Exhibit 99.1
News Release
For Further Information Call:
Walter A. Shephard
Vice President Finance, CFO, and Treasurer
Voice: 860-704-3955
inquire@zygo.com
For Immediate Release
ZYGO ANNOUNCES STRONG EARNINGS GROWTH FOR Q1 OF FISCAL 2007
MIDDLEFIELD, CT, OCTOBER 25, 2006 – Zygo Corporation (NASDAQ: ZIGO) today announced net sales of $41.1 million and net earnings of $3.7 million, or $0.20 per diluted share, for the first quarter of fiscal 2007. Compared with the same period in fiscal 2006, net sales increased by $6.8 million, or 20%, net earnings increased by $1.5 million, or 67%, and earnings per diluted share increased by $0.08. Net sales and earnings for the first quarter were favorably impacted by higher revenues from the Company’s Metrology and Precision Position Solutions business units which have above average gross margin products.
Orders for the first quarter of fiscal 2006 were $47.8 million, resulting in a positive book-to-bill of 1.16. Orders from the Company’s semiconductor segment accounted for 63% of the orders received, with the industrial segment accounting for the remaining 37%. This increased the Company’s backlog to a record $87.4 million.
Bruce Robinson, ZYGO’s Chairman and CEO stated, “We are extremely pleased by our first quarter results. We established records for a fiscal first quarter in terms of orders, sales, and earnings. The first quarter of fiscal 2007 is significant for a number of reasons. Not only did we improve our financial results substantially from Q1 of a year ago, but we also achieved several key strategic milestones.”
These milestones included:
| • | Acceptance of our first front end semiconductor process metrology tool. |
| • | Receipt of follow on orders and commitments for this same metrology tool. |
| • | Introduction of our multifunctional wafer metrology and inspection tool. The Company subsequently announced it had received its first order for this tool early in our second fiscal quarter. |
1
| • | Receipt of our first order for a flat panel metrology system to be used with ink jet printing technology. |
| • | Receipt of a multi-million dollar follow on contract award for additional laser damage tolerant high precision optics. |
| • | Continued improvement in gross profit, which was over 43% as compared with 38% in Q1 of last year. |
Mr. Robinson concluded, “Our financial results, together with the achievements during the quarter, reaffirm our confidence in our strategic direction. The strong order momentum we experienced in the last quarter of fiscal 2006 has continued into the early part of fiscal 2007, supporting our expectation that sales will grow to over $180 million in this fiscal year.”
Zygo Corporation is a worldwide supplier of optical metrology instruments, precision optics, and electro-optical design and manufacturing services, serving customers in the semiconductor capital equipment and industrial markets.
Note: ZYGO’s teleconference to discuss the results of the first quarter of fiscal 2007 will be held at 6 PM Eastern Standard Time on October 25, 2006 and can be accessed by dialing 888-793-1751. This call is web cast live on ZYGO’s web site at www.zygo.com. The call may also be accessed for 30 days following the teleconference.
All statements other than statements of historical fact included in this news release regarding our financial position, business strategy, plans, anticipated growth rates, and objectives of management of the Company for future operations are forward-looking statements. Forward-looking statements are intended to provide management's current expectations or plans for the future operating and financial performance of the Company based upon information currently available and assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "plans," "strategy," "project," and other words of similar meaning in connection with a discussion of future operating or financial performance. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are fluctuations in capital spending of our customers, fluctuations in net sales to our major customer, manufacturing and supplier risks, dependence on and timing of new product development, rapid technological and market change, risks in international operations, dependence on proprietary technology and key personnel, length of the sales cycle, environmental regulations, and fluctuations in our stock price. Further information on potential factors that could affect Zygo Corporation’s business is described in our reports on file with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended June 30, 2006.
2
Zygo Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Thousands of dollars, except per share amounts)
| Three Months Ended
September 30 | |
|---|
| |
| |
|---|
| | | | 2006 | | 2005 | |
|
| |
| |
| Net sales | | | | | | | | |
| Products | | | $ | 38,821 | | $ | 30,368 | |
| Development services | | | | 2,286 | | | 3,961 | |
|
| |
| |
| | | | | 41,107 | | | 34,329 | |
|
| |
| |
| Cost of goods sold | | | | | | | | |
| Products | | | | 21,743 | | | 18,270 | |
| Development services | | | | 1,573 | | | 2,906 | |
|
| |
| |
| | | | | 23,316 | | | 21,176 | |
|
| |
| |
| Gross profit | | | | 17,791 | | | 13,153 | |
| Selling, general, and administrative expenses | | | | 7,525 | | | 6,368 | |
| Research, development, and engineering expenses | | | | 5,124 | | | 3,540 | |
|
| |
| |
| Operating profit | | | | 5,142 | | | 3,245 | |
|
| |
| |
| Other income | | | | | | | | |
| Interest income | | | | 725 | | | 417 | |
| Miscellaneous income, net | | | | 45 | | | 123 | |
|
| |
| |
| Total other income | | | | 770 | | | 540 | |
|
| |
| |
| Earnings before income taxes | | | | | | | | |
| and minority interest | | | | 5,912 | | | 3,785 | |
| Income taxes | | | | (2,069 | ) | | (1,442 | ) |
| Minority interest | | | | (191 | ) | | (150 | ) |
|
| |
| |
| Net earnings | | | $ | 3,652 | | $ | 2,193 | |
|
| |
| |
| Basic - Earnings per share | | | $ | 0.20 | | $ | 0.12 | |
|
| |
| |
| Diluted - Earnings per share | | | $ | 0.20 | | $ | 0.12 | |
|
| |
| |
3
Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
| (Thousands of dollars) | September 30, 2006 | | | June 30, 2006 |
|---|
| |
| | |
|
|---|
| Assets | | | | | | | | | |
| Current assets: | | | | | | | | | |
| Cash and cash equivalents | | | $ | 13,673 | | | $ | 20,318 | |
| Marketable securities | | | | 24,534 | | | | 21,415 | |
| Receivables, net | | | | 29,752 | | | | 33,759 | |
| Inventories | | | | 40,687 | | | | 38,082 | |
| Prepaid expenses | | | | 2,370 | | | | 2,106 | |
| Deferred income taxes | | | | 12,054 | | | | 11,959 | |
|
| | |
| |
| Total current assets | | | | 123,070 | | | | 127,639 | |
| Marketable securities | | | | 22,675 | | | | 23,743 | |
| Property, plant, and equipment, net | | | | 33,237 | | | | 32,631 | |
| Deferred income taxes | | | | 13,663 | | | | 15,433 | |
| Intangible assets, net | | | | 5,922 | | | | 5,925 | |
| Other assets | | | | 963 | | | | 812 | |
|
| | |
| |
| Total assets | | | $ | 199,530 | | | $ | 206,183 | |
|
| | |
| |
| Liabilities and Stockholders’ Equity | | | | | | | | | |
| Current liabilities: | | | | | | | | | |
| Payables | | | $ | 10,058 | | | $ | 13,987 | |
| Accrued expenses | | | | 22,674 | | | | 29,734 | |
| Income taxes payable | | | | 1,476 | | | | 2,004 | |
|
| | |
| |
| Total current liabilities | | | | 34,208 | | | | 45,725 | |
| Other long-term liabilities | | | | 443 | | | | 101 | |
| Minority interest | | | | 1,610 | | | | 1,419 | |
| Stockholders' equity | | | | 163,269 | | | | 158,938 | |
|
| | |
| |
| Total liabilities and stockholders' equity | | | $ | 199,530 | | | $ | 206,183 | |
|
| | |
| |
4
