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 22, 2003 MKS Instruments, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Massachusetts 0-23621 04-2277512 - -------------------------------------------------------------------------------- (State or other juris- (Commission (IRS Employer diction of incorporation) File Number) Identification No.) Six Shattuck Road, Andover, Massachusetts 01810 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 978.975.2350 - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report)
ITEM 9. REGULATION FD DISCLOSURE (INFORMATION FURNISHED PURSUANT TO ITEM 12, "DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION"). On July 22, 2003, MKS Instruments, Inc. announced its financial results for the quarter ended June 30, 2003. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K. In accordance with the procedural guidance in SEC Release No. 33-8216, the information in this Form 8-K and the Exhibit attached hereto is being furnished under "Item 9. Regulation FD Disclosure" rather than under "Item 12. Disclosure of Results of Operations and Financial Condition." The information 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.
SIGNATURE 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. Date: July 22, 2003 MKS Instruments, Inc. By: /s/ Ronald C. Weigner ----------------------------------------- Ronald C. Weigner, Vice President & Chief Financial Officer
EXHIBIT INDEX Exhibit No. Description 99.1 Press release dated July 22, 2003
[MKS LOGO] EXHIBIT 99.1 FOR IMMEDIATE RELEASE INVESTOR RELATIONS CONTACT: Ronald Weigner Vice President & Chief Financial Officer 978.975.2350 MKS INSTRUMENTS REPORTS SECOND QUARTER 2003 FINANCIAL RESULTS Andover, Mass. -- July 22, 2003 -- MKS Instruments, Inc. (NASDAQ: MKSI), a leading worldwide provider of products that measure, control, power and monitor critical parameters of semiconductor and other advanced manufacturing process environments, today reported second quarter 2003 revenues of $81.2 million, up 12 percent over first quarter 2003 revenues of $72.8 million and down 6 percent from second quarter 2002 revenues of $85.9 million. The second quarter 2003 GAAP net loss was $5.5 million or $0.11 per share compared to the first quarter 2003 GAAP net loss of $7.4 million or $0.14 per share and the second quarter 2002 GAAP net loss of $4.7 million or $0.09 per share. The second quarter 2003 pro forma net loss (defined as net income before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes) was $1.9 million or $0.04 per share compared to the first quarter 2003 pro forma net loss of $3.7 million or $0.07 per share and second quarter 2002 pro forma net income of $182,000 or breakeven on a per share basis. Excluding a special item of $304,000 for restructuring, asset impairment and other charges, the second quarter 2003 pro forma net loss was $1.5 million or $0.03 per share. Since 1999, MKS has reported financial results on a pro forma basis as a complement to results provided in accordance with accounting principles generally accepted in the United
States. MKS' management uses such pro forma measures internally to evaluate the company's performance and manage its operations, and believes that pro forma measures provide useful information for understanding operating results and comparing prior periods. For the six months ended June 30, 2003, MKS reported revenues of $153.9 million and a GAAP net loss of $12.9 million or $0.25 per share compared to revenues of $145.0 million and a GAAP net loss of $16.5 million or $0.34 per share for the same period of 2002. The pro forma net loss for the six months of 2003 was $5.5 million or $0.11 per share, and excluding the special item was $5.2 million or $0.10 per share. This compares to the pro forma net loss of $4.1 million or $0.08 per share for the same period of 2002. John R. Bertucci, Chairman, Chief Executive Officer and President, said, "Our second quarter revenue growth was broad based and above our guidance. We continued to make inroads in the higher-growth flat panel display equipment market, and sales to the semiconductor and medical equipment markets also increased. Our balance sheet remained strong with cash and investments, net of debt, of approximately $110 million." Mr. Bertucci continued, "There are a few signs that the outlook is improving, such as the pull-in of some semiconductor and medical OEM orders from Q3 to Q2 and the positive tone set recently at the Semicon West trade show. In the third quarter, we will reduce mandatory time off from ten days to five days. However, given the unevenness of end user and OEM customer orders over the last two quarters, we estimate that third quarter 2003 revenues could remain relatively flat and range between $78 and $83 million. This sales range, combined with modest improvement in gross margin, could
result in a third quarter 2003 GAAP net loss of $0.08 to $0.13 per share. On a pro forma basis, the net loss could range from $0.01 to $0.06 per share, excluding amortization of acquired intangible assets of approximately $3.6 million. Our goal is to reach breakeven on a pro forma basis in this revenue range." Management will host a conference call on Tuesday, July 22, 2003 at 5:00 p.m. (EDT) to discuss these financial results. To listen to this call, dial 800-218-0530 (domestic) or 303-262-2130 (international), or access the live call and a rebroadcast at www.mksinstruments.com. To hear a replay through July 29, 2003, dial 303-590-3000, passcode 543273#. MKS Instruments, Inc. is a leading worldwide provider of instruments, components and subsystems that measure, control, power and monitor critical parameters of semiconductor and other advanced manufacturing process environments. MKS' products are used to manufacture semiconductors; thin film coatings for diverse markets such as flat panel displays, optical and magnetic storage products, architectural glass, and electro-optical products; and medical imaging equipment. 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 failure of MKS and acquired companies to realize the anticipated benefits of their combined businesses, the challenges and risks involved with integrating the operations of MKS and 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, 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 INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) Three Months Ended June 30, ------------------------- 2003 2002 -------- -------- Net sales $ 81,168 $ 85,932 Cost of sales 53,723 56,217 -------- -------- Gross profit 27,445 29,715 Research and development 11,453 12,053 Selling, general and administrative 17,459 20,721 Amortization of acquired intangible assets 3,617 4,137 Restructuring, asset impairment and other charges 304 -- Purchase of in-process technology -- 2,290 -------- -------- Loss from operations (5,388) (9,486) Interest income, net 282 356 -------- -------- Loss before income taxes (5,106) (9,130) Provision (benefit) for income taxes (See NOTE 1 below) 364 (4,436) -------- -------- Net loss $ (5,470) $ (4,694) ======== ======== Net loss per share (See NOTE 2 below) $ (0.11) $ (0.09) ======== ======== Weighted average shares outstanding 51,419 51,152 The following supplemental pro forma earnings information is presented to aid in understanding the MKS operating results: Supplemental Pro Forma Earnings Information Net loss $ (5,470) $ (4,694) Adjustments: Amortization of acquired intangible assets 3,617 4,137 Purchase of in-process technology -- 2,290 Tax effect of adjustments (See NOTE 1 below) -- (1,551) -------- -------- Pro forma net income (loss) before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes $ (1,853) $ 182 ======== ======== Pro forma net income (loss) per share before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes $ (0.04) $ -- ======== ======== Weighted average shares outstanding 51,419 52,860 Supplemental Pro Forma Earnings Information, Before Special Items Pro forma net income (loss) before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes $ (1,853) $ 182 Special Items Restructuring, asset impairment and other charges 304 -- -------- -------- Pro forma net income (loss) before amortization of acquired intangible assets, other acquisition and disposition related charges, and special items, net of income taxes $ (1,549) $ 182 ======== ======== Pro forma net income (loss) per share before amortization of acquired intangible assets, other acquisition and disposition related charges, and special charges, net of income taxes $ (0.03) $ -- ======== ======== Weighted average shares outstanding 51,419 52,860 NOTE 1: MKS recorded a tax benefit of $4,436 for the three months ended June 30, 2002. In the three months ended December 31, 2002, MKS recorded a full valuation allowance against its net deferred tax assets. Accordingly, MKS has not recorded a deferred tax benefit from the net operating loss incurred in the quarter ended June 30, 2003. The provision for income taxes of $364 includes tax expense from foreign operations and state taxes. NOTE 2: Due to the net loss for the quarter, net loss per share is based on the basic number of weighted average shares outstanding.
MKS INSTRUMENTS, INC. UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE DATA) Six Months Ended June 30, --------------------------- 2003 2002 --------- --------- Net sales $ 153,945 $ 144,999 Cost of sales 101,094 96,064 --------- --------- Gross profit 52,851 48,935 Research and development 22,685 21,185 Selling, general and administrative 35,278 37,779 Amortization of acquired intangible assets 7,395 6,342 Restructuring, asset impairment and other charges 304 -- Purchase of in-process technology -- 8,390 --------- --------- Loss from operations (12,811) (24,761) Interest income, net 562 782 --------- --------- Loss before income taxes (12,249) (23,979) Provision (benefit) for income taxes (See NOTE 1 below) 651 (7,498) --------- --------- Net loss $ (12,900) $ (16,481) ========= ========= Net loss per share (See NOTE 2 below) $ (0.25) $ (0.34) ========= ========= Weighted average shares outstanding 51,399 48,720 The following supplemental pro forma earnings information is presented to aid in understanding the MKS operating results: Supplemental Pro Forma Earnings Information Net loss $ (12,900) $ (16,481) Adjustments: Amortization of acquired intangible assets 7,395 6,342 Purchase of in-process technology -- 8,390 Tax effect of adjustments (See NOTE 1 below) -- (2,323) --------- --------- Pro forma net loss before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes $ (5,505) $ (4,072) ========= ========= Pro forma net loss per share before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes $ (0.11) $ (0.08) ========= ========= Weighted average shares outstanding 51,399 48,720 Supplemental Pro Forma Earnings Information, Before Special Items Pro forma net loss before amortization of acquired intangible assets, and other acquisition and disposition related charges, net of income taxes $ (5,505) $ (4,072) Special Items Restructuring, asset impairment and other charges 304 -- --------- --------- Pro forma net loss before amortization of acquired intangible assets, other acquisition and disposition related charges, and special items, net of income taxes $ (5,201) $ (4,072) ========= ========= Pro forma net loss per share before amortization of acquired intangible assets, other acquisition and disposition related charges, and special charges, net of income taxes $ (0.10) $ (0.08) ========= ========= Weighted average shares outstanding 51,399 48,720 NOTE 1: MKS recorded a tax benefit of $7,498 for the six months ended June 30, 2002. In the three months ended December 31, 2002, MKS recorded a full valuation allowance against its net deferred tax assets. Accordingly, MKS has not recorded a deferred tax benefit from the net operating loss incurred in the six months ended June 30, 2003. The provision for income taxes of $651 includes tax expense from foreign operations and state taxes. NOTE 2: Due to the net loss for the six month periods, net loss per share is based on the basic number of weighted average shares outstanding.
MKS INSTRUMENTS, INC. UNAUDITED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) June 30, December 31, 2003 2002 -------- -------- ASSETS Cash and short-term investments $117,196 $128,714 Trade accounts receivable 50,904 45,505 Inventories 74,570 73,235 Other current assets 6,491 6,098 -------- -------- Total current assets 249,161 253,552 Property, plant and equipment, net 78,246 82,595 Long-term investments 18,319 15,980 Goodwill 259,727 259,781 Other acquired intangible assets 60,327 67,720 Other assets 5,715 5,995 -------- -------- Total assets $671,495 $685,623 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term debt $ 14,552 $ 18,472 Accounts payable 18,079 15,301 Other accrued expenses 25,043 27,771 -------- -------- Total current liabilities 57,674 61,544 Long-term debt 10,767 11,726 Other long-term liabilities 1,526 1,663 Stockholders' equity: Common stock 113 113 Additional paid-in capital 580,539 579,175 Retained earnings 15,723 28,623 Other stockholders' equity 5,153 2,779 -------- -------- Total stockholders' equity 601,528 610,690 -------- -------- Total liabilities and stockholders' equity $671,495 $685,623 ======== ========