(MKS LOGO)
FOR IMMEDIATE RELEASE
Contact: Ron Weigner
Vice President and Chief Financial Officer
978.284.4446
MKS INSTRUMENTS REPORTS SECOND QUARTER 2004 RESULTS
Wilmington, Mass. -- July 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 second quarter 2004 financial results that were within the Company's
guidance for the quarter. Net sales were $151.6 million, up 87 percent from
$81.2 million in the second quarter of 2003 and up 14 percent from $133.0
million in the first quarter of 2004.
GAAP net earnings were $20.9 million, or $0.38 per diluted share, compared
to a net loss of $5.5 million, or $0.11 per basic share, in the second quarter
of 2003, and net earnings of $12.7 million, or $0.23 per diluted share, in the
first quarter of 2004. Second quarter 2004 net earnings included other income of
$5.4 million. On a non-GAAP basis, which excludes amortization of acquired
intangible assets and special items, net earnings were $20.3 million, or $0.37
per diluted share, compared to a net loss of $1.5 million, or $0.03 per basic
share, in the second quarter of 2003, and net earnings of $16.8 million, or
$0.31 per diluted share, in the first quarter of 2004.
John Bertucci, Chairman and Chief Executive Officer, said, "I'm pleased to
report ongoing penetration of higher growth semiconductor applications in the
second quarter and 14 percent sequential sales growth. Our 86 percent sales
growth from the third quarter of 2003 reflects the success of our strategy of
leveraging a broad portfolio of process control solutions for semiconductor and
thin-film processes. I want to thank the MKS team for continuing to deliver the
technical solutions and service performance that our customers require.
"Looking ahead to the third quarter, I believe we are in what I have
described as a 'third inning stretch', as shipments of 200mm tools are absorbed
and prior to the anticipated ramp of equipment for strategic 300mm fabs.
Therefore, we currently expect
that our third quarter revenues could be flat and range from $150 to $155
million. GAAP net earnings could range from $0.31 to $0.34 per diluted share,
which excludes $.08 per share in other income, net of tax, recorded in the
second quarter. Third quarter non-GAAP earnings, which exclude amortization of
acquired intangible assets, could range from $0.37 to $0.40 per share.
"Looking beyond the third quarter, we see opportunity for growth --
particularly at 300mm, where our product development and acquisition strategies
have been focused. With greater breadth and depth in process control around the
chamber, we are providing more solutions for improving our customers'
manufacturing yields as their process steps increase. I believe we are in an
excellent position to capture an increasing share of future semiconductor
capital equipment spending."
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 second 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 July 27, 2004, dial 303-590-3000, passcode 11001249#.
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 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 OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
-----------------------------------------
June 30, June 30, March 31,
2004 2003 2004
--------- --------- ---------
Net sales $ 151,585 $ 81,168 $ 132,985
Cost of sales 90,192 53,723 78,756
--------- --------- ---------
Gross profit 61,393 27,445 54,229
Research and development 14,620 11,453 14,336
Selling, general and administrative 22,661 17,459 20,152
Amortization of acquired intangible assets 3,691 3,617 3,693
Restructuring, asset impairment and other charges -- 304 437
--------- --------- ---------
Income (loss) from operations 20,421 (5,388) 15,611
Interest income, net 326 282 272
Other Income (NOTE 1) 5,402 -- --
--------- --------- ---------
Income (loss) before income taxes 26,149 (5,106) 15,883
Provision (benefit) for income taxes 5,281 364 3,177
--------- --------- ---------
Net income (loss) $ 20,868 $ (5,470) $ 12,706
========= ========= =========
Net income (loss) per share:
Basic $ 0.39 $ (0.11) $ 0.24
Diluted $ 0.38 $ (0.11) $ 0.23
Weighted average shares outstanding:
Basic 53,540 51,419 53,255
Diluted 54,967 51,419 55,085
THE FOLLOWING SUPPLEMENTAL NON-GAAP EARNINGS
INFORMATION IS PRESENTED TO AID IN
UNDERSTANDING THE MKS OPERATING RESULTS:
GAAP net Income (loss) $ 20,868 $ (5,470) $ 12,706
Adjustments:
Amortization of acquired intangible assets 3,691 3,617 3,693
Restructuring, asset impairment and other charges -- 304 437
Other income, net of tax (NOTE 1) (4,272) -- --
--------- --------- ---------
Non-GAAP net income (loss) (NOTE 2) $ 20,287 $ (1,549) $ 16,836
========= ========= =========
Non-GAAP net income (loss) per share (NOTE 2) $ 0.37 $ (0.03) $ 0.31
========= ========= =========
Weighted average shares outstanding (NOTE 3) 54,967 51,419 55,085
NOTE 1: The GAAP amount represents primarily the collection of a note receivable
of $5.0 million which had been written off in 2002 and the gain on the sale of
an asset. The Non-GAAP adjustment is net of applicable income taxes.
NOTE 2: 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 3: Due to the net loss for the quarter ended June 30, 2003, net loss per
share is based on the basic number of weighted average shares outstanding. For
the quarters ended June 30, 2004 and March 31, 2004, respectively, the Company
reported net income and therefore, used the diluted weighted average shares
outstanding.
MKS INSTRUMENTS, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Six Months Ended
June 30,
-------------------------
2004 2003
--------- ---------
Net sales $ 284,570 $ 153,945
Cost of sales 168,948 101,094
--------- ---------
Gross profit 115,622 52,851
Research and development 28,956 22,685
Selling, general and administrative 42,813 35,278
Amortization of acquired intangible assets 7,384 7,395
Restructuring, asset impairment and other charges 437 304
--------- ---------
Income (loss) from operations 36,032 (12,811)
Interest income, net 598 562
Other Income (NOTE 1) 5,402 --
--------- ---------
Income (loss) before income taxes 42,032 (12,249)
Provision (benefit) for income taxes 8,458 651
--------- ---------
Net income (loss) $ 33,574 $ (12,900)
========= =========
Net income (loss) per share:
Basic $ 0.63 $ (0.25)
Diluted $ 0.61 $ (0.25)
Weighted average shares outstanding:
Basic 53,398 51,399
Diluted 55,026 51,399
THE FOLLOWING SUPPLEMENTAL NON-GAAP EARNINGS
INFORMATION IS PRESENTED TO AID IN
UNDERSTANDING THE MKS OPERATING RESULTS:
GAAP net Income (loss) $ 33,574 $ (12,900)
Adjustments:
Amortization of acquired intangible assets 7,384 7,395
Restructuring, asset impairment and other charges 437 304
Other income, net of tax (NOTE 1) (4,272) --
--------- ---------
Non-GAAP net income (loss) (NOTE 2) $ 37,123 $ (5,201)
========= =========
Non-GAAP net income (loss) per share (NOTE 2) $ 0.67 $ (0.10)
========= =========
Weighted average shares outstanding (NOTE 3) 55,026 51,399
NOTE 1: The GAAP amount represents primarily the collection of a note receivable
of $5.0 million which had been written off in 2002 and the gain on the sale of
an asset. The Non-GAAP adjustment is net of applicable income taxes.
NOTE 2: 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 3: Due to the net loss for the six months ended June 30, 2003, net loss per
share is based on the basic number of weighted average shares outstanding. For
the six months ended June 30, 2004, the Company reported net income and
therefore, used the diluted weighted average shares outstanding.
MKS INSTRUMENTS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
June 30, December 31,
2004 2003
-------- --------
ASSETS
Cash and short-term investments $190,113 $129,178
Trade accounts receivable 89,251 65,454
Inventories 105,681 82,013
Other current assets 9,286 5,631
-------- --------
Total current assets 394,331 282,276
Property, plant and equipment, net 78,003 76,121
Long-term investments 8,865 13,625
Goodwill 259,818 259,924
Other acquired intangible assets 48,732 56,192
Other assets 4,075 4,724
-------- --------
Total assets $793,824 $692,862
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term debt $ 24,066 $ 20,196
Accounts payable 31,003 25,302
Other accrued expenses 48,327 26,310
-------- --------
Total current liabilities 103,396 71,808
Long-term debt 7,477 8,924
Other long-term liabilities 4,047 3,820
Stockholders' equity:
Common stock 113 113
Additional paid-in capital 624,347 587,910
Retained earnings 45,812 12,238
Other stockholders' equity 8,632 8,049
-------- --------
Total stockholders' equity 678,904 608,310
-------- --------
Total liabilities and stockholders' equity $793,824 $692,862
======== ========