ASTeX Announces Fiscal 1999 First Quarter Results.WOBURN, Mass.--(BUSINESS WIRE)--Oct. 27, 1998--Applied Science and Technology, Inc. ("ASTeX") (Nasdaq:ASTX) today reported financial results for the fiscal 1999 first quarter ended September 26, 1998. As previously announced, first quarter results were impacted by the semiconductor equipment industry downturn. Total revenue for the fiscal 1999 first quarter declined 40% sequentially to $12.1 million from $20.1 million reported in the fourth quarter of fiscal 1998. In comparison to the first quarter of fiscal 1998, total revenue declined by 31% from $17.4 million. Non-semiconductor business represented 47% of Q1 sales. The Company reported a net loss for the first quarter of fiscal 1999 of $3.5 million, or $0.41 per share 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. , which includes a $1.5 million restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. associated with consolidating two of the Company's manufacturing facilities and $1.3 million of additional one-time costs. This compares to net earnings of $1.2 million, or $0.14 per share diluted, in the first quarter of fiscal 1998. During the first quarter, the Company consolidated its Modesto, California Modesto is the county seat of Stanislaus County in the U.S. state of California. As of the 2000 census, the city population was 188,856. Current census estimates place the population at 206,300. operation into its Woburn, Massachusetts Woburn (/'wu.bə(r)n/) is a city in Middlesex County, Massachusetts, USA. The population was 37,258 at the 2000 census. Woburn is the birthplace of Anglo-American scientist Benjamin Thompson, a.k.a. and Colorado Springs, Colorado The City of Colorado Springs is the second most populous city (after Denver) in the state of Colorado and the 48th most populous city in the United States.[4] The city is the county seat of El Paso County. sites. The Company also initiated a plan to consolidate its Beverly, Massachusetts Beverly is a city in Essex County, Massachusetts, United States. The population was 39,862 at the 2000 census. A resort, residential and manufacturing community, Beverly includes Beverly Farms and Prides Crossing. operation into Woburn, which is expected to be completed by the end of the calendar year. These consolidations resulted in a non-recurring restructuring charge including 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 associated with an overall 20% headcount reduction, abandonment of leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. and fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. rent, and other restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs totaling $1.5 million. In addition, the Company wrote down its inventory totaling $1.1 million during the quarter and incurred other one-time transition costs of $0.2 million, yielding a total non-recurring expense in the first quarter of $2.8 million, including the $1.5 million restructuring charge. Without these one-time charges, the net loss would have been $1.7 million adjusting for any tax benefits, or $0.20 per share diluted, and the gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. would have been 19% in comparison to the reported gross profit margin of 10%. The Company remains financially strong with $4.6 million in cash and investments at the end of the quarter, $23 million of working capital, tangible net worth Tangible Net Worth Total assets less intangible assets and total liabilities. Notes: In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc). of $35 million, a current ratio of 4.5 to 1, no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , and no use of its bank line of credit. Dr. Richard S Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a . Post, President and Chief Executive Officer, commented, "The semiconductor downturn, combined with a slower activity in non-semiconductor business, led to a rapid drop-off in revenues. Our semiconductor equipment customers had excess inventory, causing a much steeper fall for ASTeX relative to their underlying business. In response to the changing business climate, ASTeX moved quickly to eliminate excess capacity, expand 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. , and reduce fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). . These changes should significantly improve operational performance. The new organization will be able to respond to at least a 200% increase in demand without new facilities. The full benefits of the consolidation will not be felt until Q3." "Sales of ASTeX Sorbios products have continued to increase. To meet the needs for these products and the growing European market, ASTeX has hired a new general manager, Mr. Siegfried Burzynski, for its European headquarters. Mr. Burzynski, formerly of Leybold Heraeus, has 22 years of experience in global marketing and management. As part of its plans for Europe, ASTeX will expand its manufacturing capability in Berlin. "These improvements, along with other investments in ERP (Enterprise Resource Planning) An integrated information system that serves all departments within an enterprise. Evolving out of the manufacturing industry, ERP implies the use of packaged software rather than proprietary software written by or for one customer. , ISO (1) See ISO speed. (2) (International Organization for Standardization, Geneva, Switzerland, www.iso.ch) An organization that sets international standards, founded in 1946. The U.S. member body is ANSI. 9001, and improved business processes, should enable ASTeX to improve operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. when the semiconductor business recovers. "ASTeX continues to strengthen its market position in all product areas. ASTeX delivered its 100th ozone delivery system to a new customer, APEX apex (a´peks) pl. apexes, a´pices [L.] tip; the pointed end of a conical part; the top of a body, organ, or part.ap´ical apex of lung the rounded upper extremity of either lung. Co., Ltd., Korea. The ozone delivery system will be an integral part of a deposition tool used to manufacture tantalum-oxide films for memory chip devices. Mr. Sang-ho Kim, president of APEX, commented that APEX had researched the ozone market and selected ASTeX based on performance and company reputation. `We selected a tool and a partner our customers could depend on.' ASTeX also signed two new Preferred Supplier Agreements with other OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers. Under these agreements, only ASTeX ozone solutions will be recommended to their customers. Liquozon(TM) wet ozone systems are being introduced by our customers for environmentally improved cleaning processes. These new processes can significantly reduce the amount of chemicals used in semiconductor processing. "ASTRON ASTRON Astronomy (TM), ASTeX's revolutionary chamber cleaning product, continues to get excellent acceptance in the market, with evaluations occurring for use on ten semiconductor tools worldwide. At the recent Sematech International PFC PFC abbr. private first class Noun 1. PFC - a powerful greenhouse gas emitted during the production of aluminum perfluorocarbon Emission Reduction Working Group meeting, several speakers presented results on the use of ASTRON. Initial results at a leading chip manufacturer's facility are promising, showing greater than 95% reduction in emission of PFCs (Perfluorocompounds), a class of greenhouse gases greenhouse gas n. Any of the atmospheric gases that contribute to the greenhouse effect. greenhouse gas responsible for increased global warming global warming, the gradual increase of the temperature of the earth's lower atmosphere as a result of the increase in greenhouse gases since the Industrial Revolution. . Cleaning times were reduced by 50% relative to the standard chamber clean process. These reductions could have a large impact on the overall cost of ownership of the process chamber. The evaluation activities of ASTRON are continuing at sites of OEMs and end users. "ASTeX has signed an agreement to acquire PlasmaQuest, a privately-held company manufacturing ECR ECR Efficient Consumer Response ECR European Congress of Radiology ECR Electron Cyclotron Resonance ECR El Camino Real (Kings Highway; California) ECR Electronic Cash Register ECR East Coast Radio (South Africa) systems for R&D, magnetic disk head processing, and electronic packaging applications. Revenues for the last 12 months were $3.7 million. Through the merger, which is expected to close in mid-November, ASTeX will gain considerable technology for advanced processing and development capability, together with an excellent staff led by Dr. John Spencer John Spencer can refer to different people: Earls
Post concluded, "ASTeX bookings have increased in both the semiconductor and non-semiconductor business sectors, with a strong increase in laser power supplies. The combination of improved sales and cost reductions are anticipated to result in a break-even or profitable Q2. In spite of the downturn, we have maintained our investment in both new products and infrastructure. We believe we are very well positioned to take advantage of our non-semiconductor opportunities and to profit from a recovering semiconductor capital equipment market." ASTeX is a leading provider of innovative production technology for the manufacture of advanced semiconductor devices. ASTeX markets its plasma sources Plasma sources generate plasmas. Excitation of a plasma requires partial ionisation of neutral atoms and/or molecules of a medium. There are several ways to cause ionisation: collisions of energetic particles, strong electric fields acting on bond electrons, or ionising and subsystems, ozone generators and subsystems, and specialty power sources to the world's leading semiconductor capital equipment manufacturers. ASTeX markets the same underlying core technology for medical, electro-optic, and synthetic diamond Synthetic diamond, also called lab-created, manufactured, "lab-grown" or cultured diamond is a term used to describe diamond (the tetrahedral carbon allotrope) which has been produced by a technological process, as opposed to natural diamond, which is applications. For more information, visit the ASTeX web site at www.astex.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. " statement under the 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: This release contains 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 risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, general economic conditions, availability of raw materials, fluctuations in operating results, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. -0-
Applied Science and Technology, Inc. and Subsidiaries
Consolidated Statements of Operations
Three Months Ended
September 26, September 27,
1998 1997
---- ----
(unaudited) (unaudited)
Product sales, net $ 10,847,553 $ 16,580,003
Research contact revenue 119,933 200,040
Other revenue 1,132,057 641,259
------------ ------------
Total revenue 12,099,543 17,421,302
------------ ------------
Cost of sales and revenue:
Product sales and other revenue 10,843,883 10,879,415
Research contracts 80,590 67,870
------------ ------------
Total cost of sales and revenue 10,924,473 10,947,285
------------ ------------
Gross profit 1,175,070 6,474,017
Operating expenses:
Research and development expenses 2,324,276 2,561,006
Selling expenses 1,201,361 835,059
General and administrative expenses 1,864,887 1,400,904
Restructuring charge 1,497,292 --
------------ ------------
Total operating expenses 6,887,816 4,796,969
------------ ------------
Earnings (loss) from operations (5,712,746) 1,677,048
------------ ------------
Other expense (income):
Interest expense 12,005 160,711
Interest income (123,620) (80,056)
Other expense (income) 7,959 (236,557)
------------ ------------
Total other income (103,656) (155,902)
------------ ------------
Earnings (loss) before
income taxes (5,609,090) 1,832,950
Income tax expense (benefit) (2,128,000) 678,000
------------ ------------
Net earnings (loss) $ (3,481,090) $ 1,154,950
============ ============
Basic net earnings (loss) per share $ (0.41) $ 0.17
============ ============
Diluted net earnings (loss) per share $ (0.41) $ 0.14
============ ============
Weighted average common shares
outstanding used to calculate
basic earnings per share 8,584,563 6,827,600
============ ============
Weighted average common shares
outstanding used to calculate
diluted earnings per share 8,584,583 7,970,669
============ ============
Applied Science and Technology, Inc. and Subsidiaries
Consolidated Balance Sheets
September 26, June 27,
1998 1998
---- ----
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 4,573,321 $ 7,686,805
Trade receivables 9,595,296 12,734,381
Inventories 14,007,028 13,737,212
Prepaid expenses and other assets 515,224 548,709
Deferred income taxes 1,356,044 1,356,044
------------ ------------
Total current assets 30,046,913 36,063,151
------------ ------------
Property and equipment:
Land 473,000 473,000
Building 1,643,072 1,643,072
Equipment 10,599,550 11,107,731
Furniture and fixtures 968,737 1,032,497
Leasehold improvements 1,559,329 2,228,246
------------ ------------
15,243,688 16,484,546
Less accumulated depreciation and
amortization (7,541,913) (7,960,282)
------------ ------------
Net property and equipment 7,701,775 8,524,264
------------ ------------
Other assets:
Patents, net 1,059,759 1,095,090
Goodwill, net of accumulated
amortization 3,931,015 4,042,031
Deferred income taxes 3,227,998 1,099,998
Notes receivable, less current
maturities 966,748 468,772
------------ ------------
Total other assets 9,185,520 6,705,891
------------ ------------
$ 46,934,208 $ 51,293,306
------------ ------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,463,367 $ 3,011,798
Accrued expenses 2,457,736 1,935,229
Accrued compensation expense
and related costs 1,377,634 1,993,027
Accrued income taxes 72,445 293,444
Commissions payable and customer
advances 293,153 259,154
------------ ------------
Total current liabilities 6,664,335 7,492,652
------------ ------------
Stockholders' equity:
Common stock 85,848 86,065
Additional paid-in capital 43,999,511 44,193,116
Accumulated deficit (3,728,186) (247,095)
Less: Notes receivable for common
stock purchases (148,326) (148,326)
Cumulative translation adjustment 61,026 (83,106)
------------ ------------
Total stockholders' equity 40,269,873 43,800,654
------------ ------------
$ 46,934,208 $ 51,293,306
------------ ------------
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