Andover, Mass., April 25, 2012 — MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of technologies that enable advanced processes and improve productivity, today reports first quarter 2012 financial results.
First Quarter Financial Results
Sales were $190.9 million, an increase of 11.2% from $171.7 million in the fourth quarter of 2011, and a decrease of 17.7% from a record $231.9 million in the first quarter of 2011.
First quarter net income was $22.8 million, or $0.43 per diluted share, compared to net income of $22.7 million, or $0.43 per diluted share in the fourth quarter of 2011, and $38.0 million, or $0.73 per diluted share in the first quarter of 2011.
Non-GAAP net earnings, which exclude special charges, were $22.9 million, or $0.43 per diluted share, compared to $20.4 million, or $0.38 per diluted share in the fourth quarter of 2011, and $38.2 million, or $0.73 per diluted share in the first quarter of 2011.
Also in the first quarter, the board of directors authorized a quarterly cash dividend of $0.15 per share, which was paid on March 16th. The Company repurchased 124,000 shares for $3.7 million at an average price of $30.01 pursuant to the share repurchase program announced in July of 2011.
Leo Berlinghieri, Chief Executive Officer and President, said, “We continue to demonstrate our commitment and ability to provide technologies that address the needs of both new and existing customers to grow our core semiconductor market, while leveraging our technologies and infrastructure to identify and penetrate new customers and new applications in a variety of diverse and growing markets.
“Our semiconductor business certainly improved in the first quarter; however, we continued to see variability in our other markets, with strength in some areas offset by continued weakness in the solar, LCD and LED markets. Given current business levels, we anticipate that sales in the second quarter should be relatively unchanged from the first quarter and may range from $175 million to $195 million, and, at these volumes, our non-GAAP net earnings could range from $0.29 to $0.42 per share.”
Conference Call Details
A conference call with management will be held on Thursday, April 26, 2012 at 8:30 a.m. (Eastern Time). To participate in the conference call, please dial (877) 212-6076 for domestic callers and (707) 287-9331 for international callers, and an operator will connect you. Participants will need to provide the operator with the Conference ID of 65092567, which has been reserved for this call. A live and archived webcast of the call will be available on the company’s website at www.mksinst.com.
Use of Non-GAAP Financial Results
Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude discontinued operations, amortization of acquired intangible assets, costs associated with acquisition and disposition related charges, and certain adjustments to income taxes. These non-GAAP measures are not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). MKS’ management believes the presentation of these non-GAAP financial measures, which exclude discontinued operations and disposition related charges, amortization of acquired intangible assets, costs associated with acquisitions, the related tax effect of any adjustments and income tax adjustments related to settlement of tax audits, is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.
About MKS Instruments
MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. Our products are derived from our core competencies in pressure measurement and control, materials delivery, gas composition analysis, control and information technology, power and reactive gas generation, and vacuum technology. Our primary served markets are manufacturers of capital equipment for semiconductor devices, and for other thin film applications including flat panel displays, solar cells, light emitting diodes, data storage media, and other advanced coatings. We also leverage our technology in other markets with advanced manufacturing applications including medical equipment, pharmaceutical manufacturing, energy generation, and environmental monitoring.
Forward-Looking Statements
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, and other advanced manufacturing markets, 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 and Quarterly Reports 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.
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MKS Instruments, Inc. Unaudited Consolidated Statements of Operations (In thousands, except per share data)
Three Months Ended (Note 1)
March 31, 2012
March 31, 2011
December 31, 2011
Net revenues
$
190,868
$
231,851
$
171,671
Cost of revenues
107,077
125,490
95,710
Gross profit
83,791
106,361
75,961
Research and development
16,184
16,896
14,224
Selling, general and administrative
34,119
32,707
31,473
Amortization of intangible assets
119
250
264
Income from operations
33,369
56,508
30,000
Interest income, net
252
271
275
Income before income taxes
33,621
56,779
30,275
Provision for income taxes
10,853
18,736
7,561
Net income
$
22,768
$
38,043
$
22,714
Basic income per share:
Net income
$
0.43
$
0.74
$
0.43
Diluted income per share:
Net income
$
0.43
$
0.73
$
0.43
Cash dividends per common share
$
0.15
$
0.15
$
0.15
Weighted average shares outstanding:
Basic
52,504
51,407
52,465
Diluted
53,222
52,386
53,105
The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:
Net income
$
22,768
$
38,043
$
22,714
Adjustments (net of tax, if applicable):
Settlement of foreign tax audit
—
—
(2,548
)
Amortization of intangible assets
119
250
264
Proforma tax adjustments
(34
)
(65
)
(71
)
Non-GAAP net earnings (Note 1)
$
22,853
$
38,228
$
20,359
Non-GAAP net earnings per share (Note 1)
$
0.43
$
0.73
$
0.38
Weighted average shares outstanding
53,222
52,386
53,105
Note 1: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude results of discontinued operations and disposition related charges, amortization of acquired intangible assets, costs associated with acquisitions, the related tax effect of any adjustments and income tax adjustments related to settlement of tax audits.
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MKS Instruments, Inc. Unaudited Consolidated Balance Sheet (In thousands)
March 31, 2012
December 31, 2011
ASSETS
Cash and short-term investments
$
569,445
$
565,519
Trade accounts receivable, net
131,132
120,894
Inventories
148,474
153,632
Other current assets
35,058
44,856
Total current assets
884,109
884,901
Property, plant and equipment, net
73,994
72,487
Goodwill
140,084
140,084
Intangible assets, net
1,150
1,043
Long-term investments
16,481
7,873
Other assets
11,915
12,266
Total assets
$
1,127,733
$
1,118,654
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term borrowings
$
368
$
1,932
Accounts payable
22,583
24,853
Accrued expenses and other liabilities
64,528
69,646
Total current liabilities
87,479
96,431
Other liabilities
34,212
32,211
Stockholders’ equity:
Common stock
113
113
Additional paid-in capital
709,707
707,419
Retained earnings
281,711
268,870
Other stockholders’ equity
14,511
13,610
Total stockholders’ equity
1,006,042
990,012
Total liabilities and stockholders’ equity
$
1,127,733
$
1,118,654
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