Varian Semiconductor Equipment Associates Reports Record Fiscal 2007 Third Quarter Revenue and Operating Profit
Thursday July 26, 4:25 pm ET
GLOUCESTER, MA--(MARKET WIRE)--Jul 26, 2007 -- Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NasdaqGS:VSEA - News) today announced results for its fiscal 2007 third quarter ended June 29, 2007.
Revenue for the third quarter of fiscal 2007 totaled $288.8 million, compared to revenue of $186.2 million for the same period a year ago. Varian Semiconductor recorded net income of $23.4 million, or $0.29 per share during the third quarter of fiscal 2007, compared to net income of $24.7 million, or $0.29 per share for the same period a year ago.
Varian Semiconductor's fiscal third quarter results include a provision for income taxes of $58.8 million, approximately 72% of income before income taxes, incurred primarily due to the realignment of its legal entity structure. The effective tax rate prior to adoption of the realignment plan was approximately 33%, on a non-GAAP basis. Varian Semiconductor's non-GAAP provision for income taxes would have been $27.6 million and non-GAAP earnings per share would have been approximately $0.67 without the incremental realignment tax charges.
Chief Executive Officer Gary Dickerson said, "The third quarter of fiscal 2007 was another record-setting one for Varian, as we established records for revenue, gross profit, operating profit and profit before tax. Given the momentum of our product shipments and the strong customer relationships we enjoy across the foundry, logic and memory segments worldwide, we expect to continue making significant market share gains."
Chief Financial Officer Bob Halliday provided forward guidance for the fourth quarter of fiscal 2007. "We currently expect revenue to be between $287 and $297 million. Earnings per share are anticipated to range from $0.50 to $0.55 per share on a GAAP basis and from $0.65 to $0.70 per share on a non-GAAP basis without the incremental realignment tax charges."
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 provision for taxes and earnings per share. To be comparable with results for prior periods and the guidance issued on April 26, 2007 for the third quarter of fiscal 2007, the non-GAAP tax provision and earnings per share exclude the additional tax charges associated with Varian Semiconductor's global realignment plan. The additional tax charge is considered an infrequent event. Management believes that investors may find it useful for this item to be excluded for comparability to guidance for the third quarter and results for prior periods. The non-GAAP financial measure included in this earnings announcement is not meant to be considered superior to, or a substitute for, results of operations prepared in accordance with GAAP. In addition, the non-GAAP financial measure included in this earnings announcement may be different from, and therefore may not be comparable to, similar measures used by other companies. The reconciliation of GAAP earnings per share is as follows:
(in thousands, except per share data):
Fiscal Three Months
Ended June 29, 2007
----------------------------------
GAAP Tax Non-GAAP
Results Charges Results
---------- ----------- ----------
Income before income taxes $ 82,178 $ 82,178
Provision for income taxes (58,792) 31,237 (27,555)
Net income $ 23,386 $ 31,237 $ 54,623
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Diluted earnings per share $ 0.29 $ 0.38 $ 0.67
Fiscal Three Months Ending
September 28, 2007, as Forecasted
----------------------------------
GAAP Tax Non-GAAP
Basis Charges Basis
---------- ----------- ----------
Diluted earnings per share,
Low end of range $ 0.50 $ 0.15 $ 0.65
High end of range 0.55 0.15 0.70
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 2007 revenue, gross margin, earnings per share and equity compensation costs, market share, demand for products, competitive position, expected 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 30, 2007 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 Fiscal Nine
Months Ended Months Ended
June 29, June 30, June 29, June 30,
2007 2006 2007 2006
--------- ---------- ---------- ----------
Revenue
Product $ 264,253 $ 162,656 $ 686,466 $ 452,031
Service 21,940 20,747 63,112 58,801
Royalty 2,565 2,783 6,607 6,786
--------- ---------- ---------- ----------
Total revenue 288,758 186,186 756,185 517,618
Cost of revenue 153,023 105,091 409,153 302,756
--------- ---------- ---------- ----------
Gross profit 135,735 81,095 347,032 214,862
--------- ---------- ---------- ----------
Operating expenses
Research and development 26,267 22,872 76,046 66,731
Marketing, general and
administrative 31,498 27,829 94,524 87,631
Total operating expenses 57,765 50,701 170,570 154,362
--------- ---------- ---------- ----------
Operating income 77,970 30,394 176,462 60,500
Interest income, net 4,500 5,755 15,919 16,124
Other income (expense), net (292) 651 401 611
--------- ---------- ---------- ----------
Income before income taxes 82,178 36,800 192,782 77,235
Provision for income taxes 58,792 12,126 93,981 15,465
--------- ---------- ---------- ----------
Net income $ 23,386 $ 24,674 $ 98,801 $ 61,770
========= ========== ========== ==========
Weighted average shares
outstanding - basic 79,052 85,151 81,392 85,029
Weighted average shares
outstanding - diluted 81,116 86,210 83,297 86,166
Net income per share - basic $ 0.30 $ 0.29 $ 1.21 $ 0.73
Net income per share -
diluted $ 0.29 $ 0.29 $ 1.19 $ 0.72
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 May 30, 2007 for shareholders of record on May 15, 2007.
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 29, September 29,
2007 2006
------------ ------------
ASSETS
Current assets
Cash and cash equivalents $ 157,635 $ 258,891
Short-term investments 105,569 154,810
Accounts receivable, net 183,947 125,992
Inventories 197,258 133,929
Deferred income taxes 32,044 31,592
Other current assets 19,888 18,102
------------ ------------
Total current assets 696,341 723,316
Long-term investments 110,403 135,777
Property, plant and equipment, net 63,753 62,249
Other assets 16,821 17,024
------------ ------------
Total assets $ 887,318 $ 938,366
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 498 $ 466
Accounts payable 54,511 45,937
Accrued expenses 80,256 53,947
Product warranty 11,385 8,934
Deferred revenue 93,588 49,840
------------ ------------
Total current liabilities 240,238 159,124
Long-term accrued expenses and other
liabilities 20,516 17,300
Deferred income taxes 3,246 3,722
Long-term debt 2,892 3,270
------------ ------------
Total liabilities 266,892 183,416
------------ ------------
Stockholders' equity
Common stock 917 593
Capital in excess of par value 520,341 453,229
Less: Cost of treasury stock (410,177) (108,910)
Retained earnings 509,815 411,014
Accumulated other comprehensive loss (470) (976)
------------ ------------
Total stockholders' equity 620,426 754,950
------------ ------------
Total liabilities and stockholders'
equity $ 887,318 $ 938,366
============ ============
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Source: Varian Semiconductor |
