MKS Instruments Reports Full Year and Fourth Quarter 2012 Financial Results
| Full Year 2012 | ||
| GAAP Results | Non-GAAP Results | |
| Net revenues ($ millions) |
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| Operating margin | 11.5% | 12.8% |
| Net income ($ millions) |
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| Diluted EPS |
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Full Year Financial Results
Sales were
Fourth Quarter Financial Results
Sales were
Fourth quarter net income was
Non-GAAP net earnings, which exclude special charges, were
"Based on these current conditions, we expect that sales in the first quarter of 2013 may range from
Conference Call Details
A conference call with management will be held on
Use of Non-GAAP Financial Results
Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude amortization of acquired intangible assets, costs associated with acquisitions, litigation settlements, restructuring charges, income tax adjustments related to the settlement of tax audits and the related tax effect of any adjustments. These non-GAAP measures are not in accordance with Accounting Principles Generally Accepted in
About
Forward-Looking Statements
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, and other advanced manufacturing markets, 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
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| Unaudited Consolidated Statements of Operations | |||
| (In thousands, except per share data) | |||
| Three Months Ended (Notes 4 and 5) | |||
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| 2012 | 2011 | 2012 | |
| Net revenues | $ 133,796 | $ 171,671 | $ 141,447 |
| Cost of revenues | 81,195 | 95,710 | 84,876 |
| Gross profit | 52,601 | 75,961 | 56,571 |
| Research and development | 14,207 | 14,224 | 14,136 |
| Selling, general and administrative | 30,853 | 31,473 | 29,661 |
| Litigation | -- | -- | 5,316 |
| Completed acquisition costs | -- | -- | 851 |
| Restructuring | 343 | -- | -- |
| Amortization of intangible assets | 583 | 264 | 215 |
| Income from operations | 6,615 | 30,000 | 6,392 |
| Interest income, net | 245 | 275 | 267 |
| Income before income taxes | 6,860 | 30,275 | 6,659 |
| Provision for income taxes | 2,751 | 7,561 | 4,079 |
| Net income | $ 4,109 | $ 22,714 | $ 2,580 |
| Net income per share: | |||
| Basic | $ 0.08 | $ 0.43 | $ 0.05 |
| Diluted | $ 0.08 | $ 0.43 | $ 0.05 |
| Cash dividends per common share | $ 0.16 | $ 0.15 | $ 0.16 |
| Weighted average shares outstanding: | |||
| Basic | 52,707 | 52,465 | 52,854 |
| Diluted | 53,217 | 53,105 | 53,290 |
| The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results: | |||
| Net income | $ 4,109 | $ 22,714 | $ 2,580 |
| Adjustments (net of tax, if applicable): | |||
| Settlement of foreign tax audit | -- | (2,548) | -- |
| Completed acquisition costs (Note 1) | -- | -- | 851 |
| Acquisition inventory step-up | 202 | -- | 101 |
| Litigation (Note 2) | -- | -- | 5,316 |
| Restructuring (Note 3) | 343 | -- | -- |
| Amortization of intangible assets | 583 | 264 | 215 |
| Pro forma tax adjustments | (132) | (71) | (626) |
| Non-GAAP net earnings (Note 4) | $ 5,105 | $ 20,359 | $ 8,437 |
| Non-GAAP net earnings per share (Note 4) | $ 0.10 | $ 0.38 | $ 0.16 |
| Weighted average shares outstanding | 53,217 | 53,105 | 53,290 |
| Income from operations | $ 6,615 | $ 30,000 | $ 6,392 |
| Adjustments: | |||
| Completed acquisition costs (Note 1) | -- | -- | 851 |
| Acquisition inventory step-up | 202 | -- | 101 |
| Litigation (Note 2) | -- | -- | 5,316 |
| Restructuring (Note 3) | 343 | -- | -- |
| Amortization of intangible assets | 583 | 264 | 215 |
| Non-GAAP income from operations | $ 7,743 | $ 30,264 | $ 12,875 |
| Non-GAAP operating margin percentage | 5.8% | 17.6% | 9.1% |
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Note 1: Costs related to the Company's acquisition of |
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Note 2: In the third quarter of 2012, the Company incurred |
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Note 3: The three month period ended |
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| Note 4: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude amortization of intangible assets, restructurings, costs associated with acquisitions, litigation settlements, the related tax effect of these adjustments and pro-forma income tax adjustments to reflect the expected full year effective tax rate in the quarter. | |||
| Note 5: In the third quarter of 2012, the Company reported completed acquisition costs as a line item separate from selling, general and administrative expenses. The Company has reclassified these costs from selling, general and administrative expenses to this separate line beginning with the first quarter of 2012. These costs have been excluded from Non-GAAP earnings and the second quarter and year to date 2012 Non-GAAP net earnings and Non-GAAP net earnings per share have been adjusted to reflect this change. | |||
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| Unaudited Consolidated Statements of Operations | ||
| (In thousands, except per share data) | ||
| Twelve Months Ended | ||
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| 2012 | 2011 | |
| Net revenues | $ 643,508 | $ 822,517 |
| Cost of revenues | 374,029 | 447,529 |
| Gross profit | 269,479 | 374,988 |
| Research and development | 60,118 | 61,033 |
| Selling, general and administrative | 127,185 | 128,015 |
| Litigation | 5,316 | -- |
| Completed acquisition costs | 1,258 | -- |
| Restructuring | 343 | -- |
| Amortization of intangible assets | 1,036 | 1,015 |
| Income from operations | 74,223 | 184,925 |
| Interest income, net | 913 | 1,127 |
| Income before income taxes | 75,136 | 186,052 |
| Provision for income taxes | 27,107 | 56,321 |
| Net income | $ 48,029 | $ 129,731 |
| Net income per share: | ||
| Basic | $ 0.91 | $ 2.49 |
| Diluted | $ 0.90 | $ 2.45 |
| Cash dividends per common share | $ 0.62 | $ 0.60 |
| Weighted average shares outstanding: | ||
| Basic | 52,686 | 52,169 |
| Diluted | 53,234 | 52,847 |
| The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results: | ||
| Net income | $ 48,029 | $ 129,731 |
| Adjustments (net of tax, if applicable): | ||
| Settlement of foreign tax audit | -- | (2,548) |
| Completed acquisition costs (Note 1) | 1,258 | -- |
| Acquisition inventory step-up | 303 | -- |
| Litigation (Note 2) | 5,316 | -- |
| Restructuring (Note 3) | 343 | -- |
| Amortization of intangible assets | 1,036 | 1,015 |
| Pro forma tax adjustments | (2,948) | (268) |
| Non-GAAP net earnings (Note 4) | $ 53,337 | $ 127,930 |
| Non-GAAP net earnings per share (Note 4) | $ 1.00 | $ 2.42 |
| Weighted average shares outstanding | 53,234 | 52,847 |
| Income from operations | $ 74,223 | $ 184,925 |
| Adjustments: | ||
| Completed acquisition costs (Note 1) | 1,258 | -- |
| Acquisition inventory step-up | 303 | -- |
| Litigation (Note 2) | 5,316 | -- |
| Restructuring (Note 3) | 343 | -- |
| Amortization of intangible assets | 1,036 | 1,015 |
| Non-GAAP income from operations | $ 82,479 | $ 185,940 |
| Non-GAAP operating margin percentage | 12.8% | 22.6% |
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Note 1: Costs related to the Company's acquisition of |
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Note 2: In the third quarter of 2012, the Company incurred |
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Note 3: The twelve months ended |
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| Note 4: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude amortization of intangible assets, restructurings, costs associated with acquisitions, litigation settlements, the related tax effect of these adjustments and pro-forma income tax adjustments to reflect the expected full year effective tax rate in the quarter. | ||
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| Reconciliation of GAAP Income Tax Rate to Non-GAAP Income Tax Rate | ||||||
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Three Months Ended |
Three Months Ended |
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| Income Before | Provision for | Effective | Income Before | Provision for | Effective | |
| Income Taxes | Income Taxes | Tax Rate | Income Taxes | Income Taxes | Tax Rate | |
| GAAP | $ 6,860 | $ 2,751 | 40.1% | $ 6,659 | $ 4,079 | 61.3% |
| Adjustments: | ||||||
| Completed acquisition costs (Note 1) | -- | -- | 851 | -- | ||
| Acquisition inventory step-up | 202 | -- | 101 | -- | ||
| Litigation (Note 2) | -- | -- | 5,316 | -- | ||
| Restructuring | 343 | -- | -- | -- | ||
| Amortization of intangible assets | 583 | -- | 215 | -- | ||
| Tax effect of pro forma adjustments | -- | 338 | -- | 626 | ||
| Adjustment to pro forma tax rate | -- | (206) | -- | -- | ||
| Non-GAAP | $ 7,988 | $ 2,883 | 36.1% | $ 13,142 | $ 4,705 | 35.8% |
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Three Months Ended |
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| Income Before | Provision for | Effective | ||||
| Income Taxes | Income Taxes | Tax Rate | ||||
| GAAP | $ 30,275 | $ 7,561 | 25.0% | |||
| Adjustments: | ||||||
| Amortization of intangible assets | 264 | -- | ||||
| Tax effect of pro forma adjustments | -- | 71 | ||||
| Adjustment to pro forma tax rate | -- | -- | ||||
| Non-GAAP | $ 30,539 | $ 7,632 | 25.0% | |||
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Twelve Months Ended |
Twelve Months Ended |
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| Income Before | Provision for | Effective | Income Before | Provision for | Effective | |
| Income Taxes | Income Taxes | Tax Rate | Income Taxes | Income Taxes | Tax Rate | |
| GAAP | $ 75,136 | $ 27,107 | 36.1% | $ 186,052 | $ 56,321 | 30.3% |
| Adjustments: | ||||||
| Settlement of foreign tax audit | -- | -- | (2,548) | -- | ||
| Completed acquisition costs (Note 1) | 1,258 | -- | -- | -- | ||
| Acquisition inventory step-up | 303 | -- | -- | -- | ||
| Litigation (Note 2) | 5,316 | -- | -- | -- | ||
| Restructuring | 343 | -- | -- | -- | ||
| Amortization of intangible assets | 1,036 | -- | 1,015 | -- | ||
| Tax effect of pro forma adjustments | -- | 2,948 | -- | 268 | ||
| Adjustment to pro forma tax rate | -- | -- | -- | -- | ||
| Non-GAAP | $ 83,392 | $ 30,055 | 36.0% | $ 184,519 | $ 56,589 | 30.7% |
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Note 1: Costs related to the Company's acquisition of |
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Note 2: In the third quarter of 2012, we incurred |
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| Note 3: The Non-GAAP net earnings before taxes exclude amortization of intangible assets, costs associated with acquisitions, litigation settlements, the related tax effect of these adjustments and pro-forma income tax adjustments to reflect the expected full year effective tax rate in the quarter. | ||||||
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| Unaudited Consolidated Balance Sheet | ||
| (In thousands) | ||
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| 2012 | 2011 | |
| ASSETS | ||
| Cash and short-term investments | $ 615,241 | $ 565,519 |
| Trade accounts receivable, net | 82,060 | 120,894 |
| Inventories | 134,639 | 153,632 |
| Other current assets | 36,242 | 44,856 |
| Total current assets | 868,182 | 884,901 |
| Property, plant and equipment, net | 80,516 | 72,487 |
| Long-term investments | 12,158 | 7,873 |
| Goodwill | 150,733 | 140,084 |
| Intangible assets, net | 11,561 | 1,043 |
| Other assets | 11,692 | 12,266 |
| Total assets | $ 1,134,842 | $ 1,118,654 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Short-term borrowings | $ -- | $ 1,932 |
| Accounts payable | 16,803 | 24,853 |
| Accrued expenses and other liabilities | 62,508 | 69,646 |
| Total current liabilities | 79,311 | 96,431 |
| Other liabilities | 43,375 | 32,211 |
| Stockholders' equity: | ||
| Common stock | 113 | 113 |
| Additional paid-in capital | 718,005 | 707,419 |
| Retained earnings | 278,583 | 268,870 |
| Other stockholders' equity | 15,455 | 13,610 |
| Total stockholders' equity | 1,012,156 | 990,012 |
| Total liabilities and stockholders' equity | $ 1,134,842 | $ 1,118,654 |
CONTACT:Source:Seth H. Bagshaw Vice President, Chief Financial Officer & Treasurer Telephone: 978.645.5578
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