Exhibit 99.1
Walter Shephard
Vice President, Finance, Chief Financial Officer, and Treasurer
Voice: 860-704-3955
inquire@zygo.com
For Immediate Release
ZYGO ANNOUNCES FISCAL 2004 THIRD QUARTER RESULTS
MIDDLEFIELD, CONNECTICUT (APRIL 28, 2004).....Zygo Corporation (NASDAQ: ZIGO)
The Company recorded earnings from continuing operations of $1.0 million, or
$0.05 per diluted share, for the third quarter of fiscal 2004, as compared with
earnings from continuing operations of $0.8 million, or $0.04 per diluted share,
for the third quarter of fiscal 2003. For the first nine months of fiscal 2004,
the Company recorded earnings from continuing operations of $1.2 million, or
$0.07 per diluted share, as compared with earnings from continuing operations of
$0.3 million, or $0.02 per diluted share, for the first nine months of fiscal
2003.
Backlog at March 26, 2004 totaled $49.0 million, an increase of $3.2 million, or
7%, from $45.8 million at December 26, 2003 and increased $11.8 million, or 32%
from $37.2 million at June 30, 2003. Orders for the third quarter of fiscal 2004
totaled $31.6 million. Orders by segment for the third quarter of fiscal 2004
consisted of $18.9 million, or 60%, in the semiconductor segment and $12.7
million, or 40%, in the industrial segment.
Net sales of $28.4 million for the third quarter of fiscal 2004 decreased by
$0.6 million, or 2%, from the comparable prior year period of $29.0 million. Net
sales of $80.3 million for first nine months of fiscal 2004 increased by $4.6
million, or 6%, from the comparable prior year period of $75.7 million. Our net
sales for the third quarter and first nine months of fiscal 2004 included $5.0
million and $13.3 million, respectively, from development service agreements, as
compared with $6.6 million and $13.7 million for the third quarter and first
nine months of fiscal 2003, respectively. Delivery under the first agreement is
expected to be in July 2004. We have signed an additional agreement letter that
has allowed us to begin a new development project with the expectation that a
follow-on contract will be signed by the fall of this year.
For the third quarter of fiscal 2004, net sales in the semiconductor segment
were $18.0 million, or 63% of total net sales, as compared with $17.8 million,
or 61%, in the prior year period and net sales in the industrial segment were
$10.4 million, or 37% of total net sales, as compared with $11.2 million, or
39%, in the prior year period.
For the first nine months of fiscal 2004, net sales in the semiconductor segment
were $46.4 million, or 58% of total net sales, as compared with $44.1 million,
or 58%, in the prior year period and net sales in the industrial segment were
$33.9 million, or 42% of total net sales, as compared with $31.6 million, or
42%, in the prior year period.
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The Company recorded net earnings of $0.3 million, or $0.02 per diluted share,
for the third quarter of fiscal 2004 as compared with net earnings of $0.5
million, or $0.03 per diluted share, for the third quarter of fiscal 2003. For
the first nine months of fiscal 2004, the Company recorded a net loss of $1.5
million, or $0.08 per diluted share, as compared with a net loss of $11.2
million, or $0.63 per diluted share, for the first nine months of fiscal 2003.
The net loss for the first nine months of fiscal 2004 and fiscal 2003 include
the loss from discontinued operations of our TeraOptix unit of $2.7 million and
$11.5 million, respectively. As previously announced, the Company discontinued
its telecommunications TeraOptix business unit in September of 2002.
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.
Gross profit for the third quarter of fiscal 2004 totaled $9.4 million, a
decrease of $0.1 million, or 1%, from $9.5 million in the third quarter of
fiscal 2003. Gross profit as a percentage of sales for the third quarters of
fiscal 2004 and fiscal 2003 was 33%. Gross profit for the first nine months of
fiscal 2004 totaled $27.6 million, an increase of $1.7 million, or 7%, from
$25.9 million in the first nine months of fiscal 2003. Gross profit as a
percentage of sales for both the first nine months of fiscal 2004 and fiscal
2003 was 34%. Gross profit included $0.9 million and $2.6 million for the third
quarter and first nine months of fiscal 2004, respectively, from the development
service agreements, as compared with $1.3 million and $2.8 million for the third
quarter and first nine months of fiscal 2003, respectively,.
The Company maintained cash, cash equivalents, and marketable securities at
March 26, 2004 totaling $34.1 million compared with $36.4 million at December
26, 2003. The decrease of $2.3 million was primarily due to an increase in
accounts receivable related to the development service agreements and a decrease
in accounts payable.
Management's View
The third quarter met our expectations with a slightly better than estimated
order rate. The order rate has been running 20% above last year and the backlog
at $49.0 million is our highest since June 2001. Order strength was evident
across all regions with the exception of Europe, which is not expected to
recover before the end of calendar 2004. We signed an agreement letter to enter
the second phase of the development project with the first phase scheduled for a
July 2004 delivery.
Our momentum is continuing with the recent release of two new products. These
new products expand our product offerings in the semiconductor and commercial
optics segments. Initial feedback has been positive and we are optimistic that
these new products will gain acceptance in their respective markets. In
addition, we continue to receive orders for our Flat Panel Photo Spacer
Metrology Tools, which are used for topography measurement of photo spacers
critical to the flat panel assembly process. We expect to start realizing
revenue on these orders in the first quarter of fiscal 2005.
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ZYGO's teleconference to discuss the results of the third quarter of fiscal 2004
will be held at 6 PM Eastern Standard Time on April 28, 2004 and can be accessed
by dialing 800-670-3547. 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 industrial 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)
(Thousands, except per share amounts) Three Months Ended Nine Months Ended
--------------------------------- --------------------------------
March 26, March 28, March 26, March 28,
2004 2003 2004 2003
---------------- ------------- ---------------- ------------
Net sales $ 28,433 $ 29,010 $ 80,334 $ 75,729
Cost of goods sold 19,031 19,508 52,768 49,866
---------------- ------------- ---------------- ------------
Gross profit 9,402 9,502 27,566 25,863
Selling, general, and administrative expenses 5,358 5,716 16,802 16,574
Research, development, and engineering expenses 2,725 2,510 9,344 8,696
---------------- ------------- ---------------- ------------
Operating profit 1,319 1,276 1,420 593
Other income, net 357 112 851 437
---------------- ------------- ---------------- ------------
Earnings from continuing operations
before income taxes and minority interest 1,676 1,388 2,271 1,030
Income tax expense (637) (515) (863) (384)
Minority interest, net of tax (71) (93) (175) (324)
---------------- ------------- ---------------- ------------
Earnings from continuing operations 968 780 1,233 322
---------------- ------------- ---------------- ------------
Discontinued TeraOptix operations, net of tax (340) (338) (1,221) (2,482)
Charges and adjustments on the disposal of
TeraOptix, net of tax (327) 39 (1,520) (9,079)
---------------- ------------- ---------------- ------------
Loss from discontinued operations (667) (299) (2,741) (11,561)
---------------- ------------- ---------------- ------------
Net earnings (loss) $ 301 $ 481 $ (1,508) $ (11,239)
================ ============= ================ ============
Basic - Earnings (loss) per share:
Continuing operations $ 0.05 $ 0.04 $ 0.07 $ 0.02
================ ============= ================ ============
Discontinued operations $ (0.03) $ (0.01) $ (0.15) $ (0.66)
================ ============= ================ ============
Net earnings (loss) $ 0.02 $ 0.03 $ (0.08) $ (0.64)
================ ============= ================ ============
Diluted - Earnings (loss) per share:
Continuing operations $ 0.05 $ 0.04 $ 0.07 $ 0.02
================ ============= ================ ============
Discontinued operations $ (0.03) $ (0.01) $ (0.15) $ (0.65)
================ ============= ================ ============
Net earnings (loss) $ 0.02 $ 0.03 $ (0.08) $ (0.63)
================ ============= ================ ============
Weighted average number of shares:
Basic shares 17,858 17,560 17,775 17,527
================ ============= ================ ============
Diluted shares 18,422 17,738 18,248 17,708
================ ============= ================ ============
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Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(Thousands of dollars) March 26, 2004 June 30, 2003
--------------------- ------------------
Assets
Current assets:
Cash and cash equivalents $ 18,830 $ 31,209
Marketable securities 7,931 14,929
Receivables 19,808 12,868
Inventories 21,128 18,444
Prepaid expenses 1,234 1,791
Deferred income taxes 5,529 5,179
Assets from discontinued unit held for sale 9,595 11,899
--------------------- ------------------
Total current assets 84,055 96,319
Marketable securities 7,344 6,712
Property, plant, and equipment, net 27,265 26,648
Deferred income taxes 27,568 26,364
Intangible assets, net 4,821 4,464
Other assets 1,138 561
--------------------- ------------------
Total assets $ 152,191 $ 161,068
===================== ==================
Liabilities and Stockholders' Equity
Current liabilities:
Current portion of long-term debt $ - $ 11,374
Payables 8,943 5,254
Accrued expenses and progress payments 7,804 11,060
Income taxes payable 1,593 1,750
--------------------- ------------------
Total current liabilities 18,340 29,438
Other long term liabilities 328 609
Minority interest 1,101 1,161
Stockholders' equity 132,422 129,860
--------------------- ------------------
Total liabilities and stockholders' equity $ 152,191 $ 161,068
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