Varian Semiconductor Equipment Associates Reports Fiscal 2006 Third Quarter Results
Thursday July 27, 4:25 pm ET
GLOUCESTER, MA--(MARKET WIRE)--Jul 27, 2006 -- Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ:VSEA - News) today announced results for its fiscal 2006 third quarter ended June 30, 2006.
Revenue for the third quarter of fiscal 2006 totaled $186.2 million, compared to revenue of $166.7 million for the same period a year ago. Varian Semiconductor recorded net income of $24.7 million, or $0.43 per share during the third quarter of fiscal 2006, compared to net income of $19.3 million, or $0.34 per share for the same period a year ago. As a result of the adoption of SFAS 123® "Stock Based Compensation," Varian Semiconductor's results include equity compensation costs of $3.0 million, net of tax, or $0.05 per share in the third quarter of fiscal 2006. Additionally, during the third quarter of fiscal 2006, Varian Semiconductor repurchased $33.8 million of its common stock under a previously announced share repurchase program.
Chief Executive Officer Gary Dickerson said, "The third quarter of 2006 was a record-setting one for Varian Semiconductor as we shipped more single wafer high current systems than any quarter in our history. We are confident that continued strong demand for our market share leading high current and medium current systems, as well as the growing demand for our high energy and VIISta PLAD plasma doping system, should translate into higher overall market share in 2006 and 2007. We continue to see positive customer feedback for the enhancements we are making to extend the cost and yield architectural advantages of our products for current and future device technologies. This was best expressed by our #1 ranking in customer satisfaction among Large Suppliers of Wafer Processing Equipment for the ninth time in 10 years by VLSI Research."
Chief Financial Officer Robert Halliday provided forward guidance for the fourth quarter of fiscal 2006. "We currently expect revenue to be between $205 and $215 million. Earnings per share are anticipated to range from $0.52 to $0.58 per share, including equity compensation costs. The impact from equity compensation is expected to be approximately $0.05 per share."
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.
Results of operations include the following amounts related to equity
compensation expense:
Fiscal Three Months Fiscal Nine Months
Ended Ended
June 30, July 1, June 30, July 1,
2006 2005 2006 2005
--------- --------- --------- ---------
Cost of revenue $ 492 $ 3 $ 1,504 $ 3
Research and development 817 455 2,804 455
Marketing, general and
administrative 3,175 234 10,065 3,148
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Expense before taxes 4,484 692 14,373 3,606
--------- --------- --------- ---------
Provision for income taxes (1,467) (215) (4,484) (1,119)
--------- --------- --------- ---------
Total $ 3,017 $ 477 $ 9,889 $ 2,487
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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 fourth quarter fiscal 2006 revenue, gross margin, earnings per share and equity compensation costs, market share, demand for products, competitive position, expected fourth 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 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 Fiscal Nine Months
Ended Ended
June 30, July 1, June 30, July 1,
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue
Product $ 162,656 $ 144,227 $ 452,031 $ 367,359
Service 20,747 19,902 58,801 60,584
Royalty 2,783 2,561 6,786 26,269
--------- --------- --------- ---------
Total revenue 186,186 166,690 517,618 454,212
Cost of revenue 105,091 96,233 302,756 249,348
--------- --------- --------- ---------
Gross profit 81,095 70,457 214,862 204,864
--------- --------- --------- ---------
Operating expenses
Research and development 22,872 19,351 66,731 57,081
Marketing, general and
administrative 27,829 26,243 87,631 77,953
Restructuring - - - 914
--------- --------- --------- ---------
Total operating expenses 50,701 45,594 154,362 135,948
--------- --------- --------- ---------
Operating income 30,394 24,863 60,500 68,916
Interest income, net 5,755 2,926 16,124 12,935
Other income, net 651 17 611 2,754
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Income before income taxes 36,800 27,806 77,235 84,605
Provision for income taxes 12,126 8,506 15,465 26,227
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Net income $ 24,674 $ 19,300 $ 61,770 $ 58,378
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Weighted average shares outstanding
- basic 56,767 55,197 56,686 54,929
Weighted average shares outstanding
- diluted 57,473 56,395 57,444 56,064
Net income per share - basic $ 0.43 $ 0.35 $ 1.09 $ 1.06
Net income per share -
diluted $ 0.43 $ 0.34 $ 1.08 $ 1.04
Note: Prior period shares outstanding and earnings per share have been
adjusted for the three-for-two stock split effected as a dividend, which
became effective on February 28, 2006 for shareholders of record on
February 13, 2006.
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, September 30,
2006 2005
-------------- --------------
ASSETS
Current assets
Cash and cash equivalents $ 218,517 $ 193,426
Short-term investments 167,176 280,646
Accounts receivable, net 151,556 123,612
Inventories 129,894 127,374
Deferred income taxes 34,942 30,865
Other current assets 15,317 32,796
-------------- --------------
Total current assets 717,402 788,719
Long-term investments 131,864 -
Property, plant and equipment, net 60,211 58,435
Other assets 16,464 15,665
-------------- --------------
Total assets $ 925,941 $ 862,819
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable and current portion of
long-term debt $ 455 $ 426
Accounts payable 47,311 33,272
Accrued expenses 56,082 59,280
Product warranty 9,671 8,585
Deferred revenue 51,742 52,118
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Total current liabilities 165,261 153,681
Long-term accrued expenses 9,894 10,849
Deferred income taxes 4,926 5,477
Long-term debt 3,391 3,736
-------------- --------------
Total liabilities 183,472 173,743
-------------- --------------
Stockholders' equity
Common stock 581 380
Capital in excess of par value 420,696 382,445
Less: Cost of treasury stock (53,833) -
Retained earnings 378,100 316,330
Deferred compensation - (9,366)
Accumulated other comprehensive loss (3,075) (713)
-------------- --------------
Total stockholders' equity 742,469 689,076
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Total liabilities and
stockholders' equity $ 925,941 $ 862,819
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Source: Varian Semiconductor |
