Watkins-Johnson Reports
First-Quarter 1998 Results
ÿÿÿÿBusiness Editors
ÿÿÿÿPALO ALTO, Calif.--(BUSINESS WIRE)--April 14, 1998-- Watkins-Johnson
Company (NYSE:WJ) today reported sales of $68,722,000 and net income of $9,701,000,
or $1.15 per diluted share, for the first quarter of 1998, ended March 27.
ÿÿÿÿIn 1997, first-quarter sales from continuing operations amounted to $67,216,000, with
a net loss of $318,000, or a loss of 4 cents per share.
ÿÿÿÿFirst-quarter 1998 results reflect the sale of approximately 14 acres of unused property
at the company's San Jose, Calif. site for a pre-tax gain of $14,783,000.
ÿÿÿÿFirm backlog on March 27, 1998 stood at $82,232,000, compared to the March 28,
1997 backlog for continuing operations of $146,970,000.
Semiconductor-Equipment Business Reflects Market Weakness
ÿÿÿÿThe company's orders for semiconductor equipment products were weaker than
previously expected. WJ's computer-memory customers face a large overcapacity.
Additionally, several customers curtailed or discontinued construction of new factories as a
result of currency devaluations and other financial problems in Asia.
ÿÿÿÿWJ is working with a principal Asian customer to preserve a significant sale, originally
slated for late 1997, but placed on hold by credit problems related directly to the Asian
financial crisis.
ÿÿÿÿThe company re-evaluated its sales prospects and now expects that its shipments of
semiconductor equipment will be significantly lower than the sales volume achieved in 1997.
Although WJ is taking additional action to reduce costs during this period of market
weakness, the expected drop in revenues will not produce a profit.
ÿÿÿÿThe company is maintaining a prudent level of expense to complete the development
and introduction of the WJ-2000 cluster tool platform with its high-density plasma and
atmospheric-pressure CVD process modules.
Wireless-Infrastructure Business Robust
ÿÿÿÿThe company achieved substantial progress across its wireless-infrastructure product
line during the quarter. At the chip level, the company initiated operation of its Milpitas,
Calif. gallium-arsenide (GaAs) and thin-film fabrication facility acquired at the close of 1997
as part of the assets of Samsung Microwave Semiconductor. First-quarter 1998 orders for
GaAs devices were encouraging, lending credence to WJ's decision to market proprietary
integrated-circuit technology outside the company.
ÿÿÿÿWJ booked two large-volume orders during the period for wireless local-loop products
-- one from a major U.S. customer and the second from a leading European original
equipment manufacturer. The success of a principal OEM customer led to increased orders
for integrated assemblies used in the continuing PCS-infrastructure build-out. |
