[MKS LOGO] EXHIBIT 99.1
FOR IMMEDIATE RELEASE
INVESTOR RELATIONS CONTACT:
Ronald Weigner
Vice President & Chief Financial Officer
978.975.2350
MKS INSTRUMENTS REPORTS SECOND QUARTER 2003 FINANCIAL RESULTS
Andover, Mass. -- July 22, 2003 -- MKS Instruments, Inc. (NASDAQ: MKSI), a
leading worldwide provider of products that measure, control, power and monitor
critical parameters of semiconductor and other advanced manufacturing process
environments, today reported second quarter 2003 revenues of $81.2 million, up
12 percent over first quarter 2003 revenues of $72.8 million and down 6 percent
from second quarter 2002 revenues of $85.9 million.
The second quarter 2003 GAAP net loss was $5.5 million or $0.11 per share
compared to the first quarter 2003 GAAP net loss of $7.4 million or $0.14 per
share and the second quarter 2002 GAAP net loss of $4.7 million or $0.09 per
share.
The second quarter 2003 pro forma net loss (defined as net income before
amortization of acquired intangible assets, and other acquisition and
disposition related charges, net of income taxes) was $1.9 million or $0.04 per
share compared to the first quarter 2003 pro forma net loss of $3.7 million or
$0.07 per share and second quarter 2002 pro forma net income of $182,000 or
breakeven on a per share basis. Excluding a special item of $304,000 for
restructuring, asset impairment and other charges, the second quarter 2003 pro
forma net loss was $1.5 million or $0.03 per share. Since 1999, MKS has reported
financial results on a pro forma basis as a complement to results provided in
accordance with accounting principles generally accepted in the United
States. MKS' management uses such pro forma measures internally to evaluate the
company's performance and manage its operations, and believes that pro forma
measures provide useful information for understanding operating results and
comparing prior periods.
For the six months ended June 30, 2003, MKS reported revenues of $153.9
million and a GAAP net loss of $12.9 million or $0.25 per share compared to
revenues of $145.0 million and a GAAP net loss of $16.5 million or $0.34 per
share for the same period of 2002. The pro forma net loss for the six months of
2003 was $5.5 million or $0.11 per share, and excluding the special item was
$5.2 million or $0.10 per share. This compares to the pro forma net loss of $4.1
million or $0.08 per share for the same period of 2002.
John R. Bertucci, Chairman, Chief Executive Officer and President, said,
"Our second quarter revenue growth was broad based and above our guidance. We
continued to make inroads in the higher-growth flat panel display equipment
market, and sales to the semiconductor and medical equipment markets also
increased. Our balance sheet remained strong with cash and investments, net of
debt, of approximately $110 million."
Mr. Bertucci continued, "There are a few signs that the outlook is
improving, such as the pull-in of some semiconductor and medical OEM orders from
Q3 to Q2 and the positive tone set recently at the Semicon West trade show. In
the third quarter, we will reduce mandatory time off from ten days to five days.
However, given the unevenness of end user and OEM customer orders over the last
two quarters, we estimate that third quarter 2003 revenues could remain
relatively flat and range between $78 and $83 million. This sales range,
combined with modest improvement in gross margin, could
result in a third quarter 2003 GAAP net loss of $0.08 to $0.13 per share. On a
pro forma basis, the net loss could range from $0.01 to $0.06 per share,
excluding amortization of acquired intangible assets of approximately $3.6
million. Our goal is to reach breakeven on a pro forma basis in this revenue
range."
Management will host a conference call on Tuesday, July 22, 2003 at 5:00
p.m. (EDT) to discuss these financial results. To listen to this call, dial
800-218-0530 (domestic) or 303-262-2130 (international), or access the live call
and a rebroadcast at www.mksinstruments.com. To hear a replay through July 29,
2003, dial 303-590-3000, passcode 543273#.
MKS Instruments, Inc. is a leading worldwide provider of instruments,
components and subsystems that measure, control, power and monitor critical
parameters of semiconductor and other advanced manufacturing process
environments. MKS' products are used to manufacture semiconductors; thin film
coatings for diverse markets such as flat panel displays, optical and magnetic
storage products, architectural glass, and electro-optical products; and medical
imaging equipment.
This release contains projections or other forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995
regarding MKS' future growth and the future financial performance of MKS. These
projections or statements are only predictions. Actual events or results may
differ materially from those in the projections or other forward-looking
statements set forth herein. Among the important factors that could cause actual
events to differ materially from those in the projections or other
forward-looking statements are the fluctuations in capital spending in the
semiconductor industry, fluctuations in net sales to MKS' major customers,
potential fluctuations in quarterly results, the failure of MKS and acquired
companies to realize the anticipated benefits of their combined businesses, the
challenges and risks involved with integrating the operations of MKS and
acquired companies, dependence on new product development, rapid technological
and market change, acquisition strategy, manufacturing and sourcing risks,
volatility of stock price, international operations, financial risk management,
and future growth subject to risks. Readers are referred to MKS' filings with
the Securities and Exchange Commission, including its most recent Quarterly
Report on Form 10-Q, for a discussion of these and other important risk factors
concerning MKS and its operations. MKS is under no obligation to, and expressly
disclaims any obligation to, update or alter its forward-looking statements,
whether as a result of new information, future events or otherwise.
###
MKS INSTRUMENTS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
June 30,
-------------------------
2003 2002
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Net sales $ 81,168 $ 85,932
Cost of sales 53,723 56,217
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Gross profit 27,445 29,715
Research and development 11,453 12,053
Selling, general and administrative 17,459 20,721
Amortization of acquired intangible assets 3,617 4,137
Restructuring, asset impairment and other charges 304 --
Purchase of in-process technology -- 2,290
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Loss from operations (5,388) (9,486)
Interest income, net 282 356
-------- --------
Loss before income taxes (5,106) (9,130)
Provision (benefit) for income taxes (See NOTE 1 below) 364 (4,436)
-------- --------
Net loss $ (5,470) $ (4,694)
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Net loss per share (See NOTE 2 below) $ (0.11) $ (0.09)
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Weighted average shares outstanding 51,419 51,152
The following supplemental pro forma earnings information is presented to aid in
understanding the MKS operating results:
Supplemental Pro Forma Earnings Information
Net loss $ (5,470) $ (4,694)
Adjustments:
Amortization of acquired intangible assets 3,617 4,137
Purchase of in-process technology -- 2,290
Tax effect of adjustments (See NOTE 1 below) -- (1,551)
-------- --------
Pro forma net income (loss) before amortization of acquired intangible assets, and
other acquisition and disposition related charges, net of income taxes $ (1,853) $ 182
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Pro forma net income (loss) per share before amortization of acquired intangible
assets, and other acquisition and disposition related charges,
net of income taxes $ (0.04) $ --
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Weighted average shares outstanding 51,419 52,860
Supplemental Pro Forma Earnings Information, Before Special Items
Pro forma net income (loss) before amortization of acquired intangible assets, and
other acquisition and disposition related charges, net of income taxes $ (1,853) $ 182
Special Items
Restructuring, asset impairment and other charges 304 --
-------- --------
Pro forma net income (loss) before amortization of acquired intangible assets,
other acquisition and disposition related charges, and special items,
net of income taxes $ (1,549) $ 182
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Pro forma net income (loss) per share before amortization of acquired intangible
assets, other acquisition and disposition related charges,
and special charges, net of income taxes $ (0.03) $ --
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Weighted average shares outstanding 51,419 52,860
NOTE 1: MKS recorded a tax benefit of $4,436 for the three months ended June 30,
2002. In the three months ended December 31, 2002, MKS recorded a full valuation
allowance against its net deferred tax assets. Accordingly, MKS has not recorded
a deferred tax benefit from the net operating loss incurred in the quarter ended
June 30, 2003. The provision for income taxes of $364 includes tax expense from
foreign operations and state taxes.
NOTE 2: Due to the net loss for the quarter, net loss per share is based on the
basic number of weighted average shares outstanding.
MKS INSTRUMENTS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Six Months Ended
June 30,
---------------------------
2003 2002
--------- ---------
Net sales $ 153,945 $ 144,999
Cost of sales 101,094 96,064
--------- ---------
Gross profit 52,851 48,935
Research and development 22,685 21,185
Selling, general and administrative 35,278 37,779
Amortization of acquired intangible assets 7,395 6,342
Restructuring, asset impairment and other charges 304 --
Purchase of in-process technology -- 8,390
--------- ---------
Loss from operations (12,811) (24,761)
Interest income, net 562 782
--------- ---------
Loss before income taxes (12,249) (23,979)
Provision (benefit) for income taxes (See NOTE 1 below) 651 (7,498)
--------- ---------
Net loss $ (12,900) $ (16,481)
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Net loss per share (See NOTE 2 below) $ (0.25) $ (0.34)
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Weighted average shares outstanding 51,399 48,720
The following supplemental pro forma earnings information is presented to aid in
understanding the MKS operating results:
Supplemental Pro Forma Earnings Information
Net loss $ (12,900) $ (16,481)
Adjustments:
Amortization of acquired intangible assets 7,395 6,342
Purchase of in-process technology -- 8,390
Tax effect of adjustments (See NOTE 1 below) -- (2,323)
--------- ---------
Pro forma net loss before amortization of acquired intangible assets, and
other acquisition and disposition related charges, net of income taxes $ (5,505) $ (4,072)
========= =========
Pro forma net loss per share before amortization of acquired intangible assets,
and other acquisition and disposition related charges,
net of income taxes $ (0.11) $ (0.08)
========= =========
Weighted average shares outstanding 51,399 48,720
Supplemental Pro Forma Earnings Information, Before Special Items
Pro forma net loss before amortization of acquired intangible assets, and
other acquisition and disposition related charges, net of income taxes $ (5,505) $ (4,072)
Special Items
Restructuring, asset impairment and other charges 304 --
--------- ---------
Pro forma net loss before amortization of acquired intangible assets, other
acquisition and disposition related charges, and special items,
net of income taxes $ (5,201) $ (4,072)
========= =========
Pro forma net loss per share before amortization of acquired intangible assets,
other acquisition and disposition related charges,
and special charges, net of income taxes $ (0.10) $ (0.08)
========= =========
Weighted average shares outstanding 51,399 48,720
NOTE 1: MKS recorded a tax benefit of $7,498 for the six months ended June 30,
2002. In the three months ended December 31, 2002, MKS recorded a full valuation
allowance against its net deferred tax assets. Accordingly, MKS has not recorded
a deferred tax benefit from the net operating loss incurred in the six months
ended June 30, 2003. The provision for income taxes of $651 includes tax expense
from foreign operations and state taxes.
NOTE 2: Due to the net loss for the six month periods, net loss per share is
based on the basic number of weighted average shares outstanding.
MKS INSTRUMENTS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
2003 2002
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ASSETS
Cash and short-term investments $117,196 $128,714
Trade accounts receivable 50,904 45,505
Inventories 74,570 73,235
Other current assets 6,491 6,098
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Total current assets 249,161 253,552
Property, plant and equipment, net 78,246 82,595
Long-term investments 18,319 15,980
Goodwill 259,727 259,781
Other acquired intangible assets 60,327 67,720
Other assets 5,715 5,995
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Total assets $671,495 $685,623
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $ 14,552 $ 18,472
Accounts payable 18,079 15,301
Other accrued expenses 25,043 27,771
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Total current liabilities 57,674 61,544
Long-term debt 10,767 11,726
Other long-term liabilities 1,526 1,663
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 580,539 579,175
Retained earnings 15,723 28,623
Other stockholders' equity 5,153 2,779
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Total stockholders' equity 601,528 610,690
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Total liabilities and stockholders' equity $671,495 $685,623
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