Aviza Technology Announces Fiscal Year 2006 Third Quarter Financial Results.SCOTTS VALLEY, Calif. -- Aviza Technology, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AVZA): --3QFY06 Revenues of $43.7 Million Increased 20.5% Over 2QFY06 --3QFY06 Gross Margin Increased Over 3QFY05 --Company Forecasts 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. in 1QFY07 Aviza Technology, Inc. (NASDAQ:AVZA), a supplier of advanced semiconductor equipment and process technologies for the global semiconductor, compound semiconductor, nanotechnology nanotechnology: see micromechanics. nanotechnology Manipulation of atoms, molecules, and materials to form structures on the scale of nanometres (billionths of a metre). and other related markets, today reported results for the third quarter of fiscal 2006, which ended June June: see month. 30, 2006. FINANCIAL HIGHLIGHTS -- THIRD FISCAL QUARTER ENDING JUNE 30, 2006 --Third quarter shipments of $47.4 million were up 21.9% from $38.9 million for the second quarter of fiscal 2006. --Revenues of $43.7 million increased 20.5% over the second quarter of fiscal 2006 and were approximately equal to revenues in the third quarter of fiscal 2005. --Gross margin for the quarter was 24.6%, compared to 25.4% for the second quarter of fiscal 2006 and 15.6% for the third quarter of fiscal 2005. --The Company sold an aggregate of 3,282,275 shares of its common stock to Caisse Caisse, a French word, may refer to:
QUARTERLY BUSINESS HIGHLIGHTS -- THIRD FISCAL QUARTER ENDING JUNE 30, 2006 --Aviza announced a series of consecutive shipments for its next-generation single 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. atomic layer deposition A semiconductor manufacturing technique that deposits a single layer on a chip that is only one atom or one molecule thick. As elements on a chip decreased to below 100 nm, this essential technology for making the chip ever smaller became commercial after the turn of the 21st century. (ALD ALD abbr. adrenoleukodystrophy ALD, n.pr See adrenoleukodystrophy. ALD aldolase. ) system, Celsior(TM), to multiple high-volume, global manufacturing sites, including Taiwan, China and Europe. A key feature of Celsior is its production-proven platform, which was acquired through a joint development agreement with Trikon Technologies prior to the Aviza/Trikon merger transaction. Shipments for the quarter included:
-- China's leading integrated circuit foundry.
-- Inotera Memories, Inc. of Taiwan. The Celsior system is
slated for use at Inotera's Fab I for production of its
90-nm and below DRAM chips.
-- The insertion in high-volume 90-nm DRAM production with
one of the world's largest DRAM suppliers.
FISCAL YEAR 2006 FORECAST --The Company's fiscal year 2006 forecast was initially provided on January 15, 2006 and updated on May 15, 2006. --Aviza's revenue forecast for fiscal 2006 remains $155 million to $160 million, with gross margin for fiscal 2006 expected to be in the range of 24% to 26%, all as previously forecasted on May 15, 2006. --Aviza estimates that research and development (R&D) expenses for fiscal 2006 will be 14% to 16% of revenue, and that sales, general and administrative (SG&A) expenses for fiscal 2006 will be 15% to 17% of revenue, all as previously forecasted on May 15, 2006. --Aviza presently expects that revenues for the fourth quarter of fiscal 2006 will be $45 million to $50 million. Aviza estimates that stock-based compensation expense for the fourth quarter of fiscal 2006 will be in the range of $420,000 to $450,000, depending upon the timing, number and size of new stock option grants and cancellations, as well as the variable factors contained within the Black-Scholes model. COMPANY FORECASTS OPERATING PROFIT IN FIRST QUARTER FISCAL 2007 Commenting on Aviza's operating results for the third quarter of fiscal 2006, Jerry Cutini, Aviza's President and 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. , said, "We are pleased with our continued improvement in our quarterly operating results. Revenues for the quarter grew 20.5% over the previous quarter and gross margin was 9.0% higher than it was for the same quarter a year ago. "The progress and steady execution we are demonstrating points to our team's capability to address both our 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. and 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. business objectives and initiatives. We are making solid progress and are continuing to focus on further improvements in our financial performance. We remain committed to meeting our financial forecast for fiscal year 2006. In addition, we believe that the Company will be reporting an operating profit in the first quarter of fiscal 2007, based upon anticipated acceptances of Celsior systems." OPERATING RESULTS FOR THE THIRD QUARTER OF FISCAL 2006 AND THE NINE MONTHS ENDED JUNE 30, 2006 Aviza's net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the third quarter of fiscal 2006 were $43.7 million, an increase of 20.5% over net sales for the second quarter of fiscal 2006 of $36.2 million and approximately equal to net sales for the third quarter of fiscal 2005 of $43.8 million. The increase in net sales in the third quarter of fiscal 2006 as compared to the second quarter of fiscal 2006 was due primarily to increased sales of products shipped to customers in the Asia Pacific region. For the third quarter of fiscal 2006, Aviza had shipments of $47.4 million, an increase of 21.9% as compared to shipments of $38.9 million for the second quarter of fiscal 2006. Aviza's net loss for the third quarter of fiscal 2006 was $4.0 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, compared to a net loss for the second quarter of fiscal 2006 of $5.3 million, or $0.52 per diluted share, and a net loss of $6.0 million, or $12.70 per diluted share, for the third quarter of fiscal 2005. For the nine months ended June 30, 2006, Aviza's net loss was $13.9 million, or $1.45 per diluted share, compared to a net loss of $11.6 million, or $33.52 per diluted share, for the nine months ended June 24, 2005. Aviza's results of operations for the third quarter of fiscal 2006 include the impact of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R, which Aviza adopted on October 1, 2005. The Company recorded stock-based compensation expense of $61,000 during the third quarter of fiscal 2006. Aviza currently has 16.1 million shares of common stock outstanding, which includes all of the shares of common stock that Aviza issued in connection with its merger transaction with Trikon, Aviza's sale of 3,282,275 shares of common stock to CDPQ in a private placement on April 24, 2006, and the conversion of all of the then-outstanding shares of Series B and B-1 preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. of Aviza's subsidiary, Aviza, Inc., which converted into an aggregate of 2,536,974 shares of Aviza's common stock in connection with the closing of the private placement. BALANCE SHEET As of June 30, 2006, Aviza had $17.9 million in cash and cash equivalents, as compared to $3.9 million at March 31, 2006. The increase in cash and cash equivalents is attributable to the $15 million in proceeds that Aviza received from the private placement of its common stock on April 24, 2006. As announced during the Company's last earnings release, Aviza is providing information about shipments in its quarterly earnings releases because Aviza's management believes that this shipment information will provide investors with additional insight into Aviza's operational performance. The shipment amount includes all systems and parts shipped during the quarter and the related services for which Aviza holds a contract for current or future revenue. This amount includes systems that have not yet converted to "proven" technology under the Company's revenue recognition policy. TO ACCESS THE LIVE WEB CAST Investors will have the opportunity to listen to the conference call over 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 . To listen to the live web cast today at 5:00 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT / 2:00 p.m. PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT , log on to the Aviza website at www.avizatechnology.com. To access the live conference call today at 5:00 p.m. EDT / 2:00 p.m. PDT, dial 617-213-8900 or 866-543-6411 and enter the confirmation code 19827322. TO ACCESS A REPLAY OF THE WEB CAST A digital replay will be available on Aviza's website at www.avizatechnology.com under "Calendar of Events" in the "Investors" section of the website two hours after the conclusion of the conference call. A telephone replay will also be available two hours after the conclusion of the conference call from August 10 to August 12, 2006. You may access the telephone replay by dialing 617-801-6888 or 888-286-8010 and entering confirmation code 76404920. 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 This press 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. . These forward-looking statements are based on our management's current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. You should not rely upon these forward-looking statements as predictions of future events because we cannot assure you that the events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or reflected in these statements will be achieved or will occur. These forward-looking statements include, but are not limited to, the statements made by Jerry Cutini and all statements containing the words "believes," "expects," "forecast," "may," "will," "should," "seeks," "intends," "plans," "estimates" or "anticipates" or the negative of these words and phrases Words and Phrases® A multivolume set of law books published by West Group containing thousands of judicial definitions of words and phrases, arranged alphabetically, from 1658 to the present. or other variations of these words and phrases or comparable terminology. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including, but not limited to: whether we will be able to continue to integrate Trikon's business successfully and achieve anticipated synergies; variability of our revenues and financial performance; risks associated with product development and technological changes; the acceptance of our products in the marketplace by existing and potential future customers; disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. of operations or increases in expenses due to our involvement in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or caused by civil or political unrest Unrest is a sociological phenomenon, for instance:
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. and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. , copies of which are available from us without charge. Please review these filings and do not place undue reliance on these forward-looking statements. We assume no obligation to update these forward-looking statements. The Company anticipates additional customer acceptances of its Celsior system during the fourth quarter of fiscal 2006 and first quarter of fiscal 2007. When Aviza obtains sufficient customer acceptances of its Celsior system in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the terms of its revenue recognition policy, Aviza's Celsior system will convert from "new" to "proven" technology and Aviza will be able to begin recording a portion of the revenue attributable to sales of its Celsior system when Aviza ships the systems to its customers. Based on its current expectations as to the timing and level of customer acceptances of its Celsior system and the mix of products it expects to sell to its customers during the fourth quarter of fiscal 2006 and first quarter of fiscal 2007, Aviza currently believes that the Company will record an operating profit in the first quarter of fiscal 2007. If a sufficient number of Aviza's customers do not accept the Celsior system within the time frame that Aviza currently expects them to do so, or if its product mix varies from Aviza's current expectations, Aviza does not expect to report an operating profit in the first quarter of fiscal 2007. ABOUT AVIZA TECHNOLOGY, INC. Aviza Technology, Inc. is a supplier of advanced semiconductor equipment and process technologies for the global semiconductor, compound semiconductor, nanotechnology and other related markets. Aviza offers both front-end-of-line (FEOL FEOL Front End Of Line (semiconductor manufacturing) ) and back-end-of-line (BEOL BEOL Back-End-Of-Line BEOL Bent's Old Fort National Historic Site (La Junta, Colorado) BEOL Bent's Old Fort National Historic Site (US National Park Service) ) process applications including products for atomic layer deposition (ALD), diffusion diffusion, in chemistry, the spontaneous migration of substances from regions where their concentration is high to regions where their concentration is low. Diffusion is important in many life processes. and low pressure chemical vapor deposition Vapor deposition Production of a film of material often on a heated surface and in a vacuum. Vapor deposition technology is used in a large variety of applications. (LPCVD LPCVD Low Pressure Chemical Vapor Deposition ) furnaces, atmospheric pressure atmospheric pressure or barometric pressure Force per unit area exerted by the air above the surface of the Earth. Standard sea-level pressure, by definition, equals 1 atmosphere (atm), or 29.92 in. (760 mm) of mercury, 14.70 lbs per square in., or 101. CVD CVD Cardiovascular disease, see there (APCVD APCVD Atmospheric Pressure Chemical Vapor Deposition ), CVD, etch To create a design in a material by digging out the material. The circuit designs on printed circuit boards and chips are etched by acid. See chip and printed circuit board. and physical vapor deposition  This article or section is in need of attention from an expert on the subject.Please help recruit one or [ improve this article] yourself. See the talk page for details. (PVD PVD abbr. peripheral vascular disease PVD Peripheral vascular disease, see there ). The company is publicly traded on the NASDAQ National Market (NASDAQ:AVZA). Aviza is headquartered in Scotts Valley, Calif., with manufacturing, R&D, sales and customer support facilities located in the UK, Germany, France, Italy, Taiwan, China, Japan, Korea, Singapore and Malaysia. Additional information about the company can be found at http://www.avizatechnology.com.
AVIZA TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
----------------------------------------------------------------------
June 30, September 30,
2006 2005
--------- -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,851 $ 7,437
Accounts receivable, net 32,624 23,630
Inventory 45,625 24,253
Prepaid expenses and other current assets 7,221 11,632
--------- ---------
Total current assets 103,321 66,952
Property and equipment - net 23,400 19,569
Intangible and other assets 5,360 4,388
--------- ---------
TOTAL $132,081 $ 90,909
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Bank borrowing - short term $ 30,993 $ 30,724
Accounts payable 27,095 19,397
Warranty liability 12,899 13,599
Accrued liabilities 15,708 8,814
--------- ---------
Total current liabilities 86,695 72,534
--------- ---------
Mandatorily redeemable preferred stock, Series
B and B-1 - 11,000
--------- ---------
NOTE PAYABLE - Long term 6,330 6,463
--------- ---------
Total liabilities 93,025 89,997
--------- ---------
COMMITMENTS AND CONTINGENCIES
Preferred stock, Series A - 32,650
--------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock 88,309 4,041
Accumulated deficit and accumulated other
comprehensive loss (49,253) (35,779)
--------- ---------
Total stockholders' equity (deficit) 39,056 (31,738)
--------- ---------
TOTAL $132,081 $ 90,909
========= =========
AVIZA TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
----------------------------------------------------------------------
Quarter Ended Nine Months Ended
---------------------- ---------------------
June 30, June 24, June 30, June 24,
2006 2005 2006 2005
------------ --------- ----------- ---------
NET SALES $ 43,662 $ 43,799 $ 108,846 $138,692
COST OF GOODS SOLD 32,916 36,978 81,774 118,419
------------ --------- ----------- ---------
GROSS PROFIT 10,746 6,821 27,072 20,273
------------ --------- ----------- ---------
OPERATING EXPENSES:
Research and development
costs 6,547 7,266 17,743 16,353
Selling, general and
administrative costs 6,795 4,410 18,392 12,255
In-process research and
development (29) - 373 -
------------ --------- ----------- ---------
Total operating
expenses 13,313 11,676 36,508 28,608
------------ --------- ----------- ---------
LOSS FROM OPERATIONS (2,567) (4,855) (9,436) (8,335)
------------ --------- ----------- ---------
OTHER INCOME (EXPENSE):
Interest income 79 4 132 14
Interest expense (1,424) (1,050) (4,166) (2,857)
Other income (expense) -
net 16 18 (129) 34
------------ --------- ----------- ---------
Total other income
(expense) (1,329) (1,028) (4,163) (2,809)
------------ --------- ----------- ---------
LOSS BEFORE INCOME TAXES (3,896) (5,883) (13,599) (11,144)
INCOME TAXES 70 144 310 420
------------ --------- ----------- ---------
NET LOSS $ (3,966) $ (6,027) $ (13,909) $(11,564)
============ ========= =========== =========
Loss per share:
Basic and diluted $ (0.27) $ (12.70) $ (1.45) $ (33.52)
============ ========= =========== =========
Weighted average common
shares:
Basic and diluted 14,667,980 474,382 9,563,903 344,982
============ ========= =========== =========
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