MKS Instruments Reports Q1 2013 Financial Results
| GAAP Results | Non-GAAP Results | |
| Net revenues ($ millions) |
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| Operating margin | 3.3% | 3.7% |
| Net income ($ millions) |
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| Diluted EPS |
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First Quarter Financial Results
Sales were
First quarter net income was
Non-GAAP net earnings, which exclude special charges, were
In the first quarter, the Company paid a quarterly cash dividend of
"Given current business levels, we anticipate that sales in the second quarter 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, 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 (Note 5) | |||
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2013 |
2012 |
2012 |
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| Net revenues: | |||
| Products | $ 116,611 | $ 164,488 | $ 108,788 |
| Services | 25,034 | 26,380 | 25,008 |
| Total net revenues | 141,645 | 190,868 | 133,796 |
| Cost of revenues: | |||
| Products | 70,575 | 91,024 | 66,535 |
| Services | 16,368 | 16,053 | 14,660 |
| Total cost of revenues | 86,943 | 107,077 | 81,195 |
| Gross profit | 54,702 | 83,791 | 52,601 |
| Research and development | 15,248 | 16,184 | 14,207 |
| Selling, general and administrative | 34,173 | 34,119 | 30,853 |
| Completed acquisition costs | 171 | -- | -- |
| Restructuring | -- | -- | 343 |
| Amortization of intangible assets | 434 | 119 | 583 |
| Income from operations | 4,676 | 33,369 | 6,615 |
| Interest income | 305 | 261 | 299 |
| Interest expense | 14 | 9 | 54 |
| Interest income, net | 291 | 252 | 245 |
| Income before income taxes | 4,967 | 33,621 | 6,860 |
| (Benefit) Provision for income taxes | (794) | 10,853 | 2,751 |
| Net income | $ 5,761 | $ 22,768 | $ 4,109 |
| Net income per share: | |||
| Basic | $ 0.11 | $ 0.43 | $ 0.08 |
| Diluted | $ 0.11 | $ 0.43 | $ 0.08 |
| Cash dividends per common share | $ 0.16 | $ 0.15 | $ 0.16 |
| Weighted average shares outstanding: | |||
| Basic | 52,773 | 52,504 | 52,707 |
| Diluted | 53,359 | 53,222 | 53,217 |
| The following supplemental Non-GAAP earnings information is presented to aid in understanding the Company's operating results: | |||
| Net income | $ 5,761 | $ 22,768 | $ 4,109 |
| Adjustments (net of tax, if applicable): | |||
| Acquisition inventory step-up (Note 1) | -- | -- | 202 |
| Tax benefit (Note 2) | (2,353) | -- | -- |
| Completed acquisition costs (Note 3) | 171 | -- | -- |
| Restructuring (Note 4) | -- | -- | 343 |
| Amortization of intangible assets | 434 | 119 | 583 |
| Pro forma tax adjustments | (168) | (34) | (132) |
| Non-GAAP net earnings (Note 5) | $ 3,845 | $ 22,853 | $ 5,105 |
| Non-GAAP net earnings per share (Note 5) | $ 0.07 | $ 0.43 | $ 0.10 |
| Weighted average shares outstanding | 53,359 | 53,222 | 53,217 |
| Income from operations | $ 4,676 | $ 33,369 | $ 6,615 |
| Adjustments: | |||
| Acquisition inventory step-up (Note 1) | -- | -- | 202 |
| Completed acquisition costs (Note 3) | 171 | -- | -- |
| Restructuring (Note 4) | -- | -- | 343 |
| Amortization of intangible assets | 434 | 119 | 583 |
| Non-GAAP income from operations | $ 5,281 | $ 33,488 | $ 7,743 |
| Non-GAAP operating margin percentage | 3.7% | 17.5% | 5.8% |
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Note 1: Costs related to the Company's acquisition of |
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Note 2: Tax benefit related to the enactment of the American Taxpayer Relief Act of 2012 on |
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Note 3: Costs related to the Company's acquisition of Alter Power Systems S.r.l., in |
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Note 4: The three month period ended |
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| Note 5: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude amortization of intangible assets, costs associated with acquisitions, restructuring charges, the related tax effect of these adjustments and a benefit related to the enactment of the American Taxpayer Relief Act of 2012. | |||
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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 Income Taxes |
Provision for Income Taxes |
Effective Tax Rate |
Income Before Income Taxes |
Provision for Income Taxes |
Effective Tax Rate |
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| GAAP | $ 4,967 | $ (794) | (16.0)% | $ 6,860 | $ 2,751 | 40.1% |
| Adjustments: | ||||||
| Acquisition inventory step-up (Note 1) | -- | -- | 202 | -- | ||
| Tax benefit (Note 2) | -- | 2,353 | -- | -- | ||
| Completed acquisition costs (Note 3) | 171 | -- | -- | -- | ||
| Restructuring (Note 4) | -- | -- | 343 | -- | ||
| Amortization of intangible assets | 434 | -- | 583 | -- | ||
| Tax effect of pro forma adjustments | -- | 168 | -- | 338 | ||
| Adjustment to pro forma tax rate | -- | -- | -- | (206) | ||
| Non-GAAP | $ 5,572 | $ 1,727 | 31.0% | $ 7,988 | $ 2,883 | 36.1% |
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Three Months Ended |
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Income Before Income Taxes |
Provision for Income Taxes |
Effective Tax Rate |
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| GAAP | $ 33,621 | $ 10,853 | 32.3% | |||
| Adjustments: | ||||||
| Amortization of intangible assets | 119 | -- | ||||
| Tax effect of pro forma adjustments | -- | 34 | ||||
| Adjustment to pro forma tax rate | -- | -- | ||||
| Non-GAAP | $ 33,740 | $ 10,887 | 32.3% | |||
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Note 1: Costs related to the Company's acquisition of |
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Note 2: Tax benefit related to the enactment of the American Taxpayer Relief Act of 2012 on |
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Note 3: Costs related to the Company's acquisition of Alter Power Systems S.r.l., in |
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Note 4: The three month period ended |
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| Note 5: The Non-GAAP net earnings and Non-GAAP provision for income taxes amounts exclude amortization of intangible assets, costs associated with acquisitions, restructuring charges, the related tax effect of these adjustments , a benefit related to the enactment of the American Taxpayer Relief Act of 2012 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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March 31, 2013 |
2012 |
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| ASSETS | ||
| Cash and cash equivalents | $ 266,708 | $ 287,588 |
| Short-term investments | 331,634 | 327,653 |
| Trade accounts receivable, net | 90,457 | 82,060 |
| Inventories | 131,253 | 134,639 |
| Deferred income taxes | 8,585 | 8,194 |
| Other current assets | 30,008 | 28,048 |
| Total current assets | 858,645 | 868,182 |
| Property, plant and equipment, net | 79,709 | 80,516 |
| Long-term investments | 10,157 | 12,158 |
| Goodwill | 150,340 | 150,733 |
| Intangible assets, net | 13,750 | 11,561 |
| Other assets | 12,807 | 11,692 |
| Total assets | $ 1,125,408 | $ 1,134,842 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Short-term borrowings | $ 759 | $ -- |
| Accounts payable | 21,159 | 16,803 |
| Accrued compensation | 17,621 | 20,955 |
| Income taxes payable | 3,151 | 4,148 |
| Other current liabilities | 34,042 | 37,405 |
| Total current liabilities | 76,732 | 79,311 |
| Other liabilities | 45,613 | 43,375 |
| Stockholders' equity: | ||
| Common stock | 113 | 113 |
| Additional paid-in capital | 719,782 | 718,005 |
| Retained earnings | 275,058 | 278,583 |
| Other stockholders' equity | 8,110 | 15,455 |
| Total stockholders' equity | 1,003,063 | 1,012,156 |
| Total liabilities and stockholders' equity | $ 1,125,408 | $ 1,134,842 |
CONTACT:Seth H. Bagshaw Vice President, Chief Financial Officer & Treasurer Telephone: 978.645.5578
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