MKS Instruments Reports Record Sales and Record Earnings in Q2 2010
ANDOVER, Mass., July 21, 2010 /PRNewswire via COMTEX/ --
MKS Instruments, Inc. (Nasdaq: MKSI), a global provider of technologies that enable advanced processes and improve productivity, today reports second quarter 2010 financial results.
Sales were $220.6 million, an increase of 15 percent from $192.2 million in the first quarter of 2010, and an increase of 192 percent from $75.6 million in the second quarter of 2009.
Non-GAAP net earnings, which exclude special items, were $33.4 million, or $0.66 per diluted share, compared to $28.9 million, or $0.57 per diluted share in the first quarter of 2010, and a net loss of $4.2 million, or ($0.08) per basic share in the second quarter of 2009.
GAAP net income was $38.8 million, or $0.76 per diluted share, compared to net income of $29.2 million, or $0.58 per diluted share in the first quarter of 2010, and a net loss of $207.1 million, or ($4.20) per basic share in the second quarter of 2009. Included in the GAAP results are the effect of our decision to divest two small product lines in the second quarter of 2010 which are shown as discontinued operations.
Leo Berlinghieri, Chief Executive Officer and President, said, "We achieved record revenue and Non-GAAP net earnings for the second quarter, with revenue increasing an additional 15% sequentially to $221 million and nearly 200% from a year ago.
"We continue to gain share and achieve critical design wins in SEMI. We are also continuing to successfully execute our strategy of diversification into other advanced and growing markets, which achieved a new quarterly sales record in this quarter. As a result of our efforts in all of the markets we serve, coupled with our ability to ramp production levels quickly, our sales in the first half of 2010 have already surpassed sales volumes for all of 2009.
"Over the last four quarters, the semiconductor industry has experienced phenomenal growth and our sales to other advanced markets continued to exceed our expectations. Based upon industry projections and current business levels, we estimate that our third quarter sales may range from $210 to $230 million, and at these volumes, our Non-GAAP net earnings could range from $0.58 to $0.71 per share."
Management will discuss second quarter financial results on a conference call today at 4:30 p.m. (eastern time). Dial-in numbers are (800) 762-8779 for domestic callers and (480) 629-9771 for international callers. The call will be broadcast live and available for replay at www.mksinst.com . To hear a telephone replay through July 28, 2010, dial (303) 590-3030, pass code 4317832#.
The financial results that exclude certain charges and special items are not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). MKS' management believes the presentation of non-GAAP financial measures, which exclude costs associated with acquisitions and special items, is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.
MKS Instruments, Inc. is a leading, global provider of technologies to power, control, deliver, monitor, measure and analyze advanced processes in high growth applications. Our primary served markets are manufacturers of capital equipment for thin film applications including semiconductor devices, flat panel displays, light emitting diodes (LEDs), solar cells, data storage media and coatings, as well as medical equipment; energy generation and environmental monitoring processes; biopharm and other industrial manufacturing; and university, government and industrial research laboratories.
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 Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, for a discussion of these and other important risk factors concerning MKS and its operations. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
MKS Instruments, Inc.
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
------------------
June 30, June 30, March 31,
2010 2009 2010
---- ---- ----
Net sales $220,647 $75,623 $192,166
Cost of sales 123,328 51,373 106,671
------- ------ -------
Gross profit 97,319 24,250 85,495
Research and development 16,154 11,514 15,675
Selling, general and
administrative 30,902 24,620 27,812
Amortization of acquired
intangible assets 314 690 469
Gain on sale of asset - - (682)
Goodwill and asset
impairment charges - 142,958 -
Restructuring - 15 -
--- --- ---
Income (loss) from
operations 49,949 (155,547) 42,221
Interest income, net 254 213 325
--- --- ---
Income (loss) from
continuing operations
before income taxes 50,203 (155,334) 42,546
Provision (benefit) for
income taxes 17,059 (8,986) 13,548
------ ------ ------
Income (loss) from
continuing operations 33,144 (146,348) 28,998
Income (loss) from
discontinued operations,
net of taxes 5,633 (60,786) 227
Net income (loss) $38,777 $(207,134) $29,225
======= ========= =======
Basic income (loss) per
share:
Continuing operations $0.66 $(2.97) $0.58
Discontinued operations 0.11 (1.23) 0.01
---- ----- ----
Net income (loss) $0.77 $(4.20) $0.59
Diluted income (loss) per
share:
Continuing operations $0.65 $(2.97) $0.57
Discontinued operations 0.11 (1.23) 0.01
---- ----- ----
Net income (loss) $0.76 $(4.20) $0.58
Weighted average shares
outstanding:
Basic 50,067 49,307 49,601
Diluted 50,870 49,307 50,600
The following supplemental
Non-GAAP earnings
information is presented
to aid in understanding
MKS' operating results:
Income (loss) from
continuing operations $33,144 $(146,348) $28,998
Adjustments (net of tax, if
applicable):
Amortization of acquired
intangible assets 314 690 469
Gain on sale of asset (Note
1) - - (682)
Goodwill and asset
impairment charges (Note
2) - 142,958 -
Restructuring and related
items (Note 3) - 15 -
Proforma tax adjustments (90) (1,562) 108
--- ------ ---
Non-GAAP net earnings
(Note 4) $33,368 $(4,247) $28,893
======= ======= =======
Non-GAAP net earnings per
share (Note 4) $0.66 $(0.08) $0.57
===== ====== =====
Weighted average shares
outstanding 50,870 49,307 50,600
Note 1 : The three month period ended March 31, 2010 includes a $682
gain on the sale of a vacated facility.
Note 2 : The three month period ended June 30, 2009 includes a
$142,958 charge related to the impairment of goodwill and
other long-lived assets.
Note 3: The three month period ended June 30, 2009 includes $15 of
restructuring charges primarily for severance related
costs.
Note 4 : 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 Statements of Operations
(In thousands, except per share data)
Six Months Ended
June 30,
--------
2010 2009
---- ----
Net sales $412,813 $147,888
Cost of sales 229,999 115,120
------- -------
Gross profit 182,814 32,768
Research and development 31,829 25,963
Selling, general and administrative 58,714 51,273
Amortization of acquired intangible assets 783 1,381
Gain on sale of asset (682) -
Goodwill and asset impairment charges - 142,958
Restructuring - 5,393
--- -----
Income (loss) from operations 92,170 (194,200)
Interest income, net 579 1,222
--- -----
Income (loss) from continuing operations
before income taxes 92,749 (192,978)
Provision (benefit) for income taxes 30,607 (31,657)
------ -------
Income (loss) from continuing operations 62,142 (161,321)
Income (loss) from discontinued operations,
net of taxes 5,860 (62,312)
Net income (loss) $68,002 $(223,633)
======= =========
Basic income (loss) per share:
Continuing operations $1.24 $(3.28)
Discontinued operations 0.12 (1.27)
---- -----
Net income (loss) $1.36 $(4.55)
Diluted income (loss) per share:
Continuing operations $1.22 $(3.28)
Discontinued operations 0.12 (1.27)
---- -----
Net income (loss) $1.34 $(4.55)
Weighted average shares outstanding:
Basic 49,834 49,151
Diluted 50,735 49,151
The following supplemental Non-GAAP
earnings information is presented
to aid in understanding MKS' operating
results:
Income (loss) from continuing operations $62,142 $(161,321)
Adjustments (net of tax, if applicable):
Amortization of acquired intangible assets 783 1,381
Excess & obsolete inventory adjustment
(Note 1) - 12,900
Gain on sale of asset (Note 2) (682) -
Goodwill and asset impairment charges (Note
3) - 142,958
Restructuring and related items (Note 4) - 4,144
(Benefit) for income taxes (Note 5) - (6,370)
Proforma tax adjustments 18 (8,175)
--- ------
Non-GAAP net earnings (Note 6) $62,261 $(14,483)
======= ========
Non-GAAP net earnings per share (Note 6) $1.23 $(0.29)
===== ======
Weighted average shares outstanding 50,735 49,151
Note 1: Cost of sales for the six month period ended June 30, 2009
includes $12,900 of special charges for
excess, obsolete and committed inventory purchases.
Note 2 : The six month period ended June 30, 2010 includes a $682
gain on the sale of a vacated facility.
Note 3 : The six month period ended June 30, 2009 includes a $142,958
charge related to the impairment of
goodwill and other long-lived assets.
Note 4: The six month period ended June 30, 2009 includes $5,393 of
restructuring charges primarily for
severance related costs offset by a credit of $1,249 for the reversal
of previously expensed equity
compensation charges of terminated employees.
Note 5: The six month period ended June 30, 2009 includes a benefit
of $6,370 attributable to the reversal of
FIN 48 reserve items as a result of a Federal audit close.
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)
June 30, December 31,
2010 2009
---- ----
ASSETS
Cash and short-term
investments $323,414 $271,795
Trade accounts receivable 149,863 94,215
Inventories 137,305 118,004
Other current assets 55,081 48,867
------ ------
Total current assets 665,663 532,881
Property, plant and equipment,
net 65,568 67,196
Goodwill 138,850 144,511
Other acquired intangible
assets 2,243 4,963
Other assets 10,735 24,518
------ ------
Total assets $883,059 $774,069
======== ========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Short-term debt $12,986 $12,885
Accounts payable 38,902 26,292
Accrued expenses and other
liabilities 56,257 32,123
------ ------
Total current
liabilities 108,145 71,300
Other long-term liabilities 21,071 17,836
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 652,004 645,411
Retained earnings 96,771 28,769
Other stockholders' equity 4,955 10,640
----- ------
Total stockholders'
equity 753,843 684,933
-------
Total liabilities and
stockholders' equity $883,059 $774,069
======== ========
SOURCE MKS Instruments, Inc.