Exhibit 99.1
Richard Dressler
Vice President Finance, Chief Financial Officer, and Treasurer
Voice: 860-347-8506
inquire@zygo.com
For Immediate Release
ZYGO ANNOUNCES FISCAL 2003 THIRD QUARTER RESULTS
MIDDLEFIELD, CONNECTICUT (APRIL 30, 2003)......Zygo Corporation (NASDAQ: ZIGO)
Net sales of $29.0 million for the third quarter of fiscal 2003 increased by
$8.8 million, or 44%, from the comparable prior year period's $20.2 million. Net
sales included $6.6 million from a development services agreement representing
75% of the $8.8 million increase in sales. Net sales of $75.7 million for the
first nine months of fiscal 2003 increased by $17.9 million, or 31%, from the
comparable prior year period's $57.8 million. Net sales included $13.7 million
from a development services agreement representing 77% of the $17.9 million
increase in sales. There were no comparable sales from the development services
agreement in the prior year periods. The development services agreement is
expected to continue through June 2004. Revenue under this agreement can vary
significantly from quarter to quarter.
For the third quarter of fiscal 2003, net sales in the semiconductor segment
were $17.8 million, or 61% of total net sales, as compared to $8.6 million, or
43%, in the prior year period and net sales in the industrial segment were $11.2
million, or 39% of total net sales, as compared to $11.6 million, or 57%, in the
prior year period. The increase in net sales in the semiconductor segment was
primarily due to $6.6 million of sales from the development services agreement.
For the first nine months of fiscal 2003, net sales in the semiconductor segment
were $44.1 million, or 58% of total net sales, as compared to $27.1 million, or
47%, in the prior year period and net sales in the industrial segment were $31.6
million, or 42% of total net sales, as compared to $30.7 million, or 53%, in the
prior year period. The increase in net sales in the semiconductor segment was
primarily due to $13.7 million of sales from the development services agreement.
The Company recorded net earnings of $0.5 million for the third quarter of
fiscal 2003 as compared to a net loss of $3.7 million for the third quarter of
fiscal 2002. On a diluted per share basis, the net earnings were $0.03 per share
for the third quarter of fiscal 2003 as compared to a net loss of $0.21 per
share for the third quarter of fiscal 2002. The net earnings for the third
quarter of fiscal 2003 and fiscal 2002 include the loss from discontinued
operations of our TeraOptix unit of $0.3 million and $1.8 million, respectively.
The income from continuing operations for the third quarter of fiscal 2003 was
$0.8 million, or $0.04 per share, as compared
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to a net loss of $1.9 million, or $0.11 per share, for the third quarter of
fiscal 2002. The Company recorded a net loss of $11.2 million for the first nine
months of fiscal 2003 as compared to a net loss of $9.1 million for the first
nine months of fiscal 2002. On a diluted per share basis, the net loss was $0.64
per share for the first nine months of fiscal 2003 as compared to a net loss of
$0.52 per share for the first nine months of fiscal 2002. The net loss for the
first nine months of fiscal 2003 includes losses related to the operations of
our discontinued TeraOptix unit ($2.5 million) and charges related to the
disposal of our discontinued TeraOptix unit ($9.1 million). The net loss for the
first nine months of fiscal 2002 includes the loss related to the operations of
our discontinued TeraOptix unit of $4.6 million. The income from continuing
operations for the first nine months of fiscal 2003 was $0.3 million, or $0.02
per share, as compared to a net loss of $4.6 million, or $0.26 per share, for
the first nine months of fiscal 2002.
As previously announced, the Company discontinued its telecommunications-focused
TeraOptix business unit and is disposing of its equipment and facility located
in Westborough, Massachusetts. Accordingly, the results of TeraOptix have been
presented as a separate line item on the income statement as discontinued
operations, net of tax, for all periods presented. In addition, the loss on
disposal of the business, net of tax, has been recorded as a line item for the
fiscal 2003 periods presented. All continuing operations line items presented
exclude TeraOptix results.
Gross profit for the third quarter of fiscal 2003 totaled $9.5 million, an
increase of $2.5 million, or 36%, from $7.0 million in the third quarter of
fiscal 2002. Gross profit as a percentage of sales for the third quarters of
fiscal 2003 and fiscal 2002 were 33% and 35%, respectively. Gross profit for the
first nine months of fiscal 2003 totaled $25.9 million, an increase of $6.7
million, or 35%, from $19.2 million in the first nine months of fiscal 2002.
Gross profit as a percentage of sales for the first nine months of fiscal 2003
and fiscal 2002 was 34% and 33%, respectively. Gross profit included $1.3
million and $2.8 million for the third quarter and first nine months of fiscal
2003, respectively, from a development services agreement.
Research, development, and engineering expenses ("R&D") for the third quarter of
fiscal 2003 totaled $2.5 million, a decrease of $2.0 million, or 44%, from $4.5
million in the comparable prior year period. R&D for the first nine months of
fiscal 2003 totaled $8.7 million, a decrease of $5.6 million, or 39%, from $14.3
million in the comparable prior year period. The decreases were primarily
related to the completion of several large research and development projects in
the semiconductor segment in the prior year and the transfer of engineering
resources to revenue producing projects in the current fiscal year.
Backlog at March 28, 2003 totaled $41.4 million, a decrease of $5.4 million, or
12%, from $46.8 million at December 27, 2002. Backlog at March 28, 2003,
decreased $3.1 million, or 7%, from $44.5 million at March 31, 2002. Orders for
the third quarter of fiscal 2003 totaled $23.6 million. Orders by segment for
the third quarter of fiscal 2003 consisted of $15.5 million, or 66%, in the
semiconductor segment and $8.1 million, or 34%, in the industrial segment.
The Company maintained cash, cash equivalents, restricted cash, and marketable
securities at March 28, 2003 totaling $46.4 million, an increase of $7.9 million
from June 30, 2002. The increase was primarily due to progress payments received
from customers and reductions in inventory, and accounts receivable.
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Management's View
Despite the very difficult economic climate, we have achieved two sequential
quarters of positive results. These results were consistent with our
expectations and reflect the continuing downturn in the semiconductor market.
On April 1, we announced the formation of Zygo Applied Optics (ZAO). As a
"system design and prototype" organization, ZAO serves as a point of entry into
ZYGO for customers with wide-ranging specialized needs. These needs range from
large plano and spherical optics and mounts for earth- and space-based
telescopes to fully assembled electro-optic instruments. This action supports
our continuous efforts to invest in strategies that we anticipate will produce
shareholder value as the markets recover.
We are pleased with our progress, but are cognizant of the difficulties that
continue to plague the markets.
ZYGO's teleconference to discuss the results of the third quarter ended March
28, 2003 will be held at 6 PM Eastern Standard Time on April 30, 2003 and can be
accessed by dialing 800-633-8516. 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.
Zygo Corporation (NASDAQ: ZIGO), headquartered in Middlefield, Connecticut, is a
worldwide developer and supplier of high precision optics, optical assemblies,
high performance metrology instruments, and automation for the semiconductor and
industrial markets. See ZYGO's web site at www.zygo.com for additional
information.
All statements other than statements of historical fact included in this news
release regarding the Company's financial position, business strategy, plans 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 in the
semiconductor industry, fluctuations in net sales to our major customer,
manufacturing and supplier risks, dependence on new product development, rapid
technological and market change, international operations, dependence on
proprietary technology and key personnel, length of the sales cycle,
environmental regulations and changes in expected costs of discontinued
operations. Further information on potential factors that could affect Zygo
Corporation's business is described in the Company's reports on file with the
Securities and Exchange Commission, including its Form 10-K for the fiscal year
ended June 30, 2002.
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Zygo Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(Thousands, except per share amounts) Three Months Ended Nine Months Ended
------------------- -------------------
Mar. 28, Mar. 31, Mar. 28, Mar. 31,
2003 2002 (1) 2003 2002 (1)
-------- -------- -------- --------
Net sales $29,010 $20,185 $ 75,729 $ 57,757
Cost of goods sold 19,508 13,162 49,866 38,537
------- ------- -------- --------
Gross profit 9,502 7,023 25,863 19,220
Selling, general, and administrative expenses 5,716 6,022 16,470 17,380
Research, development, and engineering expenses 2,510 4,457 8,696 14,262
Amortization of intangibles -- 185 104 555
Exit costs for Automation Systems Group -- -- -- 1,920
------- ------- -------- --------
Operating profit (loss) 1,276 (3,641) 593 (14,897)
Gain on sale of Automation Systems Group -- -- -- 6,117
Other income, net 112 355 437 1,018
------- ------- -------- --------
Earnings (loss) from continuing operations
before income taxes and minority interest 1,388 (3,286) 1,030 (7,762)
Income tax (expense) benefit (515) 1,446 (384) 3,449
Minority interest 93 94 324 246
------- ------- -------- --------
Earnings (loss) from continuing operations 780 (1,934) 322 (4,559)
------- ------- -------- --------
Discontinued TeraOptix operations, net of tax (338) (1,788) (2,482) (4,553)
Charges and related adjustments on the disposal of
TeraOptix, net of tax 39 -- (9,079) --
------- ------- -------- --------
Loss from discontinued operations (299) (1,788) (11,561) (4,553)
------- ------- -------- --------
Net earnings (loss) $ 481 $(3,722) $(11,239) $ (9,112)
======= ======= ======== ========
Basic - Earnings (loss) per share:
Continuing operations $ 0.04 $ (0.11) $ 0.02 $ (0.26)
Discontinued operations (0.01) (0.10) (0.66) (0.26)
------- ------- -------- --------
Net earnings (loss) $ 0.03 $ (0.21) $ (0.64) $ (0.52)
======= ======= ======== ========
Diluted - Earnings (loss) per share:
Continuing operations $ 0.04 $ (0.11) $ 0.02 $ (0.26)
Discontinued operations (0.01) (0.10) (0.66) (0.26)
------- ------- -------- --------
Net earnings (loss) $ 0.03 $ (0.21) $ (0.64) $ (0.52)
======= ======= ======== ========
Weighted average number of shares:
Basic 17,560 17,434 17,527 17,404
======= ======= ======== ========
Diluted 17,738 17,434 17,527 17,404
======= ======= ======== ========
(1) The consolidated statements of operations for the periods ended March 31,
2002 have been reclassified to conform with the current period presentation
of the discontinued operations and loss on disposal of TeraOptix.
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Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
Mar. 28, 2003
(Thousands of dollars) (Unaudited) June 30, 2002
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 35,321 $ 28,513
Restricted cash -- 1,225
Marketable securities 11,057 8,734
Receivables 19,405 21,241
Income tax receivable 2,072 --
Inventories 19,238 23,612
Prepaid expenses 857 1,444
Deferred income taxes 4,579 4,899
Assets from discontinued unit held for sale 11,919 --
-------- --------
Total current assets 104,448 89,668
Property, plant, and equipment, net 26,053 55,045
Deferred income taxes 25,756 19,981
Intangible assets, net 5,010 4,507
-------- --------
Total assets $161,267 $169,201
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ 11,583 $ 837
Accounts payable 6,922 5,020
Accrued expenses and progress payments 11,145 8,951
Income taxes payable -- 929
-------- --------
Total current liabilities 29,650 15,737
Long-term debt, excluding current portion -- 11,374
Other long term liabilities 1,026 1,115
Minority interest 1,026 970
Stockholders' equity 129,565 140,005
-------- --------
Total liabilities and stockholders' equity $161,267 $169,201
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