ADE Corporation Reports First-Quarter Financial Results At the High End of Guidance; Company Posts Strongest Quarter of Bookings in a Year.Business/Technology Editors WESTWOOD, Mass.--(BUSINESS WIRE)--Sept. 3, 2002 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 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. measurement and inspection systems for the silicon wafer and magnetics storage industries, today reported its financial results for the first quarter ended July 31, 2002. ADE met its financial guidance for the first quarter of fiscal 2003. Revenues were $14.7 million, compared with $25.4 million for the same quarter a year ago. ADE's operating net loss for the first quarter, which excludes approximately $900,000 in non-recurring charges for severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and office closures, was $4.9 million, or $0.36 per share. ADE's net loss including such costs was $5.8 million, or $0.42 per share, with 13.7 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 a net loss of $1.2 million, or $0.09 per share, with 13.6 million weighted average diluted shares outstanding for the first quarter of fiscal 2002. New orders rose 64% sequentially during the first fiscal quarter, raising 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. to $24.8 million at July 31, 2002, compared with $21.2 million at the quarter ended April 30, 2002. Cash and cash equivalents totaled $18.9 million at July 31, 2002, compared with $26.1 million at the end of fiscal 2002. This reduction reflects the Company's 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. as well as an increase in working capital. 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 inventory amounted to $46.0 million compared with $55.5 million a year ago. "We met the high end of our guidance on the top and bottom lines and posted our best bookings quarter in more than a year," said Dr. Chris L. Koliopoulos, ADE's president and chief executive officer. "As we stated some weeks ago, ADE's customer inquiries were rising sharply at the end of fiscal 2002, and we turned this activity into a stream of orders for ADE products in the first quarter." "Demand from the Asian markets for our 200mm legacy equipment was strong during the first quarter and continues to build in the second quarter," Dr. Koliopoulos continued. "Utilization at 200mm fabs worldwide is now reported to be in excess of 80%, triggering consideration of capacity expansion and the need for additional ADE 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 products. At the same time, we are receiving continuing orders for our advanced 300mm products, particularly in Japan, as wafer makers add 300mm capacity." ADE Chief Financial Officer Brian James Not to be confused with Brion James. Brian James can be
Business Outlook "Looking ahead, we believe that the worst is over and that ADE will show improved results as our customers' expand 200mm capacity with our legacy and bridge tools, as well as provide advanced 300mm equipment for process control and monitoring during 300mm 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 ," Dr. Koliopoulos added. "The growing SOI (Silicon On Insulator) A chip architecture that increases transistor switching speed by reducing capacitance (build-up of electrical charges in the transistor's elements), and thus reducing the discharge time. The power requirement is also reduced in some designs. market also holds great promise for ADE, and our tools are currently being selected for use in SOI process development. We expect to see increasing shipments of 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 , 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 , AcuMap and NanoMapper tools for these next-generation wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. ." "As we maintain our leading position in the wafer inspection and metrology arena, we also intend to continue penetrating penetrating breaching the tissues of the body. the device market, placing more tools in major device houses in the near term. During the past few quarters, we have introduced innovative products for device makers, including the Film Inspection Tool for defect defect - bug inspection and classification, and the X9 Magnetometer, our second award-winning product in the past three years. We also see alliances with complementary equipment makers playing a growing role in our strategy to build share on the device side. These partnerships should enable us to accelerate our presence in this market and enable customers to consolidate their equipment purchasing. We believe that these initiatives will allow us to grow our total available market while lessening 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. nature of our business," concluded Dr. Koliopoulos. Mr. James added, "ADE's recent growth in bookings and backlog provides us with confidence that we will see improvement on both the top and bottom lines in the second quarter. We expect second-quarter bookings to remain near the level of our first fiscal quarter. Although the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. industry outlook is strong, demand remains somewhat cloudy cloudy (clou´de) 1. murky; turbid; not transparent. 2. marked by indistinct streaks. over the balance of our fiscal year. Given this lack of visibility, we plan to continue to reduce costs in the second quarter as we focus not only on preserving our cash but achieving cash-flow-positive operations in the near future. For the second quarter of fiscal 2003, ADE is currently forecasting revenues in the range of $16 million to $18 million. Gross margins for the second quarter are expected to improve to be in the range of 39% to 41%, reflecting higher revenue level and factory utilization. Research and development expenditures are expected to decline on a dollar basis and be in the range of 28% to 32% of revenues for the second quarter. Given these projections, the Company anticipates an operating loss, before non-recurring costs for the second quarter of fiscal 2003 in the range of $0.14 per share to $0.19 per share. This figure excludes anticipated charges associated with severance costs of ADE's recent CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. succession." Conference Call Reminder ADE will host a conference call to discuss the Company's first-quarter financial results on Wednesday, September 4, 2002 at 8:30 a.m. Eastern Time (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 www.ade.com, fifteen minutes prior to the start of the conference call. This will allow participants the time to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. The software and broadcast can be obtained at no charge to the user. A replay of the call will be available on the website two hours after the completion of the conference call and will continue to be available for a period of one week. About ADE Corporation ADE Corporation is a leading supplier of metrology and inspection systems for the silicon wafer and computer disk manufacturing industries manufacturing industries npl → industrias fpl manufactureras manufacturing industries npl → industries fpl de transformation . 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 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. 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, intentions, assumptions and anticipations should be considered forward-looking statements. These statements include, but are not limited to, those associated with expected demand for the Company's 200mm, 300mm, SOI and MRAM (Magnetic RAM) A non-volatile, random access memory technology that is designed to initially replace flash memory and, potentially, DRAM memory. MRAM uses magnetic, thin film elements on a silicon substrate that can be built on the same chip with the logic circuits. products; the Company's mission to sign partnerships and the potential impact of those partnerships; financial projections, including those for the second quarter of fiscal 2003; and the Company's intent to cut costs. These statements involve risks and uncertainties including those associated with the strength of the semiconductor and device markets, wafer pricing and wafer demand, the results of the Company's 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, 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
July 31,
2002 2001
Revenue $ 14,740 $ 25,371
Cost of revenue 8,942 14,919
Gross profit 5,798 10,452
Operating expenses:
Research and development 4,844 6,115
Marketing and sales 2,800 3,588
General and administrative 2,853 2,312
Restructuring charges 877 --
Total operating expenses 11,374 12,015
Loss from operations (5,576) (1,563)
Interest and other income
(expense), net (119) 311
Loss before provision for income
taxes and equity in net earnings
(loss) of affiliated companies (5,695) (1,252)
Provision for income taxes 22 7
Loss before equity in net
earnings (loss) of affiliated
companies (5,717) (1,259)
Equity in net earnings (loss)
of affiliated companies (64) 68
Net loss $ (5,781) $ (1,191)
Basic loss per share $ (0.42) $ (0.09)
Diluted loss per share $ (0.42) $ (0.09)
Loss per share reflecting
addback of restructuring
charge: (a)
Net loss $ (5,781) $ (1,191)
Restructuring charge 877 --
Operating loss excluding
restructuring charge $ (4,904) $ (1,191)
Basic operating loss per share $ (0.36) $ (0.09)
Diluted operating loss per share $ (0.36) $ (0.09)
Weighted average shares
outstanding - basic 13,679 13,567
Weighted average shares
outstanding - diluted 13,679 13,567
(a) Operating loss per share amounts are not in accordance with
Generally Accepted Accounting Principles.
ADE CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)
July 31, April 30,
2002 2002
Assets
Cash and cash equivalents $ 18,937 $ 26,108
Marketable securities 1,291 2,571
Accounts receivable, net 12,888 11,725
Inventories 33,065 32,701
Other current assets 1,074 1,278
Total current assets 67,255 74,383
Fixed assets, net 29,952 30,658
Investments 3,485 3,610
Restricted cash 3,302 3,352
Other assets 2,632 2,748
Total assets $106,626 $114,751
Liabilities and Stockholders' Equity
Total current liabilities $ 19,703 $ 20,714
Long-term debt 10,558 10,715
Total stockholders' equity 76,365 83,322
Total liabilities and stockholders'
equity $106,626 $114,751
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