0.24 on 133 lasers
Cymer Announces Record Fourth Quarter and Year-end
Results for 1997
1997 Net Income up 300 Percent on 213 Percent Revenue Rise
SAN DIEGO, CALIF. - January 29, 1998 - Cymer Inc. <NASDAQ: CYMI>, the
world's leading supplier of excimer laser illumination sources
essential for deep ultraviolet (DUV) photolithography, today reported
record fourth quarter and year-end results for 1997.
Net income for the fourth quarter doubled to $7,173,000, or $0.24 per
share (diluted), on revenues of $59,076,000 compared to net income of
$3,547,000, or $0.12 per share (diluted), on revenues of $27,567,000
for the fourth quarter of 1996.
For the year, net income increased 300 percent to $26,058,000, or
$0.86 per share (diluted), compared to $6,510,000, or $0.29 per share
(diluted), reported for 1996. Revenues climbed 213 percent for the
year, reaching $203,647,000, compared to $64,995,000 recorded for
1996.
FY '97 Business Highlights
Commenting on the results, Cymer President and Chief Executive Officer
Robert Akins noted that the company's rapid growth was driven by the
semiconductor industry's adoption of DUV lithography to create faster,
smaller and higher performance integrated circuits (ICs). "As the
leading supplier of the enabling laser light systems essential to the
progression of this advanced technology, Cymer is uniquely positioned
to capitalize on this growth," said Akins.
Akins added that in addition to meeting or exceeding its 1997
financial projections, Cymer is pleased to report that it met all of
its major business development objectives during the year. "Consistent
with our plan, we boosted manufacturing capacity by more than 100
percent to meet rising demand. We also expanded our global
infrastructure to support both stepper manufacturers and chipmakers
around the world. Finally, we made excellent progress on our future
technology roadmap. This included shipping next-generation argon
fluoride (ArF) laser systems and significant development of our two
new krypton fluoride (KrF) laser models slated for introduction and
shipment in 1998. In addition to raising the competitive bar, these
new systems will allow Cymer to offer a complete suite of advanced
laser models designed to further strengthen our technical and market
leadership position."
FY '97 Operating Highlights
Product revenues for 1997 reflected the sale of 460 lasers, compared
to 145 in 1996. During the fourth quarter, this number totaled 133
laser systems, 131 of which were for use in semiconductor
photolithography applications. Gross margins on product sales reached
40 percent during the fourth quarter, contributing to gross margins of
38.5 percent for the year. Operating income for the year was
$34,444,000, up 337 percent from the $7,884,000 reported in 1996. At
year-end, backlog was $108,704,000. Cash, cash equivalents and
short-term investments totaled $132,290,000 with a quick ratio of
2.3:1 and a current ratio of 3.4:1. Working capital totaled
$202,539,000, while capital spending was approximately $42,200,000 for
the year and $11,610,000 for the fourth quarter.
Preparing for the Future
"Looking ahead, we remain extremely optimistic about the long-term
prospects for our market. According to independent market analyst
firms, the DUV lithography market is currently projected to grow at a
compound annual growth rate of 28 percent through the year 2000. We
plan to leverage the two new products slated for introduction and
shipment in the coming year to capitalize on this anticipated
long-term growth and further solidify our leadership position," said
Akins.
Akins added, "Near term, however, the current Asian economic
condition, coupled with the ongoing DRAM supply/demand imbalance, is
affecting demand for the lithography equipment that relies on Cymer
lasers. Many of the world's leading lithography suppliers, all of
which are Cymer customers, are now indicating that their earlier
forecasts are under revision due to these changing market conditions.
We are also seeing shifts in market share among the suppliers
themselves."
"As a result of these factors, and based on information currently
available to us, we anticipate a reduction in our revenues by 10 to 15
percent in the first quarter of 1998 from fourth quarter levels. We
will closely monitor the situation going forward, consulting with
customers on an ongoing basis to ensure that their laser inventory
levels are in line with the current demand scenario," noted Akins.
Akins concluded, "1998 will be a year in which our plan is to further
distance Cymer from the competition through increased investments
throughout the year in: 1) aggressive R&D and manufacturing programs
to develop and deliver the higher performance products that will
enable higher average selling prices; and 2) further expansion of our
global service and support network to support our growing installed
based of DUV lasers in production. We currently expect that the
investments needed to fund these critical future-oriented efforts,
coupled with the anticipated revenue decline, will reduce our
quarterly earnings by $0.10 - $0.15 per share in the first quarter of
1998, as compared to our just announced fourth quarter."
Forward Looking Statements
Statements in this press release regarding the effects of Cymer's new
products on its competition, new product introduction schedules,
market growth projections and revenue, spending and earnings
projections are forward looking statements, are based on current
expectations and involve a number of risks and uncertainties. Actual
results may differ materially from those projected in any such
statements due to various factors, including: the demand for
semiconductors in general, and, in particular, for leading-edge
devices with smaller geometries; changing business and economic
conditions in various geographic regions, including Asia, and the
effect of these conditions on capital spending plans by the Company's
customers and end-users; the rate at which semiconductor manufacturers
take delivery of photolithography tools from the Company's customers,
which in turn may be affected by delays and cancellations of new
factory construction; the timing of customer orders, shipments, and
acceptances; the effect of recent price increases instituted by the
Company on new orders; new and enhanced product offerings by
competitors; the Company's ability to meet its production goals; and
failure by the Company to match expense levels with revenue
fluctuations.
Corporate Profile
Cymer, Inc. is the leading provider of excimer laser illumination
sources for use in deep ultraviolet (DUV) photolithography systems
targeted at the pilot and production segments of the semiconductor
manufacturing market. Further information on Cymer may be obtained
from the Company's SEC filings, the Internet at cymer.com
or by contacting the Company directly.
Analyst Contact: William Angus, III
Senior Vice President and CFO ÿ
619-451-7300
619-618-3090 (Fax) ÿ Media Contact: Andrea Mace
Director
MCA, Inc.
650-968-8900
650-968-8990 (Fax)
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Cymer, Inc.
Quarter Dec. 31: 1997 1996
Revenues $59,076,000 $27,567,000
Net Income 7,173,000 3,547,000
Avg. Diluted Shares 30,042,000 28,422,000
Share Earnings (basic):
Net Income $0.25 $0.14
Share Earnings (diluted):
Net Income $0.24 $0.12
Year:
Revenues $203,647,000 $64,995,000
Net Income 26,058,000 6,510,000
Avg. Diluted Shares 30,267,000 22,420,000
Share Earnings (basic):
Net Income $0.92 $0.33
Share Earnings (diluted):
Net Income $0.86 $0.29
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CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share data)
For the three months
ended December 31 For the twelve months
ended December 31
1996 1997 1996 1997
REVENUES:
Product sales $26,957 $58,653 $62,510 $201,191
Other 610 423 2,485 2,456
Total revenues
27,567 59,076 64,995 203,647
COSTS AND EXPENSES:
Cost of product sales 15,150 35,181 35,583 123,654
Research and development 4,264 7,619 11,742 24,971
Sales and marketing 2,013 3,671 5,516 11,992
General and administrative 2,003 2,706 4,270 8,586
Total costs and expenses
23,430 49,177
57,111 169,203
OPERATING INCOME 4,137 9,899 7,884 34,444
OTHER INCOME (EXPENSE):
Foreign currency exchange gain (loss) - net 45 37 161 (359)
Interest and other income 304 2,435 347 5,318
Interest and other expense (316) (2,829) (691) (4,847)
Total other income (expense) - net
33 (357) (183) 112
INCOME BEFORE PROVISION
FOR INCOME TAXES AND
MINORITY INTEREST
4,170
9,542
7,701
34,556
Provision for income taxes (623) (2,386) (1,191) (8,639)
Minority interest
17 141
NET INCOME $3,547 $7,173 $6,510 $26,058
EARNINGS PER SHARE:
BASIC:
ÿ ÿ Earnings per share
$0.14
$0.25
$0.33
$0.92
ÿ ÿWeighted average common shares outstanding 25,354 28,643 19,868 28,212
DILUTED:
ÿ ÿ Earnings per share $0.12 $0.24 $0.29 $0.86
ÿ ÿWeighted average common and common
ÿ ÿequivalent shares outstanding 28,422 30,042 22,420 30,267
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except per share data)
December 31,
ASSETS 1996 1997
CURRENT ASSETS:
Cash and cash equivalents $55,405 $51,903
Short-term investments 10,449 80,387
Accounts receivable -net 18,833 59,140
Foreign exchange contracts receivable 9,317 31,267
Inventories 15,678 47,502
Deferred income taxes 1,432 12,690
Prepaid expenses and other 1,880 2,847
Total current assets 112,994 285,736
PROPERTY - net
11,707
48,031
LONG-TERM INVESTMENTS 1,361 42,667
OTHER ASSETS 3,405 8,446
TOTAL ASSETS $129,467 $384,880
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $7,095 $22,615
Accrued and other liabilities 8,401 26,860
Foreign exchange contracts payable 8,396 27,278
Income taxes payable 2,609 6,444
Revolving loan and security agreements 1,750
Total current liabilities 28,251 83,197
LONG-TERM LIABILITIES:
Convertible subordinated notes 172,500
Other liabilities 2,396 3,566
MINORITY INTEREST
1,077
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock - authorized 5,000,000 shares; $.001 par value,
no shares issued or outstanding
Common Stock - authorized 50,000,000 shares; $.001 par value,
issued and outstanding 27,560,000 and 28,724,000 shares 28 29
Paid-in capital 106,658 109,367
Net unrealized gain on investments 50
Retained earnings (accumulated deficit) (7,421) 18,637
Cumulative translation adjustment (445) (3,543)
Total stockholders' equity
98,820 124,540
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $129,467 $384,880
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