MKS Instruments Reports Second Quarter 2007 Financial Results
WILMINGTON, Mass., July 26 /PRNewswire-FirstCall/ -- MKS Instruments, Inc. (Nasdaq: MKSI), a leading worldwide provider of process control technologies for improving productivity in semiconductor and other advanced manufacturing processes, today reported second quarter 2007 financial results.
Second quarter sales totaled $204.0 million, up 3 percent from $198.4 million in the second quarter of 2006 and down 4 percent from $211.4 million in the first quarter of 2007.
Net income totaled $22.5 million, or $0.39 per diluted share, compared to $24.4 million, or $0.44 per diluted share, in the second quarter of 2006, and $27.3 million, or $0.48 per diluted share, in the first quarter of 2007.
Non-GAAP net earnings, which exclude amortization of acquired intangible assets and special items, totaled $25.1 million, or $0.43 per diluted share, compared to $27.0 million, or $0.48 per diluted share, in the second quarter of 2006, and $29.9 million, or $0.52 per diluted share, in the first quarter of 2007.
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.
Leo Berlinghieri, Chief Executive Officer and President, said, "MKS continues to demonstrate that our technology leadership supports multi-market growth. In the second quarter, we achieved double-digit sales growth in non-semiconductor markets as we continue to leverage our process technologies in thin film and other growth markets that are less cyclical. After record first quarter sales on strong semiconductor market demand, we saw some softening in the second quarter, which is consistent with industry trends.
"Looking ahead to the third quarter, based on semiconductor market projections and current order patterns, we expect sales could range from $180 to $188 million. Net income could range from $0.25 to $0.31 per diluted share on 58.5 million shares outstanding, and non-GAAP net earnings could range from $0.29 to $0.35 per diluted share. Although visibility is limited, we remain optimistic about longer-term prospects for growth. As fabs implement more high performance 300mm equipment, we are well positioned with process control and analysis technologies that improve fab productivity and reduce cost. And we are seeing more opportunities for our broad technology portfolio in other markets with favorable growth dynamics."
Management will discuss second quarter financial results on a conference call today at 8:30 a.m. (Eastern Time). Dial-in numbers are 1-800-240-8621 for domestic callers and 303-262-2137 for international callers. The call will be broadcast live and available for replay at http://www.mksinstruments.com . To hear a telephone replay through August 2, 2007, dial 303-590-3000, pass code 11093388#.
MKS Instruments, Inc. is a leading worldwide provider of process control solutions for improving productivity in advanced manufacturing processes such as semiconductor device manufacturing; thin-film manufacturing for flat panel displays, data storage media, architectural glass and electro-optical products; and technology for medical imaging equipment and other markets. Our instruments, components and subsystems incorporate sophisticated technologies to power, measure, control, and monitor increasingly complex gas-related semiconductor manufacturing processes, thereby enhancing our customers' uptime, yield and throughput, and return on invested capital.
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,
2007 2006 2007
Net sales $203,978 $198,351 $211,432
Cost of sales 117,948 111,850 118,570
Gross profit 86,030 86,501 92,862
Research and development 18,351 17,663 18,299
Selling, general and administrative 35,928 30,300 34,576
Amortization of acquired intangible
assets 4,108 4,086 4,107
Income from operations 27,643 34,452 35,880
Interest income, net 3,581 1,934 3,305
Income before income taxes 31,224 36,386 39,185
Provision for income taxes 8,697 12,012 11,895
Net income $22,527 $24,374 $27,290
Net income per share:
Basic $0.40 $0.44 $0.48
Diluted $0.39 $0.44 $0.48
Weighted average shares outstanding:
Basic 56,820 55,338 56,354
Diluted 57,939 55,907 57,326
The following supplemental Non-GAAP
earnings information is presented to
aid in understanding MKS' operating
results:
GAAP net income $22,527 $24,374 $27,290
Adjustments (net of tax, if
applicable):
Amortization of acquired intangible
assets 4,108 4,086 4,107
Tax effect of adjustments (1,513) (1,506) (1,514)
Non-GAAP net earnings (Note 1) $25,122 $26,954 $29,883
Non-GAAP net earnings per share (Note 1) $0.43 $0.48 $0.52
Weighted average shares outstanding -
diluted 57,939 55,907 57,326
Note 1: The Non-GAAP net earnings and Non-GAAP net earnings 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,
2007 2006
Net sales $415,410 $377,412
Cost of sales 236,518 217,166
Gross profit 178,892 160,246
Research and development 36,650 33,720
Selling, general and administrative 70,504 60,065
Amortization of acquired intangible assets 8,215 9,340
Purchase of in-process technology - 800
Income from operations 63,523 56,321
Interest income, net 6,886 3,364
Income before income taxes 70,409 59,685
Provision for income taxes 20,592 19,876
Net income $49,817 $39,809
Net income per share:
Basic $0.88 $0.72
Diluted $0.86 $0.72
Weighted average shares outstanding:
Basic 56,587 54,999
Diluted 57,633 55,588
The following supplemental Non-GAAP
earnings information is presented to
aid in understanding MKS' operating
results:
GAAP net income $49,817 $39,809
Adjustments (net of tax, if applicable):
Amortization of acquired intangible assets 8,215 9,340
Purchase of in-process technology - 800
Tax effect of adjustments (3,027) (3,410)
Non-GAAP net earnings (Note 1) $55,005 $46,539
Non-GAAP net earnings per share (Note 1) $0.95 $0.84
Weighted average shares outstanding
- diluted 57,633 55,588
Note 1: The Non-GAAP net earnings and Non-GAAP net earnings 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,
2007 2006
ASSETS
Cash and short-term investments $336,076 $289,957
Trade accounts receivable 125,910 123,658
Inventories 163,713 149,820
Other current assets 29,831 28,003
Total current assets 655,530 591,438
Property, plant and equipment, net 80,130 79,463
Long-term investments 6,729 2,816
Goodwill 322,712 323,973
Other acquired intangible assets 35,998 43,104
Other assets 2,376 2,926
Total assets $1,103,475 $1,043,720
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $25,421 $23,021
Accounts payable 37,938 38,541
Accrued expenses and other liabilities 45,979 58,424
Total current liabilities 109,338 119,986
Long-term debt 6,135 6,113
Other long-term liabilities 20,139 16,402
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 714,034 680,164
Retained earnings 243,479 210,877
Other stockholders' equity 10,237 10,065
Total stockholders' equity 967,863 901,219
Total liabilities and stockholders'
equity $1,103,475 $1,043,720
SOURCE MKS Instruments, Inc.
CONTACT: Ronald C. Weigner, Vice President and Chief Financial Officer of MKS Instruments, Inc., 1-978-284-4000
Web site: http://www.mksinst.com
(MKSI)