ADE Corporation Reports First Quarter Fiscal 2007 Financial Results.WESTWOOD Westwood. 1 Residential town (1990 pop. 12,557), Norfolk co., E Mass., in the greater Boston area; settled 1640, inc. 1897. It has several early 18th-century buildings. 2 Residential borough (1990 pop. 10,446), Bergen co., NE N.J. , Mass. -- ADE Corporation (NasdaqGM: ADEX ADEX Athens Derivatives Exchange (Athens, Greece) ADEX Air Defense Exercise ADEX Advertisement Expenditure ADEX Asociaciã³n de Exportadores (Peru) ) today reported financial results for its first fiscal quarter ended July July: see month. 31, 2006. Revenue for the first quarter of fiscal 2007 was $29.7 million compared with $29.3 million for the fourth quarter of fiscal 2006 and $24.3 million for the first quarter of fiscal 2006. ADE posted net income of $3.9 million, or $0.27 per 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. share, for the first quarter of fiscal 2007. First fiscal quarter net income included stock-based compensation expense related to FAS 123R of $0.2 million and certain expenses totaling $0.5 million associated with ADE's pending merger with KLA-Tencor Corporation (NasdaqGS: KLAC). This compares with net income of $4.7 million, or $0.32 per diluted share, in the fourth quarter of fiscal 2006. The fourth quarter fiscal 2006 net income figure included a tax benefit of approximately $980,000 related to 2005 tax deductions Tax deduction An expense that a taxpayer is allowed to deduct from taxable income. tax deduction See deduction. . For the first quarter of fiscal 2006, ADE reported net income of $2.9 million, or $0.20 per diluted share. The first quarter fiscal 2007 tax rate was 36% compared with a tax rate of 24% for the sequential fourth quarter of fiscal 2006 and 28% for the first quarter of fiscal 2006. Gross margin for the first fiscal quarter of 2007 was 55%. This compares with 54% for the sequential fourth fiscal quarter and 56% for the year-ago first fiscal quarter. Cash, cash equivalents and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has reached a record $100.0 million in the first quarter of fiscal 2007. This reflects an increase of 9% from $91.6 million at April 30, 2006, the end of fiscal 2006, and was 27% above the $79.0 million reported at the end of the first quarter of fiscal 2006, July 31, 2005. 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. at July 31, 2006 reached a record $60.5 million, an increase of 14% from the $53.1 million reported at the end of the sequential fourth quarter of fiscal 2006 and a 44% increase from the year-ago quarter backlog of $42.1 million on July 31, 2005. "ADE continued to perform well during the first fiscal quarter," said Dr. Chris L. Koliopoulos, president and chief executive officer. "Revenue grew more than 20% year-over-year, and comparable period net income rose by 36%, despite the increased expenses associated with our pending merger with KLA-Tencor. Gross margins remained strong and at the high end our operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. . Customer activity in our core markets remained robust, creating a strong, record backlog of tool orders for 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. production. At the same time, ADE continued to generate solid cash flow, concluding the quarter with a record level of cash." Also, as previously announced, during the fourth fiscal quarter of 2006, ADE entered into a definitive merger agreement with KLA-Tencor, which was amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. and restated in May 2006. Under this agreement, KLA-Tencor would acquire ADE for cash consideration of $32.50 per share. On July 13, 2006, ADE shareholders approved the proposed merger. A closing date will be established once the parties have cleared or waived all conditions to close, including regulatory clearance from the German antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. authorities who, as previously reported, notified KLA-Tencor on July 10, 2006 of the commencement of a Phase II investigation of the proposed merger. Both ADE and KLA-Tencor continue to be confident that the acquisition will be completed once German antitrust clearance is obtained. About ADE Corporation ADE Corporation is a leading supplier of 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 data storage and optics manufacturing industries manufacturing industries npl → industrias fpl manufactureras manufacturing industries npl → industries fpl de transformation . Wafer suppliers and device manufacturers worldwide rely on ADE measurement and inspection systems to certify cer·ti·fy v. cer·ti·fied, cer·ti·fy·ing, cer·ti·fies v.tr. 1. a. To confirm formally as true, accurate, or genuine. b. and ensure the highest quality bare silicon substrates. ADE's most recent generation of products serve both 65nm in-line In-line Used in the context of general equities. (1) An order or market in a specific security within the inside market; 2) any announcement (earnings) that adheres closely to Wall Street analysts' expectations. manufacturing applications and 45nm process development. Semiconductor device yields begin with the bare wafer, and ADE's leading technology provides early insight into surface defect defect - bug , shape, flatness and nanotopography of these advanced 300mm substrates. Additional information about ADE is available on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at http://www.ade.com, which website is not part of this press release. Cautionary Statement Regarding 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. This news release contains certain forward-looking statements within the meaning of the "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. " provisions of the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 and federal securities law. Such forward-looking statements 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 expectations, predictions, beliefs, and assumptions should be considered forward-looking statements. These statements include, but are not limited to, those associated with the proposed merger with KLA-Tencor, including the expected closing time for the proposed merger and the obtaining of clearance from German antitrust authorities. These statements involve risks and uncertainties including those associated with delays in obtaining, or adverse conditions contained in, the German antitrust authorities' regulatory approvals; failure to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. or delay in consummating the proposed merger for other reasons, changes in laws or regulations and other similar factors. Further information on potential factors that could affect ADE's business is contained in its 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 year ended April 30, 2005. Except as otherwise required by law, ADE is under no obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share amounts)
Three months ended
July 31
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2006 2005
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Revenue $ 29,734 $ 24,312
Cost of revenue 13,452 10,703
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Gross profit 16,282 13,609
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Operating expenses:
Research and development 4,130 3,812
Marketing and sales 3,469 3,509
General and administrative 3,533 2,758
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Total operating expenses 11,132 10,079
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Income from operations 5,150 3,530
Interest income 994 482
Interest expense (58) (49)
Other income 59 53
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Income before provision for income taxes 6,145 4,016
Provision for income taxes 2,224 1,131
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Net income $ 3,921 $ 2,885
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Basic earnings per share $ 0.27 $ 0.20
Diluted earnings per share $ 0.27 $ 0.20
Weighted average shares outstanding - basic 14,519 14,318
Weighted average shares outstanding - diluted 14,777 14,611
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, unaudited)
July 31, 2006 April 30, 2006
Assets
Cash and cash equivalents $ 99,943 $ 91,573
Marketable securities 23 -
Accounts receivable, net 19,231 23,164
Inventories 35,935 35,855
Other current assets 1,301 1,701
Deferred income taxes 9,153 9,311
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Total current assets 165,586 161,604
Fixed assets, net 8,642 8,946
Deferred income taxes 4,742 4,742
Investments 499 499
Other assets 1,584 1,671
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Total assets $ 181,053 $ 177,462
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Liabilities and Stockholders' Equity
Total current liabilities $ 21,133 $ 22,718
Deferred gain on sale-leaseback 1,355 1,383
Long-term debt 3,195 3,244
Total stockholders' equity 155,370 150,117
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Total liabilities and
stockholders' equity $ 181,053 $ 177,462
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