Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Relations Contact: | Media Contact: |
Terry Slavin | Meggan Powers |
Director, Corp. Communications & IR | PR Manager |
Cymer, Inc. | Cymer, Inc. |
(858) 385-5232 | (858) 385-6327 |
tslavin@cymer.com | mpowers@cymer.com |
CYMER REPORTS SECOND QUARTER 2006 OPERATING RESULTS
SAN DIEGO, Calif., July 25, 2006 - - Cymer, Inc. (Nasdaq NM: CYMI), the world’s leading supplier of excimer laser light sources used in semiconductor manufacturing, today announced operating results for the second quarter and first six months, ended June 30, 2006.
For the second quarter of 2006:
· net income rose to $22,602,000, equal to $0.55 per share (diluted), a 105 percent increase over net income of $11,015,000, equal to $0.30 per share (diluted), in the second quarter of 2005, and a 10 percent increase over net income of $20,603,000, equal to $0.52 per share (diluted), in the first quarter of 2006.
· revenue grew to $135,379,000, a 40 percent increase over revenue of $96,392,000 in last year’s second quarter, and a 6 percent increase over revenue of $127,117,000 in this year’s first quarter.
For the first six months of 2006:
· net income climbed to $43,205,000, equal to $1.07 per share (diluted), a 163 percent increase over net income of $16,400,000, equal to $0.45 per share (diluted) in the first half of 2005.
· revenue rose to $262,496,000, a 45 percent increase over revenue of $181,202,000 in the first six months of 2005.
Commenting on the second quarter of 2006, Bob Akins, Cymer’s chief executive officer, said, “We achieved record quarterly total revenue and non-systems revenue, and record net income. Gross margin improved for the sixth consecutive quarter, and at 48 percent, met our April 18, 2006 guidance. We realized operating income of $29,023,000 or 21 percent of revenue in the second quarter of 2006, compared to operating income of $24,273,000, or 19 percent of revenue, in the previous quarter. This demonstrated significant operating leverage, with every dollar of incremental revenue for the second quarter adding $0.58 to the operating income line.
“We recognized revenue on 75 light sources in the second quarter, a 7 percent increase over the prior quarter,” Akins continued. “We shipped 31 of our XLA Series argon fluoride (ArF) light sources, the second highest quarterly volume of XLA light sources since the series was introduced. Shipments of our XLA 300, which targets high volume immersion production, accounted for 8 percent of second quarter system shipments.�� Our direct customers are currently ramping up their immersion scanner production to meet growing demand for immersion tools from an expanding number of chipmakers, and this in turn will drive increasing demand for the XLA 300. In the second quarter, ArF light sources accounted for 44 percent of systems shipments and constituted 64 percent of systems revenue.”
Cymer’s second quarter 2006 average selling price (ASP) was $958,000 on a currency adjusted basis. The quarterly average utilization of the company’s light sources at chipmakers in the second quarter grew 3 percent over the prior quarter’s level. This drove non-systems product revenue, which consists of consumables and spare parts, upgrades, and service, to $62,661,000 for the second quarter, equal to 46 percent of total revenue.
Second quarter 2006 bookings totaled $128,305,000 compared to first quarter 2006 bookings of $135,575,000. The second quarter 2006 book-to-bill ratio was 0.95, and the quarter-end backlog totaled
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$92,225,000. Included in this quarter’s book-to-bill calculation is the dilutive effect of shipping competitive replacement lasers in the quarter under the laser replacement purchase order the company announced in January 2006.
Nancy Baker, Cymer’s chief financial officer, stated, “Cymer generated $16,437,000 in cash from operations in the second quarter of 2006, and spent $2,817,000 on the acquisition of property and equipment, and an additional $8,200,000 on an EUV patent license agreement. This yielded free cash flow of $5,420,000 for the second quarter. Free cash flow is calculated as the net cash provided by operating activities less the acquisition of property, equipment and patent licenses. Our free cash flow would have been significantly higher, but we increased our inventory in the quarter. As we reduce inventory we anticipate generating higher levels of cash from operations during the remainder of 2006.”
Corporate Outlook
Commenting on Cymer’s outlook, Akins noted, “Over the past few weeks, investor sentiment in the semiconductor sector has obviously become cautious, based in part on concerns over whether or not consumers will continue to spend. Looking at semiconductor market conditions, in spite of the currently mixed macro-economic environment, the demand picture for DUV lithography remains intact and broad-based. Fab over-buying has not occurred and fab utilization remains in the low to mid 90% range. Flash memory manufacturers continue to expand capacity and 300mm fabs continue being built and populated. Our most advanced, highest value-added products are experiencing robust and growing demand, our ability to bring more advanced and highly innovative products to market strengthens our leadership, and our overall competitive position continues to be strong. The improvements we have made to date in our operating efficiency and financial performance have enhanced our ability to financially perform attractively throughout the semiconductor cycle.”
Based on information available at this time, Cymer is currently providing the following guidance for the third quarter of 2006:
· We currently estimate that total revenue should be up between 5 and 10 percent over second quarter 2006 revenue.
· We are forecasting that foreign currency adjusted ASPs should rise to approximately $1,080,000 due to the product mix shifting more toward our XLA Series of light sources.
· We expect that gross margin should be between 50 and 52 percent.
· We anticipate that R&D expenses should be between $19.0 million and $20.0 million.
· We expect SG&A expenses to be between $17.5 million and $18.0 million.
· Our 2006 estimated annual effective tax rate is expected to be approximately 35 percent.
Cymer’s management will hold a conference call at 2:00 pm (PDT) today, July 25, 2006, to discuss second quarter 2006 results and third quarter guidance. This press release, the conference call and accompanying slides may be accessed on the investor relations page of the company’s Web site at www.cymer.com.
Forward Looking Statements
Statements in this press release that are not strictly historical in nature are forward-looking statements. These statements include, but are not limited to statements regarding factors that are expected to increase demand for the XLA 300, future cash generation, and the statements under the caption “Corporate Outlook” above. These statements are predictions based on current information and expectations and involve a number of risks and uncertainties. In addition, statements regarding backlog and book-to-bill ratios should not be read as predictions or projections of future performance. Actual events or results may differ materially from those projected in any of such statements due to various factors, including but not limited to: the performance and market acceptance of the company’s new products or technologies; new and enhanced product offerings by competitors; the company’s ability to meet its production and product development schedules; the demand for semiconductors in general, and, in particular, for leading-edge devices with smaller geometries; the timing of
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customer orders, shipments and acceptances; delays or cancellations by customers of their orders; cyclicality in the market for semiconductor manufacturing equipment; the rate at which semiconductor manufacturers take delivery of photolithography tools from the company’s customers; the company’s ability to secure adequate supplies of critical components for its advanced products; the company’s ability to manage its expense levels and unanticipated expenses, and general economic conditions. For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the company’s most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other subsequent filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.
About Cymer
Cymer, Inc. is the world’s leading supplier of DUV laser illumination sources, the essential light source for DUV photolithography systems. DUV lithography is a key enabling technology, which has allowed the semiconductor industry to meet the exacting specifications and manufacturing requirements for volume production of today’s advanced semiconductor chips. Further information on Cymer may be obtained from the Company’s SEC filings, the Internet at www.cymer.com or by contacting the company directly.
Free Cash Flow Reconciliation
For the three months ended June 30, 2006
Cash provided by operating activities | | $ | 16,437,000 | |
Less acquisition of property, equipment and patent licenses | | $ | 11,017,000 | |
Free cash flow | | $ | 5,420,000 | |
Cymer, Inc.
| | Three Months Ended June 30 | | Six Months Ended June 30 | |
| | 2005 | | 2006 | | 2005 | | 2006 | |
Total revenues | | $ | 96,392,000 | | $ | 135,379,000 | | $ | 181,202,000 | | $ | 262,496,000 | |
| | | | | | | | | |
Net income | | $ | 11,015,000 | | $ | 22,602,000 | | $ | 16,400,000 | | $ | 43,205,000 | |
Diluted earnings per share | | $ | 0.30 | | $ | 0.55 | | $ | 0.45 | | $ | 1.07 | |
Weighted average common shares outstanding - diluted | | 36,166,000 | | 42,708,000 | | 36,695,000 | | 41,892,000 | |
