Etec Systems, Inc. Announces Financial Results for Second Quarter and First Half Fiscal 1998.HAYWARD Hayward, city (1990 pop. 111,498), Alameda co., W Calif.; settled 1851, inc. 1876. It is an important commercial and distribution center for farm products. Manufactures include wire, plastics, metal and paper products, textiles, machinery, and motor vehicles. , Calif.--(BUSINESS WIRE)--Feb. 24, 1998--Etec Systems, 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 :ETEC ETEC enterotoxigenic Escherichia coli. ETEC Enterotoxic Escherichia coli, see there ), a leader in patterning solutions for the worldwide semiconductor and electronics industries, today announced financial results for the second quarter and first half of fiscal 1998, ended January January: see month. 30, 1998. Second Quarter Net Income up 14%, Six Months Net Income up 23% Revenues for the second quarter of fiscal 1998 were $62.2 million, a 16% increase from the $53.7 million reported for the second quarter of fiscal 1997. Net income for the second quarter increased 14% to $8.7 million, or $0.38 per share on 22.9 million average 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, compared to $7.6 million, or $0.35 per share on 21.8 million average diluted shares in the second quarter of fiscal 1997.(1) Revenues for the first half of fiscal 1998 were $130.5 million, a 32% increase over the $98.6 million reported for the first half of fiscal 1997. Net income for the first half of fiscal 1998 increased 23% to $17.9 million, or $0.78 per share on 22.8 million average diluted shares, compared to $14.6 million, or $0.68 per share on 21.5 million average diluted shares in the first half of fiscal 1997. The $14.6 million net income for the first six months of fiscal 1997 included a $1.2 million favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. adjustment in valuation allowance previously recorded against deferred tax assets. Excluding this item, net income for the first half of fiscal 1997 was $13.4 million or $0.62 per share. On a comparable basis, net income for the first half of 1998 increased 34%. Gross margin reached a record 54.2% in the second quarter of fiscal 1998, up from 47.2% in the second quarter of fiscal 1997 and up from 49.1% in the first quarter of fiscal 1998. This reflects a favorable product mix toward Etec's most advanced systems. Research and development expenses in the second quarter were unusually high due to heightened levels of spending on advanced, next generation product development in the IC mask, interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. and display product groups. Quarterly Commentary Steve Cooper, Etec's Chairman, 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. stated, "Despite the fact that we delayed an ALTA 3500(R) into the third quarter, as announced on February 2, 1998, the results for Q2 demonstrated solid year-over-year growth. The quarter had the potential to be excellent had it not been for the failure of a critical subassembly sub·as·sem·bly n. pl. sub·as·sem·blies An assembled unit forming a component to be incorporated into a larger assembly. in an ALTA 3500 late in the quarter which forced us to delay shipment, an event which had a significant impact upon revenues and earnings for the quarter," he continued. "The system in question has met all specifications and has passed factory acceptance by the customer. This system is scheduled to ship next week." "During the second quarter, Etec shipped three, 0.18 micron micron: see micrometer. One micrometer, which is one millionth of a meter or approximately 1/25,000 of an inch. The tiny elements that make up a transistor on a chip are measured in micrometers and nanometers. See process technology. , MEBES 4500S(R) systems. The continued demand for Etec's leading edge products is evidenced by the fact that over two thirds of Etec's product 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 the end of Q2 was for 0.18 micron and 0.25 micron systems," Cooper added. Interconnect and Display Products The first Etec laser direct imaging system for advanced printed circuit board manufacturing is scheduled to begin factory acceptance by the customer in early March with shipment expected later in the month. "Progress toward the commercialization of both our interconnect and display products is very positive," stated Jim Herd Jim Herd was the Executive Vice-President of World Championship Wrestling from 1988 to 1992, following Turner Broadcasting's acquisition of the NWA-affiliated Jim Crockett Promotions in 1988. Before that, Herd had been a station manager for the St. , Etec's new Vice President of Business Development and General Manager of Interconnect and Display Products. Jim joined Etec during the second quarter and is responsible for the launch of both the laser direct imaging system for printed circuit board production and the electron-beam test products for AMLCD (Active Matrix LCD) See active matrix. displays. Semiconductor Industry Trends Demand for mask pattern generation systems in Taiwan is at record levels, with strong demand in 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. and Europe as well. While backlog for Japan is strong, Etec is seeing some weakness as Japanese maskmakers assess the impact of a retrenching by Japanese semiconductor manufacturers. Despite this weakness there continues to be strong interest in every geographical region for Etec's next generation systems to address 0.18 micron and smaller requirements. Etec's near-term exposure to the Korean financial crisis is limited. One Etec system shipped to Korea in the second quarter and no further system deliveries are scheduled to this region for the remainder of this fiscal year. While the Korean market has a need for advanced systems at 0.25 micron and smaller geometries, the lack of available credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities has made it difficult to close new orders under terms acceptable to both parties. We expect this situation to continue into the next fiscal year. Cooper concluded, "Etec continues to strengthen the infrastructure necessary to meet increasingly demanding customer requirements. Groundbreaking celebrations scheduled this month in Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. and next month in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , signal the beginning of construction projects designed to more than double our capacity and improve our ability to meet worldwide customer requirements. During the second quarter we also launched a major initiative to make customer satisfaction our number one priority. A recent internal audit using the SEMATECH SEMATECH Semiconductor Manufacturing Technology SSQA SSQA Sunshine State Quilters Association (Kissimmee, FL) SSQA Sheep Safety & Quality Assurance (standard supplier quality audit) process has identified areas needing attention and the company is aggressively pursuing a strategy of continuous improvement. As global acceptance of our new product technologies has been quite strong, we must meet increasing customer expectations on all levels. "In conclusion, while visibility into future quarters has decreased in recent months as customers re-assess the global economic environment, we remain positive in our outlook for the remainder of this fiscal year and beyond." (1)Implementation of Accounting Principle Related to EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Presentation In the second quarter of fiscal 1998, Etec implemented a new accounting principle which requires it to report basic earnings per share (EPS) and diluted EPS on the face of the income statement. Diluted EPS is directly comparable to previously reported EPS data and includes the dilutive impact of common stock equivalents from outstanding stock options and warrants. 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: Except for historical information, the matters discussed in this news release are 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 certain risks and uncertainties that could cause the actual results to differ materially from those projected, including the timely development and acceptance of new products, general market conditions, particularly in Asia, availability of key components, delays in factory testing and acceptance, construction delays, continued success in technology development and competition. Statements in this release are based upon internal estimates, preliminary information and assumptions which are subject to a number of risks and uncertainties inherent in estimating future results. Other risks are detailed from time to time in the Company's SEC reports including the annual report filed 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. , our December 1996 prospectus and subsequent filings on Form 10-Q Form 10-Q See 10-Q. . The Company assumes no obligation to update the information in this release. About Etec: Etec Systems, Inc. is a leader in patterning solutions for the worldwide semiconductor and electronics industries. Its products include electron- and laser-beam systems that produce high-precision masks, which are used to print circuit patterns onto semiconductor wafers wafers compressed roughage in flat plates useful for feeding to animals in transit. and high-speed, large-area laser direct imaging systems and electron-beam test systems for electronic interconnect and flat panel display A thin display screen for computer and TV usage. The first flat panels appeared on laptop computers in the mid-1980s, and the LCD technology became the standard. Stand-alone LCD screens became available for desktop computers in the mid-1990s and exceeded sales of CRTs for the first time production applications. Founded in 1970, the company is headquartered in Hayward, Calif., with manufacturing facilities in Hayward, Calif., Beaverton, Ore., Tucson, Ariz., and Feldkirchen, Germany, with sales and service offices worldwide. Customer satisfaction is Etec's No. 1 priority. Etec's stock is traded on the Nasdaq Stock Market Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies. under the symbol ETEC. The Company's World Wide Web site can be accessed at www.etec.com. -0-
ETEC SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
January 31, January 31,
------------------ ----------------
1998 1997 1998 1997
------ ------ ------ ------
Revenue:
Products $ 53,161 $ 45,309 $112,132 $ 81,711
Services 9,007 8,371 18,401 16,856
--------- -------- -------- ---------
62,168 53,680 130,533 98,567
--------- -------- -------- ---------
Cost of revenue:
Products 21,858 21,723 49,605 39,275
Services 6,633 6,642 13,717 13,194
--------- -------- -------- ---------
28,491 28,365 63,322 52,469
--------- -------- -------- ---------
Gross profit 33,677 25,315 67,211 46,098
--------- -------- -------- ---------
Operating expenses:
Research, development
and engineering 13,555 8,115 24,332 14,596
Selling, general
and administrative 8,096 6,290 17,373 12,185
--------- -------- -------- --------
21,651 14,405 41,705 26,781
--------- -------- -------- --------
Income from operations 12,026 10,910 25,506 19,317
Interest expense (161) (266) (360) (510)
Other income, net 1,124 1,027 2,149 1,821
--------- -------- -------- --------
Income before income
tax provision 12,989 11,671 27,295 20,628
Income tax provision 4,338 4,085 9,416 6,058
--------- -------- -------- --------
Net income $8,651 $7,586 $17,879 $14,570
========= ======== ======== ========
Basic earnings per share $0.39 $0.37 $0.82 $0.72
========= ======== ======== ========
Weighted-average shares 21,906 20,560 21,820 20,140
========= ======== ======== ========
Diluted earnings per share $0.38 $0.35 $0.78 $0.68
========= ======== ======== ========
Dilutive potential common
shares 22,948 21,806 22,783 21,462
========= ======== ======== ========
NOTE: Earnings per share amounts for prior periods presented have
been restated to reflect the dual presentation required under
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 128. Diluted earnings per share is
directly comparable to previously reported earnings per share under
Accounting Principles Board Opinion No. 15.
ETEC SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
January 31, July 31,
1998 1997(a)
--------- --------
ASSETS
Cash and investments $ 96,894 $ 90,237
Accounts receivable, net(b) 59,108 46,421
Inventory 79,134 67,202
Other current assets 28,095 26,144
Property, plant and equipment, net 52,271 42,013
Other assets 3,871 4,068
-------- --------
$319,373 $276,085
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 95,969 $ 73,701
Noncurrent liabilities 4,346 4,743
Stockholders' equity 219,058 197,641
-------- --------
$319,373 $276,085
======== ========
(a) Derived from audited consolidated financial statements at
July 31, 1997.
(b) Accounts receivable, net, at January 31, 1998 and July 31, 1997
has been offset by a liability of $10.4 million and $8.5 million,
respectively, which is due to a trading partner as a result of
third-party financing of receivables.
CONTACT: Etec Systems, Inc. Bill Snyder Bill Snyder (born October 7, 1939, in Saint Joseph, Missouri) is the former head football coach for Kansas State University, holding that position from 1989 to 2005. Coaching career , 510/887-3473, fax: 510/732-1469 (CFO See Chief Financial Officer. ) Kathy Call, 510/887-3578, fax: 510/780-3845 (IR) |
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