CYMER REPORTS FIRST QUARTER 2005 OPERATING RESULTS
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Cymer, Inc. (Nasdaq:CYMI - News), 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, 2005. Highlights for the first quarter included the generation of $44.5 million in cash from operations, the highest quarterly level in the company's history.
For the first quarter of 2005, net income totaled $5,385,000, equal to $0.14 per share (diluted), compared to net income of $7,156,000, equal to $0.19 per share (diluted), in the first quarter of 2004, and to net income of $10,376,000, equal to $0.28 per share (diluted), in the fourth quarter of 2004.
Total revenue for the first quarter of 2005 was $84,810,000, a 4 percent decline from total revenue of $87,921,000 posted in the first quarter of 2004, and a sequential 34 percent decline from $128,111,000 in total revenue in the fourth quarter of 2004, which includes the $28,519,000 cumulative impact of the correction to the method of accounting for Cymer's consumables refurbishment activities.
Commenting on the first quarter, Bob Akins, Cymer's chief executive officer, said, "We are pleased that first quarter 2005 operating results came in generally in line with our January 25, 2005 guidance, and with the progress we made on a number of important initiatives. We extended our market leadership position in light sources at the 193nm wavelength with the on-schedule shipment in the first quarter of our first XLA 200, our third generation dual chamber MOPA argon fluoride (ArF) light source based on the XL common platform. During the first quarter, we also completed our excess consumables and spares inventory reduction, which had the expected negative impact on gross margin due to reduced factory loading.
"We recognized revenue on 48 light sources in the first quarter of 2005 compared to 70 light sources in the fourth quarter of 2004," Akins continued. "Cymer installed 67 new light sources in the first quarter compared to 65 light sources in the fourth quarter of 2004.
"In the current business environment, ongoing technology buys are driving demand for our ArF and our most advanced krypton fluoride (KrF) light sources, which pushed our first quarter average selling price (ASP) to $994,000 on a currency adjusted basis, an increase of 4 percent over the $957,000 ASP in the fourth quarter of 2004," Akins noted. "Our non-systems product revenue, which consists of upgrades, consumables and spare parts and service, was $36,073,000, in the first quarter of 2005, roughly flat with the level in the previous quarter."
Nancy Baker, Cymer's chief financial officer, stated, "Product gross margin in the first quarter of 2005 came in at 37 percent compared to 33 percent in the fourth quarter of 2004. Cymer reported operating income of $5,077,000, or 6 percent of revenue in the first quarter of 2005, compared to operating income of $12,881,000, or 10 percent of revenue, in the fourth quarter of 2004," Baker continued. "First quarter 2005 bookings totaled $81,470,000, resulting in a first quarter 2005 book-to-bill ratio of 0.96. The 2005 first quarter-end backlog totaled $75,775,000."
Cymer generated $44,473,000 in cash from operations in the first quarter of 2005 compared to $15,528,000 in the fourth quarter of 2004. Cash and cash equivalents and short- and long-term investments totaled $406,702,000 at March 31, 2005. Capital spending for the first quarter of 2005 totaled $5,180,000 compared to $4,901,000 in the fourth quarter of 2004.
Corporate Outlook
Commenting on Cymer's outlook, Akins noted, "Our visibility is limited to about one quarter, which makes it difficult for us to speculate on industry behavior beyond that. But concentrating on what we do know: The quarterly average utilization of our light sources at chipmakers in the first quarter of 2005 remained flat with quarterly average utilization in the fourth quarter of 2004. Though utilization in February and March was up substantially from the January level, we feel it is too early to see any trend in these short-term data points. A small number of large chipmakers are engaging in counter-cyclical tool purchasing, and those that can afford to are intent on making strategic 300mm equipment buys to further lower their manufacturing costs. Based on our most recent discussions with chipmakers and our three direct customers, in the near term we expect technology buys of ArF light sources to remain strong, and the timing for the resumption of capacity demand remains uncertain."
Baker commented, "In 2005, our management team is driving ongoing initiatives to improve efficiency of all our operations, including improving asset management, and reducing accounts receivable while simultaneously decreasing inventory and increasing inventory turns to best-in-class levels. While some of these efforts will have a dampening effect on gross margin in the short term, these initiatives will result in a much shorter cash conversion cycle and significant cash generation, which, combined with a reduced capital spending level will result in optimizing Cymer's ability to produce free cash flow from its operations."
Based on information available at this time, Cymer is currently providing the following guidance for the second quarter of 2005, which includes effects associated with the inventory reduction:
* We currently estimate that total product revenue in the second quarter of 2005 will be flat to up approximately 5 percent from first quarter 2005 revenue.
* We are forecasting that foreign currency adjusted ASPs will be approximately $920,000 due to second quarter product mix variation driving a higher percentage of KrF light sources.
* We expect that gross margin will be between 36 and 38 percent.
* We anticipate that R&D expenses will be between $15 million and $16 million.
* We expect SG&A expenses to be between $12.5 million and $13.0 million.
* We estimate the annual effective tax rate for 2005 to be approximately 0 percent. |
