distribution of the Common Stock. The Selling Stockholder
has agreed to reimburse the Company for these fees and expenses.
SEC Registration Fee............................. $ 250
Accounting Fees and Expenses..................... 2,500*
Legal Fees and Expenses.......................... 15,000*
Miscellaneous.................................... 2,500*
-------
TOTAL........................................ $20,250*
- --------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Company's Restated Certificate of Incorporation
eliminates the personal liability of directors to the Company or its
stockholders for monetary damages for breaches of their fiduciary duty (subject
to certain exceptions, such as breaches of the duty of loyalty to the Company or
its stockholders), and provides that the Company may indemnify its officers and
directors to the full extent permitted by law. The Company's Amended and
Restated By-Laws include provisions for mandatory indemnification of its
officers and directors provided certain conditions are met. Section 145 of the
General Corporation Law of the State of Delaware authorizes a corporation to
indemnify directors, officers, employees or agents of the corporation in
non-derivative suits if such party acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, as determined in
accordance with the Delaware General Corporation Law. Section 145 further
provides that indemnification shall be provided if the party in question is
successful on the merits or otherwise.
The effect of these provisions would be to permit such indemnification by
the Company for liabilities arising under the Securities Act of 1933, as
amended, to the extent permitted under the Act.
The Company has directors' and officers' liability insurance.
II-1
17
ITEM 16. EXHIBITS
Exhibit
Number Description
------- -----------
(3)(a) Restated Certificate of Incorporation (Filed as Exhibit 3(a)
to Registration Statement on Form S-3 (Registration
No. 33-63857)).*
(3)(b) Amended and Restated By-laws dated April 30, 1992 (Filed as
Exhibit 3(b) to the Annual Report on Form 10-K for the fiscal
year ended March 29, 1992).*
(4)(a) Specimen Certificate of Common Stock (Filed as Exhibit 4(a) to
Registration Statement on Form S-3 (Registration
No. 33-63857).*
(4)(b) Stock Purchase Warrant for 50,000 shares of the Registrant's
Common Stock issued to Silicon Valley Bank as of April 1,
1994 (Filed as Exhibit 4(i) to the Quarterly Report on
Form 10-Q for the quarter ended July 3, 1994).*
(5) Opinion of Brown, Rudnick, Freed & Gesmer.
(23)(a) Consent of Brown, Rudnick, Freed & Gesmer (included in
Exhibit (5)).
(23)(b) Consent of KPMG Peat Marwick LLP.
(24) Power of Attorney (included on Signature Page of this
Registration Statement).
- ----------
* In accordance with Rule 411 promulgated pursuant to the Securities Act of
1933, as amended, reference is made to the documents previously filed with
the Securities and Exchange Commission which are incorporated by reference
herein.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution and not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating
II-2
18
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Amendment No. 2
to this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Woburn, Commonwealth of Massachusetts,
on the 5th day of March, 1998.
ALPHA INDUSTRIES, INC.
By: /s/ Thomas C. Leonard
--------------------------------------
Thomas C. Leonard
Chief Executive Officer, President and
Director
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman March 5, 1998
- ---------------------------
George S. Kariotis
/s/ Thomas C. Leonard President, Chief Executive March 5, 1998
- --------------------------- Officer and Director
Thomas C. Leonard (Principal Executive Officer)
/s/ Paul E. Vincent Vice President, Chief Financial March 5, 1998
- --------------------------- Officer and Treasurer
Paul E. Vincent
20
(Principal Financial and
Principal Accounting Officer)
* Director March 5, 1998
- ---------------------------
Arthur Pappas
* Director March 5, 1998
- ---------------------------
Martin J. Reid
* Director March 5, 1998
- ---------------------------
Raymond Shamie
* Director March 5, 1998
- ---------------------------
Sidney Topol
* Director March 5, 1998
- ---------------------------
Charles A. Zraket
* By: /s/ Thomas C. Leonard
------------------------
Thomas C. Leonard
Attorney-in-fact,
pursuant to power of
attorney previously
filed as part of this
Registration Statement
21
EXHIBIT INDEX
Exhibit Sequential
Number Description Page No.
- ------- ----------- ----------
(3)(a) Restated Certificate of Incorporation (Filed as Exhibit 3(a) to *
Registration Statement on Form S-3 (Registration No. 33-63857)).
(3)(b) Amended and Restated By-laws dated April 30, 1992 (Filed as *
Exhibit 3(b) to the Annual Report on Form 10-K for the fiscal year
ended March 29, 1992).
(4)(a) Specimen Certificate of Common Stock (Filed as Exhibit 4(a) to *
Registration Statement on Form S-3 (Registration No. 33-63857).
(4)(b) Stock Purchase Warrant for 50,000 shares of the Registrant's Common *
Stock issued to Silicon Valley Bank as of April 1, 1994 (Filed as
Exhibit 4(i) to the Quarterly Report on Form 10-Q for the quarter
ended July 3, 1994).
(5) Opinion of Brown, Rudnick, Freed & Gesmer. **
(23)(a) Consent of Brown, Rudnick, Freed & Gesmer ***
(23)(b) Consent of KPMG Peat Marwick LLP.
(24) Power of Attorney **
- ----------
* In accordance with Rule 411 promulgated pursuant to the Securities Act of
1933, as amended, reference is made to the documents previously filed with
the Securities and Exchange Commission which are incorporated by reference
herein.
** Previously filed and not refiled herewith.
*** Included in Exhibit (5)
1
EXHIBIT (23)(B)
ACCOUNTANTS' CONSENT
The Board of Directors of Alpha Industries, Inc.:
We consent to the incorporation herein by reference of our report dated May 9,
1997 included in Alpha Industries, Inc.'s Annual Report on Form 10-K for the
fiscal year ended March 30, 1997 and to the reference to our Firm under the
heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Boston, Massachusetts
March 4, 1998