ADE Corporation Reports Financial Results for the Third Quarter of Fiscal 2002.Business/Technology Editors WESTWOOD, Mass.--(BUSINESS WIRE)--March 5, 2002 ADE Corporation (Nasdaq: ADEX ADEX Athens Derivatives Exchange (Athens, Greece) ADEX Air Defense Exercise ADEX Advertisement Expenditure ADEX Asociaciã³n de Exportadores (Peru) ) today reported its financial results for the third fiscal quarter ended January 31, 2002. Revenues were $17.9 million, compared with $28.2 million for the same quarter a year ago. ADE's fiscal 2002 third-quarter net loss was $3.2 million, or $0.24 per share, with 13.6 million weighted average basic and 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 net income of $1.7 million, or $0.12 per share, with 13.7 million weighted average diluted shares outstanding for the third quarter of fiscal 2001. Cash and cash equivalents continued to increase to $31.9 million at January 31, 2002 from $29.2 million at the end of fiscal 2001. Receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and inventories decreased to $46.3 million at the end of the third quarter from $63.4 million at the end of fiscal 2001. For the first nine months of fiscal 2002, ADE reported revenues of $65.2 million, compared with $73.3 million in the first nine months of fiscal 2001. For the first nine months of fiscal 2002, excluding a non-cash income tax valuation allowance of $10.6 million in the second quarter, the Company reported a pro-forma net loss of $8.4 million, or $0.62 per share, with 13.6 million weighted average basic and diluted shares outstanding. This compares with net loss of $1.6 million, or $0.12 per share, with 13.5 million weighted average basic and diluted shares outstanding, in the corresponding period of the previous year. Net loss for the first nine months of fiscal 2002, including the income tax valuation allowance, was $19.0 million, or $1.40 per share. "Equipment orders for ADE and many other semiconductor capital equipment manufacturers reflected the steepest decline in the sector's history, particularly as capacity-based orders were put on hold due to lower end-use consumption," said ADE President and Chief Executive Officer Robert Abbe Robert Abbe (1851 - 1928), was an American surgeon and pioneer radiologist in New York City. He was born April 13, 1851, at New York City and educated at the College of the City of New York (S.B., 1871) and Columbia University (M.D., 1874). . "This has challenged ADE to reshape its operational strategies and business model in order for the Company to be well prepared for the coming upturn that industry experts are starting to predict. Though capacity remains below the level generally needed to drive expansion, ADE has recently witnessed trends that corroborate To support or enhance the believability of a fact or assertion by the presentation of additional information that confirms the truthfulness of the item. The testimony of a witness is corroborated if subsequent evidence, such as a coroner's report or the testimony of other the experts' optimism. For instance, ADE's service activity has been on the increase for several months as wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. makers bring existing equipment back on line at existing fabs. This has historically indicated that utilization is on the rise for ADE customers." "Meanwhile, technology-driven investments remain active, particularly those related to 300mm fabs for which ADE has developed a suite of 300mm inspection and 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. products," continued Abbe. "Products such as ADE's NanoMapper, 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 and 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 are the result of several years of investment and effort by the Company and are increasingly being recognized as must-have technologies for 300mm wafer production. NanoMapper recently was chosen by a leading device manufacturer as its tool of choice for qualifying incoming silicon wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. used as starting material in its 300mm production ramp. An important component of ADE's strategy is to leverage its technology into new and larger markets that provide growth in excess of the industry growth rate. As part of this strategy, ADE delivered multiple units of its front-end film surface inspection system to a large Asian device manufacturer for use in its new 300mm device manufacturing process." "The Company continued to weather the challenging industry downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , posting another cash-flow-positive quarter and exceeding its bottom-line guidance," stated ADE Chief Financial Officer Brian James Not to be confused with Brion James. Brian James can be
adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. reduced headcount and eliminated layers of management, enacted strict controls over discretionary spending, aggressively pursued production efficiency initiatives and implemented a major 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. initiative to lower ADE's cost structure and reduce future working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. ." BUSINESS OUTLOOK "While there are several encouraging early signs of increased industry activity, ADE's near-term revenues are likely to reflect the flat level of new orders received in the past few quarters," continued James. "Revenues should begin to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective when currently ongoing 300mm evaluations are completed and 200mm wafer capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. increases to the point of requiring additional capacity at wafer and device fabs. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , we are continuing our initiatives to reduce ADE's cost structure in order to help offset the lower revenues and maintain the strength of the Company's balance sheet. At the same time, we are positioning ADE's products and organization to create compelling value for our shareholders as we emerge from this cycle. We are forecasting revenues in the fourth quarter of fiscal 2002 to be in the range of $16 million to $18 million. ADE currently anticipates that fourth-quarter gross margins will be in the range of 37 percent to 40 percent, with anticipated research and development expenditures to remain at or near current levels in the short term approximating 29 percent to 30 percent of revenues. Given these assumptions, ADE expects to report an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. ranging from $0.27 per share to $0.32 per share for the fourth quarter of fiscal 2002." "At this stage, ADE will be increasingly shifting its focus toward production and delivery of 300mm equipment as capacity-driven purchasing of advanced technology increases," continued Abbe. "Although the Company faces continued challenges in the near term as it awaits the next wave of wafer fab capacity expansion, ADE's ongoing operational streamlining and process efficiency initiatives are reducing the Company's cost structure and increasing its operating leverage Operating Leverage A measurement of the degree to which a firm or project relies on fixed rather than variable costs. Notes: The higher the degree of operating leverage, the greater the potential danger from forecasting risk. . ADE will continue to maximize working capital and leverage short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments in order to conserve cash and position the Company to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the eventual upturn in its markets." About ADE Corporation ADE Corporation is a leading supplier of metrology and inspection systems for the silicon wafer and data storage industries. The Company's systems analyze and report product quality at critical manufacturing process steps and provide quality certification data that is relied upon by semiconductor and data storage manufacturers. The Company's systems also are used in the fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. of integrated circuits Integrated circuits Miniature electronic circuits produced within and upon a single semiconductor crystal, usually silicon. Integrated circuits range in complexity from simple logic circuits and amplifiers, about 1/20 in. (1. . To learn more about ADE, visit the Company's Web site at www.ade.com. 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 and anticipations should be considered forward-looking statements. These statements include, but are not limited to, those associated with the recovery of the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. semiconductor and data storage industries, wafer pricing and wafer demand, the anticipated ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of 300mm capacity, the success of ADE's product development efforts and cost-cutting initiatives, and financial projections for the fourth quarter of fiscal 2002. These statements involve risks and uncertainties including those associated with the strength of the semiconductor and hard disk 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, further increases in backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. , 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, 2001.
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three months ended Nine months ended
January 31, January 31,
2002 2001 2002 2001
Revenue $ 17,945 $ 28,223 $ 65,227 $ 73,281
Cost of revenue 10,407 14,243 39,056 37,319
Gross profit 7,538 13,980 26,171 35,962
Operating expenses:
Research and
development 5,190 5,731 17,266 16,062
Marketing and sales 2,973 3,508 10,112 12,054
General and
administrative 2,995 3,203 8,103 8,054
Total operating expenses 11,158 12,442 35,481 36,170
Income (loss) from
operations (3,620) 1,538 (9,310) (208)
Interest and other
income, net -- 281 361 947
Income (loss) before
provision for income
taxes, equity in net
earnings (loss) of
affiliated companies
and cumulative effect
of change in accounting
principle (3,620) 1,819 (8,949) 739
Provision for income
taxes 9 47 10,615 111
Income (loss) before
equity in net earnings
(loss) of affiliated
companies and
cumulative effect of
change in accounting
principle (3,629) 1,772 (19,564) 628
Equity in net earnings
(loss) of affiliated
companies 384 (61) 560 (479)
Income (loss) before
cumulative effect of
change in accounting
principle (3,245) 1,711 (19,004) 149
Cumulative effect of
change in accounting
principle, net of tax -- -- -- (1,785)
Net income (loss) $ (3,245) $ 1,711 $(19,004) $ (1,636)
Net earnings (loss) per
share:
Basic
Earnings (loss) before
cumulative effect of
change in accounting
principle $ (0.24) $ 0.13 $ (1.40) $ 0.01
Cumulative effect of
change in accounting
principle $ -- $ -- $ -- $ (0.13)
Basic earnings (loss)
per share $ (0.24) $ 0.13 $ (1.40) $ (0.12)
Diluted
Earnings (loss) before
cumulative effect of
change in accounting
principle $ (0.24) $ 0.12 $ (1.40) $ 0.01
Cumulative effect of
change in accounting
principle $ -- $ -- $ -- $ (0.13)
Diluted earnings (loss)
per share $ (0.24) $ 0.12 $ (1.40) $ (0.12)
Weighted average shares
outstanding
Basic 13,627 13,511 13,601 13,498
Diluted 13,627 13,748 13,601 13,498
Adjusted net income
(loss) excluding
deferred income tax
valuation allowance $ (3,245) $ 1,711 $ (8,414) $ (1,636)
Adjusted basic earnings
(loss) per share $ (0.24) $ 0.13 $ (0.62) $ (0.12)
Adjusted diluted
earnings (loss) per
share $ (0.24) $ 0.12 $ (0.62) $ (0.12)
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
January 31, April 30,
2002 2001
Assets
Cash and cash equivalents $ 31,890 $ 29,220
Marketable securities 1,823 1,913
Accounts receivable, net 12,449 24,424
Inventories 33,865 39,025
Other current assets 1,417 8,080
Total current assets 81,444 102,662
Fixed assets, net 29,707 29,569
Investments 3,672 3,221
Restricted cas 3,396 3,525
Other assets 2,952 7,730
Total assets $121,171 $146,707
Liabilities and Stockholders' Equity
Total current liabilities $ 23,895 $ 30,704
Long-term debt 10,872 11,339
Total stockholders' equity 86,404 104,664
Total liabilities and stockholders'
equity $121,171 $146,707
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