Highlights of the NVLS conference call not in press release:
Record revs and record profits. Bookings: on historical
method, 434 mil, for year, 1 630 545, sab101: exactly the
same. Shipments in Q4: 425 mil, for year, 1 384 293. Exactly
same for SAB101. Move to rev: historical method,
recognized all of the shipments. Under SAB101, recognize
389.9mil in Q4. Deferred rev: none on historical method.
Under SAB101, 432 mil deferred revenues (same as for
year). Historical: 76cts/share, yr, 2.39$. For SAB, 69ct,
yr 1.29 including 1 time write-off for tax adjustment on
back adjusted profits.
Bookings fell short of projected 450mil at end of november.
Slippage of major order that slipped into january. Happy
to report we did win that business. Otherwise, as planned.
Shipped more than planned by 14mil due to acceleration
of copper and 300mm.
Company at highest level of gross margins in 4 yrs. R&D at
14% (SAB101 and down from 16% for year). SG&A 12.3% of
revs, 1% better than previous Q and for year, 4% better than
previous year. Good improvement showed up in income line.
Details in the bookings: came in like a lion and out like
a lamb. Softness originally seen in Korea now seen in
Taiwan and US. Now see slwodown in telecom in addition to
PC market. Best estimate of future: in Q1, bookings to
decrease approx 30-35% from Q4. For yr, bookings come in
around 1.6 bil. Shipments Q4, 430 mil. From rev standpoint
(SAB101) 478 mil, expecting profit of 68cts/share.
During Q, closed the Gasonix transaction. Consolidated
Q4 (NVLS+GSNX): bookings around 1/2 bil, shipments, 485mil,
revs sab101, approx 440 mil. NVLS believes it is well
positioned when industry recovers growth. Major ramps
starting on 200mm and 300mm copper. Major wins in PVD 200mm
and 300mm --taking market share from AMAT??
Q&A:
SSB. Outlook from US for bookings. Confident from
US. Major win in 300 mm copper, and accelerating at 3 major
factories where we are ttor (what's that??). Anticipating
less of a decline in US than rest of world. Major win
in Europe at the 300mm. Cautious because front end of the
engine (capacity). BElieves NVLS wins most of technology
upgrades but capacity is slowing.
GS: bookings predispose 2nd 1/2 re-accelaration. Why?
See it based on current industry plans for ramping copper
and 300mm into production.
CSFB: Looking at core business excluding copper...
no question gained market share in all core product
lines and copper until the Q4 was not as significant in
growth as has been core product line. But going forward,
copper and pvd are substantive to performance of NVLS.
All top 10 customers are going to copper. Foundries are
also going to copper. Ultimately, copper will be cheaper
and everyone will go to copper including 2nd tier
manufacturers. And what about margins during pause period?
don't anticipate major deterioration of margins...
BS: geographic breakdown of orders. See Taiwan pulling in
horns dramatically short term. Some aggressive players
in US pushing for copper and 300mm so balancing things out.
Japan holding up. Believe industry as a whole will behave
in response to macro-economic pressures. Down 30% next
Q in orders, then flat, then ramp back up.
MSDW: Demand for copper chips is real. Yields equal to
Aluminum. Think transition to copper is significant.
Believes 60-65% of all interconnects in 2005 will be
copper. Also believe will be successful with low-K at 0.13.
Believes NVLS has best solution on market right now.
LB: qualitative standpoint: industry recognizing NVLS as
leader in deposition and made major move in surface
preparation (reason for buying gasonix). no one as strong
as NVLS in 300mm deposition... (true?? amat??)
BAS: guidance for Q1 eps: bookings: 320mil, shipments:
430 mil, revs: 478mil, profits: 68cts/share. PVD wins
are aluminum...
SGC: update on vector tool and how it's doing in low-k.
Help us alot, lowest ownership tool, runs right out of
the box. At this time, only running 300mm applications.
PCM: new tech vs capacity buys at end of this year?
some major players have quicked into full gear for 300mm.
Have not seen alot of cancellations at this time but doesn't
mean it won't happen.
JPM: gasonix has been capacity driven. Will GSNX slow
down NVLS? bought GSNX for its technology rather than
legacy business. Short term, hard to turn into tech leader
in 1st Q. Will take awhile --18 to 24 months before get
flow of products out of GSNX. But short term, bring much
stronger delivery for sales, field and delivery support will
produce immediate leverage in downturn. Will give breathing
time to produce innovative products. Do you feel INTC
may force other companies to invest faster in equip?
Don't think there is much of a chance everybody will make
frenzied investments.
...: can we anticipate breakeven in coming quarters??
will try to maintain a model were don't go below 5% profits.
Historically, never below 7%...
ML: what share count to be using in Q1 NVLS+GSNX? 150mil
b-to-bill was good for GSNX, expect this to continue?
to expect them to outperform the market. Depends on
their large customers. Expect core NVLS to expect less of
a downturn than industry but not GSNX.
...: how to model tungsten business. HDP continue to
gain share in Asia due to low cost. TCVD --vector series
is going extremely well with every layer due to cost
advantage. Our business is less than 10% spares and service.
Recognize tremendous penetration of product because
getting more sales from products due to services. Lowest
cost of ownership. Should we expect vector be 50%
of business? won't say.
AB: comfortable with industry cap ex down 20-25 y/y?
changing by the moment... look at INTC... what think
300mm and copper will be in 2001. From market as a whole,
400 million for copper market. For 300mm, only deposition
piece, probably, 750 million.
JPM: higher deposition rate of innova an advantage at 0.13?
yes sir.
power outage in California!!!! just got disconnected...
AHH: how long for new products to go from the shipment to
revenue line in SAB101? about 120-180 days.
quarterly update will come at the end of february......... |
