Exhibit 99.1
Richard Dressler
Vice President, Finance, Chief Financial Officer, and Treasurer
Voice: 860-347-8506
inquire@zygo.com
For Immediate Release
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ZYGO ANNOUNCES FISCAL 2004 SECOND QUARTER RESULTS
MIDDLEFIELD, CONNECTICUT (JANUARY 27, 2004).....Zygo Corporation (NASDAQ: ZIGO)
Net sales of $27.7 million for the second quarter of fiscal 2004 increased by
$1.4 million, or 5%, from the comparable prior year period of $26.3 million. Net
sales of $51.9 million for the first half of fiscal 2004 increased by $5.2
million, or 11%, from the comparable prior year period of $46.7 million.
For the second quarter of fiscal 2004, net sales in the semiconductor segment
were $16.1 million, or 58% of total net sales, as compared with $15.6 million,
or 59%, in the prior year period and net sales in the industrial segment were
$11.6 million, or 42% of total net sales, as compared with $10.7 million, or
41%, in the prior year period.
For the first half of fiscal 2004, net sales in the semiconductor segment were
$28.4 million, or 55% of total net sales, as compared with $26.3 million, or
56%, in the prior year period and net sales in the industrial segment were $23.5
million, or 45% of total net sales, as compared with $20.4 million, or 44%, in
the prior year period.
The Company recorded earnings from continuing operations of $0.9 million, or
$0.05 per share, for the second quarter of fiscal 2004, as compared with
earnings from continuing operations of $0.4 million, or $0.02 per share, for the
second quarter of fiscal 2003. For the first half of fiscal 2004, the Company
recorded earnings from continuing operations of $0.3 million as compared with a
loss from continuing operations of $0.5 million for the first half of fiscal
2003. On a per share basis, the earnings from continuing operations was $0.01
per share for the first six months of fiscal 2004 as compared with a loss from
continuing operations of $0.03 per share for the first six months of fiscal
2003.
As previously announced, the Company discontinued its telecommunications
TeraOptix business unit in September of 2002. The Company disposed of its
equipment and is currently marketing for sale its facility located in
Westborough, Massachusetts. Accordingly, the results of TeraOptix, net of tax,
and charges on the disposal of the business, net of tax, have been recorded as
separate line items for all periods presented on the statements of operations.
All continuing operations line items presented exclude TeraOptix results.
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Including the loss from discontinued operations, the Company recorded a net loss
of $1.0 million for the second quarter of fiscal 2004 as compared with net
earnings of $0.2 million for the second quarter of fiscal 2003. On a per share
basis, the diluted net loss was $0.05 per share for the second quarter of fiscal
2004 as compared with a diluted net earnings of $0.01 per share for the second
quarter of fiscal 2003. The net loss for the second quarter of fiscal 2004 and
the net earnings for the second quarter of fiscal 2003 include the loss from
discontinued operations of our TeraOptix unit of $1.9 million and $0.2 million,
respectively. The loss from discontinued operations during the current quarter
was primarily due to the write-down of the market value of the vacant
Westborough, Massachusetts facility of $1.2 million, net of tax, and the cost of
exiting an interest swap agreement of $0.6 million, net of tax, related to the
pay off of the mortgage debt in December 2003 ($11.0 million) on the Westborough
facility.
For the first half of fiscal 2004, the Company recorded a net loss of $1.8
million as compared with a net loss of $11.7 million for the first half of
fiscal 2003. On a diluted per share basis, the net loss was $0.10 per share for
the first six months of fiscal 2004 as compared with a net loss of $0.67 per
share for the first six months of fiscal 2003. The net loss for the first six
months of fiscal 2004 and the net loss for the first six months of fiscal 2003
include the loss from discontinued operations of our TeraOptix unit of $2.1
million and $11.3 million, respectively.
Gross profit for the second quarter of fiscal 2004 totaled $10.4 million, an
increase of $1.4 million, or 16%, from $9.0 million in the second quarter of
fiscal 2003. Gross profit as a percentage of sales for the second quarters of
fiscal 2004 and fiscal 2003 was 38% and 34%, respectively. The increase in gross
profit as a percentage of sales was primarily due to a change in product mix to
more highly profitable products during this quarter. Gross profit for the first
half of fiscal 2004 totaled $18.2 million, an increase of $1.8 million, or 11%,
from $16.4 million in the first half of fiscal 2003. Gross profit as a
percentage of sales for both the first half of fiscal 2004 and fiscal 2003 was
35%. Gross profit included $1.0 million and $1.8 million for the second quarter
of fiscal 2004 and first half of fiscal 2004, respectively, from a development
services agreement.
Research, development, and engineering expenses ("R&D") for the second quarter
of fiscal 2004 totaled $3.3 million, an increase of $0.1 million, or 3%, from
$3.2 million in the comparable prior year period. R&D for the first half of
fiscal 2004 totaled $6.6 million, an increase of $0.4 million, or 6%, from $6.2
million in the comparable prior year period. The increase was primarily due to
costs associated with our Zygo Applied Optics group in Southern California,
which commenced operations in the second half of fiscal 2003.
Backlog at December 26, 2003 totaled $45.8 million, an increase of $8.7 million,
or 23%, from $37.1 million at September 26, 2003. Backlog at December 26, 2003,
decreased $1.0 million, or 2%, from $46.8 million at December 27, 2002. Orders
for the second quarter of fiscal 2004 totaled $36.4 million. Orders by segment
for the second quarter of fiscal 2004 consisted of $20.1 million, or 55%, in the
semiconductor segment and $16.3 million, or 48%, in the industrial segment.
The Company maintained cash, cash equivalents, and marketable securities at
December 26, 2003 totaling $36.4 million compared with $48.5 million at
September 26, 2003. The decrease of $12.1
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million was due to the pay off of the Westborough facility mortgage and the
related swap agreement.
Management's View
The bookings achieved in both the semiconductor and industrial segments of the
Company for the second quarter of fiscal 2004 are extremely encouraging.
Bookings in the semiconductor segment were $20.1 million, up 21% over the first
quarter of fiscal 2004, supported by flat panel metrology and lithography
related optics orders. Bookings for the industrial segment were $16.3 million,
up 117% over the first quarter of fiscal 2004 with strong bookings in the
defense and aerospace markets for optics and optomechanical assemblies. This was
the Company's best quarter for total bookings since the third quarter of our
2001 fiscal year. All regions exhibited strength, with the exception of Europe,
where capital spending continues to be slow. The industry forecasts show
increasing strength in calendar 2004 for capital spending in the semiconductor
market, which has traditionally been a positive indicator for our business.
Our net sales for the second quarter and first half of fiscal 2004 included $3.9
million and $8.3 million, respectively, from a development services agreement.
This agreement will be substantially complete by June 2004. At the request of
our customer for the development services agreement, we are presently
negotiating the terms of a follow-on contract.
ZYGO's teleconference to discuss the results of the second quarter of fiscal
2004 will be held at 6 PM Eastern Standard Time on January 27, 2004 and can be
accessed by dialing 888-674-1998. 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 supplier of optical metrology instruments, precision optics, and
electro-optical design and manufacturing services, serving customers in the
semiconductor capital equipment and defense/aerospace industries. 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 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 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 our reports on file with the Securities
and Exchange Commission, including our Form 10-K for the fiscal year ended June
30, 2003.
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Zygo Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
Net sales $27,654 $26,310 $51,901 $ 46,719
Cost of goods sold 17,267 17,315 33,737 30,358
------- ------- ------- --------
Gross profit 10,387 8,995 18,164 16,361
Selling, general, and administrative expenses 5,606 5,294 11,444 10,858
Research, development, and engineering expenses 3,310 3,188 6,619 6,186
------- ------- ------- --------
Operating profit (loss) 1,471 513 101 (683)
Other income, net 245 265 494 325
------- ------- ------- --------
Earnings (loss) from continuing operations
before income taxes and minority interest 1,716 778 595 (358)
Income tax (expense) benefit (674) (301) (226) 131
Minority interest, net of tax (114) (87) (104) (231)
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Earnings (loss) from continuing operations 928 390 265 (458)
------- ------- ------- --------
Discontinued TeraOptix operations, net of tax (719) (462) (881) (2,144)
Charges on the disposal of TeraOptix, net of tax (1,193) 234 (1,193) (9,118)
------- ------- ------- --------
Loss from discontinued operations (1,912) (228) (2,074) (11,262)
------- ------- ------- --------
Net earnings (loss) $ (984) $ 162 $(1,809) $(11,720)
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Basic - Earnings (loss) per share:
Continuing operations $ 0.05 $ 0.02 $ 0.01 $ (0.03)
======= ======= ======= ========
Discontinued operations $ (0.10) $ (0.01) $ (0.11) $ (0.64)
======= ======= ======= ========
Net earnings (loss) $ (0.05) $ 0.01 $ (0.10) $ (0.67)
======= ======= ======= ========
Diluted - Earnings (loss) per share:
Continuing operations $ 0.05 $ 0.02 $ 0.01 $ (0.03)
======= ======= ======= ========
Discontinued operations $ (0.10) $ (0.01) $ (0.11) $ (0.64)
======= ======= ======= ========
Net earnings (loss) $ (0.05) $ 0.01 $ (0.10) $ (0.67)
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Weighted average number of shares:
Basic shares 17,785 17,511 17,732 17,510
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Diluted shares 18,355 17,706 18,163 17,510
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Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(Thousands of dollars) Dec. 26, 2003 June 30, 2003
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Assets
Current assets:
Cash and cash equivalents $ 21,960 $ 31,209
Marketable securities 7,682 14,929
Receivables 18,502 12,868
Inventories 21,348 18,444
Prepaid expenses 1,223 1,791
Deferred income taxes 5,701 5,179
Assets from discontinued unit held for sale 9,595 11,899
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Total current assets 86,011 96,319
Marketable securities 6,799 6,712
Property, plant, and equipment, net 26,870 26,648
Deferred income taxes 29,049 26,364
Intangible assets, net 4,725 4,464
Other assets 1,183 561
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Total assets $154,637 $161,068
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Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ -- $ 11,374
Payables 11,296 5,254
Accrued expenses and progress payments 8,578 11,060
Income taxes payable 1,631 1,750
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Total current liabilities 21,505 29,438
Other long term liabilities 434 609
Minority interest 1,030 1,161
Stockholders' equity 131,668 129,860
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Total liabilities and stockholders' equity $154,637 $161,068
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