##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 Form 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2010
 Commission File Number 1-9965
 KEITHLEY INSTRUMENTS, INC.
  Ohio
(State or other jurisdiction of incorporation or organization)
    
    34-0794417
(I.R.S. Employer Identification No.)
 28775 Aurora Road, Solon, Ohio 44139
 Registrants telephone number, including area code: (440) 248-0400
 YES þ NO o
 YES o NOo
  Large accelerated filero
    
    Accelerated filerþ
    
    Non-accelerated filero
    
    Smaller reporting companyo
 YES o NO þ




---



TABLE OF CONTENTS  PART I. FINANCIAL INFORMATIONITEM 1. Financial StatementsCONDENSED CONSOLIDATED BALANCE SHEETSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSITEM 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsITEM 3. Quantitative and Qualitative Disclosure About Market RiskITEM 4. Controls and ProceduresPART II.OTHER INFORMATIONITEM 1. Legal ProceedingsITEM 1A. Risk FactorsITEM 2. Unregistered Sales of Equity Securities and Use of ProceedsITEM 6. ExhibitsSIGNATURESExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  Forward-Looking Statements
      1




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1 Financial Statements.
  
  
 June 30, 2010
    
    
    September 30, 2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    38,867
    
    
    $
    24,114Restricted cash
    
    
    510
    
    
    
    569Short-term investments
    
    
    2,721
    
    
    
    759Refundable income taxes
    
    
    1,229
    
    
    
    466Accounts receivable and other, net
    
    
    15,077
    
    
    
    11,738Inventories:Raw materials
    
    
    5,702
    
    
    
    5,760Work in process
    
    
    985
    
    
    
    613Finished products
    
    
    2,461
    
    
    
    3,564Total inventories
    
    
    9,148
    
    
    
    9,937Deferred income taxes
    
    
    263
    
    
    
    303Assets held for sale
    
    
    1,715
    
    
    
    Prepaid expenses
    
    
    1,818
    
    
    
    1,753Total current assets
    
    
    71,348
    
    
    
    49,639Property, plant and equipment, at cost
    
    
    38,641
    
    
    
    54,081Less-Accumulated depreciation
    
    
    32,886
    
    
    
    42,981Property, plant and equipment, net
    
    
    5,755
    
    
    
    11,100Deferred income taxes
    
    
    708
    
    
    
    748Intangible assets
    
    
    
    
    
    
    910Other assets
    
    
    9,615
    
    
    
    10,705Total assets
    
    $
    87,426
    
    
    $
    73,102Liabilities and Shareholders EquityCurrent liabilities:Short term debt
    
    $
    59
    
    
    $
    Accounts payable
    
    
    5,255
    
    
    
    4,916Accrued payroll and related expenses
    
    
    6,645
    
    
    
    5,648Other accrued expenses
    
    
    4,334
    
    
    
    5,424Income taxes payable
    
    
    1,810
    
    
    
    1,122Total current liabilities
    
    
    18,103
    
    
    
    17,110Long-term deferred compensation
    
    
    2,002
    
    
    
    2,111Long-term income taxes payable
    
    
    3,330
    
    
    
    2,852Other long-term liabilities
    
    
    11,901
    
    
    
    14,419Shareholders equity:Common Shares, stated value $.0125:Authorized  80,000,000; issued and outstanding 
15,007,501 at June 30, 2010 and
14,950,093 at September 30, 2009
    
    
    187
    
    
    
    187Class B Common Shares, stated value $.0125:Authorized  9,000,000; issued and outstanding 
2,150,502 at June 30, 2010 and September 30, 2009
    
    
    27
    
    
    
    27Capital in excess of stated value
    
    
    40,491
    
    
    
    39,121Retained earnings
    
    
    43,463
    
    
    
    28,629Accumulated other comprehensive loss
    
    
    (16,501
    )
    
    
    (15,900
    )Common shares held in treasury, at cost
    
    
    (15,577
    )
    
    
    (15,454
    )Total shareholders equity
    
    
    52,090
    
    
    
    36,610Total liabilities and shareholders equity
    
    $
    87,426
    
    
    $
    73,102
   2




---



##### Table of Contents



For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    30,686
    
    
    $
    23,438
    
    
    $
    88,929
    
    
    $
    78,469Cost of goods sold
    
    
    11,025
    
    
    
    10,953
    
    
    
    31,741
    
    
    
    34,657Inventory write-off and accelerated depreciation
for exit of product line
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,540Gross profit
    
    
    19,661
    
    
    
    12,485
    
    
    
    57,188
    
    
    
    41,272Selling, general and administrative expenses
    
    
    11,960
    
    
    
    11,678
    
    
    
    35,173
    
    
    
    37,952Product development expenses
    
    
    2,993
    
    
    
    3,655
    
    
    
    8,927
    
    
    
    14,341Loss (Gain) on the sale of product line
    
    
    18
    
    
    
    
    
    
    
    (3,068
    )
    
    
    Restructuring and other charges (income)
    
    
    39
    
    
    
    
    
    
    
    (95
    )
    
    
    4,202Operating income (loss)
    
    
    4,651
    
    
    
    (2,848
    )
    
    
    16,251
    
    
    
    (15,223
    )Investment income
    
    
    21
    
    
    
    42
    
    
    
    65
    
    
    
    274Interest expense
    
    
    (8
    )
    
    
    (19
    )
    
    
    (16
    )
    
    
    (47
    )Income (loss) before income taxes
    
    
    4,664
    
    
    
    (2,825
    )
    
    
    16,300
    
    
    
    (14,996
    )Income tax (benefit) provision
    
    
    (942
    )
    
    
    601
    
    
    
    505
    
    
    
    31,068Net income (loss)
    
    $
    5,606
    
    
    $
    (3,426
    )
    
    $
    15,795
    
    
    $
    (46,064
    )Basic earnings (loss) per share
    
    $
    0.36
    
    
    $
    (0.22
    )
    
    $
    1.00
    
    
    $
    (2.95
    )Diluted earnings (loss) per share
    
    $
    0.34
    
    
    $
    (0.22
    )
    
    $
    0.98
    
    
    $
    (2.95
    )Cash dividends per Common Share
    
    $
    .0375
    
    
    $
    .0125
    
    
    $
    .0625
    
    
    $
    .0875Cash dividends per Class B Common Share
    
    $
    .0300
    
    
    $
    .0100
    
    
    $
    .0500
    
    
    $
    .0700
   3




---



##### Table of Contents



For the Nine MonthsEnded June 30,2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    15,795
    
    
    $
    (46,064
    )Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:Gain on sale of product line
    
    
    (3,068
    )
    
    
    Depreciation and amortization
    
    
    1,730
    
    
    
    2,642Non-cash stock compensation
    
    
    1,259
    
    
    
    (303
    )Non-cash restructuring charges and inventory write-down
    
    
    
    
    
    
    4,498Loss on the disposition/impairment of assets
    
    
    220
    
    
    
    92Deferred income taxes
    
    
    (16
    )
    
    
    29,982Other items not affecting outlay of cash
    
    
    87
    
    
    
    158Changes in working capital
    
    
    (6,277
    )
    
    
    3,947Other operating activities
    
    
    (508
    )
    
    
    623Net cash provided by (used in) operating activities
    
    
    9,222
    
    
    
    (4,425
    )Cash flows from investing activities:Capital expenditures
    
    
    (240
    )
    
    
    (1,544
    )Increase (decrease) in Restricted cash
    
    
    59
    
    
    
    (558
    )Proceeds from sale of product line
    
    
    9,000
    
    
    
    Net purchases of short-term investments
    
    
    (1,962
    )
    
    
    (868
    )Proceeds from maturities and sales of investments
    
    
    
    
    
    
    12,500Net cash provided by investing activities
    
    
    6,857
    
    
    
    9,530Cash flows from financing activities:Net borrowings of short-term debt
    
    
    65
    
    
    
    174Cash dividends
    
    
    (959
    )
    
    
    (1,330
    )Repurchase of Common Shares
    
    
    (12
    )
    
    
    (787
    )Proceeds from stock purchase and option plans
    
    
    
    
    
    
    136Excess tax benefits from stock-based compensation arrangements
    
    
    
    
    
    
    92Net cash used in financing activities
    
    
    (906
    )
    
    
    (1,715
    )Effect of exchange rate changes on cash
    
    
    (420
    )
    
    
    79Increase in cash and cash equivalents
    
    
    14,753
    
    
    
    3,469Cash and cash equivalents at beginning of period
    
    
    24,114
    
    
    
    22,073Cash and cash equivalents at end of period
    
    $
    38,867
    
    
    $
    25,542
   4




---



##### Table of Contents



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (In thousands of dollars, except for share data)
 Nature of Operations
  Summary of Significant Accounting Policies
 Basis of Presentation
    Recent Accounting Pronouncements
 Recently Adopted Accounting Guidance
   5




---



##### Table of Contents



Accounting Guidance Not Yet Adopted
   Earnings Per Share
  For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income (loss)
    
    $
    5,606
    
    
    $
    (3,426
    )
    
    $
    15,795
    
    
    $
    (46,064
    )Weighted averages shares outstanding
    
    
    15,772,747
    
    
    
    15,648,996
    
    
    
    15,753,941
    
    
    
    15,625,851Dilutive effect of stock awards
    
    
    495,990
    
    
    
    
    
    
    
    335,429
    
    
    
    Weighted average shares used for
dilutive earnings per share
    
    
    16,268,737
    
    
    
    15,648,996
    
    
    
    16,089,370
    
    
    
    15,625,851Basic earnings (loss) per share
    
    $
    0.36
    
    
    $
    (0.22
    )
    
    $
    1.00
    
    
    $
    (2.95
    )Diluted earnings (loss) per share
    
    $
    0.34
    
    
    $
    (0.22
    )
    
    $
    0.98
    
    
    $
    (2.95
    )
  Comprehensive Income
  For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income (loss)
    
    $
    5,606
    
    
    $
    (3,426
    )
    
    $
    15,795
    
    
    $
    (46,064
    )Unrealized (losses) gains on value of
derivative contracts
    
    
    (81
    )
    
    
    (43
    )
    
    
    75
    
    
    
    (154
    )Net unrealized investment gains, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    442Pension liability adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,730
    )Foreign currency translation adjustments
    
    
    (257
    )
    
    
    282
    
    
    
    (676
    )
    
    
    81Comprehensive income (loss)
    
    $
    5,268
    
    
    $
    (3,187
    )
    
    $
    15,194
    
    
    $
    (63,425
    )
  6




---



##### Table of Contents



Fair Value Measurements
  Level 1
    
    
    Level 2
    
    
    TotalAssetsCash and
cash equivalents (1)
    
    $
    37,499
    
    
    $
    1,368
    
    
    $
    38,867Restricted cash
    
    
    510
    
    
    
    
    
    
    
    510Certificates of deposit (2)
    
    
    
    
    
    
    2,721
    
    
    
    2,721Foreign currency forward contracts (3)
    
    
    
    
    
    
    12
    
    
    
    12$
    38,009
    
    
    $
    4,101
    
    
    $
    42,110
  Level 1
    
    
    Level 2
    
    
    TotalAssetsCash and
cash equivalents (1)
    
    $
    22,444
    
    
    $
    1,670
    
    
    $
    24,114Restricted cash
    
    
    569
    
    
    
    
    
    
    
    569Certificates of deposit (2)
    
    
    
    
    
    
    759
    
    
    
    759$
    23,013
    
    
    $
    2,429
    
    
    $
    25,442LiabilitiesForeign currency forward contracts (3)
    
    $
    
    
    
    $
    170
    
    
    $
    170
 (1)
    
    Consists of cash, money market funds and certificates of deposit having
maturities of less than 90 days.(2)
    
    Included in Short term investments in the unaudited condensed
consolidated balance sheets.(3)
    
    Included in Prepaid expenses or Other accrued expenses in the unaudited
condensed consolidated balance sheets, with related unrecognized gains and losses
being recorded in Accumulated other comprehensive losses until realized, at which
time they are recorded in Cost of goods sold in the condensed consolidated
statement of operations.  Guarantors Disclosure Requirements
 Guarantee of lease
   7




---



##### Table of Contents



Product Warranties
  For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Beginning balance
    
    $
    533
    
    
    $
    506
    
    
    $
    466
    
    
    $
    701Accruals for warranties issued during the period
    
    
    267
    
    
    
    242
    
    
    
    795
    
    
    
    729Accruals related to pre-existing warranties
(including changes in estimates and
expiring warranties)
    
    
    (48
    )
    
    
    (20
    )
    
    
    (127
    )
    
    
    (81
    )Settlements made (in cash or in kind)
during the period
    
    
    (190
    )
    
    
    (222
    )
    
    
    (572
    )
    
    
    (843
    )Ending balance
    
    $
    562
    
    
    $
    506
    
    
    $
    562
    
    
    $
    506
 Repurchase of Common Shares
      8




---



##### Table of Contents



Investments
   Financing Arrangements
  Derivatives and Hedging Activities
   9




---



##### Table of Contents



June 30, 2010
    
    
    September 30, 2009Assets:Contract value
    
    $
    1,462
    
    
    $
    371Fair value
    
    
    1,375
    
    
    
    360Total asset
    
    
    87
    
    
    
    11Liabilities:Contract value
    
    
    2,158
    
    
    
    4,350Fair value
    
    
    2,233
    
    
    
    4,531Total liability
    
    
    (75
    )
    
    
    (181
    )Net asset (liability)
    
    $
    12
    
    
    $
    (170
    )
   For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,Financial Statement Line Item
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Cost of goods sold
    
    $
    (141
    )
    
    $
    157
    
    
    $
    (126
    )
    
    $
    82
  Pension Benefits
   10




---



##### Table of Contents



United States Plan
    
    
    German PlanFor the Three Months
    
    
    For the Three MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Service costs-benefits earned during the period
    
    $
    368
    
    
    $
    367
    
    
    $
    28
    
    
    $
    46Interest cost on projected benefit obligation
    
    
    653
    
    
    
    650
    
    
    
    100
    
    
    
    110Expected return on plan assets
    
    
    (925
    )
    
    
    (934
    )
    
    
    (17
    )
    
    
    (19
    )Amortization of net loss (gain)
    
    
    99
    
    
    
    23
    
    
    
    (4
    )
    
    
    Amortization of prior service cost
    
    
    8
    
    
    
    9
    
    
    
    1
    
    
    
    2Net periodic benefit cost
    
    $
    203
    
    
    $
    115
    
    
    $
    108
    
    
    $
    139
 United States Plan
    
    
    German PlanFor the Nine Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Service costs-benefits earned during the period
    
    $
    1,104
    
    
    $
    1,138
    
    
    $
    92
    
    
    $
    134Interest cost on projected benefit obligation
    
    
    1,958
    
    
    
    1,915
    
    
    
    334
    
    
    
    322Expected return on plan assets
    
    
    (2,774
    )
    
    
    (2,846
    )
    
    
    (57
    )
    
    
    (54
    )Amortization of net loss (gain)
    
    
    298
    
    
    
    31
    
    
    
    (12
    )
    
    
    Amortization of prior service cost
    
    
    23
    
    
    
    49
    
    
    
    4
    
    
    
    4Curtailment expense
    
    
    
    
    
    
    28
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    609
    
    
    $
    315
    
    
    $
    361
    
    
    $
    406
  Stock-based Compensation
   11




---



##### Table of Contents



Compensation costs recorded
  For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Cost of goods sold
    
    $
    18
    
    
    $
    16
    
    
    $
    53
    
    
    $
    (73
    )Selling, general and administrative expenses
    
    
    555
    
    
    
    182
    
    
    
    1,120
    
    
    
    (77
    )Product development expenses
    
    
    36
    
    
    
    35
    
    
    
    85
    
    
    
    (153
    )Stock-based
compensation expense (income), net of tax
    
    $
    609
    
    
    $
    233
    
    
    $
    1,258
    
    
    $
    (303
    )
   Stock option activity
   First Nine Months
    
    
    First Nine MonthsFiscal Year 2010
    
    
    Fiscal Year 2009Expected life (years)
    
    
    4.75
    
    
    
    4.75Risk-free interest rate
    
    
    2.12
    %
    
    
    1.90
    %Volatility
    
    
    63
    %
    
    
    49
    %Dividend yield
    
    
    1.20
    %
    
    
    2.50
    %
 Performance award unitsFiscal 2010 Grant
  Risk-free interest rate
    
    
    1.25
    %Volatility
    
    
    78
    %
  12




---



##### Table of Contents



Performance award unitsGrants prior to Fiscal 2010
     Restricted award units
  Directors equity plans
   13




---



##### Table of Contents



Income Taxes
        14




---



##### Table of Contents



Gain on Sale of RF Product Line
   Severance and Other Restructuring Charges
    Restructuring and other charges:Severance and related benefits
    
    $
    1,052Sales demonstration inventory write-off
    
    
    1,579Write-down of fixed assets
    
    
    341Pension plan curtailment charge
    
    
    28Lease termination charge
    
    
    103,010Inventory write-off and accelerated depreciation for
exit of product line (included in Cost of goods sold)
    
    
    2,540$
    5,550
    BalanceSeptember 30, 2009
    
    $
    2,000Severance charges associated with sale of RF product line
    
    
    669Cash payments made during the period
    
    
    (2,457
    )Adjustments to previously-recorded expense
    
    
    (114
    )BalanceJune 30, 2010
    
    $
    98
  15




---



##### Table of Contents



Geographic Segment Information
  For the Three Months
    
    
    For the Nine MonthsEnded June 30,
    
    
    Ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales:United States
    
    $
    9,371
    
    
    $
    6,308
    
    
    $
    24,903
    
    
    $
    20,065Other Americas
    
    
    554
    
    
    
    424
    
    
    
    1,779
    
    
    
    1,388Germany
    
    
    2,897
    
    
    
    2,804
    
    
    
    9,076
    
    
    
    10,197Other Europe
    
    
    5,570
    
    
    
    4,762
    
    
    
    16,191
    
    
    
    16,814Japan
    
    
    2,359
    
    
    
    1,882
    
    
    
    11,628
    
    
    
    10,462China
    
    
    3,685
    
    
    
    3,750
    
    
    
    11,131
    
    
    
    9,140Other Asia
    
    
    6,250
    
    
    
    3,508
    
    
    
    14,221
    
    
    
    10,403$
    30,686
    
    
    $
    23,438
    
    
    $
    88,929
    
    
    $
    78,469
 At June 30,
    
    
    At September 30,2010
    
    
    2009Long-lived assets:United States
    
    $
    4,724
    
    
    $
    9,751Other
    
    
    1,031
    
    
    
    1,349$
    5,755
    
    
    $
    11,100
 Assets Held for Sale
  Building and improvements
    
    $
    1,296Land
    
    
    401Equipment, furniture and fixtures
    
    
    18BalanceJune 30, 2010
    
    $
    1,715
 Subsequent Event
   16




---



##### Table of Contents



ITEM 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations.
  Business Overview
    Critical Accounting Policies and Estimates
   17




---



##### Table of Contents



Results of Operations
 Third Quarter Fiscal 2010 Compared with Third Quarter Fiscal 2009
     .
     18




---



##### Table of Contents



Nine Months Ended June 30, 2010 Compared with Nine Months Ended June 30, 2009
      19




---



##### Table of Contents



20




---



##### Table of Contents



Financial Condition, Liquidity and Capital Resources
 Working Capital
  June 30
    
    
    September 30Current assets:Cash and cash equivalents
    
    $
    38,867
    
    
    $
    24,114Restricted cash
    
    
    510
    
    
    
    569Short-term investments
    
    
    2,721
    
    
    
    759Refundable income taxes
    
    
    1,229
    
    
    
    466Accounts receivable and other, net
    
    
    15,077
    
    
    
    11,738Total inventories
    
    
    9,148
    
    
    
    9,937Deferred income taxes
    
    
    263
    
    
    
    303Assets held for sale
    
    
    1,715
    
    
    
    Prepaid expenses
    
    
    1,818
    
    
    
    1,753Total current assets
    
    $
    71,348
    
    
    $
    49,639Current liabilities:Short term debt
    
    $
    59
    
    
    $
    Accounts payable
    
    
    5,255
    
    
    
    4,916Accrued payroll and related expenses
    
    
    6,645
    
    
    
    5,648Other accrued expenses
    
    
    4,334
    
    
    
    5,424Income taxes payable
    
    
    1,810
    
    
    
    1,122Total current liabilities
    
    
    18,103
    
    
    
    17,110Working capital
    
    $
    53,245
    
    
    $
    32,529
  Sources and Uses of Cash
  2010
    
    
    2009Cash provided by (used in):Operating activities
    
    $
    9,222
    
    
    $
    (4,425
    )Investing activities
    
    
    6,857
    
    
    
    9,530Financing activities
    
    
    (906
    )
    
    
    (1,715
    )
 Operating activities Working Capital
  21




---



##### Table of Contents



Investing activities Results of Operations,
 Financing activities
  Recent Accounting Pronouncements
 Recently Adopted Accounting Guidance
  Accounting Guidance Not Yet Adopted
    22




---



##### Table of Contents



ITEM 3.
    
    Quantitative and Qualitative Disclosure About Market Risk.
    
 ITEM 4 Controls and Procedures.
    23




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1.
    
    Legal Proceedings.
  
 ITEM 1A.
    
    Risk Factors.
  
 ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
  
 ITEM 6.
    
    Exhibits.
 Exhibits
 ExhibitNumber
    
    Exhibit31.1
    
    
    Certification of Joseph P. Keithley pursuant to Rule 13a-14(a)-15d-14(a).31.2
    
    
    Certification of Mark J. Plush pursuant to Rule 13a-14(a)-15d-14(a).32.1
    +
    
    Certification of Joseph P. Keithley pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.32.2
    +
    
    Certification of Mark J. Plush pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350.
 +
    
    The certifications furnished pursuant to this item will not be deemed filed for
purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the
liability of that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act or the Exchange Act, except to the
extent that the registrant specifically incorporates it by reference.  24




---



##### Table of Contents



KEITHLEY INSTRUMENTS, INC.
(Registrant)Date:  August 9, 2010
    /s/ Joseph P. KeithleyJoseph P. KeithleyChairman, President and Chief Executive Officer
(Principal Executive Officer)Date:  August 9, 2010
    /s/ Mark J. PlushMark J. PlushSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)  25