[MKS LOGO]
FOR IMMEDIATE RELEASE
Contact: Ron Weigner
Vice President and Chief Financial Officer
978.975.2350
MKS INSTRUMENTS REPORTS FIRST QUARTER 2004 RESULTS
31% SEQUENTIAL QUARTERLY REVENUE GROWTH AND CONTINUED MARGIN IMPROVEMENT
Wilmington, Mass. -- April 20, 2004 -- MKS Instruments, Inc. (NASDAQ:
MKSI), a leading worldwide provider of process control technologies for
improving productivity in semiconductor and other advanced manufacturing
processes, today reported first quarter 2004 financial results. Net sales were
$133.0 million, up 31 percent from $101.8 million in the fourth quarter of 2003
and up 83 percent from $72.8 million in the first quarter of 2003.
On a GAAP basis, net earnings were $12.7 million, or $0.23 per diluted
share compared to net earnings of $2.1 million, or $0.04 per diluted share, in
the fourth quarter of 2003 and up from a net loss of $7.4 million, or $0.14 per
basic share, in the first quarter of 2003. On a non-GAAP basis, which excludes
amortization of acquired intangible assets and other special items, net earnings
were $16.8 million or $0.31 per diluted share compared to net earnings of $5.9
million, or $0.11 per diluted share, in the fourth quarter of 2003 and up from a
net loss of $3.7 million, or $0.07 per basic share, in the first quarter of
2003.
"I am pleased to report another strong quarter, with 31 percent sequential
quarterly revenue growth on top of 25 percent sequential growth in the fourth
quarter, driven mainly by the semiconductor capital equipment ramp. Gross margin
increased to 41 percent in the first quarter of 2004 from 37 percent in the
fourth quarter of 2003. We gained share in key markets and posted strong results
across all product areas. Our operations and supply chain management
organization and our suppliers continued to execute, with on-time deliveries of
advanced, reliable products that improve customers' productivity," said John R.
Bertucci, Chairman, Chief Executive Officer and President.
"We see a lot of opportunity ahead, and MKS is in an excellent position to
participate fully in this semiconductor capital equipment spending growth cycle.
We expect our sequential quarterly growth to continue at a rate consistent with
or higher than the growth of the semiconductor capital equipment industry. Based
on current order patterns, we anticipate that second quarter revenues could
increase sequentially by 10 to 15 percent and range from $146 to $153 million.
GAAP net earnings could range from $0.29 to $0.36 per share. On a non-GAAP
basis, excluding amortization of acquired intangible assets and special items,
second quarter earnings could range from $0.35 to $0.43 per share."
The financial results that exclude certain charges and special items are
not in accordance with Accounting Principles Generally Accepted in the United
States of America (GAAP). MKS' management uses these non-GAAP measures
internally to evaluate the Company's performance and manage its operations, and
believes that these measures provide useful information for understanding
operating results and comparing prior periods.
Management will discuss the first quarter financial results on a conference
call today at 5:00 p.m. (Eastern Time). A webcast of the conference call will be
available at www.mksinstruments.com in the "Investors" section. To hear a replay
through April 27, 2004, dial 303-590-3000, passcode 574745#.
MKS Instruments, Inc. is a leading worldwide provider of process control
solutions for advanced manufacturing processes such as semiconductor device
manufacturing; thin-film manufacturing for flat panel displays, data storage
media, architectural glass and electro-optical products; and technology for
medical imaging equipment. Our instruments, components and subsystems
incorporate sophisticated technologies to power, measure, control, and monitor
increasingly complex gas-related semiconductor manufacturing processes, thereby
enhancing our customers' uptime, yield and throughput, and improving their
productivity and return on invested capital.
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
challenges, risks and costs involved with integrating the operations of MKS and
any 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 Annual Report on Form 10-K, 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 OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
March 31,
---------------------
2004 2003
-------- --------
Net sales $132,985 $72,777
Cost of sales 78,756 47,371
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Gross profit 54,229 25,406
Research and development 14,336 11,232
Selling, general and administrative 20,152 17,819
Amortization of acquired intangible assets 3,693 3,778
Restructuring charges 437 --
-------- -------
Income (loss) from operations 15,611 (7,423)
Interest income, net 272 280
-------- -------
Income (loss) before income taxes 15,883 (7,143)
Provision for income taxes 3,177 287
-------- -------
Net income (loss) $ 12,706 $(7,430)
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Net income (loss) per share:
Basic $ 0.24 $ (0.14)
Diluted $ 0.23 $ (0.14)
Weighted average shares outstanding:
Basic 53,255 51,380
Diluted 55,085 51,380
THE FOLLOWING SUPPLEMENTAL NON-GAAP EARNINGS INFORMATION IS
PRESENTED TO AID IN UNDERSTANDING MKS'S OPERATING RESULTS:
GAAP net income (loss) $ 12,706 $(7,430)
Adjustments:
Amortization of acquired intangible assets 3,693 3,778
Restructuring charges 437 --
-------- -------
Non-GAAP net income (loss) (NOTE 1) $ 16,836 $(3,652)
======== =======
Non-GAAP net income (loss) per share (NOTE 1) $ 0.31 $ (0.07)
Weighted average shares outstanding (NOTE 2) 55,085 51,380
NOTE 1: The Non-GAAP net income (loss) and non-GAAP net income (loss) per share
amounts exclude amortization of acquired intangible assets, acquisition and
disposition related charges and special items, net of applicable income taxes.
NOTE 2: Due to the net loss for the quarter ended March 31, 2003, non-GAAP net
loss per share is based on the basic number of weighted average shares
outstanding. For the quarter ended March 31, 2004, the Company reported non-GAAP
net income and therefore, used the diluted weighted average shares outstanding.
MKS INSTRUMENTS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
March 31, December 31,
2004 2003
-------- -----------
ASSETS
Cash and short-term investments $168,068 $129,178
Trade accounts receivable 87,991 65,454
Inventories 94,878 82,013
Other current assets 8,151 5,631
-------- --------
Total current assets 359,088 282,276
Property, plant and equipment, net 77,280 76,121
Long-term investments 13,313 13,625
Goodwill 260,041 259,924
Other acquired intangible assets 52,445 56,192
Other assets 4,083 4,724
-------- --------
Total assets $766,250 $692,862
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $ 22,649 $ 20,196
Accounts payable 34,341 25,302
Other accrued expenses 40,643 26,310
-------- --------
Total current liabilities 97,633 71,808
Long-term debt 8,460 8,924
Other long-term liabilities 4,127 3,820
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 622,334 587,910
Retained earnings 24,944 12,238
Other stockholders' equity 8,639 8,049
-------- --------
Total stockholders' equity 656,030 608,310
-------- --------
Total liabilities and stockholders' equity $766,250 $692,862
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