MKS Instruments Reports Second Quarter 2008 Financial Results
ANDOVER, Mass., July 24 /PRNewswire-FirstCall/ -- MKS Instruments, Inc. (Nasdaq: MKSI), a global provider of technologies that enable advanced processes and improve productivity, today reported second quarter 2008 financial results.
Sales were $171.0 million, down 12 percent from $193.4 million in the first quarter of 2008 and down 16 percent from $204.0 million in the second quarter of 2007.
Net income was $9.2 million, or $0.18 per diluted share, compared to $20.4 million, or $0.39 per diluted share, in the first quarter of 2008 and $22.5 million, or $0.39 per diluted share, in the second quarter of 2007.
Non-GAAP net earnings, which exclude amortization of acquired intangible assets and special items, totaled $10.5 million, or $0.21 per diluted share, compared to $20.6 million, or $0.39 per diluted share, in the first quarter of 2008 and $25.1 million, or $0.43 per diluted share, in the second 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, "After a strong first quarter with double-digit sequential growth in the semiconductor market, we saw sharply lower demand in the second quarter as this market weakened. However, our solar business continued to ramp, and sales to non-semiconductor markets grew by 17 percent to 45 percent of total sales. Even in this changing business environment, we continue to increase our investment in new product development that will contribute to future revenue growth.
"In the third quarter, we expect some incremental weakness in semiconductor capital equipment spending. Our sales could range from $155 to $165 million. Net income could range from $0.09 to $0.16 per diluted share on approximately 51 million shares outstanding, and non-GAAP net earnings could range from $0.12 to $0.19 per diluted share."
Management will discuss second quarter financial results on a conference call today at 8:30 a.m. (Eastern Time). Dial-in numbers are 1-800-240-2430 for domestic callers and 303-262-2130 for international callers. The call will be broadcast live and available for replay at http://www.mksinstruments.com. To hear a telephone replay through July 31, 2008, dial 303-590-3000, pass code 11116548#.
MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. Our products are derived from our core competencies in pressure measurement and control, materials delivery, gas composition analysis, electrostatic charge management, control and information technology, power and reactive gas generation, and vacuum technology. Our primary served markets are manufacturers of capital equipment for semiconductor devices, and for other thin film applications including flat panel displays, solar cells, data storage media, and other advanced coatings. We also leverage our technology in other markets with advanced manufacturing applications including medical equipment, pharmaceutical manufacturing, and energy generation and environmental monitoring.
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,
2008 2007 2008
Net sales $171,002 $203,978 $193,448
Cost of sales 100,514 117,948 111,541
Gross profit 70,488 86,030 81,907
Research and development 20,486 18,351 19,249
Selling, general and administrative 35,113 35,928 31,709
Amortization of acquired intangible
assets 1,984 4,108 3,105
Income from operations 12,905 27,643 27,844
Impairment of investments (251) - (1,161)
Interest income, net 1,636 3,581 2,176
Income before income taxes 14,290 31,224 28,859
Provision for income taxes 5,056 8,697 8,477
Net income $9,234 $22,527 $20,382
Net income per share:
Basic $0.19 $0.40 $0.39
Diluted $0.18 $0.39 $0.39
Weighted average shares outstanding:
Basic 49,691 56,820 51,733
Diluted 50,866 57,939 52,571
The following supplemental Non-GAAP
earnings information is presented
to aid in understanding MKS'
operating results:
GAAP net income $9,234 $22,527 $20,382
Adjustments (net of tax, if applicable):
Amortization of acquired intangible
assets 1,984 4,108 3,105
Foreign exchange gain from legal
entity restructuring (Note 1) - - (2,669)
Tax effect of adjustments (717) (1,513) (204)
Non-GAAP net earnings (Note 2) $10,501 $25,122 $20,614
Non-GAAP net earnings per share
(Note 2) $0.21 $0.43 $0.39
Weighted average shares outstanding -
diluted 50,866 57,939 52,571
Note 1: 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 2: 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,
2008 2007
Net sales $364,450 $415,410
Cost of sales 212,055 236,518
Gross profit 152,395 178,892
Research and development 39,735 36,650
Selling, general and administrative 66,822 70,504
Amortization of acquired intangible assets 5,089 8,215
Income from operations 40,749 63,523
Impairment of investments (1,412) -
Interest income, net 3,812 6,886
Income before income taxes 43,149 70,409
Provision for income taxes 13,533 20,592
Net income $29,616 $49,817
Net income per share:
Basic $0.58 $0.88
Diluted $0.57 $0.86
Weighted average shares outstanding:
Basic 50,712 56,587
Diluted 51,718 57,633
The following supplemental Non-GAAP
earnings information is presented
to aid in understanding MKS'
operating results:
GAAP net income $29,616 $49,817
Adjustments (net of tax, if
applicable):
Amortization of acquired
intangible assets 5,089 8,215
Foreign exchange gain from legal
entity restructuring (Note 1) (2,669) -
Tax effect of adjustments (921) (3,027)
Non-GAAP net earnings (Note 2) $31,115 $55,005
Non-GAAP net earnings per share
(Note 2) $0.60 $0.95
Weighted average shares outstanding -
diluted 51,718 57,633
Note 1: Selling, general and administrative expenses for the six month
period ended June 30, 2008 includes a foreign exchange gain of
$2.7 million related to the Company's legal entity restructuring
of certain foreign operations.
Note 2: 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,
2008 2007
ASSETS
Cash and short-term investments $259,943 $323,765
Trade accounts receivable 109,512 107,504
Inventories 152,468 150,731
Other current assets 31,298 27,980
Total current assets 553,221 609,980
Property, plant and equipment, net 80,138 81,365
Goodwill 337,765 337,473
Other acquired intangible assets 31,052 36,141
Other assets 12,010 11,301
Total assets $1,014,186 $1,076,260
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $18,374 $20,203
Accounts payable 24,416 28,683
Accrued expenses and other
liabilities 47,191 46,859
Total current liabilities 89,981 95,745
Long-term debt 5,563 5,871
Other long-term liabilities 22,624 20,635
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 637,104 685,465
Retained earnings 245,559 255,244
Other stockholders' equity 13,242 13,187
Total stockholders' equity 896,018 954,009
Total liabilities and stockholders'
equity $1,014,186 $1,076,260
SOURCE MKS Instruments, Inc.
CONTACT: Ronald C. Weigner, Vice President and Chief Financial Officer
of MKS Instruments, Inc., 1-978-645-5500
Web site: http://www.mksinstruments.com
(MKSI)