Full Earnings Press Release except tables:
SOURCE: SpeedFam International, Inc.
CHANDLER, Ariz., Sept. 24 /PRNewswire/ -- SpeedFam International, Inc. (Nasdaq: SFAM - news), a leading supplier of high-throughput chemical mechanical planarization (CMP) systems for the semiconductor industry, today announced its financial results for the first quarter of fiscal 1999, ended August 31, 1998.
Total revenue was $36.4 million, compared with $53.8 million for the first quarter of fiscal 1998. Net earnings were $156,000, or $0.01 per share (diluted), compared with $5.6 million, or $0.39 per share (diluted), a year ago. Weighted average shares outstanding increased 15.1 percent, due primarily to SpeedFam's equity offering in October 1997.
''We continue to see the impact of the worldwide semiconductor industry slowdown on sales of CMP systems,'' said Makoto Kouzuma, SpeedFam president and chief executive officer. ''We also continue to see softness in the thin film memory disk media and silicon wafer markets. General overcapacity, compounded by global economic forces, has slowed the growth of all of our markets. In response to these conditions -- and the fact that they are likely to be with us for some time to come -- we are systematically reducing costs and expenses wherever practical to align them with lower revenue expectations.''
Kouzuma specifically cited an 11-percent reduction in SpeedFam's work force in April 1998 and a second 11-percent reduction on September 3, 1998. In addition, the salaries of all managers throughout SpeedFam's global operations have been reduced.
SpeedFam's first-quarter 1999 sales of CMP equipment to the semiconductor device market were $22.9 million, or 63.0 percent of total revenue, compared with $30.7 million, or 57.0 percent, for the year-earlier period. During the first quarter, the company shipped eight Auriga-C dry-in/dry-out planarization and cleaning systems, including one with hydrofluoric acid (HF) capabilities for the post-CMP cleaning process.
First-quarter sales to the thin film memory disk media market were $7.0 million, or 19.2 percent of total revenue, compared with $16.2 million, or 30.1 percent a year ago. The silicon wafer and industrial components markets accounted for sales of $6.5 million, or 17.8 percent of total revenue, compared with $6.9 million, or 12.9 percent, for the year-earlier quarter.
Backlog at August 31, 1998, was $29.3 million, compared with $43.5 million a quarter earlier and with $68.3 million a year ago.
First-quarter 1999 gross margin was 35.6 percent, down from 42.7 percent a year ago. This comparison reflects the effects of higher material costs for Auriga-C systems, higher overhead costs due to excess capacity, lower commission revenue, pricing pressure in all markets, and shifts in the product mix.
''We are determined to emerge from the current industry downturn as the CMP market leader,'' Kouzuma continued. ''Toward that end, we continue to invest aggressively in research and development, targeting all process applications requiring sub-0.2-micron technology. In addition, we continue to spend money to ensure that an effective and efficient field engineering support organization is maintained in order to meet our customers' needs globally.''
Research, development and engineering expenses were $9.1 million, or 25.1 percent of total revenue, compared with $6.8 million, or 12.6 percent, a year earlier. Selling, general and administrative expenses were $7.3 million, or 20.0 percent of total revenue, compared with $9.4 million, or 17.4 percent, for the first quarter of 1998.
Equity in the net earnings of joint ventures contributed $728,000 to SpeedFam's net earnings for the first quarter of 1999, approximately equal to the $729,000 reported a year ago.
At August 31, SpeedFam's cash, cash equivalents and short-term investments were $131.0 million, compared with $141.2 million at May 31, the end of the prior fiscal year.
The Company
SpeedFam International, Inc. designs, develops, manufactures, markets and supports chemical mechanical planarization (CMP) systems used in the fabrication of semiconductor devices and other high-throughput precision surface processing systems. SpeedFam polishing systems are also used in the thin film memory disk media, silicon wafer and general industrial components markets. In addition, the company markets and distributes polishing liquids (slurries), parts and expendables used in its customers' manufacturing processes. SpeedFam International owns a 50-percent interest in each of two joint ventures, SpeedFam Co., Ltd. (the Far East Joint Venture) and Fujimi Corporation.
Certain statements in this news release constitute 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Statements reflecting the company's backlog reflect orders that the company has received and that are expected to be shipped in the next 12 months, and may not be indicative of future orders from existing or potential future customers. Other factors that may affect the company's business, and may therefore affect actual results, include the cancellation or delay of customer orders, the cyclical nature of the company's business and the industries that it serves, the company's dependence on new product development, and the effects of rapid technological change in the semiconductor, disk media and silicon wafer industries, including the effects of significant competition in these industries. Normal fluctuations in the company's quarterly operating results, including the effects of the operating results of the company's joint ventures, could be factors that may affect the company's business. The aforementioned risks, uncertainties and other factors are discussed in detail in the company's filings with the Securities and Exchange Commission (SEC). |
