Varian Semiconductor Equipment Associates Reports Fiscal 2006 First Quarter Results
Thursday January 26, 4:25 pm ET
GLOUCESTER, MA--(MARKET WIRE)--Jan 26, 2006 -- Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NasdaqNM:VSEA - News) today announced results for its fiscal 2006 first quarter ended December 30, 2005.
Revenue for the first quarter of fiscal 2006 totaled $160.9 million, compared to revenue of $148.4 million for the same period a year ago. Varian Semiconductor recorded net income of $22.3 million, or $0.59 per share during the first quarter of fiscal 2006, compared to net income of $28.0 million, or $0.75 per share for the same period a year ago.
In the first quarter of fiscal 2006, Varian Semiconductor recognized: a tax benefit (including interest) of $0.26 per share related to the conclusion of a tax audit; equity compensation costs of $0.07 per share and earnings of $0.40 per share exclusive of these items. In the first quarter of fiscal 2005, Varian Semiconductor recognized $0.45 per share, related to past royalties and interest from Applied Materials, Inc. (NasdaqNM:AMAT - News); equity compensation costs of $0.05 per share and earnings of $0.35 per share exclusive of these items.
Gary Dickerson, Varian Semiconductor's chief executive officer, said, "Chipmakers are choosing Varian Semiconductor's single wafer high current ion implanters as their tools of record. The most recent evidence of this is our selection by a major Taiwanese foundry as its tool of record. To date, this foundry has ordered 7 of our VIISta HC tools, a number of which have been shipped. Customer feedback during the selection process indicated that our VIISta HC delivers the best device performance, productivity and yields. Across the customer base, the broad-scale acceptance of our single wafer high current tools is evidenced by our record first quarter high current revenues and the recent shipment of our 200th single wafer high current tool."
Robert Halliday, chief financial officer, provided forward guidance for the second quarter of fiscal 2006. "We currently expect revenue to be between $160 and $170 million and gross margin as a percentage of revenue to be in the low 40's. Earnings per share are anticipated to range from $0.40 to $0.48 per share, excluding equity compensation costs. The impact from equity compensation is expected to be approximately $0.10 to $0.12 per share. This equity compensation is expected to decline to $0.06 to $0.08 per share in the third quarter of fiscal 2006."
Varian Semiconductor will hold a conference call, broadcast over the Internet, at 5:30 p.m. eastern time today to discuss Varian Semiconductor's operating results and outlook. Access to the call is available through the investor relations page on Varian Semiconductor's website at www.vsea.com. Replays will be available via the website for two weeks after the call.
This press release includes, within Varian Semiconductor's results of operations, a non-GAAP measure of earnings per share. To be comparable with the first quarter of fiscal 2005, the non-GAAP earnings per share for the first quarter of fiscal 2006 excludes the income tax benefit, equity compensation costs, net of tax, and interest income on the income tax benefit, also net of tax. To be comparable with the first quarter of fiscal 2006, the non-GAAP earnings per share for the first quarter of fiscal 2005 excludes past due royalty revenue, equity compensation costs, and interest income on the past due royalty revenue, all net of tax. The past due royalties, income tax benefit and associated interest income on both items were all infrequent events. Management believes that investors may find it useful for these items to be excluded. The reconciliation of GAAP earnings per share is as follows:
Reconciliation of Non-GAAP
to GAAP EPS
Q1 2006 Q1 2005
------- -------
Non-GAAP EPS $ 0.40 $ 0.35
ADD: Past royalties, net of tax - 0.35
ADD: Income tax benefit 0.24 -
ADD: Interest income on past
royalties and income
taxes, net of tax 0.02 0.10
LESS: Equity compensation,
net of tax (0.07) (0.05)
------- -------
GAAP EPS $ 0.59 $ 0.75
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This press release includes, within Varian Semiconductor's forward guidance, a non-GAAP measure of earnings per share, excluding equity compensation costs. To allow direct comparison to fiscal 2005 second quarter results, which management believes is useful for investors, the earnings per share forward guidance for the second quarter of fiscal 2006 excludes equity compensation costs. The reconciliation of GAAP earnings per share is as follows:
Second Quarter Fiscal
2006 Guidance
Low High
------- -------
EPS excluding equity compensation range $ 0.40 $ 0.48
Estimated equity compensation range (0.12) (0.10)
------- -------
GAAP EPS range $ 0.28 $ 0.38
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About Varian Semiconductor Equipment Associates, Inc.
Varian Semiconductor is the leading producer of ion implantation equipment used in the manufacture of semiconductors. Varian Semiconductor is headquartered in Gloucester, Massachusetts, and operates worldwide. Varian Semiconductor maintains a website at www.vsea.com. The information contained in Varian Semiconductor'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, Varian Semiconductor's guidance for second quarter fiscal 2006 revenue, gross margin, earnings per share and equity compensation costs, market share, competitive position, expected second quarter fiscal 2006 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; Varian Semiconductor's dependence on a small number of customers; fluctuations in Varian Semiconductor's quarterly operating results; Varian Semiconductor's transition to new products; Varian Semiconductor's exposure to risks of operating internationally; uncertain protection of Varian Semiconductor's patent and other proprietary rights; Varian Semiconductor's reliance on a limited group of suppliers; potential environmental liabilities; Varian Semiconductor's ability to manage potential growth, decline and strategic transactions; Varian Semiconductor's reliance on one primary manufacturing facility; Varian Semiconductor's dependence on certain key personnel; and the risk of substantial indemnification obligations under the agreements governing the spin-off of Varian Semiconductor 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 Varian Semiconductor's Annual Report on Form 10-K and in other reports filed by Varian Semiconductor with the Securities and Exchange Commission. Varian Semiconductor cannot guarantee any future results, levels of activity, performance or achievement. Varian Semiconductor 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
December 30, December 31,
2005 2004
--------- ---------
Revenue
Product $ 138,726 $ 107,088
Service 20,561 19,395
Royalty 1,629 21,942
--------- ---------
Total revenue 160,916 148,425
Cost of revenue * 97,362 72,284
--------- ---------
Gross profit 63,554 76,141
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Operating expenses
Research and development * 21,587 18,653
Marketing, general & administrative * 28,380 27,380
--------- ---------
Total operating expenses 49,967 46,033
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Operating income 13,587 30,108
Interest income, net 5,431 7,605
Other (expense) income, net (41) 2,819
--------- ---------
Income before income taxes 18,977 40,532
(Benefit from) provision for income taxes * (3,301) 12,565
--------- ---------
Net income $ 22,278 $ 27,967
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Weighted average shares outstanding - basic 37,565 36,456
Weighted average shares outstanding - diluted 38,048 37,222
Net income per share - basic $ 0.59 $ 0.77
Net income per share - diluted $ 0.59 $ 0.75
* Includes the following amounts related to equity awards:
Cost of revenue $ 447 $ --
Research and development 1,019 --
Marketing, general and administrative 2,498 2,725
Provision for income taxes (1,189) (845)
--------- ---------
Total $ 2,775 $ 1,880
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VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 30, September 30,
2005 2005
--------- ---------
ASSETS
Current assets
Cash and cash equivalents $ 191,525 $ 193,426
Short-term investments 285,789 280,646
Accounts receivable, net 145,787 123,612
Inventories 117,618 127,374
Deferred income taxes 31,893 30,865
Other current assets 16,440 32,796
--------- ---------
Total current assets 789,052 788,719
Property, plant and equipment, net 57,235 58,435
Other assets 15,788 15,665
--------- ---------
Total assets $ 862,075 $ 862,819
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable and current portion of
long-term debt $ 435 $ 426
Accounts payable 41,566 33,272
Accrued expenses 45,155 59,280
Product warranty 9,033 8,585
Deferred revenue 41,370 52,118
--------- ---------
Total current liabilities 137,559 153,681
Long-term accrued expenses 10,884 10,849
Deferred income taxes 5,477 5,477
Long-term debt 3,623 3,736
--------- ---------
Total liabilities 157,543 173,743
--------- ---------
Stockholders' equity
Common stock 381 380
Capital in excess of par value 387,564 373,079
Treasury stock (20,040) --
Retained earnings 338,608 316,330
Accumulated other comprehensive loss (1,981) (713)
--------- ---------
Total stockholders' equity 704,532 689,076
--------- ---------
Total liabilities and stockholders'
equity $ 862,075 $ 862,819
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Source: Varian Semiconductor |
