Monday October 26, 4:04 pm Eastern Time
Company Press Release
Zygo Announces First Quarter Fiscal 1999 Results
MIDDLEFIELD, Conn.--(BUSINESS WIRE)--Oct. 26, 1998--Zygo Corporation (NASDAQ:ZIGO - news) today announced its financial results for the first
quarter of fiscal 1999, ended September 30, 1998. In announcing its results, Gary K. Willis, president and CEO of Zygo, stated, ''while economic conditions
continued to impact orders from our two largest market sectors, semiconductor and data storage, our order rates improved from the fourth quarter of fiscal
1998. Despite these difficult conditions, the Company was essentially able to break even prior to charges recorded as a result of the bankruptcy filing of a
data storage customer, and we made substantial progress in our strategy of delivering integrated metrology-based yield improvement solutions to the
production floor of our customers by booking several large orders in the quarter.''
Net sales in the three months ended September 30, 1998 totaled $15,438,000, a decrease of $8,878,000 or 37% from $24,316,000 in the three months ended
September 30, 1997. Net sales of the Company's instruments and systems decreased by 45% to approximately $9,412,000 and net sales of its modules and
components totaled approximately $6,026,000 a decrease of 15% from the comparable quarter in the prior year. Net sales of both instruments and systems
and modules and components were significantly impacted by the prolonged downturn in the semiconductor and data storage industries.
The Company recorded a net loss of $1,071,000 in the three months ended September 30, 1998 versus net income of $1,698,000 in the year earlier period
ended September 30, 1997 which included $1,920,000 of nonrecurring charges. The net loss in the most recent quarter was largely due to the reversal of
revenues and establishment of an allowance for doubtful accounts relating to contracts in process with StorMedia Inc. and its affiliates which filed for
Chapter 11 protection with the U.S. Bankruptcy Court on October 11, 1998. The Company, therefore, essentially produced breakeven results on substantially
lower revenues. This financial performance was positively impacted by the cost reduction actions taken late in the fourth quarter of fiscal 1998 and early in
the first quarter of fiscal 1999. Commenting on these results, Mr. Willis stated, ''management has focused considerable attention on ensuring that appropriate
cost reduction measures are implemented, while at the same time investing in those activities that have the greatest long-term benefit to the Company.'' Mr.
Willis added, ''one example of these investments was the distribution agreement signed with IBM which allows the Company to add Atomic Force
Microscopy to our array of measurement technologies and to further our claim of the broadest measurement capability among metrology suppliers to high
technology markets today.'' The net loss on a per share basis was $(.10) for the quarter ending September 30, 1998 compared with net earnings per share in
the comparable prior year period of $.14 which included certain nonrecurring charges.
Backlog at September 30, 1998 totaled $25,520,000, an increase of $1,110,000 or 5% from June 30, 1998 and a decrease of $18,245,000 or 42% from
September 30, 1997. While the Company continued to experience softness in demand in the first quarter for its instruments and systems due to very difficult
market conditions in the semiconductor and data storage markets, the Company had a positive book-to-bill ratio at 1.07 in the quarter ended September 30,
1998.
Commenting on the outlook for the Company, Mr. Willis stated, ''while sales of the Company's products remain somewhat dependent upon macro economic
conditions in the markets the Company serves, which can not be accurately predicted, the Company's strong financial position and actions taken by the
Company to reduce our cost structure and broaden our technology, market and product base, should allow us to improve our competitive position and
financial performance in the future as these depressed markets improve.''
Zygo Corporation designs, develops, manufactures, and markets high performance measurement and yield improvement instruments, systems, and accessories
used in high technology industries. The Company is headquartered in Middlefield, Connecticut, and also has operations in Asslar, Germany; Longmont,
Colorado; and in Newbury Park and Sunnyvale, California. Zygo is traded on the Nasdaq National Market under the symbol ZIGO. Additional information on
the Company is available on the Internet at www.zygo.com.
This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended, which reflect the Company's current judgment on certain issues. Because such statements apply to future
events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors which could cause actual results to
differ materially are described in the Company's reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission.
Zygo Corporation and Consolidated Subsidiaries
Consolidated Statements of Earnings
(Thousands, except per share amounts) Three Months Ended
September 30,(1)
1998 1997
Net sales $ 15,438 $ 24,316
Cost of goods sold 10,064 12,851
Gross profit 5,374 11,465
Selling, general and administrative
expenses 4,641 3,928
Research and development 2,271 2,445
Nonrecurring acquisition-related charges -- 1,585
Failed merger costs -- 335
Amortization of goodwill and other
intangibles 216 142
Operating (loss) profit (1,754) 3,030
Other income, net 220 264
(Loss) earnings before income taxes (1,534) 3,294
Income tax (benefit) expense (463) 1,596
Net (loss) earnings $ (1,071) $ 1,698
(Loss) Earnings per common share:(4)
Basic (2) $ (.10)(3)$ .16
Diluted (2) (.10)(3)$ .14
Weighted average number of shares:
Basic 11,063 10,738
Diluted 11,063 12,241
(1) The results of Sight Systems, Inc. which is being accounted for
as an immaterial pooling-of-interests, are included from July 1,
1997; the results of Syncotec Neue Technologien und Instrumente
GmbH ("Syncotec") are included from September 1, 1997 when the
acquisition of the remaining 50% of Syncotec not then owned by
Zygo was completed.
(2) The difference between basic shares outstanding and diluted
shares outstanding is the assumed conversion of common stock
equivalents (stock options) in the amount of 1,503,200 in the
three months ended September 30, 1997.
(3) As per generally accepted accounting principles, the computation
of the net loss per share is based on the weighted average basic
shares outstanding.
(4) The net earnings or loss per common share have been restated as a
result of the adoption of Statement of Financial Accounting
Standards No. 128, Earnings Per Share.
Zygo Corporation and Consolidated Subsidiaries
Condensed Consolidated Balance Sheets
(Thousands of dollars) September 30, 1998 June 30, 1998
------------------ -------------
Assets
Current assets:
Cash and cash equivalents $16,169 $22,023
Marketable securities 10,855 8,264
Receivables 14,209 16,555
Inventories 14,558 14,430
Costs in excess of billings - 1,182
Prepaid expenses and taxes 845 829
Income taxes receivable 281 -
Deferred income taxes 2,671 2,680
------- ------
Total current assets 59,588 65,963
------ ------
Property, plant and equipment, net 15,986 15,689
Goodwill and other intangible assets 8,346 8,524
Other assets, net 826 829
-------- --------
Total assets $84,746 $91,005
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 4,090 $ 5,993
Accrued expenses and progress payments 5,792 9,542
Billings in excess of cost 495 -
Income taxes payable - 343
---------- -------
Total current liabilities 10,377 15,878
------ ------
Deferred income taxes 2,961 2,961
Stockholders' equity 71,408 72,166
------ ------
Total liabilities and stockholders' equity $84,746 $91,005
====== ======
Contact:
Zygo Corporation, Middlefield
Kevin M. McGuane
Vice President, Finance and Chief Financial Officer
860/347-8506 |
