Electroglas Reports Results for First Quarter Fiscal 2003.Business Editors/High-Tech Writers SAN JOSE San Jose, city, United States San Jose (sănəzā`, săn hōzā`), city (1990 pop. 782,248), seat of Santa Clara co., W central Calif.; founded 1777, inc. 1850. , Calif.--(BUSINESS WIRE)--April 17, 2003 Electroglas, Inc. (Nasdaq:EGLS EGLS Eastside German Language School (Issaquah, WA) ), a supplier of process management tools for the semiconductor industry, today reported operating results for its first quarter ended March 31, 2003. Revenue was $9.5 million for the first quarter, down 28% from $13.2 million for the fourth quarter and down 19% from $11.7 million for the first quarter of 2002. Including the previously disclosed one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charge of $8.5 million related to the amortization of the shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. between fair value and the guaranteed residual value Residual value Usually refers to the value of a lessor's property at the time the lease expires. residual value The price at which a fixed asset is expected to be sold at the end of its useful life. of the Company's San Jose, California San Jose (IPA: /ˌsænhoʊˈzeɪ/) is the third-largest city in California, and the tenth-largest in the United States. It is the county seat of Santa Clara County. campus, the net loss for the first quarter of 2003 on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). (Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ) basis was $23.3 million, or $1.09 per share, compared with a loss of $14.8 million, or $0.71 per share for the first quarter of 2002. On a non-GAAP financial measure basis the net loss for the first quarter of 2003 was $14.8 million, or $0.69 per share, before the revaluation Revaluation A calculated adjustment to a country's official exchange rate relative to a chosen baseline. The baseline can be anything from wage rates to the price of gold to a foreign currency. In a fixed exchange rate regime, only a decision by a country's government (i.e. charge. We believe this pro-forma information is useful to enable an informed comparison to other fiscal periods. At March 31, 2003, the Company had cash 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. investments of $49.0 million, or $2.30 per share. Commented Curt Wozniak Woz·ni·ak , Stephen Born 1950. American computer engineer who cofounded Apple Computers (1975). , 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. of Electroglas, "The semiconductor equipment market continued to be very weak in the first quarter as significant overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. in semiconductor companies restricted demand for new equipment. Uncertainty in the economic outlook also caused customers to be very conservative in both orders and acceptance of new shipments. Customers delayed both bookings and expected shipments during the quarter to match near-term near-term adj. Of, for, or involving a short period of time in the near future. capacity requirements. As a result, bookings came in at $9.5 million, flat compared to the fourth quarter. Considering all of these cautionary factors, our guidance for the second quarter calls for revenue between $9 million and $12 million." Continued Wozniak, "In view of the sustained weakness of the semiconductor equipment market and the uncertainty in outlook for the remainder of the year, we are taking additional steps to reduce our cash usage and breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations levels. Over the last year, we have continuously evaluated our overall strategy and product portfolio in light of the extended economic 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. . As a result of that evaluation, we have decided to focus the overall business strategy on our historical position in semiconductor test. We will concentrate on our core wafer prober The introduction to this article provides insufficient context for those unfamiliar with the subject matter. Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page. business and the associated test floor networking software  This article is written like a personal reflection or and may require .Please [ improve this article] by rewriting this article in an . that helps our customers improve their overall test efficiency. Our first step in this effort will be the sale of our inspection business. We have entered into a letter of intent to sell this business and with the objective of closing this transaction during the second quarter. In addition, we are reducing headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. in the remainder of the organization to decrease our cost structure and our breakeven point. The combination of these efforts is expected to result in a reduction in headcount of over 25% over the next two quarters. We will continue to review our strategy and spending profile with the goal of significantly reducing our breakeven revenue level and returning to profitability as soon as possible." Concluded Wozniak, "In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite the ongoing difficult economic conditions, we have made progress with our new products, adding new 300mm customers in Taiwan, Korea and 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. . The industry-leading accuracy of the EG5|300 ARGOS Argos, city, ancient Greece Argos (är`gŏs, –gəs), city of ancient Greece, in NE Peloponnesus, 3 mi (4.8 km) inland from the Gulf of Argos, near the modern Nauplia. wafer prober platform has helped us achieve this." Electroglas' first-quarter results conference call will be held at 11:00 a.m. PT/2:00 p.m. ET today; the number is 785-832-1077. A replay will be available from 2:00 p.m. PT/5:00 p.m. ET today through April 24. The call-in number for the replay is 402-220-0423. There will be a simultaneous webcast of the conference call, which can be accessed through the Electroglas web site, http://www.electroglas.com. Legal Notice 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 press release contains forward-looking statements including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the current business condition in the semiconductor industry: our efforts to reduce cash usage and breakeven levels, reduce head count and return to profitability; our expectations of our second quarter revenues; and our intent to sell our inspection business. These forward-looking statements involve risks and uncertainties including, but not limited to, the risk of adverse changes in global and domestic economic conditions, prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. downturn in the semiconductor and electronics industries, continued downturn or further decreases in customer utilization rates, unforeseen technical difficulties related to the development and manufacture of our products, and a failure of our new products to achieve broad market acceptance as a result of competing technologies. Electroglas assumes no obligation to update this information. Further, the sale of our inspection business is subject to satisfactory completion of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , negotiation and execution of a definitive agreement and other customary conditions relating to the sale of a business. We cannot assure you that we will ultimately effect the sale of our inspection business. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Electroglas' business in general, see the risk disclosures in Electroglas' SEC filings, including its most recent Annual Report on 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 December 31, 2002 and its quarterly reports on Form 10-Q Form 10-Q See 10-Q. filed from time to time with the SEC. About Electroglas: Electroglas delivers essential tools for process management to enhance semiconductor manufacturers. The Company's wafer probers, inspection systems and software solutions serve as data collection, management and analysis tools that semiconductor manufacturers depend on to improve their productivity and process control by optimizing sort-floor efficiency. Electroglas has been a supplier of wafer probers for over 40 years and has an installed base of more than 15,000 systems. The Company's stock trades on the Nasdaq National Market under the symbol EGLS. The Company's World Wide Web site is located at http://www.electroglas.com. Note: In EG5|300, there is a pipe symbol between EG5 and 300. This symbol may not appear properly in some systems.
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per-share amounts)
(Unaudited)
Three months ended
March 31,
--------------------
2003 2002
--------- ---------
Net sales $ 9,465 $ 11,670
Cost of sales 8,616 11,219
--------- ---------
Gross profit 849 451
--------- ---------
Operating expenses:
Engineering, research and development 6,817 7,970
Selling, general and administrative 6,889 9,300
Restructuring charges 97 360
Impairment charge 8,475 --
--------- ---------
Total operating expenses 22,278 17,630
--------- ---------
Operating loss (21,429) (17,179)
Interest income 213 770
Other income (expense), net (1,999) 286
--------- ---------
Loss before income taxes (23,215) (16,123)
Provision (benefit) for income taxes 43 (1,275)
--------- ---------
Net loss $ (23,258) $ (14,848)
========= =========
Basic and diluted net loss per share: $ (1.09) $ (0.71)
========= =========
Shares used in basic and diluted calculation 21,279 21,006
========= =========
Reconciliation of GAAP to Non-GAAP Financial Measures Financial Information In addition to disclosing results that are determined 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 Generally Accepted Accounting Principles (GAAP), Electroglas also discloses pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma or non-GAAP results of operations that exclude certain charges. Electroglas reports pro forma results in order to better assess and reflect operating performance. These results are provided as a complement to results provided in accordance with GAAP. Management believes the pro forma measure helps indicate underlying trends in Electroglas' business, and management uses pro forma measures to establish operational goals. Pro forma information is not determined using GAAP and should not be considered superior to or as a substitute for GAAP measures or data prepared in accordance with GAAP. The following is a reconciliation of Generally Accepted Accounting Principles (GAAP) Net Loss to Pro Forma Net Loss:
Three months ended
March 31,
--------------------
2003 2002
--------- ---------
GAAP loss before income taxes $ (23,215) $ (16,123)
Non-GAAP adjustment
Asset impairment 8,475 --
--------- ---------
Non-GAAP loss before income taxes (14,740) (16,123)
Provision (benefit) for income taxes 43 (1,275)
--------- ---------
Non-GAAP net loss $ (14,783) $ (14,848)
========= =========
Non-GAAP EPS $ (0.69) $ (0.71)
========= =========
ELECTROGLAS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
March 31, Dec. 31,
2003 2002
--------- ---------
(Unaudited) (1)
Assets
Current assets:
Cash and short-term investments $ 49,037 $ 58,155
Accounts receivable, net 9,817 11,803
Inventories 25,761 26,650
Prepaid expenses and other current assets 1,088 1,428
--------- ---------
Total current assets 85,703 98,036
Restricted cash -- 7,245
Long-term lease receivable -- 41,055
Equipment and leasehold improvements, net 50,735 15,391
Other assets 10,839 11,453
--------- ---------
Total assets $ 147,277 $ 173,180
========= =========
Liabilities and stockholders' equity
Current liabilities:
Accrued interest payable $ 576 $ 110
Accounts payable 4,216 3,955
Accrued liabilities 12,191 16,411
--------- ---------
Total current liabilities 16,983 20,476
Convertible subordinated notes 33,281 33,169
Non-current liabilities 11,147 11,490
Stockholders' equity 85,866 108,045
--------- ---------
Total liabilities and stockholders' equity $ 147,277 $ 173,180
========= =========
(1) The information in this column was derived from the Company's
audited consolidated financial statements for the year ended
December 31, 2002. Certain prior-year amounts have been
reclassified to conform to the current-year presentation.
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