$1.20 EPS!
Varian Semiconductor Equipment Associates Reports FY 2001 First Quarter Results
Operating Earnings at Record Level
GLOUCESTER, Mass.--(BUSINESS WIRE)--Jan. 25, 2001-- Varian Semiconductor Equipment Associates, Inc. (NASDAQ: VSEA - news) today announced results, including record operating earnings, for the first quarter of fiscal 2001, ended December 29, 2000.
First quarter revenue totaled $228 million, up 108 percent from $110 million in the previous year's same quarter, and net income reached $40.1 million, or $1.20 per diluted share, compared with $5.3 million, or $0.16 per diluted share in the same quarter of the previous fiscal year. Gross margin increased to 42.5 percent, from 36.4 percent in fiscal 2000's first quarter (revised for FIFO accounting--see note at end of this release).
Richard A. Aurelio, Varian Semiconductor's president and chief executive, said, ``Our financial results are a direct reflection of our focus on customers' needs. Our early introduction of the VIISta single-wafer, common platform of ion implanters has given us a 59 percent share of the total 300-mm ion implant market. Our growth in recurring revenue of 158 percent in calendar 2000, compared with published results of our competitors, also confirms our increase in overall market share.''
``To extend our leadership in 300 mm,'' Aurelio continued, ``we introduced the high energy VIISta 3000 at Semicon Japan in December. This system completes the VIISta platform, extending the energy range to 3.75 MeV - more than twice that of any competing single-wafer implanter. We believe there are several technological advantages to the VIISta platform, most notably incident angle control, as well as economic benefits that offer our customers up to a 25 percent advantage in capital investment and operating costs.''
Ernest L. Godshalk, chief financial officer, explained, ``Our record operating profits are a result of improved gross margins and expense control. We remain optimistic about our long-term prospects because of our gains in market share and increasing profitability. For the near term, in view of the uncertain economic outlook, while we continue to invest in R&D, we are reducing overhead and imposing strict spending controls, which further improve our operating leverage.''
``Our expectations for fiscal 2001 remain high, although our year-over-year growth rate is slowing. As we noted on January 10, we anticipate an annual revenue increase of about 10 percent year-over-year. Currently, we expect second quarter revenue to grow approximately 15 percent above the same period last year.''
Note: On September 30, 2000, the company changed its accounting for domestic inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method to conform to industry practice. Included with this release is a table highlighting what results would have been had the company's prior year been reported on FIFO. The effects of this change for the quarter ended December 31, 1999, and the previous full fiscal year were immaterial.
Varian Semiconductor will hold a conference call, broadcast over the Internet, at 5 p.m. Eastern time today for interested analysts, investors and media, to discuss the company's operating results and outlook for the balance of fiscal 2001. Access to the call is available through the company's web site at www.vsea.com, and replays will be available for two weeks after the call.
About Varian Semiconductor
Varian Semiconductor Equipment Associates is a leading producer of ion implantation equipment used in the manufacture of semiconductors. The company is headquartered in Gloucester, Massachusetts, and operates worldwide. Varian Semiconductor maintains a web site at www.vsea.com. The information contained in our web site is not incorporated by reference into this release, and our web site address is included in this release as an inactive textual reference only.
Note: This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. For this purpose, the statements concerning the industry outlook, the company's sales growth, market share, capacity utilization and technological improvements and benefits, and any statements using the terms ``believes,'' ``anticipates,'' ``expects,'' ``plans'' or similar expressions, are forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: volatility in the semiconductor equipment industry; significant fluctuations in the company's quarterly operating results; risks associated with the company's transition to a new information technology infrastructure; the impact of rapid technological change and the company's dependence on the development and introduction of new products; the company's concentration on ion implantation systems and related products; concentration in the company's customer base and lengthy sales cycles; the highly competitive market in which the company competes; risks of international sales; foreign currency risks; uncertain protection of patent and other proprietary rights; potential environmental liabilities; the company's reliance on a limited group of suppliers; the ability of the company's suppliers to respond to increased demand for parts; the company's dependence on certain key personnel; as well as other risk factors described from time to time in the company's periodic reports and registration statements filed with the Securities and Exchange Commission. The company cannot guarantee any future results, levels of activity, performance or achievement. The company undertakes no obligation to update any of the forward-looking statements after the date of this press release.
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited)
Fiscal Three Months Ended
December 29, December 31,
2000 1999
Revised1
Revenue
Product revenue $ 211,821 $ 97,015
Service revenue 11,072 11,968
Royalties 5,346 810
Total revenue 228,239 109,793
Cost of Revenue
Cost of product and
service revenue 131,325 69,824
Gross Profit 96,914 39,969
Operating Expenses
Research and development 13,865 11,168
Marketing, general and
administrative 25,274 21,481
Total operating expenses 39,139 32,649
Operating earnings 57,775 7,320
Interest income 2,043 773
Earnings before taxes 59,818 8,093
Income tax provision on
earnings 19,740 2,832
Net earnings $ 40,078 $ 5,261
Weighted average shares
outstanding--basic 32,092 30,555
Weighted average shares
outstanding--diluted 33,480 32,472
Net earnings per
share---basic $ 1.25 $ 0.17
Net earnings per
share---diluted $ 1.20 $ 0.16
1. Effective September 30, 2000, the Company changed its method of
valuing domestic inventories from the last-in, first-out (LIFO)
method to the first-in, first-out (FIFO) method. This change had no
impact on net earnings per share for the quarter ended December 31,
1999.
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share data)
December 29, September 29,
2000 2000
----------------------------------------
(Unaudited) Revised1
ASSETS
Current Assets
Cash and cash equivalents $ 133,106 $ 121,692
Accounts receivable, net 190,516 182,396
Inventories, net 163,129 148,234
Other current assets 43,121 17,749
Total Current Assets 529,872 470,071
Property, plant and equipment 108,318 104,525
Accumulated depreciation and
amortization (63,365) (60,770)
Net property, plant and
equipment 44,953 43,755
Other assets 18,889 19,869
Total Assets $ 593,714 $ 533,695
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $ 5,260 $ 5,541
Accounts payable 69,650 63,392
Accrued expenses 89,044 74,309
Product warranty 31,872 28,190
Advance payments from
customers 1,741 4,566
Total Current Liabilities 197,567 175,998
Long-term accrued expenses 5,192 6,792
Deferred taxes 1,325 1,546
Total Liabilities 204,084 184,336
Stockholders' Equity Preferred stock,
par value $.01; authorized
5,000,000 shares, issued none.
Common stock, par value $.01;
authorized 150,000,000 shares,
issued and outstanding
32,103,573 at December 29, 2000
and 32,103,167 at September 29, 2000. 321 321
Capital in excess of par value 223,456 223,263
Retained earnings 165,853 125,775
Total Stockholders' Equity 389,630 349,359
Total Liabilities and Stockholders'
Equity $ 593,714 $ 533,695
1. Effective September 30, 2000, the Company changed its method of
valuing domestic inventories from the last-in, first-out (LIFO)
method to the first-in, first-out (FIFO) method. This change
resulted in a net increase to total assets of $14.2 million for the
year ended September 29, 200
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
REVISED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
(Unaudited; revised for FIFO (1))
Fiscal Three Months Ended
Dec. 31, March 31, June 30, Sept. 29,
1999 2000 2000 2000
Revenue
Product revenue $ 97,015 $141,590 $177,619 $209,995
Service revenue 11,968 12,509 11,481 15,474
Royalties 810 2,114 3,697 3,447
Total revenue 109,793 156,213 192,797 228,916
Cost of Revenue
Cost of product and
service revenue 69,824 93,036 115,763 138,366
Gross Profit 39,969 63,177 77,034 90,550
Operating Expenses
Research and development 11,168 10,818 11,986 13,053
Marketing, general and
administrative 21,481 24,030 24,873 27,679
Total operating
expenses 32,649 34,848 36,859 40,732
Operating earnings 7,320 28,329 40,175 49,818
Other income -- 2,700 -- 16,000
Interest income 773 789 1,533 1,502
Earnings before taxes 8,093 31,818 41,708 67,320
Income tax provision
on earnings 2,832 11,190 13,491 21,559
Net earnings $ 5,261 $ 20,628 $ 28,217 $ 45,761
Weighted average shares
outstanding--basic 30,555 31,066 31,812 32,066
Weighted average shares
outstanding--diluted 32,472 33,730 34,245 34,275
Net earnings per share
---basic $ 0.17 $ 0.66 $0.89 $1.43
Net earnings per share
---diluted $0.16 $0.61 $ 0.82 $1.34
1. Effective September 30, 2000, the Company changed its method of
valuing domestic inventories from the last-in, first-out (LIFO) method
to the first-in, first-out (FIFO) method. This change had no impact on
diluted net earnings per share for the quarter ended December 31,
1999, and resulted in an increase of $.06, $.01, and a decrease of
($.04) on diluted net earnings per share for the quarters ended March
31, 2000, June 30, 2000 and September 29, 2000, respectively.
The above information reflects the revisions to previously
reported information to reflect the change from LIFO to FIFO.
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
REVISED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
(Unaudited; revised for FIFO (1))
Dec. 31, March 31, June 30, Sept. 29,
1999 2000 2000 2000
ASSETS
Current Assets
Cash and cash equivalents $ 53,080 $ 96,756 $ 78,881 $ 121,692
Restricted cash 500 -- -- --
Accounts receivable, net 103,369 114,224 158,185 182,396
Inventories, net 109,062 125,767 140,249 148,234
Other current assets 29,211 29,465 27,759 17,749
Total Current Assets 295,222 366,212 405,074 470,071
Property, plant and
equipment 94,734 95,110 100,963 104,525
Accumulated depreciation
and amortization (56,021) (56,417) (58,075) (60,770)
Net property, plant and
equipment 38,713 38,693 42,888 43,755
Other assets 21,543 19,783 19,213 19,869
Total Assets $ 355,478 $ 424,688 $ 467,175 $ 533,695
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $ 5,787 $ 5,580 $ 5,653 $ 5,541
Accounts payable 30,736 49,606 61,232 63,392
Accrued expenses 77,021 88,979 90,604 74,309
Product warranty 15,929 18,643 20,550 28,190
Advance payments from
customers 3,672 6,450 825 4,566
Total Current Liabilities 133,145 169,258 178,864 175,998
Long-term accrued expenses 7,276 7,376 6,745 6,792
Deferred taxes 1,210 1,216 1,507 1,546
Total Liabilities 141,631 177,850 187,116 184,336
Stockholders' Equity
Total Stockholders' Equity 213,847 246,838 280,059 349,359
Total Liabilities and
Stockholders' Equity $ 355,478 $ 424,688 $ 467,175 $ 533,695
1. Effective September 30, 2000, the Company changed its method of
valuing domestic inventories from the last-in, first-out (LIFO) method
to the first-in, first-out (FIFO) method. This change resulted in a
net increase to total assets of $13.2 million, $15.1 million, $15.7
million and $14.2 million for the quarters ended December 31, 1999,
March 31, 2000, June 30, 1000 and September 29, 2000, respectively.
The above information reflects the revisions to previously
reported information to reflect the change from LIFO to FIFO. |
