Cymer Reports Second Quarter 2005 Operating Results
Tuesday July 19, 4:05 pm ET
SAN DIEGO--(BUSINESS WIRE)--July 19, 2005--Cymer, Inc. (Nasdaq:CYMI - News), the world's leading supplier of deep ultraviolet (DUV) light sources used in semiconductor manufacturing, today announced operating results for the second quarter ended June 30, 2005. Second quarter total revenue and gross margin exceeded Cymer's April 19, 2005 guidance. Highlights of the second quarter included higher than expected non-systems revenue, as well as generation of $34,479,000 in cash from operations, and the successful execution of the company's stock and convertible note repurchase programs. Additionally, Cymer announced earlier today the formation of the TCZ joint venture with Carl Zeiss SMT, AG, to provide production tools to the flat panel display manufacturing industry.
ADVERTISEMENT
For the second quarter of 2005, net income totaled $11,015,000, equal to $0.30 per share (diluted), compared to net income of $10,201,000, equal to $0.27 per share (diluted), in the second quarter of 2004, and to net income of $5,385,000, equal to $0.14 per share (diluted), in the first quarter of 2005.
Total revenue for the second quarter of 2005 rose to $96,392,000 compared to total revenue of $94,907,000 posted in the second quarter of 2004, and increased 14 percent sequentially over $84,810,000 in total revenue in the first quarter of 2005.
For the first six months of 2005, net income totaled $16,400,000, equal to earnings of $0.45 per share (diluted) compared to net income of $17,357,000, equal to earnings of $0.46 per share (diluted), in the first six months of 2004. Total revenue for the first six months of 2005 was $181,202,000, compared to $182,828,000 in total revenue recorded in the first six months of 2004.
Other Income (Expense) in the second quarter and first half of 2005 was positively impacted by a gain on debt extinguishment of $2,220,000 related to the repurchase of approximately $60 million of the company's convertible subordinated notes during the second quarter of 2005. On a net income basis, the gain amounted to approximately $0.06 per share (diluted) for the second quarter.
Commenting on the second quarter, Bob Akins, Cymer's chief executive officer, said, "We are pleased that second quarter 2005 operating results came in ahead of our expectations, and with the continuing robust acceptance of our product offerings. Our market leadership position at 193nm continued with strong shipments of our XL Series products in the quarter -- a total of 26 systems. We received multiple purchase orders for the XLA 200, our third generation dual chamber MOPA ArF light source, and received our first purchase orders for the XLA 300, the fourth generation in this product line that we introduced last week at SEMICON West, and which is scheduled to begin shipping in the final quarter of this year.
"We recognized revenue on 56 light sources in the second quarter of 2005 compared to 48 light sources in the first quarter of this year," Akins continued. "Cymer installed 77 new light sources in the second quarter compared to 67 light sources in the first quarter of 2005.
"With chipmakers focused on filling out 90nm production lines and preparing for the ramp up of 65nm production which will occur in 2006 or 2007 for most manufacturers, technology buys remained the main driver of system demand in the second quarter. Our second quarter average selling price (ASP) was $941,000 on a currency adjusted basis," Akins stated. "The quarterly average utilization of our light sources at chipmakers in the second quarter increased nearly 5 percent over the previous quarter's average utilization, and drove non-systems product revenue, which consists of consumables and spare parts, upgrades, and service, to $41,000,000, for the second quarter, equal to 43 percent of total revenue."
Nancy Baker, Cymer's chief financial officer, stated, "Product gross margin in the second quarter of 2005 was 40 percent compared to 37 percent in the first quarter of 2005. Cymer recorded operating income of $8,925,000, or 9 percent of revenue in the second quarter of 2005, compared to operating income of $5,077,000, or 6 percent of revenue, in the first quarter of 2005," Baker continued. "Second quarter 2005 bookings totaled $96,368,000, resulting in a second quarter 2005 book-to-bill ratio of 1.0. The 2005 second quarter-end backlog totaled $75,751,000."
Cymer generated $34,479,000 in cash from operations in the second quarter of 2005 compared to $44,473,000 in the first quarter of 2005, and cash generated from operations in the first six months of 2005 totaled $78,952,000. Cash and cash equivalents and short- and long-term investments totaled $342,332,000 at June 30, 2005.
Baker stated, "Capital spending for the second quarter of 2005 totaled $2,669,000 compared to $5,180,000 in the first quarter of 2005. Our free cash flow for the second quarter, calculated as the net cash provided by operating activities less our acquisition of property and equipment, was $31,810,000, and for the first six months of 2005, free cash flow totaled $71,103,000. In addition to our repurchase of approximately $60 million worth of our convertible notes during the second quarter, we also repurchased approximately 1.7 million shares of Cymer's common stock in the open market for a total of approximately $41.7 million."
Corporate Outlook
Commenting on Cymer's outlook, Akins noted, "At SEMICON West last week, the overall tone of the show was mixed, with some equipment companies indicating that their business had leveled off and that they expected orders to improve late this year. Though chipmakers for the most part continue to make strategic purchases for their 300mm fabs to fill out their 90nm production lines, and prepare for the coming transition to the 65nm node, certain segments have slowed as they install equipment ordered in recent quarters. Specific to Cymer, while the second quarter pickup in our light source utilization rates is encouraging, until overall fab utilization increases from its current level in the high 80 percent range and is sustained at levels well above 90 percent we would expect business to remain at or near its current levels."
Based on information available at this time, Cymer is currently providing the following guidance for the third quarter of 2005, which includes expectations for the financial impact of the recently announced joint venture:
We currently estimate that total product revenue in the third quarter of 2005 should be flat to down approximately five percent compared to second quarter 2005 revenue.
We are forecasting that foreign currency adjusted ASPs should be approximately $940,000.
We expect that gross margin should be between 38 and 40 percent.
We anticipate that R&D expenses should be between $16.5 million and $17.5 million.
We expect SG&A expenses to be between $13.0 million and $13.5 million.
We currently estimate the third quarter 2005 annualized effective tax rate to be approximately 9 percent. U.S. GAAP requirements prevent recognizing certain expected tax benefits until the quarter in which they occur. With the realization of anticipated discrete fourth quarter events, we expect that our annual effective tax rate will return to approximately 0 percent for 2005 by year-end. |
