MKS Instruments Reports First Quarter 2009 Financial Results
Sales were
The net loss was
Included in the first quarter 2009 GAAP net loss were special charges
totaling
Leo Berlinghieri, Chief Executive Officer and President, said, "Although a weaker global economy affected all of our business to some extent, our participation in non-semiconductor markets lessened the impact of significantly lower demand for semiconductor capital equipment spending in the quarter.
"In this challenging business environment, we took additional actions to
reduce our costs and our headcount during the quarter. We implemented
restructuring and reductions in workforce of approximately 630 people during
the quarter, representing approximately 24% of our worldwide headcount. The
reductions were done with consideration to both our ability to grow in diverse
markets, and to respond to the demand and innovation requirements from our
customers when the economy begins to recover. As a result of these actions,
we expect annual compensation-related savings of approximately
"Some semiconductor customers have suggested that the industry cycle may
be bottoming. While this is encouraging, our short lead times limit our
visibility, and we cannot predict when our semiconductor business and sales to
other markets will improve significantly. However, considering current levels
of activity, we estimate that second quarter sales may range from
Management will discuss second quarter financial results on a conference
call today at
The financial results that exclude certain charges and special items are
not in accordance with Accounting Principles Generally Accepted in the
This release contains projections or other forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995,
Section 27 of the Securities Act, and Section 21E of the Securities Exchange
Act regarding MKS' future growth and the future financial performance of MKS.
These projections or statements are only predictions. Actual events or results
may differ materially from those in the projections or other forward-looking
statements set forth herein. Among the important factors that could cause
actual events to differ materially from those in the projections or other
forward-looking statements are the fluctuations in capital spending in the
semiconductor industry, fluctuations in net sales to MKS' major customers,
potential fluctuations in quarterly results, the challenges, risks and costs
involved with integrating the operations of MKS and any acquired companies,
dependence on new product development, rapid technological and market change,
acquisition strategy, manufacturing and sourcing risks, volatility of stock
price, international operations, financial risk management, and future growth
subject to risks. Readers are referred to MKS' filings with the
MKS Instruments, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
------------------
March 31, March 31, December 31,
2009 2008 2008
---- ---- ----
Net sales $76,719 $193,448 $125,180
Cost of sales 66,128 111,541 80,571
------ ------- ------
Gross profit 10,591 81,907 44,609
Research and development 15,463 19,341 19,277
Selling, general and administrative 28,464 31,617 30,518
Amortization of acquired intangible
assets 1,653 3,105 1,949
Impairment of intangible assets - - 6,069
Restructuring 5,620 - -
----- - -
Income (expense) from operations (40,609) 27,844 (13,204)
Impairment of investments - (1,161) -
Interest income, net 1,009 2,176 1,287
----- ----- -----
Income (expense) before income taxes (39,600) 28,859 (11,917)
Provision (benefit) for income taxes (23,101) 8,477 (5,627)
------- ----- ------
Net income (loss) $(16,499) $20,382 $(6,290)
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Net income (loss) per share:
Basic $(0.34) $0.39 $(0.13)
Diluted $(0.34) $0.39 $(0.13)
Weighted average shares outstanding:
Basic 48,994 51,733 48,712
Diluted 48,994 52,571 48,712
The following supplemental Non-GAAP
earnings information is presented
to aid in understanding MKS'
operating results:
GAAP net income (loss) $(16,499) $20,382 $(6,290)
Adjustments (net of tax, if applicable):
Amortization of acquired intangible
assets 1,653 3,105 1,949
Excess & obsolete inventory
adjustment (Note 1) 12,900 - 5,000
Restructuring and related items
(Note 2) 4,322 - -
Foreign exchange gain from legal
entity restructuring (Note 3) - (2,669) -
Impairment of intangible assets
(Note 4) - - 6,069
(Benefit) for income taxes (Note 5) (6,370) - (1,823)
Tax effect of adjustments (7,047) (204) (4,855)
------ ---- ------
Non-GAAP net earnings (loss) (Note 6) $(11,041) $20,614 $50
======== ======= ===
Non-GAAP net earnings (loss) per
share (Note 6) $(0.23) $0.39 $-
====== ===== ==
Weighted average shares outstanding -
diluted 48,994 52,571 49,680
Note 1 : Cost of Sales for the three month periods ended March 31, 2009
and December 31, 2008 include $12,900 and $5,000 , respectively,
of special charges for excess, obsolete and committed inventory purchases.
Note 2 : The three month period ended March 31, 2009 includes a $5,620
restructuring charge primarily for severance related costs offset by
a credit of $1,298 for the reversal of previously expensed equity
compensation charges of terminated employees.
Note 3 : Selling, general and administrative expenses for the three month
period ended March 31, 2008 includes a foreign exchange gain of
$2.7 million related to the Company's legal entity restructuring of
certain foreign operations.
Note 4 : The three month period ended December 31, 2008 includes a $6,069
write-down for the impairment of intangible assets resulting from a lower
forecast for a product for the semiconductor industry.
Note 5 : The three month period ended March 31, 2009 includes a benefit of
$6,370 attributable to the reversal of FIN 48 reserve items as a result
of a Federal audit close. The three month period ended December 31, 2008
includes a benefit of $1,823 attributable to a discrete tax matter
related to the reinstatement of the U.S. research and development tax
credits and other adjustments.
Note 6 : The Non-GAAP net earnings (loss) and Non-GAAP net earnings (loss)
per share amounts exclude amortization of acquired intangible assets,
acquisition and disposition related charges and special items, net
of applicable income taxes.
MKS Instruments, Inc.
Unaudited Consolidated Balance Sheet
(In thousands)
March 31, December 31,
2009 2008
---- ----
ASSETS
Cash and short-term investments $255,404 $278,869
Trade accounts receivable 56,990 85,350
Inventories 126,512 131,519
Other current assets 59,417 32,990
------ ------
Total current assets 498,323 528,728
Property, plant and equipment,
net 78,552 82,017
Goodwill 337,765 337,765
Other acquired intangible assets 19,419 21,069
Other assets 12,005 15,360
------ ------
Total assets $946,064 $984,939
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $9,827 $18,678
Accounts payable 21,226 19,320
Accrued expenses and other
liabilities 33,999 37,937
------ ------
Total current liabilities 65,052 75,935
Long-term debt 262 396
Other long-term liabilities 16,600 21,910
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 636,627 637,938
Retained earnings 224,929 241,428
Other stockholders' equity 2,481 7,219
----- -----
Total stockholders' equity 864,150 886,698
------- -------
Total liabilities and
stockholders' equity $946,064 $984,939
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SOURCE
CONTACT:
Vice President, Chief Financial Officer &
Treasurer of
+1-978-645-5576
Web Site: http://www.mksinstruments.com
(MKSI)