Exhibit 99
Keithley Instruments Reports Results for Fiscal 2003 Third Quarter
CLEVELAND, July 30 /PRNewswire-FirstCall/ -- Keithley Instruments, Inc.
(NYSE: KEI), a leader in solutions for emerging measurement needs, today
announced results for its fiscal 2003 third quarter that ended June 30, 2003.
Third Quarter Fiscal 2003 Results
Net sales of $25.3 million for the third quarter of fiscal 2003 decreased
3 percent from sales of $26.0 million in last year's third quarter. Sales
were down 28 percent in the United States, flat in Europe, and up 19 percent
in the Pacific Basin region. Without the benefit of favorable currency
adjustments, net sales would have decreased 7 percent from the prior year's
quarter. Sequentially, sales were down 3 percent from the second quarter.
The company reported a net loss of $1.9 million, or $0.12 per share, compared
to a net loss of $0.9 million, or $0.06 per share, in last year's quarter.
The results include severance charges of $0.02 per share and $0.06 per share
in the third quarter of fiscal year 2003 and the third quarter of fiscal year
2002, respectively.
The company announced its second strongest order quarter in two years,
after last year's third quarter, driven primarily by significantly stronger
orders in Asia and the semiconductor industry. Orders of $30.1 million for
the quarter decreased 3 percent from last year's third quarter orders of
$30.9 million. Geographically, orders were down 22 percent in the United
States, flat in Europe and up 43 percent in the Pacific Basin. Strong orders
in Japan and Korea more than offset lower orders in China during May and June
due to the SARS virus. Compared to the prior year's third quarter, orders
from semiconductor customers decreased 20 percent, wireless communications
customers decreased 5 percent, while orders from electronic components and
subassembly manufacturers increased 20 percent, and research and education
customers increased 30 percent. Sequentially, orders increased 22 percent
from the second quarter due to strong orders from semiconductor, and research
and education customers. Order backlog increased $4.6 million to
$16.3 million at June 30, 2003 from $11.7 million at March 31, 2003.
Nine-Month Results
For the nine months ending June 30, 2003, net sales were $77.4 million, up
13 percent from $68.5 million last year. The net loss for the nine months of
fiscal 2003 was $3.4 million, or $0.22 per share, compared with a net loss of
$3.8 million, or $0.24 per share, last year.
Orders of $77.7 million for the nine months ending June 30, 2003,
increased 6 percent from $73.6 million last year. Geographically, orders
decreased 10 percent in the United States and three percent in Europe, but
increased 51 percent in the Pacific Basin. For the first nine months,
semiconductor orders comprised approximately 30 percent of the total, research
and education made up about 20 percent, electronic components and subassembly
manufacturers comprised about 20 percent, and wireless communications made up
about 15 percent of the total.
Cash and short-term investments totaled $35.1 million, while short-term
debt was $0.6 million. Inventory of $11.1 million decreased $1.3 million from
year ago levels, with turns at 3.7. Days sales outstanding were 48 at June
30, 2003 compared to 52 at this time last year. The total number of worldwide
employees on June 30, 2003 was 603, down from 615 the end of March, and 649 at
June 30, 2002.
Business Initiatives
"During the course of the past two years, we have implemented programs to
strengthen our business as we waited for the electronics industry to recover,"
stated Joseph P. Keithley, the company's Chairman, President and Chief
Executive Officer. "Our strong balance sheet has afforded us the financial
strength, as well as the confidence, to pursue these initiatives. We believe
our strategy is sound. We are clear on who our customers are and what
applications we want to serve. However, the upturn has been slower to arrive
than anticipated, and we can no longer wait for the upturn to help return us
to profitability and cash generation. Therefore, strengthened by our
completed initiatives of the past two years, we have acted to reduce costs to
return to profitability in fiscal year 2004."
"Part of our expected cost savings will come from improvements in gross
margins. During the last year, we have made major changes to the way we
purchase and manufacture as we adopted lean manufacturing principles. While
we have seen some of the benefits of lean, such as increased turns and lower
inventory balances, our overall manufacturing costs have increased. Our next
phase of the lean implementation involves fine-tuning our processes and
improving our execution. We expect to see significant improvements during
fiscal 2004," stated Keithley.
"During the quarter we won an important benchmark from a large
semiconductor manufacturer in Japan. This customer has selected our S630
parametric test system to support development of its newest generation of
semiconductors targeted at mobile products. We have not yet received a large
volume of orders; however, we view this win as a significant development in
partnering with a leading edge semiconductor manufacturer that is often seen
as setting the standard in the industry," stated Keithley.
The company provided an update on several other initiatives it has
undertaken:
-- It laid off a small percentage of its workforce and recorded a pretax
charge of $535,000,
-- It is reprioritizing business initiatives and further de-emphasizing
some areas such as optoelectronics applications in the communications
sector,
-- It made good progress working with customers to gain design wins for
its Model 2800 RF Power Analyzer,
-- It reported increasing momentum from the recently announced structural
change in its United States sales force. Orders were up 44 percent as
a result of this group's efforts when compared to the March 2003
quarter,
-- As part of its succession planning efforts, the company promoted three
individuals to the officer level. It also hired a Vice President of
new product development,
-- It went live with the first phase of its worldwide Enterprise Resource
Planning implementation, with no significant business interruptions,
-- It will continue to fully implement ERP and its Customer Relationship
Management systems throughout the remainder of the year and into fiscal
year 2004.
Business Outlook
The cost cutting actions and improvements to the company's lean
manufacturing process are expected to result in annualized cost savings of
approximately $6 million beginning in fiscal year 2004. Not all of the cost
savings will be realized in its results, as the company expects these savings
to be partially offset by normal cost increases in fiscal 2004. In
conjunction with the reduction in force, the company expects to record
approximately $200,000 of additional charges in the September 2003 quarter.
"While conditions throughout the electronics industry have improved, the
outlook remains hard to predict. Our sales are order dependent, and we are
currently estimating sales for the September quarter to range between $25 and
$28 million. Including the additional severance charge, we would expect a
pretax loss in the teens as a percentage of sales at the low end of the sales
range. At the high end of the sales range, we would expect a loss in the
single digits as a percentage of sales," stated Keithley.
Stock Buyback Program
During the third quarter of fiscal 2003, the company repurchased 32,500
common shares at an average cost of $12.89 per share including commissions.
For the nine months ending June 30, 2002, the company spent $2.8 million
repurchasing 243,200 common shares at an average cost per share of
$11.41 including commissions. Under the current repurchase program, the
company may purchase an additional 1,223,800 shares through December 2003.
Forward Looking Statements
Statements in the "Business Initiatives" and "Business Outlook" sections
of this release are forward-looking statements that involve a number of risks
and uncertainties. Actual results may differ materially from the results
stated or implied in the forward-looking statements as a result of a number of
factors that include but are not limited to: worldwide economic conditions and
business conditions in the semiconductor, wireless, optoelectronics and other
industries which the company serves and the severity and duration of the
current downturn of these as well as the overall electronics industry,
customers delaying or canceling orders in backlog, the company's ability to
continue to develop an effective direct sales force in the United States, the
company's ability to develop new products in a timely fashion and gain market
acceptance of those products to remain competitive and gain market share, the
company's ability to implement and execute an effective lean manufacturing
system without incurring significant costs or disruptions in production, the
company's ability to implement and effectively manage CRM and ERP systems
without interruptions in its accounting, order entry, billing, manufacturing
and other customer support functions, the company's ability to control costs,
changes in effective tax rates, foreign currency fluctuations which could
affect worldwide operations, and the effects of terrorist activities and armed
conflicts, as well as the spread of contagious diseases, that could cause
disruptions in general economic activity. Further information on factors that
could cause actual results to differ from those anticipated is included in the
company's annual report on Form 10-K and quarterly reports on Form 10-Q which
are filed with the Securities and Exchange Commission. In light of these
uncertainties, the inclusion of forward-looking information should not be
regarded as a representation by the company that its plans or objectives will
be achieved. Further, the company is not obligating itself to revise forward-
looking statements contained herein to reflect events or circumstances after
the date of this release or to reflect the occurrence of unanticipated events.
Conference Call on the Web
On Wednesday, July 30, 2003 at 10:00 a.m. Eastern Time, interested parties
may listen to the Keithley Instruments quarterly conference call live on the
Web by registering on the investor relations portion of the company's web site
at http://www.keithley.com. Interested parties may also listen to a replay of
the quarterly conference call by visiting the web site. The replay will be
available for approximately 45 days.
About Keithley Instruments, Inc.
Keithley Instruments, Inc. provides optical and electrical measurement
solutions from DC to RF (radio frequency) to the wireless, semiconductor,
optoelectronics, and other electronics manufacturing industries. Engineers
and scientists around the world use Keithley's advanced hardware and software
for process monitoring, production test, and basic research.
KEITHLEY INSTRUMENTS, INC.
Consolidated Statements of Income
(In Thousands of Dollars Except for Per Share Data)
(Unaudited)
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2003 2002 2003 2002
NET SALES $25,264 100.0% $26,029 100.0% $77,415 100.0% $68,499 100.0%
Cost of
goods
sold 11,819 46.8 11,259 43.3 35,300 45.6 30,258 44.2
Selling,
general and
adminis-
trative
expenses 12,666 50.1 11,407 43.8 37,385 48.3 32,926 48.1
Product
development
expenses 3,488 13.8 3,551 13.6 10,080 13.0 10,560 15.4
Severance
charges 535 2.1 1,461 5.6 535 0.7 1,461 2.1
Net
financing
income (77) (0.3) (253) (1.0) (383) (0.5) (765) (1.1)
Loss before
income
taxes (3,167) (12.5) (1,396) (5.3) (5,502) (7.1) (5,941) (8.7)
Income
taxes
benefit (1,241) (4.9) (507) (1.9) (2,146) (2.8) (2,109) (3.1)
NET LOSS $(1,926) (7.6)% $(889) (3.4)% $(3,356) (4.3)% $(3,832) (5.6)%
Basic
loss per
share $ (0.12) $(0.06) $(0.22) $(0.24)
Diluted
loss per
share $ (0.12) $(0.06) $(0.22) $(0.24)
Cash
dividends
per
Common
Share $ .0375 $ .0375 $ .1125 $ .1125
Cash
dividends
per Class
B
Common
Share $ .030 $ .030 $ .0900 $ .0900
Weighted
average
number
of shares
outstanding
(000) -
Diluted 15,481 15,755 15,482 15,699
KEITHLEY INSTRUMENTS, INC.
CONDENSED Consolidated Balance Sheets
(In Thousands of Dollars)
(Unaudited)
June 30, September 30,
2003 2002
ASSETS
Current assets:
Cash and cash equivalents $8,875 $21,707
Short-term investments 26,262 28,171
Refundable income taxes 550 954
Accounts receivable, net of allowances 14,593 14,140
Inventory 11,083 10,112
Other current assets 7,419 5,095
Total current assets 68,782 80,179
Property, plant and equipment, net 14,546 13,808
Other assets 31,638 26,384
Total assets $114,966 $120,371
Liabilities and Shareholders' Equity
Current liabilities:
Short term debt $625 $--
Accounts payable 6,865 7,170
Other current liabilities 13,501 13,583
Total current liabilities 20,991 20,753
Long-term debt -- --
Other long-term liabilities 7,878 7,170
Shareholders' equity 86,097 92,448
Total liabilities and shareholders' equity $114,966 $120,371
SOURCE Keithley Instruments, Inc.
-0- 07/30/2003
/CONTACT: Mark J. Plush, Vice President and Chief Financial Officer of
Keithley Instruments, Inc., +1-440-498-2618/
/Web site: http://www.keithley.com/
(KEI)
CO: Keithley Instruments, Inc.
ST: Ohio
IN: CPR TLS SEM
SU: CCA ERN