Would the technical folks here please comment on ETEC's references to .25 geometries and the lasers referred to in the following report? Is this good for us?
Oppenheimer upgraded ETEC to strong buy this evening, BTW.
HAYWARD, Calif. Nov. 25, 1997 Etec Systems, Inc. (NASDAQ:ETEC.O), a leader in patterning solutions for the worldwide semiconductor and electronics industries, today announced financial results for the first quarter ended October 31, 1997.
First-Quarter Revenues Up 52% Over 1997 Levels Revenues in the first quarter of fiscal year 1998 were $68.4 million, a 52% increase over the $44.9 million reported for the first quarter of 1997. Net income for the first quarter increased 32% to $9.2 million, or $0.41 per share on 22.6 million average shares outstanding, compared with $7.0 million, or $0.33 per share on 21.1 million average shares outstanding in the first quarter of 1997. The $7.0 million net income in the first quarter of 1997 included a $1.2 million favorable adjustment in valuation allowance previously recorded against deferred tax assets. Excluding this item, net income on a comparable basis for the first quarter of fiscal 1997 was $5.8 million, or $0.28 per share. On a comparable basis, net income for the first quarter of 1998 increased 60%. "In the first quarter Etec faced some challenges, including the
sale of a low-margin refurbished MEBES tool and high selling expenses associated with an unusually high number of system sales to Taiwan. As we enter Q2, these circumstances are now behind us," commented Steve Cooper, Etec Chairman, President and CEO.
Quarterly Commentary
"In October, we delivered our first ALTAR 3500 IC mask pattern
generation system, an advanced laser tool for 0.25 micron production
mask requirements. We are pleased that the first system was shipped
on time and met specifications prior to shipment," stated Cooper.
This laser system is currently being installed at a leading U.S.
merchant maskmaking facility. Etec ended the first quarter with record cash and investments of $98.7 million. Despite significant investments in infrastructure to grow the business, the company increased its cash and investment position in each of the last two quarters and remains debt free. Cooper continued, "We are also pleased to announce that Warren Kocmond, Jr. has joined Etec as Vice President of Manufacturing, reporting to Paul Warkentin, Etec's Senior Vice President and COO. Warren is responsible for all of Etec's manufacturing in Hayward,California and Beaverton, Oregon. He joins us from Silicon Graphics, Inc. where he was Director of Manufacturing, High-End Operations."
Interconnect and Display Products
"Etec plans to ship its first laser direct imaging system for
printed circuit board manufacturing in the first quarter of calendar
1998. We continue to see strong customer and industry interest in
our laser direct imaging technology, and we look forward to ramping
production in Tucson, Arizona," Cooper stated. "The Etec Tucson
team has made tremendous progress in this past year, and we are
confident that this product will contribute to Etec's long-term
diversification strategy." Recently Etec discontinued the use of the Etec Polyscan name. Going forward all interconnect and display products will be marketed under the Etec Systems, Inc. name.
Cooper also stated that Etec products for the display markets are
making progress. "Recent visits to Japan have confirmed the display
industry's need for better AMLCD in-process monitoring and test
capability, and Etec's initial electron-beam test system appears well positioned to meet this need. The new manufacturing facility in
Feldkirchen, Germany is on-line and preparing to make initial beta
shipments in calendar 1998."
Industry Trends
"The worldwide migration to next-generation semiconductor devices
at 0.25 micron and below continues to drive demand for Etec's most
advanced systems, the ALTA 3500 and MEBESR 4500S. Advances in chip
manufacturing technology will remain our primary driver going
forward," Cooper stated. Addressing the current situation in Asia Pacific, Cooper continued, "Demand for Etec products and our business outlook worldwide remain positive despite recent economic concerns in Asia Pacific. Taiwan is emerging as our third largest market for fiscal year 1998, as multiple new fabs and mask shops call for continued new investment in maskmaking capacity. Etec continues to capture a significant share of this market. "In Korea, where the outlook is uncertain, we continue to see interest in our leading edge products. Korea represented 13% of our sales in fiscal year 1997 and is projected to be a smaller segment this year. To limit Etec's risk of currency fluctuation, we conduct system sales transactions in U.S. dollars and utilize letters of credit where appropriate."
"Recent demand for our mask pattern generation products has been
strong and our growth is being driven by a shift to new products
which command higher average selling prices. As we continue to
introduce leading edge products and upgrade our manufacturing
capability, we see the opportunity for continued growth as the market
leader in this fast moving segment of the semiconductor industry,"
stated Cooper.
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