UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 26, 2005
MKS Instruments, Inc.
(Exact name of registrant as specified in its charter)
| Massachusetts | 0-23621 | 04-2277512 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer 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
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 26, 2005, MKS Instruments, Inc. announced its financial results for
the quarter ended June 30, 2005. 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 |
Exhibit No.
|
Description | |
99.1
|
Press Release dated July 26, 2005. |
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 26, 2005 | MKS Instruments, Inc. | |||
| By: | /s/ Ronald Weigner | |||
| Ronald C. Weigner, Vice President & Chief Financial Officer |
||||
EXHIBIT INDEX
EXHIBIT NO.
|
DESCRIPTION | |||
99.1
|
Press release dated July 26, 2005 | |||
|
Exhibit 99.1 |
For Immediate Release
Contact: Ron Weigner
Vice President and Chief Financial Officer
978.284.4446
Vice President and Chief Financial Officer
978.284.4446
MKS Instruments Reports Second Quarter 2005 Results
Wilmington, Mass. — July 26, 2005 — 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 2005 financial results. Net
sales were $130.2 million, up 2 percent from $127.4 million in the first quarter of 2005 and down
14 percent from $151.6 million in the second quarter of 2004.
GAAP net earnings totaled $9.8 million, or $0.18 per diluted share on 54.5 million shares,
compared to $5.5 million, or $0.10 per diluted share, in the first quarter of 2005 and $20.9
million, or $0.38 per diluted share, in the second quarter of 2004. Non-GAAP earnings, which
exclude amortization of acquired intangible assets and special items, were $10.2 million, or $0.19
per share, compared to $8.0 million, or $0.15 per share, in the first quarter of 2005 and $19.2
million, or $0.35 per share, in the second quarter of 2004.
“In the second quarter, we exceeded the high end of our sales and earnings guidance. Sales
increased over the first quarter along with gross margin improvement and lower operating expense,”
said John Bertucci, Executive Chairman of the Board. “As the leading edge shifts to smaller
geometries that require new processes, demand continues for process control and information
management to enhance tool performance and productivity. With our broad technology portfolio, we
are providing higher value solutions that enable precise control and optimization of advanced
manufacturing processes.”
“Going forward, we will continue to work closely with our customers as their technology needs
evolve and their lead times shorten,” said Chief Executive Officer and President Leo Berlinghieri.
“In the near term, based on cautious customer order patterns,
we currently estimate that our third quarter sales could decrease by 3% to 8% and range from
$120 to $126 million. At these levels, GAAP net earnings could range from $0.07 to $0.11 per
diluted share, and non-GAAP earnings could range from $0.11 to $0.15 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 has
historically been acquisitive, and MKS’ management believes the presentation of non-GAAP financial
measures, which exclude the costs associated with acquisitions and other special items, 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 5:00
p.m. (Eastern Daylight Time). A live web cast and replay of the conference call will be available
at www.mksinstruments.com in the “Investors” section. To hear a telephone replay through
August 2, 2005, dial 303-590-3000, pass code 11034204#.
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, 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)
(In thousands, except per share data)
| Three Months Ended | ||||||||||||
| June 30, | June 30, | March 31, | ||||||||||
| 2005 | 2004 | 2005 | ||||||||||
Net sales |
$ | 130,193 | $ | 151,585 | $ | 127,407 | ||||||
Cost of sales |
78,407 | 90,192 | 78,045 | |||||||||
Gross profit |
51,786 | 61,393 | 49,362 | |||||||||
Research and development |
14,689 | 14,620 | 14,549 | |||||||||
Selling, general and administrative |
23,040 | 22,661 | 23,849 | |||||||||
Amortization of acquired intangible assets |
3,693 | 3,691 | 3,690 | |||||||||
Restructuring charges |
— | — | 454 | |||||||||
Income from operations |
10,364 | 20,421 | 6,820 | |||||||||
Interest income, net |
1,348 | 326 | 1,098 | |||||||||
Other income (NOTE 1) |
— | 5,402 | — | |||||||||
Income before income taxes |
11,712 | 26,149 | 7,918 | |||||||||
Provision for income taxes |
1,934 | 5,281 | 2,460 | |||||||||
Net income |
$ | 9,778 | $ | 20,868 | $ | 5,458 | ||||||
Net income per share: |
||||||||||||
Basic |
$ | 0.18 | $ | 0.39 | $ | 0.10 | ||||||
Diluted |
$ | 0.18 | $ | 0.38 | $ | 0.10 | ||||||
Weighted average shares outstanding: |
||||||||||||
Basic |
53,975 | 53,540 | 53,878 | |||||||||
Diluted |
54,451 | 54,967 | 54,393 | |||||||||
The following supplemental Non-GAAP earnings information is presented
to aid in understanding MKS’s operating results: |
||||||||||||
GAAP net income |
$ | 9,778 | $ | 20,868 | $ | 5,458 | ||||||
Adjustments (net of tax, if applicable): |
||||||||||||
Amortization of acquired intangible assets |
2,308 | 3,691 | 2,306 | |||||||||
Restructuring charges |
— | — | 272 | |||||||||
Other income (NOTE 1, NOTE 2) |
— | (5,402 | ) | — | ||||||||
Benefit for income taxes (NOTE 3) |
(1,901 | ) | — | — | ||||||||
Non-GAAP net income (NOTE 4) |
$ | 10,185 | $ | 19,157 | $ | 8,036 | ||||||
Non-GAAP net income per share (NOTE 4) |
$ | 0.19 | $ | 0.35 | $ | 0.15 | ||||||
Weighted average shares outstanding — diluted |
54,451 | 54,967 | 54,393 | |||||||||
NOTE 1: The GAAP amount for June 30, 2004 represents primarily the collection of a note receivable of $5.0 million which had been
written off in 2002.
NOTE 2: The Non-GAAP adjustment for Other income for the three months ended June 30, 2004 was originally reported net of tax at $4,272.
The amount currently reported as the Non-GAAP adjustment for Other income had been revised in the fourth quarter of 2004 to exclude tax in conjunction
with the reversal of the previously established valuation allowance against net deferred tax assets and was reflected
in our reported non-GAAP net earnings of $1.15 per share for 2004.
NOTE 3: The three month period ended June 30, 2005 includes a benefit of $1,901 in connection with
closing an IRS audit.
NOTE 4: The Non-GAAP net income and non-GAAP net income 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)
Unaudited Consolidated Statements of Operations
(In thousands, except per share data)
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2005 | 2004 | |||||||
Net sales |
$ | 257,600 | $ | 284,570 | ||||
Cost of sales |
156,452 | 168,948 | ||||||
Gross profit |
101,148 | 115,622 | ||||||
Research and development |
29,238 | 28,956 | ||||||
Selling, general and administrative |
46,889 | 42,813 | ||||||
Amortization of acquired intangible assets |
7,383 | 7,384 | ||||||
Restructuring charges |
454 | 437 | ||||||
Income from operations |
17,184 | 36,032 | ||||||
Interest income, net |
2,446 | 598 | ||||||
Other income (NOTE 1) |
— | 5,402 | ||||||
Income before income taxes |
19,630 | 42,032 | ||||||
Provision for income taxes |
4,394 | 8,458 | ||||||
Net income |
$ | 15,236 | $ | 33,574 | ||||
Net income per share: |
||||||||
Basic |
$ | 0.28 | $ | 0.63 | ||||
Diluted |
$ | 0.28 | $ | 0.61 | ||||
Weighted average shares outstanding: |
||||||||
Basic |
53,926 | 53,398 | ||||||
Diluted |
54,422 | 55,026 | ||||||
The following supplemental Non-GAAP earnings information is presented
to aid in understanding the MKS operating results: |
||||||||
GAAP Net income |
$ | 15,236 | $ | 33,574 | ||||
Adjustments (net of tax, if applicable): |
||||||||
Amortization of acquired intangible assets |
4,614 | 7,384 | ||||||
Restructuring charges |
272 | 437 | ||||||
Other income (NOTE 1, NOTE 2) |
— | (5,402 | ) | |||||
Benefit for income taxes (NOTE 3) |
(1,901 | ) | — | |||||
Non-GAAP net income (NOTE 4) |
$ | 18,221 | $ | 35,993 | ||||
Non-GAAP net income per share (NOTE 4) |
$ | 0.33 | $ | 0.65 | ||||
Weighted average shares outstanding |
54,422 | 55,026 | ||||||
NOTE 1: The GAAP amount for June 30, 2004 represents primarily the collection of a note receivable of $5.0 million which had been
written off in 2002.
NOTE 2: The Non-GAAP adjustment for Other income for the six months ended June 30, 2004 was originally reported net of tax at $4,272.
The amount currently reported as the Non-GAAP adjustment for Other income had been revised in the fourth quarter of 2004 to exclude tax in conjunction
with the reversal of the previously established valuation allowance against net deferred tax assets and was reflected
in our reported non-GAAP net earnings of $1.15 per share for 2004.
NOTE 3: The six month period ended June 30, 2005 includes a benefit of $1,901 in connection with
closing an IRS audit.
NOTE 4: The Non-GAAP net income and non-GAAP net income 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)
Unaudited Consolidated Balance Sheet
(In thousands)
| June 30, | December 31, | |||||||
| 2005 | 2004 | |||||||
ASSETS |
||||||||
Cash and short-term investments |
$ | 264,303 | $ | 235,900 | ||||
Trade accounts receivable |
78,452 | 82,315 | ||||||
Inventories |
95,469 | 99,633 | ||||||
Other current assets |
22,918 | 22,037 | ||||||
Total current assets |
461,142 | 439,885 | ||||||
Property, plant and equipment, net |
80,062 | 80,917 | ||||||
Long-term investments |
1,627 | 4,775 | ||||||
Goodwill |
255,385 | 255,740 | ||||||
Other acquired intangible assets |
33,952 | 41,604 | ||||||
Other assets |
5,442 | 5,756 | ||||||
Total assets |
$ | 837,610 | $ | 828,677 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Short-term debt |
$ | 23,882 | $ | 24,509 | ||||
Accounts payable |
23,280 | 23,338 | ||||||
Accrued expenses and other liabilities |
38,959 | 44,338 | ||||||
Total current liabilities |
86,121 | 92,185 | ||||||
Long-term debt |
6,830 | 6,667 | ||||||
Other long-term liabilities |
3,735 | 3,191 | ||||||
Stockholders’ equity: |
||||||||
Common stock |
113 | 113 | ||||||
Additional paid-in capital |
634,569 | 631,760 | ||||||
Retained earnings |
97,313 | 82,077 | ||||||
Other stockholders’ equity |
8,929 | 12,684 | ||||||
Total stockholders’ equity |
740,924 | 726,634 | ||||||
Total liabilities and stockholders’ equity |
$ | 837,610 | $ | 828,677 | ||||