Cymer Reports First Quarter 2004 Revenue and Earnings
SAN DIEGO, Apr 20, 2004
Cymer, Inc. (Nasdaq NM: CYMI), the world's leading supplier of deep ultraviolet (DUV) light sources used in
semiconductor manufacturing, today announced operating results for the first quarter ended March 31, 2004.
Among the highlights for the first quarter, both revenue and gross margin exceeded the updated guidance
Cymer provided on March 8, 2004.
For the first quarter of 2004, net income totaled $7,156,000, equal to earnings of $0.19 per share (diluted),
compared to a net loss of $3,362,000, equal to a loss of $0.10 per share (diluted), in the first quarter of 2003. On
a sequential basis, first quarter 2004 net income compared to net income of $1,674,000, equal to earnings of
$0.04 per share (diluted) in the fourth quarter of 2003.
Total revenue for the first quarter of 2004 was $87,921,000, a 30 percent increase over total revenue of
$67,393,000 posted in the first quarter of 2003, and a sequential 21 percent increase over $72,430,000 in total
revenue in the fourth quarter of 2003. Revenue for the first and fourth quarters of 2003 has been changed to
reflect a reclassification of certain externally funded research and development (R&D) amounts. These
amounts are now offset against R&D expenses.
Commenting on some of the highlights of the first quarter, Bob Akins, Cymer's chief executive officer, said,
"The first quarter of 2004 turned out better than we had anticipated even as recently as our quarterly update
in early March. Revenue for the quarter grew 21 percent over fourth quarter 2003 due to increased light
source shipments and, late in the quarter, stronger than forecasted demand for consumables and spares to
support the record level light source utilization. The light source product mix was heavily weighted toward
krypton fluoride (KrF) products, reflecting chipmakers' need to expand capacity. Average selling prices (ASP)
were down compared to the fourth quarter of last year as anticipated due to the product mix shift. Our gross
margin for the first quarter of 2004 came in above recent guidance, and we continued to aggressively control
operating expenses.
"We recognized revenue on 64 light sources in the first quarter of 2004 compared to 42 light sources in the
fourth quarter of 2003," Akins continued. "Cymer installed 65 light sources in the first quarter, bringing our
total installed base at chipmakers and other end users to 2,282 units. We estimate that the rolling
four-quarter share of total Cymer light sources installed at chipmakers as of March 31 was approximately 85
percent, compared to 87 percent at the end of 2003, due primarily to competitiveness in the mature segment
of the KrF market."
In the first quarter, technology buys of advanced argon fluoride (ArF) light sources made up 23 percent of
unit shipments, while capacity buys of KrF products made up 77 percent. Because the product mix was
heavily weighted toward KrF light sources that have lower selling prices than advanced ArF light sources,
the first quarter's ASP declined, on a currency adjusted basis, to $805,000 from $953,000 in the fourth quarter
of 2003. Non-systems product revenue, which consists of upgrades, consumables and spare parts and
service, represented 40 percent of first quarter 2004 revenue compared to 42 percent of fourth quarter 2003
revenue, and on a dollar basis reached the highest quarterly level in Cymer's history, indicative of high light source utilization rates.
Nancy Baker, Cymer's chief financial officer, stated, "Product gross margin grew to 41 percent during the
first quarter of 2004 from 38 percent in the fourth quarter of 2003. The increase in the first quarter's gross margin resulted from a number of factors, including the improved manufacturing efficiencies for the XLA 100
and the reduction of its materials costs, as well as overall product mix, improved production yields and our
increased factory utilization."
Cymer reported operating income of $10,905,000, or 12 percent of revenue in the first quarter of 2004,
compared to operating income of $5,202,000, or 7 percent of revenue, in the fourth quarter of 2003. First
quarter 2004 bookings of $89,550,000 yielded a book-to-bill ratio of 1.02, and were approximately 33 percent
ahead of fourth quarter 2003 bookings of $67,452,000 which yielded a book-to-bill of 0.92. The first quarter
2004 backlog rose to $105,506,000, which included 117 light sources, from a fourth quarter 2003 backlog of
$103,877,000, which included 108 light sources.
Cash and cash equivalents and short- and long-term investments totaled $398,937,000 as of March 31, 2004.
Capital spending for the first quarter of 2004 totaled $4,435,000 compared to $7,274,000 in the fourth quarter of
2003. Depreciation and amortization for the first quarter of 2004 totaled $6,909,000 compared with $7,122,000 in
the fourth quarter of 2003.
Corporate Outlook
Commenting on Cymer's outlook, Akins noted, "We are particularly well positioned to make the most of this
semiconductor industry upturn because of the key investments we made over the last three years, including:
our new manufacturing facilities in Korea and San Diego; our new MOPA technology and the XL platform;
and our ongoing work to improve business processes that leverage the efficiency of our workforce. As we
enter the second quarter we continue to expect that 2004 will be characterized by sequential quarterly
increases in light source unit shipments. At our chipmaker customers, high light source utilization levels
continue to drive our consumables and spares activity, and we expect this high activity level to persist
throughout this year. Overall we continue to look forward to a record-setting revenue year for Cymer in 2004."
Based on information available at this time, Cymer is currently providing the following guidance for the
second quarter of 2004:
-- We currently estimate that total product revenue in the second quarter of 2004 will be up between 5 percent and 10 percent from first quarter 2004 revenue.
-- We are forecasting that foreign currency adjusted ASPs will be down from the first quarter 2004 ASP to approximately $745,000, which reflects a product mix shifting more heavily toward KrF capacity tools in the second quarter. We expect ASPs to increase in the second half of the year, however, as chipmakers adopt more ArF tools to expand their leading edge capacity.
-- We expect that gross margin will be between 42 percent and 46 percent.
-- We anticipate that net R&D expenses in the second quarter will be between $14 million and $15 million. These R&D expenses are net of certain development funds received from external sources.
-- We expect SG&A expenses to be between $13 million and $14 million.
-- We currently model net other income and expense as a $600,000 expense for the second quarter, excluding net effects of foreign currency exchange gains or losses.
-- We estimate the annual effective tax rate for 2004 to be approximately 23 percent.
-- Capital spending for the quarter is expected to be between $5 million and $8 million.
-- We plan to issue a second quarter update between June 7 and June 11, 2004.
Cymer's management will hold a conference call at 2:00 pm (PDT) today, April 20, 2004, to discuss first quarter 2004 results and second quarter 2004 guidance. This press release may be accessed on the
company's Web site, and the call and accompanying slides may be accessed on the Investor Relations page
of the company's Web site, at www.cymer.com. |
