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Technology Stocks : Varian Semiconductor Equipment Associates -- VSEA -- Ignore unavailable to you. Want to Upgrade?

To: Bob D who wrote (35)	5/17/1999 9:16:00 AM
From: Duker	Respond to of 1929

Varian Semiconductor Equipment Associates Announces FY 1999 Second Quarter Results First Report as an Independent Public Company GLOUCESTER, Mass.--(BUSINESS WIRE)--May 17, 1999-- Varian Semiconductor Equipment Associates, Inc. (NASDAQ: VSEA - news) today announced results for the second quarter of fiscal 1999, ended April 2, 1999. Second quarter revenues totaled $53.2 million, up 12 percent from the $47.4 million revenue level in this fiscal year's first quarter, but down 49 percent from the prior year's quarterly revenue of $105.1 million. The quarter's net loss per share was $0.63 on a diluted basis, compared with a net loss per share of $0.22 on a diluted basis in the first quarter of this fiscal year and earnings per share of $0.34 on a diluted basis for the previous year's same quarter. For the six-month fiscal year period, revenues reached $100.6 million, compared with $219.4 million in the same period last year. The net loss per share for the six months was $0.85 on a diluted basis, against $0.83 earnings per share on a diluted basis in last year's comparable six-month period. This year's three-month and six-month periods include $11.6 million of special charges, as described below. Richard A. Aurelio, Varian Semiconductor's president and chief executive, noted that the worldwide slowdown in the semiconductor industry seems to be abating. ''Based on our increase in revenues since last quarter and our increasing backlog, we are optimistic that industry growth has resumed, although we doubt the upturn will be quick. Demand for our products is increasing, and we expect that sales growth will contribute to better capacity utilization in the coming quarters.'' This is the first quarterly report from Varian Semiconductor as an independent company. Varian Semiconductor became independent on April 2, 1999, when its former parent, Varian Associates, Inc., reorganized into three separate companies. Special charges incurred in the second quarter totaled $11.6 million and included inventory provisions, restructuring charges relating to severance costs and asset write downs and other costs relating to the reorganization into an independent company. Gross profit for the quarter of $3.8 million, at 7 percent of revenues, was well below the $37.6 million gross profit (36 percent of revenues) achieved in the same quarter of the previous fiscal year, due primarily to the special charges and low capacity utilization. ''Longer term, our proprietary technological improvements to ion implantation will be a major driver of growth for Varian Semiconductor,'' Aurelio said. ''Our customers are responding well to our single-wafer technology as a high-quality, cost-effective solution to the pressing demands of smaller semiconductor device geometries. The clear benefits of our single-wafer technology should become a standard customer requirement. ''The fact is, we are rated number one in customer satisfaction, and we are gaining market share because our customers recognize that Varian Semiconductor's products, and the service organization behind them, are the best in the industry,'' Aurelio concluded. Varian Semiconductor Equipment Associates is the world's largest producer of ion implantation equipment used in the manufacture of semiconductors. The company is based in Gloucester, Massachusetts, and operates from three manufacturing sites and 26 worldwide offices. Varian Semiconductor maintains a web site at www.vsea.com. Note: This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. For this purpose, the statements concerning the industry outlook, the company's sales growth, market share, capacity utilization and technological improvements and benefits, and any statements using the terms ''believes,'' ''anticipates,'' ''expects,'' ''plans'' or similar expressions, are forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the lack of recent operating history for the company as a separate entity; volatility in the semiconductor equipment industry; significant fluctuations in the company's quarterly operating results; risks associated with the company's transition to a new information technology infrastructure; the impact of rapid technological change and the company's dependence on the development and introduction of new products; the company's concentration on ion implantation systems and related products; concentration in the company's customer base and lengthy sales cycles; the highly competitive market in which the company competes; risks of international sales; foreign currency risks; uncertain protection of patent and other proprietary rights; potential environmental liabilities; the company's reliance on a limited group of suppliers; the company's dependence on certain key personnel; the impact of the Year 2000 issue; as well as other risk factors described from time to time in the company's periodic reports and registration statements filed with the Securities and Exchange Commission.

To: Bob D who wrote (35)	5/17/1999 9:17:00 AM
From: Duker	Read Replies (1) \| Respond to of 1929

VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts) (Unaudited) Three months ended Six months ended April 2, April 3, April 2, April 3, 1999 1998 1999 1998 Revenue $ 53,205 $ 105,087 $ 100,560 $ 219,375 Operating Costs and Expenses Cost of revenue 49,431 67,537 84,626 132,322 Research and development 10,492 8,418 18,209 18,245 Marketing 9,061 10,104 16,518 21,864 General and administrative 9,130 3,984 16,451 10,591 Restructuring costs 2,688 -- 2,688 -- Total Operating Costs and Expenses 80,802 90,043 138,492 183,022 Operating (Loss) Earnings before Taxes (27,597) 15,044 (37,932) 36,353 Tax provision (benefit) on (loss) earnings (8,382) 4,529 (12,020) 10,948 Net (Loss) Earnings $(19,215) $ 10,515 $ (25,912) $ 25,405 Average Shares Outstanding - Basic 30,423 30,423 30,423 30,423 Average Shares Outstanding - Diluted 30,423 30,508 30,423 30,508 Net (Loss) Earnings Per Share - Basic $ (0.63) $ 0.35 $ (0.85) $ 0.84 Net (Loss) Earnings Per Share - Diluted $ (0.63) $ 0.34 $ (0.85) $ 0.83 VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Amounts in thousands, except share amounts) April 2, October 2, 1999 1998 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 99,457 $ -- Accounts receivable 54,507 62,677 Inventories 53,848 60,692 Other current assets 45,012 38,754 Total Current Assets 252,824 162,123 Net Property, Plant and Equipment 34,028 38,814 Other Assets 22,587 23,689 TOTAL ASSETS $309,439 $224,626 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Notes payable $ 5,036 $ -- Other current liabilities 109,862 112,629 Total Current Liabilities 114,898 112,629 Long-Term Liabilities 7,896 8,748 Total Liabilities 122,794 121,377 Stockholders' Equity Preferred stock Authorized 5,000,000 shares, par value $.01, issued none.... -- -- Common stock Authorized 150,000,000 shares, par value $.01 issued and outstanding 30,422,792 at April 2, 1999 304 -- Capital in Excess of Par Value 186,341 Divisional Equity -- 103,249 Total Stockholders' Equity 186,645 103,249 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $309,439 $224,626 -------------------------------------------------------------------------------- Contact: Varian Semiconductor Equipment Associates, Gloucester Ernest L. Godshalk, 978/282-2303 Chief Financial Officer or Investor Relations Partners, Inc., Livingston, N.J. Shellie M. Roth, 973/535-8389 --------------------------------------------------------------------------------