MKS Instruments Reports Third Quarter 2007 Financial Results
WILMINGTON, Mass., Oct. 25 /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 third quarter 2007 financial results.
Sales were $181.0 million, down 12 percent from $205.5 million in the third quarter of 2006 and down 11 percent from $204.0 million in the second quarter of 2007.
Net income totaled $21.4 million, or $0.37 per diluted share, compared to $27.9 million, or $0.50 per diluted share, in the third quarter of 2006, 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 $22.0 million, or $0.38 per diluted share, compared to $28.9 million, or $0.52 per diluted share, in the third quarter of 2006, 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 we achieved double-digit sales growth year over year in the first half of 2007, our business declined in the third quarter, primarily as a result of the industry-wide slowdown in semiconductor capital equipment spending. Despite lower sales, we delivered stronger than expected financial results.
"While we are quite optimistic about our long-term growth opportunities, we remain cautious about the near term outlook. Looking ahead to the fourth quarter, we expect sales could range from $165 to $173 million. Net income could range from $0.19 to $0.24 per diluted share on 58 million shares outstanding, and non-GAAP net earnings could range from $0.23 to $0.28 per diluted share."
Management will discuss third quarter financial results on a conference call today at 8:30 a.m. (Eastern Time). Dial-in numbers are 1-800-366-7640 for domestic callers and 303-262-2140 for international callers. The call will be broadcast live and available for replay at www.mksinstruments.com. To hear a telephone replay through November 1, 2007, dial 303-590-3000, pass code 11099192#.
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
September September June
30, 30, 30,
2007 2006 2007
Net sales $181,014 $205,494 $203,978
Cost of sales 104,416 114,875 117,948
Gross profit 76,598 90,619 86,030
Research and development 17,159 17,964 18,351
Selling, general and administrative 32,494 33,017 35,928
Amortization of acquired intangible
assets 3,877 4,016 4,108
Income from operations 23,068 35,622 27,643
Interest income, net 4,010 2,239 3,581
Income before income taxes 27,078 37,861 31,224
Provision for income taxes 5,696 9,928 8,697
Net income $21,382 $27,933 $22,527
Net income per share:
Basic $0.38 $0.50 $0.40
Diluted $0.37 $0.50 $0.39
Weighted average shares outstanding:
Basic 56,809 55,668 56,820
Diluted 57,482 56,105 57,939
The following supplemental Non-GAAP earnings information is presented
to aid in understanding MKS' operating results:
GAAP net income $21,382 $27,933 $22,527
Adjustments (net of tax, if applicable):
Amortization of acquired
intangible assets 3,877 4,016 4,108
Benefit for income taxes (Note 1) (1,847) (1,565) -
Tax effect of adjustments (1,427) (1,479) (1,513)
Non-GAAP net earnings (Note 2) $21,985 $28,905 $25,122
Non-GAAP net earnings per share (Note 2) $0.38 $0.52 $0.43
Weighted average shares
outstanding - diluted 57,482 56,105 57,939
Note 1: The three month period ended September 30, 2007 includes a
benefit of $1,847 attributable to a discrete tax matter related to our
research and development tax credits. The three month period ended
September 30, 2006 includes a net benefit of $1,565 primarily attributable
to certain discrete tax matters related to our international 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)
Nine Months Ended
September 30,
2007 2006
Net sales $596,424 $582,906
Cost of sales 340,934 332,041
Gross profit 255,490 250,865
Research and development 53,809 51,684
Selling, general and administrative 102,998 93,082
Amortization of acquired intangible assets 12,092 13,356
Purchase of in-process technology - 800
Income from operations 86,591 91,943
Interest income, net 10,896 5,603
Income before income taxes 97,487 97,546
Provision for income taxes 26,288 29,804
Net income $71,199 $67,742
Net income per share:
Basic $1.26 $1.23
Diluted $1.24 $1.21
Weighted average shares outstanding:
Basic 56,661 55,222
Diluted 57,582 55,760
The following supplemental Non-GAAP earnings information is presented to
aid in understanding MKS' operating results:
GAAP net income $71,199 $67,742
Adjustments (net of tax, if applicable):
Amortization of acquired intangible assets 12,092 13,356
Purchase of in-process technology - 800
Benefit for income taxes (Note 1) (1,847) (1,565)
Tax effect of adjustments (4,454) (4,889)
Non-GAAP net earnings (Note 2) $76,990 $75,444
Non-GAAP net earnings per share (Note 2) $1.34 $1.35
Weighted average shares outstanding - diluted 57,582 55,760
Note 1: The nine month period ended September 30, 2007 includes a benefit
of $1,847 attributable to a discrete tax matter related to our research
and development tax credits. The nine month period ended September 30,
2006 includes a net benefit of $1,565 primarily attributable to certain
discrete tax matters related to our international 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)
September 30, December 31,
2007 2006
ASSETS
Cash and short-term investments $359,844 $289,957
Trade accounts receivable 115,668 123,658
Inventories 159,441 149,820
Other current assets 33,139 28,003
Total current assets 668,092 591,438
Property, plant and equipment, net 82,069 79,463
Long-term investments 3,541 2,816
Goodwill 322,396 323,973
Other acquired intangible assets 32,122 43,104
Other assets 5,780 2,926
Total assets $1,114,000 $1,043,720
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $24,198 $23,021
Accounts payable 29,772 38,541
Accrued expenses and other liabilities 52,216 68,335
Total current liabilities 106,186 129,897
Long-term debt 6,055 6,113
Other long-term liabilities 19,348 6,491
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 712,936 680,164
Retained earnings 256,868 210,877
Other stockholders' equity 12,494 10,065
Total stockholders' equity 982,411 901,219
Total liabilities and stockholders'
equity $1,114,000 $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.mksinstruments.com
(MKSI)