ESI Announces Fiscal 1998 Sales and Earnings
PORTLAND, Ore., July 6 /PRNewswire/ -- Electro Scientific Industries, Inc. (Nasdaq: ESIO) reported record sales of $230 million, along with record net income of $27.8 million or $2.41 per diluted share, excluding merger related costs, for the fiscal year ended May 31, 1998. This compares with diluted earnings per share of $1.79 and sales of $180 million for the fiscal year ended May 31, 1997.
Fourth quarter net income was $6.3 million, or $0.54 per diluted share, on sales of $55 million. These results compare to third quarter sales of $57 million and net income of $7.5 million, excluding merger costs. Fourth quarter results reflect no tax provision, as increased export shipments and a lower level of income negated any requirement for an income tax provision.
Fourth quarter income was negatively affected by a shift of sales to lower margin advanced packaging products and costs associated with the initial output of mechanical drilling products in Portland.
In announcing the results, Donald R. VanLuvanee, ESI's Chief Executive Officer and President said, "Demand for new technology continues; however, customers are adding capacity very cautiously, even in new capability."
VanLuvanee further commented, "The visibility in today's market is short, but we continue to move new technology to our customers' manufacturing floor. I expect this activity to generate the basis for future sales, as new capability proves its value."
All results reflect the pooling-of-interest mergers with Applied Intelligent Systems, Inc., completed on December 1, 1997 and Chip Star Inc. in June 1997. A purchase merger of Dynamotion was completed in June 1997. Fiscal 1998 merger related costs were $14.6 million. These costs include a one-time acquired research and development charge and transaction costs. Backlog as of May 31, 1998, was $22 million, compared to $32 million on May 31, 1997.
Statements in this press release may include forward looking statements that involve a number of risks and uncertainties that could cause actual results to materially differ, either better or worse, from those discussed. Such risks and uncertainties are numerous and are identified in the Company's Annual Report on Form 10-K and interim reports on Form 10-Q for fiscal 1998.
About ESI
ESI, headquartered in Portland, Oregon, designs and manufactures sophisticated products used around the world in electronics manufacturing including: laser manufacturing systems for semiconductor yield improvement; production and test equipment for the manufacture of surface mount ceramic capacitors; laser trim systems for precise electrical tuning of circuits; precision laser and mechanical drilling systems for electronic interconnect; and machine vision systems. Electro Scientific Industries is traded on the Nasdaq National Market System under the symbol, "ESIO." ESI's web site is esio.com.
Electro Scientific Industries, Inc. FY 1998 Results (In thousands, except per share data) Three Months Ended Year Ended Operating Results May-98 May-97 May-98 May-97 Net sales $55,034 $54,193 $229,619 $180,035 Gross margin 27,787 27,923 124,927 96,109 Operating expenses: Selling, service and administrative 14,552 11,721 57,145 43,359 Research, engineering and development 7,194 6,383 28,511 22,675 Merger related expenses 0 0 14,634 0 Total operating expenses 21,746 18,104 100,290 66,034 Operating income 6,041 9,819 24,637 30,075 Interest income 370 387 1,715 1,516 Other income (expense) (119) 112 500 (664) Income before income taxes 6,292 10,318 26,852 30,927 Provision for income taxes 0 2,977 9,969 11,468 Net income $6,292 $7,341 $16,883 $19,459 Net income per share - Basic $0.56 $0.70 $1.52 $1.85 Net income per share - Diluted $0.54 $0.67 $1.47 $1.79 Pro-forma EPS - Basic * N/A N/A $2.50 N/A Pro-forma EPS - Diluted * N/A N/A $2.41 N/A
* Excludes the acquired research and development charge and transaction costs of mergers in fiscal 1998.
Electro Scientific Industries, Inc. Analysis of FY 1998 Results (Dollars in thousands) Three Months Ended Year Ended May-98 May-97 May-98 May-97 Sales detail: Semiconductor yield improvement systems $12,189 $18,703 $61,353 $65,271 Capacitor production equipment 13,772 16,496 64,598 50,447 Laser fine tuning systems 8,596 6,865 26,704 28,483 Electronic packaging 15,434 3,236 44,721 10,781 Vision systems 5,043 8,893 32,243 25,053 Total $55,034 $54,193 $229,619 $180,035 Gross margin % 50.5% 51.5% 54.4% 53.4% Selling, service and administrative expense % 26.4% 21.6% 24.9% 24.1% Research, engineering and development expense % * 13.1% 11.8% 12.4% 12.6% Operating income margin % * 11.0% 18.1% 17.1% 16.7% Effective tax rate % 0.0% 28.9% 37.1% 37.1% Average shares outstanding - Basic 11,304 10,530 11,112 10,499 Average shares outstanding - Diluted 11,722 10,915 11,512 10,875
* Excludes the acquired research and development charge and transaction costs of mergers in fiscal 1998.
Electro Scientific Industries, Inc. FY 1998 Results (Amounts in thousands) Financial Position As Of: May-98 Feb-98 May-97 Cash and S/T investments $38,916 $37,760 $48,175 Trade receivables 61,890 63,060 54,321 Inventory 49,805 53,058 35,023 Deferred tax assets 4,788 3,966 3,966 Other current assets 3,558 2,785 675 Total current assets 158,957 160,629 142,160 Property and equipment, net 27,638 25,474 19,033 Deferred tax assets 2,692 4,042 1,042 Other assets 10,156 7,912 5,115 Total assets $199,443 $198,057 $167,350 Current liabilities $17,162 $25,608 $20,655 Long-term debt 0 0 0 Shareholders' equity 182,281 172,449 146,695 Total liabilities and equity $199,443 $198,057 $167,350 End of period shares outstanding 11,369 11,165 10,594
/CONTACT: investor relations, Joe Reinhart, 503-671-5500, or press, Kimberly McAlear, 503-671-5233, both of Electro Scientific Industries, Inc./
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