SpeedFam International Announces Third-Quarter Fiscal 1999 Results
CHANDLER, Ariz.--(BUSINESS WIRE)--March 25, 1999--SpeedFam International, Inc. (NASDAQ:SFAM - news), a leading supplier of high-throughput chemical mechanical planarization (CMP) systems for the semiconductor, thin film memory disk media and silicon wafer industries worldwide, today announced its financial results for the third fiscal quarter ended Feb. 28, 1999.
Total revenue was $32.1 million, compared with $48.4 million for the third quarter of fiscal 1998. Net loss was $2.1 million, or $0.13 per share (basic), compared with net earnings of $5.1 million, or $0.31 per share (diluted), a year ago.
For the first nine months of fiscal 1999, SpeedFam's total revenue was $92.5 million, compared with the $158.8 million reported for the first nine months of fiscal 1998. Net loss for the first nine months of fiscal 1999 was $6.2 million, compared with net earnings of $18.3 million for the first nine months of the prior year.
Net loss per share for the first nine months of fiscal 1999 was $0.38 (basic), compared with net earnings per share of $1.19 (diluted) for the same period a year ago.
''Although generally disappointed with bottom-line results, we are pleased with our recently announced CMP order from a major Korean semiconductor manufacturer, which is valued in excess of $10 million,'' said Richard J. Faubert, SpeedFam president and chief executive officer.
''We are also encouraged by the sequential trend in our overall book-to-bill ratio, which was on par with the semiconductor equipment industry average of 1.17 for the third quarter and up from 0.8 for the second quarter. We are especially pleased that the book-to-bill ratio for our core CMP business came in stronger than the industry average.
''We believe that this pick-up in order activity for SpeedFam and other equipment companies may be an early indicator that the long-awaited recovery of the worldwide semiconductor industry is on its way.''
Business Mix
SpeedFam's third-quarter fiscal 1999 sales of CMP equipment to the semiconductor device market were $19.1 million, or 59.6 percent of total revenue, compared with $28.0 million, or 57.8 percent, for the year-earlier period. Third-quarter sales to the thin film memory disk media market were $6.1 million, or 19.0 percent of total revenue, compared with $13.0 million, or 26.8 percent, a year ago.
The silicon wafer and industrial components markets accounted for sales of $6.9 million, or 21.4 percent of total revenue, compared with $7.5 million, or 15.4 percent, for the year-earlier quarter.
Backlog at Feb. 28, 1999, was $29.9 million, compared with $25.0 million a quarter earlier and with $58.2 million a year ago.
Operating Results
Third-quarter fiscal 1999 gross margin was 33.4 percent, down from 41.4 percent a year ago. Research, development and engineering expenses were $7.5 million, or 23.3 percent of total revenue, compared with $7.7 million, or 15.9 percent, a year earlier.
Selling, general and administrative expenses were $9.5 million, or 29.6 percent of total revenue, up from $8.7 million, or 18.0 percent, for the third quarter of fiscal 1998. The increase in selling, general and administrative expenses reflects significant commissions paid to the Far East Joint Venture for Auriga C systems shipped to Asian markets.
SpeedFam's third-quarter operating loss was $6.2 million, compared with an operating profit of $3.6 million for the third quarter of fiscal 1998. For the first nine months of fiscal 1999, the operating loss was $21.0 million, compared with an operating profit of $18.6 million for the same period a year earlier.
Equity in the net earnings of SpeedFam's joint ventures was $211,000 for the third quarter of fiscal 1999, down from the $1.7 million reported a year ago. For the first nine months of fiscal 1999, equity in the net earnings of SpeedFam's two joint ventures was $1.6 million, compared with $3.8 million for the same period of last year.
At Feb. 28, SpeedFam's cash, cash equivalents and short-term investments were $108.4 million, compared with $121.3 million at Nov. 30, the end of the prior quarter, and with $141.2 million at May 31, the end of the prior fiscal year.
Technology Center Completed
During the third quarter, SpeedFam completed the construction of its new, world-class Technology Center in Chandler, Arizona. The company began moving in staff and equipment and expects to finish this process by the end of the current fiscal year.
SpeedFam-IPEC Merger Update
On Jan. 26, 1999, SpeedFam and Integrated Process Equipment Corp. (NASDAQ: IPEC - news) jointly announced that the waiting period for their merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 was terminated by the Federal Trade Commission and the Department of Justice.
In addition, on March 5, 1999, SpeedFam and IPEC announced that the Form S-4 filed for their proposed merger was declared effective by the Securities and Exchange Commission (SEC). This cleared the way for the two companies to complete the merger, pending SpeedFam shareholder approval, IPEC stockholder approval and other customary closing conditions.
SpeedFam and IPEC have scheduled their own special meetings of shareholders and stockholders, respectively, for April 6, 1999, at 11:00 a.m. local time. The two companies expect the transaction to be completed in April 1999.
''We look forward to completing the merger, subject to shareholder and stockholder approval, and to the rapid implementation of our approved integration plans,'' said Faubert.
SpeedFam International, Inc.
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's flat surface processing 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 consumables used in its customers' manufacturing processes. SpeedFam International, Inc. owns a 50-percent interest in each of two joint ventures, SpeedFam Co. Ltd. (the Far East Joint Venture) and Fujimi Corp.
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 company's pending agreement to merge with IPEC, the ability of the company to achieve certain operating synergies and cost reductions as a result of the merger should it be approved by shareholders, 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).
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