Well, SVGI closed below Book Value which is now a little more than $18.50 with 32M shares outstanding as of May 1st and $595M of shareholders' equity.
From the 10Q:
...
The Company believes that as a result of the Asian economic crisis, an
oversupply of certain products (customers reporting inventory excesses) and the
implications of low cost personal computers, semiconductor manufacturers have
reduced planned expenditures and cancelled or delayed the construction of new
fabrication facilities. This slowdown in demand has begun to impact the Company.
During the second quarter of fiscal 1998, the Company recorded customer order
bookings
of $135,793,000, significantly lower than first quarter bookings of
$175,253,000. Additionally, during the first half of fiscal 1998, customer
orders totaling $71,455,000 were removed from the Company's backlog due to
customer deferrals of scheduled deliveries to dates in excess of twelve months
from the fiscal quarter-end. An additional $1,896,000 in orders were cancelled
during this period. As a result of such lower bookings, the Company believes
sales during the second half of fiscal 1998 could be as much as 30% to 35% below
sales during the first half of fiscal 1998.* Further, the Company believes that
a decrease in sales of this magnitude will result in significant reductions in
the Company's gross margin and net income.* To lessen the impact of these lower
volumes, in April 1998 the Company reduced its workforce by approximately 6%.
Additionally the Company has scheduled 15 shutdown days, five in the third
quarter of fiscal 1998 and ten in the fourth quarter of fiscal 1998, and is
restricting personnel additions. There can be no assurance that the Company will
not experience further customer delivery deferrals, additional order
cancellations or a prolonged period of customer orders at reduced levels, any or
a combination of which would further reduce earnings.*
...
During the second quarter of fiscal 1998, the Company recorded customer order
bookings of $135,793,000, significantly below first quarter fiscal 1998 bookings
of $175,253,000 and above bookings for the year-earlier quarter of $127,726,000.
The Company includes in backlog only those orders to which a purchase order
number has been assigned by the customer, with all terms and conditions agreed
upon and for which delivery has been specified within twelve months. During the
second quarter of fiscal 1998, customer orders totaling $33,455,000 were removed
from the Company's backlog due to customer deferrals of scheduled deliveries to
dates outside the Company's one-year parameter. An additional $1,896,000 in
orders were cancelled during the quarter. Such orders were in addition to orders
totalling $38,000,000 which, as a result of rescheduled shipment dates, were
removed from backlog in the first quarter of fiscal 1998. After giving effect to
such rescheduled and cancelled orders, the Company's backlog at March 31, 1998
totaled $288,608,000, significantly below the September 30, 1997 backlog of
$435,482,000. At March 31, 1998, the
backlog included orders for 31 Micrascan photolithography systems. Additionally,
SVGL had orders for 29 additional systems with scheduled delivery dates outside
the twelve-month backlog window.
Gross margin was 39.6% in the second quarter of fiscal 1998, compared to 39.4%
during the preceding quarter and 37.4% in the second quarter of fiscal 1997. The
slight improvement in gross margin over the first quarter of fiscal 1998
reflects the effect of increased Thermco shipments, substantially offset by
reduced margins on lower Track shipments. In comparison to the year-earlier
quarter the improvement in gross margin was primarily due to increased Track
shipments.
For the first six months of fiscal 1998, gross margin was 39.5% compared to
37.7% for the first half of fiscal 1997. The improvement over the year-earlier
period was primarily the result of higher gross margins on increased Track
shipments offset in part by the effect of lower margins on reduced Thermco
shipments and lower margins resulting from a shift in the mix of systems shipped
by SVGL.
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