Varian Semiconductor Equipment Associates Reports Fiscal 2004 Fourth Quarter Results
Tuesday October 26, 4:25 pm ET
GLOUCESTER, Mass.--(BUSINESS WIRE)--Oct. 26, 2004--Varian Semiconductor Equipment Associates, Inc. (the "Company") (Nasdaq: VSEA - News) today announced results for its fiscal 2004 fourth quarter ended October 1, 2004.
Revenue for the fourth quarter of fiscal 2004 totaled $154.8 million, compared to revenue of $84.8 million for the same period a year ago. The Company recorded net income of $23.0 million, or $0.62 per diluted share during the fourth quarter of fiscal 2004, compared to net income of $1.0 million, or $0.03 per diluted share for the same period a year ago. Gross margin for the fourth quarter of fiscal 2004 was 47 percent, compared to 44 percent for the same period a year ago.
Robert J. Halliday, chief financial officer, provided forward guidance, "Exclusive of a $22 million payment we received from Applied Materials (Nasdaq: AMAT - News), we expect revenue for the first quarter of fiscal 2005 to be between $123 and $133 million and gross margin as a percentage of revenue to be in the mid 40's. Earnings per share, including the $22 million payment from Applied Materials, are anticipated to range from $0.67 to $0.75 per diluted share." Mr. Halliday further added, "The allocation of the $22 million between royalty revenue and interest income cannot be determined until we receive documentation from Applied Materials." Applied Materials made this payment as the result of an arbitration panel ruling on the validity of several patents of the Company.
"Fiscal year 2004 has been a strong year for us, especially in Asia," said Richard A. Aurelio, the Company's executive chairman. "Our outstanding financial and operating performance this year, and in the past five years, has been recognized by our shareholders. I am confident that our new chief executive officer, Gary Dickerson, will continue to position the Company strategically and financially. Gary brings an understanding of our customers' needs and the process for rapid new product introduction. His extensive knowledge of our industry, his customer experience and proven leadership skills strengthen the Company's management team and further positions the Company as a leader in ion implant."
Gary E. Dickerson, the Company's new chief executive officer, said, "I am excited to have the opportunity to lead one of the strongest companies in the industry. Our Company is well-positioned in the industry with technically superior products, strong financials, and a team of talented and dedicated people. I am looking forward to leveraging these strengths to deliver the highest productivity to our customers and the highest returns to our shareholders."
The Company will hold a conference call, broadcast over the Internet, at 5:00 p.m. eastern time today to discuss the Company's operating results and outlook. Access to the call is available through the investor relations page on the Company's website at www.vsea.com. Replays will be available via the website for two weeks after the call.
About Varian Semiconductor Equipment Associates, Inc.
The Company is a leading producer of ion implantation equipment used in the manufacture of semiconductors. The Company is headquartered in Gloucester, Massachusetts, and operates worldwide. The Company maintains a website at www.vsea.com. The information contained in the Company's website is not incorporated by reference into this release, and the website 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, statements concerning the industry outlook, the Company's guidance for first quarter fiscal 2005 revenue, gross margin and earnings per share, market share, competitive position, expected first quarter fiscal 2005 product shipments, and any statements using the terms "believes," "anticipates," "will," "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; intense competition in the semiconductor equipment industry; the Company's dependence on a small number of customers; the Company's ability to manage factory operations and efficiently use resources; fluctuations in the Company's quarterly operating results; the Company's transition to new products; uncertain protection of the Company's patent and other proprietary rights; concentration in the Company's customer base and lengthy sales cycles; the Company's reliance on a limited group of suppliers; potential environmental liabilities; the Company's dependence on certain key personnel; the Company's limited operating history; and the risk of substantial indemnification obligations under the agreements governing the spin-off of the Company from Varian Associates, Inc. on April 2, 1999. These and other important risk factors that may affect actual results are discussed in detail under the caption "Risk Factors" in the Company's Annual Report on Form 10-K and in other reports filed by the Company 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 release.
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Fiscal Three Months Ended Fiscal Year Ended
October 1, October 3, October 1, October 3,
2004 2003 2004 2003
----------- ------------ ----------- -----------
Revenue
Product $ 133,351 $ 65,887 $ 456,217 $ 284,939
Service 19,650 17,296 65,947 69,187
Royalty 1,804 1,659 7,945 8,375
----------- ------------ ----------- -----------
Total revenue 154,805 84,842 530,109 362,501
Cost of revenue 81,992 47,208 290,269 211,142
----------- ------------ ----------- -----------
Gross profit 72,813 37,634 239,840 151,359
----------- ------------ ----------- -----------
Operating expenses
Research and
development 16,995 16,889 67,715 60,512
Marketing, general
and administrative 23,059 19,928 85,615 76,919
Restructuring costs -- 139 -- 1,435
----------- ------------ ----------- -----------
Total operating
expenses 40,054 36,956 153,330 138,866
----------- ------------ ----------- -----------
Operating income 32,759 678 86,510 12,493
Interest income, net 1,507 905 4,277 4,037
Other expense, net (425) (35) (923) (436)
----------- ------------ ----------- -----------
Income before income
taxes 33,841 1,548 89,864 16,094
Provision for income
taxes 10,829 510 28,756 5,310
----------- ------------ ----------- -----------
Net income $ 23,012 $ 1,038 $ 61,108 $ 10,784
=========== ============ =========== ===========
Weighted average
shares outstanding -
basic 36,390 34,592 36,085 34,219
Weighted average
shares outstanding -
diluted 36,944 35,882 36,978 35,176
Net income per
share - basic $ 0.63 $ 0.04 $ 1.69 $ 0.32
Net income per
share - diluted $ 0.62 $ 0.03 $ 1.65 $ 0.31
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
October 1, October 3,
2004 2003
------------ -----------
ASSETS
Current assets
Cash and cash equivalents $ 218,578 $ 310,481
Short-term investments 173,891 40,021
Accounts receivable, net 123,749 63,048
Inventories 104,900 59,228
Deferred income taxes 27,691 28,486
Other current assets 16,376 19,906
------------ -----------
Total current assets 665,185 521,170
Property, plant and equipment, net 52,344 47,013
Other assets 15,405 15,351
------------ -----------
Total assets $ 732,934 $ 583,534
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable and current portion of long-
term debt $ 4,170 $ 5,805
Accounts payable 33,980 22,530
Accrued expenses 36,672 33,059
Product warranty 7,841 6,867
Deferred revenue 54,509 23,392
------------ -----------
Total current liabilities 137,172 91,653
Long-term accrued expenses 10,905 9,042
Deferred income taxes 4,615 4,321
Long-term debt 4,162 4,551
------------ -----------
Total liabilities 156,854 109,567
------------ -----------
Stockholders' equity
Common stock 364 350
Capital in excess of par value 331,701 290,443
Retained earnings 244,320 183,212
Deferred compensation (149) -
Accumulated other comprehensive loss (156) (38)
------------ -----------
Total stockholders' equity 576,080 473,967
------------ -----------
Total liabilities and stockholders'
equity $ 732,934 $ 583,534
============ ===========
Backlog $ 184,370 $ 101,077
============ ===========
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Source: Varian Semiconductor Equipment Associates, Inc. |
