ADE Corporation Posts Better Than Expected Profits on Rising Sales; Company Reports Improved Gross Margins, Positive Cash Flow and Higher Bookings.Business Editors/High-Tech Writers WESTWOOD, Mass.--(BUSINESS WIRE)--Feb. 25, 2003 ADE Corporation (Nasdaq: ADEX ADEX Athens Derivatives Exchange (Athens, Greece) ADEX Air Defense Exercise ADEX Advertisement Expenditure ADEX Asociaciã³n de Exportadores (Peru) ), a leading supplier of production metrology metrology Science of measurement. Measuring a quantity means establishing its ratio to another fixed quantity of the same kind, known as the unit of that kind of quantity. and inspection systems for the semiconductor wafer, semiconductor device, magnetic storage and optics manufacturing industries manufacturing industries npl → industrias fpl manufactureras manufacturing industries npl → industries fpl de transformation , today reported strong financial results for the fiscal third quarter ended January 31, 2003. ADE reported revenues of $18.5 million for the third quarter of fiscal 2003. This compares with $18.1 million for the second quarter of fiscal 2003 and $17.9 million for the third quarter of fiscal 2002. ADE's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). net income for the third quarter of fiscal 2003 was $0.6 million, or $0.04 per share with 13.7 million weighted average diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. shares outstanding. This compares with a GAAP net loss of $2.4 million, or $0.18 per share with 13.7 million weighted average basic and diluted shares outstanding, for the second quarter of fiscal 2003 and a net loss of $3.2 million, or $0.24 per share with 13.6 million weighted average basic and diluted shares outstanding, for the third quarter of fiscal 2002. Backlog increased to $24.6 million on January 31, 2003, compared with $23.3 million on October 31, 2002, reflecting 18% sequential growth in new orders over the previous quarter. Cash and cash equivalents, which excludes $3.2 million of restricted cash, totaled $17.6 million at January 31, 2003 compared with $14.2 million at October 31, 2002. "ADE's much improved year-over-year performance demonstrates the successful actions we have taken to improve our fundamental cost structure and manage the business amid challenging market conditions," said Dr. Chris L. Koliopoulos, president and chief executive officer of ADE Corporation. "Quarter-to-quarter, we continued to increase revenues. We also showed substantial gross margin growth, and we posted a notably stronger bookings quarter. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , ADE posted a profitable quarter and, in the process, added $3.5 million in cash to its balance sheet. ADE's continuing improvement in operating and financial performance in a soft capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. environment demonstrates that we are executing on our plan to create shareholder value." Dr. Koliopoulos continued, "Revenues and bookings for ADE's 200mm and 300mm wafer equipment tool sets continued to rise in the third quarter. Furthermore, as our newly released products receive customer attention, we see strong product evaluation activity, and these evaluations are translating into acceptance and orders. We received a multi-million-dollar follow-on order for multiple AFS A distributed file system for large, widely dispersed Unix and Windows networks from Transarc Corporation, now part of IBM. It is noted for its ease of administration and expandability and stems from Carnegie-Mellon's Andrew File System. AFS - Andrew File System 300mm advanced wafer flatness measurement and sorting systems from a major Japanese wafer supplier. Our AWIS AWIS Association for Women in Science AWIS Alexa Web Information Service AWIS Army WWMCCS Information System AWIS Advanced Wafer Inspection System (ADE Corporation) AWIS Association for the Wellbeing of Israel's Soldiers wafer surface inspection and NanoMapper wafer nanotopography metrology products continued to generate robust demand. And we are especially pleased to announce receiving our first order for WaferSight, ADE's new wafer flatness and shape optical metrology tool for 300mm and advanced 200mm production, after completing a successful beta evaluation period Evaluation period The time interval over which funds assess a money manager's performance. . This is continuing evidence that ADE is providing the highest value in advanced inspection and metrology systems required by our wafer-supplier customer base." ADE Chief Financial Officer Brian James Not to be confused with Brion James. Brian James can be
Business Outlook & Financial Guidance "Going forward, we expect to continue growing revenues for our new tool sets in the wafer and device markets while we trim expenses further," continued Mr. James. "Our ongoing operational strategy of outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. non-core assemblies, improving cycle times and implementing other efficient manufacturing practices has enabled us to decrease our working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. and generate more revenue per square foot. As a result of these actions, we can consolidate ADE's Newton, Massachusetts The City of Newton in Middlesex County, Massachusetts, is an important residential suburb of Boston, which abuts it on the east. According to the 2000 census, the population of the Newton was 83,829, making it the tenth largest city in the state. operations into our Westwood, Massachusetts Westwood is a town in Norfolk County, Massachusetts, United States. The population was 14,117 at the 2000 census. History Westwood was first settled in 1640 and was part of the town of Dedham (it was originally called 'West Dedham') until it was officially incorporated facility in the fourth quarter. Subsequently, we will offer the Newton property for sale. This initiative will provide us with ample room for continued growth at ADE while also further enhancing our cash balance." "ADE expects that a blend of legacy and new product sales will drive another sequential increase in revenues for the fourth quarter. We anticipate revenues in the range of $19 million to $20 million for the fourth quarter, while gross margins return to a range of 43% to 45% as we deliver a more historical product mix. We also expect that near-term legal costs will increase sharply during the quarter as our ongoing patent infringement patent infringement n. the manufacture and/or use of an invention or improvement for which someone else owns a patent issued by the government, without obtaining permission of the owner of the patent by contract, license or waiver. case against KLA-Tencor relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc our Angular angular /an·gu·lar/ (ang´gu-lar) sharply bent; having corners or angles. Resolved Surface Inspection technology goes to trial. Including these additional legal fees, we anticipate EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become to remain positive and fourth-quarter earnings per share to range from a loss of $0.03 per share to income of $0.03 per diluted share, depending in part on trial timing and preparations," concluded Mr. James. Conference Call Reminder ADE will host a conference call to discuss the Company's third-quarter financial results on Wednesday, February 26, 2003 at 8:30 a.m. (ET). To participate in the webcast, please visit the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section of the ADE website, located at http://www.ade.com, fifteen minutes prior to the start of the conference call. About ADE Corporation ADE Corporation is a leading supplier of metrology and inspection systems for the silicon wafer and magnetic data storage, and optics manufacturing industries. The Company's systems analyze and report product quality at critical manufacturing process steps for yield enhancement, providing quality certification data that is relied upon by semiconductor wafer, device and computer disk manufacturers. The Company's systems also are used for production measurements in the semiconductor chip fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. process. To learn more about ADE, visit the Company's Web site at http://www.ade.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. This news release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Those statements that make reference to the Company's expectations, predictions, assumptions and anticipations should be considered forward-looking statements. These statements include, but are not limited to, those associated with expected demand in the wafer, device and data storage markets; financial results for the fourth quarter of fiscal 2003; developments in the Company's patent infringement legal suit; and the consolidation of the Company's Newton, Massachusetts operations. These statements involve risks and uncertainties including those associated with the strength of the semiconductor, data storage and device markets; wafer pricing and wafer demand; the results of its product development efforts, the success of ADE's product offerings to meet customer needs within the timeframes required by customers in these markets, increases in backlog, the Company's ability to increase gross margins, its visibility, and its predictions of future financial outcomes. Further information on potential factors that could affect ADE Corporation's business is described in the Company's reports on file with the Securities and Exchange Commission, including its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended April 30, 2002. Attached are the Company's condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of operations and balance sheets.
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three months ended Nine months ended
January 31 January 31
2003 2002 2003 2002
Revenue $18,465 $17,945 $51,261 $65,227
Cost of revenue 9,492 10,407 28,441 39,056
Gross profit 8,973 7,538 22,820 26,171
Operating expenses:
Research and development 3,637 5,190 12,829 17,266
Marketing and sales 2,584 2,973 8,294 10,112
General and administrative 2,094 2,995 7,389 8,103
Restructuring charges - - 1,588 -
Total operating expenses 8,315 11,158 30,100 35,481
Income (loss) from operations 658 (3,620) (7,280) (9,310)
Interest and other income
(expense), net (160) - (368) 361
Income (loss) before provision
for income taxes and equity in
net earnings of affiliated
companies 498 (3,620) (7,648) (8,949)
Provision for income taxes 36 9 71 10,615
Income (loss) before equity in
net earnings of affiliated
companies 462 (3,629) (7,719) (19,564)
Equity in net earnings of
affiliated companies 132 384 102 560
Net income (loss) $594 $(3,245) $(7,617) $(19,004)
Basic earnings (loss) per share $0.04 $(0.24) $(0.56) $(1.40)
Diluted earnings (loss) per share $0.04 $(0.24) $(0.56) $(1.40)
Weighted average shares
outstanding - basic 13,721 13,627 13,699 13,601
Weighted average shares
outstanding - diluted 13,742 13,627 13,699 13,601
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
January 31, 2003 April 30, 2002
Assets
Cash and cash equivalents $17,649 $26,108
Marketable securities 1,028 2,571
Accounts receivable, net 11,754 11,725
Inventories 30,306 32,701
Other current assets 925 1,278
Total current assets 61,662 74,383
Fixed assets, net 27,860 30,658
Investments 3,651 3,610
Restricted cash 3,206 3,352
Other assets 2,399 2,748
Total assets $98,778 $114,751
Liabilities and Stockholders' Equity
Total current liabilities $14,077 $20,714
Long-term debt 10,241 10,715
Total stockholders' equity 74,460 83,322
Total liabilities and
stockholders' equity $98,778 $114,751
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