Carl, Thread;
Well, Zygo missed estimates which explains why they have been so beaten up the last several sessions. I still like the stock and may average here.
Tuesday January 26, 10:06 am Eastern Time
Company Press Release
Zygo Announces Second Quarter Fiscal 1999 Results
MIDDLEFIELD, Conn.--(BUSINESS WIRE)--Jan. 26, 1999--Zygo Corporation (NASDAQ:ZIGO - news) today announced its financial results for the second quarter ended December 31, 1998. In announcing its results, Gary K. Willis, chairman and CEO, stated, ''The second quarter remained very difficult for the Company although several milestones were reached including the broadening of our product offering with Atomic Force Microscopy, the introduction of our industrial MESA, and the introduction of a lower price/performance micropositioning system, our ZMI 510. The financial condition of the Company remains strong with cash and cash equivalents totaling over $24 million and the Company remains debt free.''
Net sales of $15,979,000 for the three months and $31,417,000 for the six months ended December 31, 1998, decreased by $11,298,000 or 41% and $20,176,000 or 39%, respectively, from the net sales in the comparable prior year periods. Net sales of the Company's instruments and systems decreased by 33% to $11,382,000 from the comparable quarter in the prior fiscal year. The Company's sales continue to be impacted by the Asian economic environment and weak semiconductor and data storage markets. Net sales of modules and components decreased by 55% to $4,597,000 in the second quarter of fiscal 1999 from $10,184,000 in the comparable quarter in fiscal 1998 which included $3.2 million of facilitization revenues recorded by the Company on the NIF facility contract with Lawrence Livermore National Laboratory.
The Company recorded a net loss of $336,000 in the three-month period ended December 31, 1998, as compared to net income of $3,689,000 reported in the three-month period ended December 31, 1997. The Company reported diluted per share earnings of $(.03) in the quarter ended December 31, 1998, as compared to diluted per share earnings of $.30 in the comparable quarter in the prior year. Excluding nonrecurring charges, a net loss for the six months ended December 31, 1998 totaling $1,407,000, as compared to net profit of $7,307,000 for the six months ended December 31, 1997. Diluted earnings per share for the first half of fiscal 1999, excluding the nonrecurring charges, were $(.13), as compared to $.60 in the first half of fiscal 1998. Including the nonrecurring charges, the Company reported a net loss of $1,407,000 or $(.13) per share for the first half of fiscal 1999, as compared to a net profit in the comparable prior period of $5,387,000 or $.44 per share.
The Company's backlog at December 31, 1998 totaled $23,088,000, a decrease of 36% from the backlog at December 31, 1997. The decline in the Company's backlog from the $25,520,000 at September 30, 1998 was due to softness in two major market sectors. Mr. Willis commented, ''Orders in the second quarter continued to be depressed, particularly from the semiconductor and data storage markets. Although we are beginning to see more enthusiasm for new projects among our customers, they are continuing to hold back capital spending and, thus, orders for our equipment are expected to remain somewhat sluggish for the immediate future.''
Mr. Willis commented on business conditions and prospects, stating, ''While it is difficult to precisely predict the degree to which the current business climate will affect us as well as the duration of this impact, we continue to be well positioned in our markets. The inherent value of our precision measurement capabilities coupled with our automation and parts handling solutions has not diminished during these difficult times. Improving production productivity and yields depends on our technology more today than ever. We are well positioned to take advantage of this increasing trend through the investments we have made in our core business and in acquisitions, as well as in our ability to commercialize innovative solutions. Our company has a demonstrated track record supporting this. We are particularly excited at this time due to our recently announced distribution agreements with IBM's Manufacturing Technology Center for their production MagnaScope SXM 300 and laboratory MagnaScope 2000. These products further broaden our line of high precision metrology tools and, in fact, we now have the broadest array of high precision metrology tools utilized by the high technology industry.''
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 Operations
(Thousands, except per share amounts)
For the Three Months For the Six Months
Ended December 31,(1) Ended December 31, (1)
1998 1997 1998 1997
Net sales $ 15,979 $ 27,277 $ 31,417 $ 51,593
Cost of good sold 9,860 15,701 19,924 28,552
Gross profit 6,119 11,576 11,493 23,041
Selling, general
and administrative
expenses 3,982 3,620 8,623 7,548
Research,
development and
engineering expenses 2,562 2,465 4,833 4,910
Nonrecurring
acquisition-related
charges 0 0 0 1,585
Failed merger costs 0 0 0 335
Amortization of
goodwill and
other intangibles 277 196 493 338
Operating (loss) profit (702) 5,295 (2,456) 8,325
Other income, net: 290 105 510 369
(Loss) earnings
before income taxes (412) 5,400 (1,946) 8,694
Income tax
(benefit) expense (76) 1,711 (539) 3,307
Net (loss) earnings $ (336) $ 3,689 $ (1,407) $ 5,387
Earnings per share (4):
Basic (2) $ (.03)(3)$ .34 $ (.13)(3)$ .50
Diluted (2) $ (.03)(3)$ .30 $ (.13)(3)$ .44
Weighted average number of shares:
Basic 11,158 10,921 11,110 10,816
Diluted 11,158 12,338 11,110 12,275
(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 assumedconversion of common stock equivalents (stock options) in the amounts of 1,417,000 in the three months ended December 31, 1997, and 1,459,000 in the six months ended December 31, 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) December 31, 1998 June 30, 1998
----------------- -------------
Assets
Current assets:
Cash and cash equivalents $14,660 $22,023
Marketable securities 9,468 8,264
Receivables 11,426 16,555
Inventories 14,915 14,430
Costs in excess of billings 2,049 1,182
Income taxes receivable 633 0
Prepaid expenses and taxes 587 829
Deferred income taxes 2,696 2,680
Total current assets 56,434 65,963
Property, plant and equipment, net 15,539 15,689
Goodwill and other intangible assets 10,156 8,524
Other assets, net 896 829
Total assets $83,025 $91,005
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 3,509 $ 5,993
Accrued expenses and progress payments 5,455 9,542
Income taxes payable 0 343
Total current liabilities 8,964 15,878
Deferred liabilities 2,961 2,961
Stockholders' equity 71,100 72,166
Total liabilities and stockholders' equity $83,025 $91,005
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