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 21, 2010

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.)
      
2 Tech Drive, Suite 201, Andover, Massachusetts   01810
_________________________________
(Address of principal executive offices)
  ___________
(Zip Code)
     
Registrant’s telephone number, including area code:   978-645-5500

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 21, 2010 MKS Instruments, Inc. announced its financial results for the quarter ended June 30, 2010. 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 of the Exchange Act, except as expressly set forth by specific reference in such a filing.





Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release dated July 21, 2010.






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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 21, 2010   By:   /s/ Seth H. Bagshaw
       
        Name: Seth H. Bagshaw
        Title: VP & CFO


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Exhibit Index


     
Exhibit No.   Description

 
99.1
  Press Release dated July 21, 2010
EX-99.1

(MKS LOGO)

EXHIBIT 99.1

Contact: Seth H. Bagshaw
Vice President & Chief Financial Officer
Telephone: 978.645.5500

MKS Instruments Reports Record Sales
and Record Earnings in Q2 2010

Andover, Mass., July 21, 2010 — MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of technologies that enable advanced processes and improve productivity, today reports second quarter 2010 financial results.

Sales were $220.6 million, an increase of 15 percent from $192.2 million in the first quarter of 2010, and an increase of 192 percent from $75.6 million in the second quarter of 2009.

Non-GAAP net earnings, which exclude special items, were $33.4 million, or $0.66 per diluted share, compared to $28.9 million, or $0.57 per diluted share in the first quarter of 2010, and a net loss of $4.2 million, or ($0.08) per basic share in the second quarter of 2009.

GAAP net income was $38.8 million, or $0.76 per diluted share, compared to net income of $29.2 million, or $0.58 per diluted share in the first quarter of 2010, and a net loss of $207.1 million, or ($4.20) per basic share in the second quarter of 2009. Included in the GAAP results are the effect of our decision to divest two small product lines in the second quarter of 2010 which are shown as discontinued operations.

Leo Berlinghieri, Chief Executive Officer and President, said, “We achieved record revenue and Non-GAAP net earnings for the second quarter, with revenue increasing an additional 15% sequentially to $221 million and nearly 200% from a year ago.

“We continue to gain share and achieve critical design wins in SEMI. We are also continuing to successfully execute our strategy of diversification into other advanced and growing markets, which achieved a new quarterly sales record in this quarter. As a result of our efforts in all of the markets we serve, coupled with our ability to ramp production levels quickly, our sales in the first half of 2010 have already surpassed sales volumes for all of 2009.

“Over the last four quarters, the semiconductor industry has experienced phenomenal growth and our sales to other advanced markets continued to exceed our expectations. Based upon industry projections and current business levels, we estimate that our third quarter sales may range from $210 to $230 million, and at these volumes, our Non-GAAP net earnings could range from $0.58 to $0.71 per share.”

Management will discuss second quarter financial results on a conference call today at 4:30 p.m. (eastern time). Dial-in numbers are (800) 762-8779 for domestic callers and (480) 629-9771 for international callers. The call will be broadcast live and available for replay at www.mksinst.com. To hear a telephone replay through July 28, 2010, dial (303) 590-3030, pass code 4317832#.

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.

MKS Instruments, Inc. is a leading, global provider of technologies to power, control, deliver, monitor, measure and analyze advanced processes in high growth applications. Our primary served markets are manufacturers of capital equipment for thin film applications including semiconductor devices, flat panel displays, light emitting diodes (LEDs), solar cells, data storage media and coatings, as well as medical equipment; energy generation and environmental monitoring processes; biopharm and other industrial manufacturing; and university, government and industrial research laboratories.

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.

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1

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

                         
    Three Months Ended
    June 30, 2010   June 30, 2009   March 31, 2010
Net sales
  $ 220,647     $ 75,623     $ 192,166  
Cost of sales
    123,328       51,373       106,671  
 
                       
Gross profit
    97,319       24,250       85,495  
Research and development
    16,154       11,514       15,675  
Selling, general and administrative
    30,902       24,620       27,812  
Amortization of acquired intangible assets
    314       690       469  
Gain on sale of asset
                (682 )
Goodwill and asset impairment charges
          142,958        
Restructuring
          15        
 
                       
Income (loss) from operations
    49,949       (155,547 )     42,221  
Interest income, net
    254       213       325  
 
                       
Income (loss) from continuing operations before income taxes
    50,203       (155,334 )     42,546  
Provision (benefit) for income taxes
    17,059       (8,986 )     13,548  
 
                       
Income (loss) from continuing operations
    33,144       (146,348 )     28,998  
Income (loss) from discontinued operations, net of taxes
    5,633       (60,786 )     227  
 
                       
Net income (loss)
  $ 38,777     $ (207,134 )   $ 29,225  
 
                       
Basic income (loss) per share:
                       
Continuing operations
  $ 0.66     $ (2.97 )   $ 0.58  
Discontinued operations
    0.11       (1.23 )     0.01  
 
                       
Net income (loss)
  $ 0.77     $ (4.20 )   $ 0.59  
Diluted income (loss) per share:
                       
Continuing operations
  $ 0.65     $ (2.97 )   $ 0.57  
Discontinued operations
    0.11       (1.23 )     0.01  
 
                       
Net income (loss)
  $ 0.76     $ (4.20 )   $ 0.58  
Weighted average shares outstanding:
                       
Basic
    50,067       49,307       49,601  
Diluted
    50,870       49,307       50,600  
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
                       
Income (loss) from continuing operations
  $ 33,144     $ (146,348 )   $ 28,998  
Adjustments (net of tax, if applicable):
                       
Amortization of acquired intangible assets
    314       690       469  
Gain on sale of asset (Note 1)
                (682 )
Goodwill and asset impairment charges (Note 2)
          142,958        
Restructuring and related items (Note 3)
          15        
Proforma tax adjustments
    (90 )     (1,562 )     108  
 
                       
Non-GAAP net earnings (Note 4)
  $ 33,368     $ (4,247 )   $ 28,893  
 
                       
Non-GAAP net earnings per share (Note 4)
  $ 0.66     $ (0.08 )   $ 0.57  
 
                       
Weighted average shares outstanding
    50,870       49,307       50,600  

Note 1: The three month period ended March 31, 2010 includes a $682 gain on the sale of a vacated facility.
Note 2: The three month period ended June 30, 2009 includes a $142,958 charge related to the impairment of goodwill and other long-lived assets.
Note 3: The three month period ended June 30, 2009 includes $15 of restructuring charges primarily for severance related costs.
Note 4: The Non-GAAP net earnings (loss) and Non-GAAP net earnings (loss) per share amounts exclude amortization of acquired intangible assets, acquisition and disposition related charges and special items, net of applicable income taxes.

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

                 
    Six Months Ended
    June 30,
    2010   2009
Net sales
  $ 412,813     $ 147,888  
Cost of sales
    229,999       115,120  
 
               
Gross profit
    182,814       32,768  
Research and development
    31,829       25,963  
Selling, general and administrative
    58,714       51,273  
Amortization of acquired intangible assets
    783       1,381  
Gain on sale of asset
    (682 )      
Goodwill and asset impairment charges
          142,958  
Restructuring
          5,393  
 
               
Income (loss) from operations
    92,170       (194,200 )
Interest income, net
    579       1,222  
 
               
Income (loss) from continuing operations before income taxes
    92,749       (192,978 )
Provision (benefit) for income taxes
    30,607       (31,657 )
 
               
Income (loss) from continuing operations
    62,142       (161,321 )
Income (loss) from discontinued operations, net of taxes
    5,860       (62,312 )
 
               
Net income (loss)
  $ 68,002     $ (223,633 )
 
               
Basic income (loss) per share:
               
Continuing operations
  $ 1.24     $ (3.28 )
Discontinued operations
    0.12       (1.27 )
 
               
Net income (loss)
  $ 1.36     $ (4.55 )
Diluted income (loss) per share:
               
Continuing operations
  $ 1.22     $ (3.28 )
Discontinued operations
    0.12       (1.27 )
 
               
Net income (loss)
  $ 1.34     $ (4.55 )
Weighted average shares outstanding:
               
Basic
    49,834       49,151  
Diluted
    50,735       49,151  
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
               
Income (loss) from continuing operations
  $ 62,142     $ (161,321 )
Adjustments (net of tax, if applicable):
               
Amortization of acquired intangible assets
    783       1,381  
Excess & obsolete inventory adjustment (Note 1)
          12,900  
Gain on sale of asset (Note 2)
    (682 )      
Goodwill and asset impairment charges (Note 3)
          142,958  
Restructuring and related items (Note 4)
          4,144  
(Benefit) for income taxes (Note 5)
          (6,370 )
Proforma tax adjustments
    18       (8,175 )
 
               
Non-GAAP net earnings (Note 6)
  $ 62,261     $ (14,483 )
 
               
Non-GAAP net earnings per share (Note 6)
  $ 1.23     $ (0.29 )
 
               
Weighted average shares outstanding
    50,735       49,151  

Note 1: Cost of sales for the six month period ended June 30, 2009 includes $12,900 of special charges for excess, obsolete and committed inventory purchases.
Note 2: The six month period ended June 30, 2010 includes a $682 gain on the sale of a vacated facility.
Note 3: The six month period ended June 30, 2009 includes a $142,958 charge related to the impairment of goodwill and other long-lived assets.
Note 4: The six month period ended June 30, 2009 includes $5,393 of restructuring charges primarily for severance related costs offset by a credit of $1,249 for the reversal of previously expensed equity compensation charges of terminated employees.
Note 5: The six month period ended June 30, 2009 includes a benefit of $6,370 attributable to the reversal of FIN 48 reserve items as a result of a Federal audit close.
Note 6: The Non-GAAP net earnings (loss) and Non-GAAP net earnings (loss) per share amounts exclude amortization of acquired intangible assets, acquisition and disposition related charges and special items, net of applicable income taxes.

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

                 
    June 30, 2010   December 31, 2009
ASSETS
               
Cash and short-term investments
  $ 323,414     $ 271,795  
Trade accounts receivable
    149,863       94,215  
Inventories
    137,305       118,004  
Other current assets
    55,081       48,867  
 
               
Total current assets
    665,663       532,881  
Property, plant and equipment, net
    65,568       67,196  
Goodwill
    138,850       144,511  
Other acquired intangible assets
    2,243       4,963  
Other assets
    10,735       24,518  
 
               
Total assets
  $ 883,059     $ 774,069  
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Short-term debt
  $ 12,986     $ 12,885  
Accounts payable
    38,902       26,292  
Accrued expenses and other liabilities
    56,257       32,123  
 
               
Total current liabilities
    108,145       71,300  
Other long-term liabilities
    21,071       17,836  
Stockholders’ equity:
               
Common stock
    113       113  
Additional paid-in capital
    652,004       645,411  
Retained earnings
    96,771       28,769  
Other stockholders’ equity
    4,955       10,640  
 
               
Total stockholders’ equity
    753,843       684,933  
 
               
Total liabilities and stockholders’ equity
  $ 883,059     $ 774,069  
 
               

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