MKS Instruments, Inc. (Form: 8-K)  

 


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

     
Date of Report (Date of Earliest Event Reported):   July 27, 2006

MKS Instruments, Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

     
Massachusetts 000-23621 04-2277512
_____________________
(State or other jurisdiction
_____________
(Commission
______________
(I.R.S. Employer
of incorporation) File Number) Identification No.)
      
90 Industrial Way, Wilmington, Massachusetts   01887
_________________________________
(Address of principal executive offices)
  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   978-284-4000

Not Applicable
______________________________________________
Former name or former address, if changed since last report

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


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Item 2.02 Results of Operations and Financial Condition.

On July 27, 2006, MKS Instruments, Inc. announced its financial results for the quarter ended June 30, 2006. The full text of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.





Item 9.01 Financial Statements and Exhibits.

(c) Exhibits

99.1 Press Release dated July 27, 2006.






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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

         
    MKS Instruments, Inc.
          
July 27, 2006   By:   /s/ Ronald C. Weigner
       
        Name: Ronald C. Weigner
        Title: VP & CFO


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Exhibit Index


     
Exhibit No.   Description

 
99.1
  Press Release dated July 27, 2006.
EX-99.1

(MKS LOGO)

EXHIBIT 99.1

Contact: Ronald C. Weigner
Vice President and Chief Financial Officer
Telephone: 978.284.4446

MKS Instruments Reports Second Quarter 2006 Results

Sales up 52 percent, Net Income up 143 percent per share over 2005 Quarter

Wilmington, Mass., July 27, 2006 — 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 2006 financial results.

Net sales of $198.4 million increased by 52 percent compared to $130.2 million in the second quarter of 2005, and by 11 percent compared to $179.1 million in the first quarter of 2006.

GAAP net income of $24.4 million, or $0.44 per diluted share, increased by 143 percent per share compared to second quarter 2005 GAAP net income of $9.8 million, or $0.18 per diluted share, and by 56 percent per share compared to first quarter 2006 GAAP net income of $15.4 million, or $0.28 per diluted share.

Non-GAAP net income of $29.1 million, or $0.52 per share, which excludes amortization of acquired intangible assets, special items and stock-based compensation, increased by 178 percent per share compared to second quarter 2005 non-GAAP net income of $10.2 million, or $0.19 per share, and by 35 percent per share compared to first quarter 2006 non-GAAP net income of $21.3 million, or $0.39 per share.

For the six months ended June 30, net sales of $377.4 million in 2006 increased by 47 percent compared to $257.6 million in the corresponding period in 2005. GAAP net income of $39.8 million, or $0.72 per diluted share, increased by 156 percent per share compared to $15.2 million, or $0.28 per diluted share, in the prior period. Non-GAAP net income of $50.4 million, or $0.91 per share, increased by 171 percent per share compared to $18.2 million, or $0.33 per share, in the prior period.

Leo Berlinghieri, Chief Executive Officer and President, said, “After a strong first quarter, I am pleased to report another quarter of double-digit sales growth and higher profitability on strong sales to semiconductor and other markets. Our focus on differentiated solutions to solve problems and improve process performance and productivity contributed to our results.”

“Looking ahead to the third quarter, our sales to semiconductor OEMs are closely related to their production and shipment levels. Based on major customers’ announced expectations and our current order patterns, we anticipate that third quarter sales could range from $195 to $205 million. GAAP net income could range from $0.42 to $0.48 per diluted share on approximately 56.7 million shares outstanding, and non-GAAP net income could range from $0.50 to $0.56 per share.”

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 the costs associated with acquisitions, special items and stock-based compensation, is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.

Management will discuss second quarter financial results on a conference call today at 8:30 a.m. (Eastern Time). Dial-in numbers are 1-800-218-0530 for domestic callers and 303-262-2137 for international callers. The call will be broadcast live and available for replay at www.mksinstruments.com. To hear a telephone replay through August 3, 2006, dial 303-590-3000, pass code 11065321#.

MKS Instruments, Inc. is a leading worldwide provider of process control solutions for 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. 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 improving their productivity 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 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 Quarterly Report on Form 10-Q and 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.

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MKS Instruments, Inc.
Unaudited Consolidated Statements of Income
(In thousands, except per share data)

                         
    Three Months Ended
    June 30, 2006   June 30, 2005   March 31, 2006
Net sales
  $ 198,351     $ 130,193     $ 179,061  
Cost of sales
    111,850       78,407       105,316  
 
                       
Gross profit
    86,501       51,786       73,745  
Research and development
    17,663       14,689       16,057  
Selling, general and administrative
    30,300       23,040       29,765  
Amortization of acquired intangible assets
    4,086       3,693       5,254  
Purchase of in-process technology
                800  
 
                       
Income from operations
    34,452       10,364       21,869  
Interest income, net
    1,934       1,348       1,430  
 
                       
Income before income taxes
    36,386       11,712       23,299  
Provision for income taxes
    12,012       1,934       7,864  
 
                       
Net income
  $ 24,374     $ 9,778     $ 15,435  
 
                       
 
                       
Net income per share:
                       
Basic
  $ 0.44     $ 0.18     $ 0.28  
Diluted
  $ 0.44     $ 0.18     $ 0.28  
 
                       
Weighted average shares outstanding:
                       
Basic
    55,338       53,975       54,660  
Diluted
    55,907       54,451       55,269  
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’s operating results:
                       
GAAP net income
  $ 24,374     $ 9,778     $ 15,435  
 
                       
Adjustments:
                       
Amortization of acquired intangible assets
    4,086       3,693       5,254  
Stock-compensation charges
    3,315             2,666  
Purchase of in-process technology
                800  
Benefit for income taxes (NOTE 1)
          (1,901 )      
Tax effect of adjustments
    (2,687 )     (1,385 )     (2,840 )
 
                       
Non-GAAP net income (NOTE 2)
  $ 29,088     $ 10,185     $ 21,315  
 
                       
Non-GAAP net income per share
  $ 0.52     $ 0.19     $ 0.39  
 
                       
Weighted average shares outstanding — diluted
    55,907       54,451       55,269  

NOTE 1: The three month period ended June 30, 2005 includes a benefit of $1,901 in connection with closing an IRS audit.

NOTE 2: The Non-GAAP net income and Non-GAAP net income per share amounts exclude amortization of acquired intangible assets, acquisition and disposition related charges, stock-compensation charges and special items, net of applicable income taxes.

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MKS Instruments, Inc.
Unaudited Consolidated Statements of Income
(In thousands, except per share data)

                 
    Six Months Ended
    June 30,
    2006   2005
Net sales
  $ 377,412     $ 257,600  
Cost of sales
    217,166       156,452  
 
               
Gross profit
    160,246       101,148  
Research and development
    33,720       29,238  
Selling, general and administrative
    60,065       46,889  
Amortization of acquired intangible assets
    9,340       7,383  
Purchase of in-process technology
    800        
Restructuring charges
          454  
 
               
Income from operations
    56,321       17,184  
Interest income, net
    3,364       2,446  
 
               
Income before income taxes
    59,685       19,630  
Provision for income taxes
    19,876       4,394  
 
               
Net income
  $ 39,809     $ 15,236  
 
               
 
               
Net income per share:
               
Basic
  $ 0.72     $ 0.28  
Diluted
  $ 0.72     $ 0.28  
 
               
Weighted average shares outstanding:
               
Basic
    54,999       53,926  
Diluted
    55,588       54,422  
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’s operating results:
               
GAAP net income
  $ 39,809     $ 15,236  
 
               
Adjustments:
               
Amortization of acquired intangible assets
    9,340       7,383  
Stock-compensation charges
    5,980        
Purchase of in-process technology
    800        
Restructuring charges
          454  
Benefit for income taxes (NOTE 1)
          (1,901 )
Tax effect of adjustments
    (5,526 )     (2,951 )
 
               
Non-GAAP net income (NOTE 2)
  $ 50,403     $ 18,221  
 
               
Non-GAAP net income per share
  $ 0.91     $ 0.33  
 
               
Weighted average shares outstanding
    55,588       54,422  

NOTE 1: The six month period ended June 30, 2005 includes a benefit of $1,901 in connection with closing an IRS audit.

NOTE 2: The Non-GAAP net income and Non-GAAP net income per share amounts exclude amortization of acquired intangible assets, acquisition and disposition related charges, stock-compensation charges and special items, net of applicable income taxes.

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MKS Instruments, Inc.
Unaudited Consolidated Balance Sheet
(In thousands)

                 
    June 30, 2006   December 31, 2005
ASSETS
               
Cash and short-term investments
  $ 237,406     $ 292,619  
Trade accounts receivable
    118,623       82,610  
Inventories
    127,379       98,242  
Other current assets
    29,467       25,676  
 
               
Total current assets
    512,875       499,147  
Property, plant and equipment, net
    79,916       78,726  
Long-term investments
    2,366       857  
Goodwill
    322,676       255,243  
Other acquired intangible assets
    50,917       27,422  
Other assets
    2,955       2,345  
 
               
Total assets
  $ 971,705     $ 863,740  
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Short-term debt
  $ 24,417     $ 18,886  
Accounts payable
    38,699       27,955  
Accrued expenses and other liabilities
    57,406       42,246  
 
               
Total current liabilities
    120,522       89,087  
Long-term debt
    6,144       6,152  
Other long-term liabilities
    14,883       5,658  
 
               
Stockholders’ equity:
               
Common stock
    113       113  
Additional paid-in capital
    665,221       639,152  
Retained earnings
    156,451       116,642  
Other stockholders’ equity
    8,371       6,936  
 
               
Total stockholders’ equity
    830,156       762,843  
 
               
Total liabilities and stockholders’ equity
  $ 971,705     $ 863,740  
 
               

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