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Cymer Reports First Quarter 2010 Operating Results

SAN DIEGO, April 22, 2010 /PRNewswire via COMTEX/ --Cymer, Inc. (Nasdaq: CYMI), the world's leading supplier of light sources used by chipmakers to create advanced semiconductor chips, today announced operating results for the first quarter ended March 31, 2010.

(Logo: http://www.newscom.com/cgi-bin/prnh/20090406/LA94420LOGO)

For the first quarter of 2010:

  • net income totaled $16,005,000 equal to $0.53 per share (diluted), compared to net loss of $11,487,000, equal to a loss of $0.39 per share (diluted) in the first quarter of 2009 and net income of $12,153,000, equal to $0.40 per share (diluted), in the fourth quarter of 2009.
  • revenue totaled $113,781,000 compared to revenue of $56,499,000 in the first quarter of 2009, and revenue of $96,404,000 in the fourth quarter of 2009.

Commenting on first quarter results, Bob Akins, Cymer's chief executive officer, said, "We are off to a solid start in 2010. Semiconductor fabs are operating at significantly higher utilization levels as compared to this time last year, and investment in argon fluoride (ArF) immersion lithography is being driven by technology transition buys in all three chipmaking sectors. First quarter revenue exceeded our January guidance increasing approximately 18 percent over fourth quarter 2009 as we responded to customer requests to accelerate deliveries of ArF immersion units from the second quarter. We also delivered a higher level of gross margin as we continued to realize the benefits of our 2008 and 2009 sustainable operating improvements."

In the first quarter of 2010, the company shipped 24 light sources, of which 16 were ArF immersion, 7 were krypton fluoride (KrF), and 1 was ArF dry. The company installed 18 light sources at chipmaker locations during the quarter. The company reported gross profit of $56.8 million for the first quarter of 2010, yielding a 50 percent gross margin. Total operating expenses, which include research and development and selling and administrative expenses, were $34.2 million. Increased investments in extreme ultraviolet (EUV) source development and TCZ development and market penetration, as well as the reinstatement of various variable compensation programs drove a higher level of operating expense. Total operating income was $22.6 million or approximately 20 percent of revenue. The first quarter effective tax rate was 30 percent. As of March 31, 2010, cash and investments totaled $172 million.

Deep ultraviolet (DUV) bookings for the first quarter of 2010 totaled $111.6 million, resulting in a book-to-bill ratio of 0.98. Seventy five percent of the light source bookings in the first quarter were ArF immersion and 25 percent were KrF. The company ended the quarter with a DUV backlog of approximately $43.8 million, with ArF immersion light sources comprising approximately 92 percent of the value of sources in backlog.

Corporate Outlook

Commenting on the outlook, Akins stated, "For Cymer, 2010 represents a year of growth and continued investment in promising new light source and display manufacturing technologies. We anticipate that ArF immersion will continue to represent the majority of our second quarter light source shipments and we expect to ship several KrF sources. We also anticipate that Installed Base Products revenue will increase driven by installed base growth, higher pulse utilization, and a more favorable mix of ArF immersion pulses. We believe our investment in EUV commercialization and TCZ market penetration positions us strategically for future growth and market leadership."

Based on information available at this time, Cymer is providing the following guidance for the second quarter of 2010:

  • Revenue to be in the range of $115 to $120 million.
  • Gross margin to be approximately 50 percent.
  • Research and development expenses to be approximately $21 million.
  • Sales, marketing, general and administrative expenses to be approximately $15 million.
  • The second quarter effective tax rate to be approximately 31 percent.

Cymer's management will hold a conference call at 2:00 pm (PDT) today, April 22, 2010, to discuss first quarter 2010 operating results and second quarter 2010 guidance. This press release, the conference call and accompanying slides may be accessed on the investor relations page of the company's Web site at http://www.cymer.com/.

Forward Looking Statements

Statements in this press release that are not strictly historical in nature are forward-looking statements. These statements include, but are not limited to statements regarding the effects of higher fab utilization levels, ArF immersion technology investment, the benefits of the company's operational improvements, the industry's transition to EUV lithography and the statements under the caption "Corporate Outlook" above. These statements are predictions based on current information and expectations and involve a number of risks and uncertainties. In addition, statements regarding backlog and book-to-bill ratios should not be read as predictions or projections of future performance. Actual events or results may differ materially from those projected in any of such statements due to various factors, including but not limited to: the demand for semiconductors in general, and, in particular, for leading-edge devices with smaller geometries; cyclicality in the market for semiconductor manufacturing equipment; the timing of customer orders, shipments and acceptances; delays or cancellations by customers of their orders; the performance and market acceptance of the company's new products or technologies; new and enhanced product offerings by competitors; the company's ability to meet its production and product development schedules; the rate at which semiconductor manufacturers adopt new technologies and purchase and take delivery of photolithography tools from the company's customers; the company's ability to secure adequate supplies of critical components for its advanced products; the company's ability to manage its expense levels and unanticipated expenses; the company's ability to achieve its forecasted gross margin which includes its ability to absorb manufacturing costs; the company's ability to align its cost structure with forecasted business levels; the company's ability to manage its foreign currency exposure; the performance and conditions in the United States and world financial markets; the policies and actions of the United States and other governments; and general economic conditions. For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other subsequent filings with the Securities and Exchange Commission (SEC). You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement, and the company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.

About Cymer

Cymer, Inc. (Nasdaq: CYMI) is the market leader in developing light sources, used by chipmakers worldwide to pattern advanced semiconductor chips. Cymer's light sources have been widely adopted by the world's top chipmakers and the company's installed base comprises approximately 3,300 systems. Continuing its legacy of leadership, Cymer is currently pioneering the industry's transition to EUV lithography, the next viable step on the technology roadmap for the creation of smaller, faster chips. The company is headquartered in San Diego, Calif., and supports its customers from numerous offices around the globe. Cymer maintains a Web site to which it regularly posts press releases, SEC filings, and additional information about Cymer. Interested persons can also subscribe to automated e-mail alerts or RSS feeds. Please visit www.cymer.com.

Cymer and all other Cymer product or service names used herein are either registered trademarks or trademarks of Cymer, Inc. Any other marks mentioned herein are the property of their respective holders.

    CYMER, INC.
    CONSOLIDATED STATEMENTS OF
     OPERATIONS
    (in thousands, except per
     share data)
    (unaudited)
    -----------

                                                    Three Months
                                                  Ended March 31,
                                                  ---------------
                                            2010                          2009
    Revenues:
       Product sales                    $113,781                       $56,295
       Product sales -related party            -                           204
                                             ---                           ---

         Total revenues                  113,781                        56,499
                                         -------                        ------

    Cost of revenues                      56,965                        34,958
                                          ------                        ------

    Gross profit                          56,816                        21,541
                                          ------                        ------

    Operating expenses:
       Research and development           19,885                        18,443
       Sales and marketing                 5,134                         3,963
       General and administrative          9,211                         7,244
       Restructuring                           -                         8,407
                                             ---                         -----

         Total operating expenses         34,230                        38,057
                                          ------                        ------

    Operating income (loss)               22,586                      (16,516)
                                          ------                       -------

    Other income (expense):
       Foreign currency exchange gain
        (loss)                               104                       (1,933)
       Interest and other income             140                           603
       Interest and other expense           (177)                        (763)
                                            ----                          ----

         Total other income (expense) -
          net                                 67                       (2,093)
                                             ---                        ------


    Income (loss) before income
     tax expense (benefit)                22,653                      (18,609)
                                          ------                       -------

    Income tax expense (benefit)           6,796                       (6,513)
                                           -----                        ------

    Net income (loss)                    $15,857                     ($12,096)
                                         -------                      --------

       Net loss attributable to
        noncontrolling interest in
        subsidiary                           148                           609
                                             ===                           ===

    Net income (loss) attributable
     to Cymer, Inc.                      $16,005                     ($11,487)
                                         =======                      ========


    Earnings (loss) per share:

    Basic earnings (loss) per
     share                                 $0.53                       ($0.39)
                                           -----                        ------
       Weighted average common shares
        outstanding-basic                 29,997                        29,640
                                          ======                        ======

    Diluted earnings (loss) per
     share                                 $0.53                 ($0.39)
                                           -----                        ------
       Weighted average common shares
        outstanding-diluted               30,325                  29,640
                                          ======                        ======



    CYMER, INC.
    CONSOLIDATED BALANCE SHEETS
    (in thousands, except share
     data)
    (unaudited)
    -----------

                                          March 31,      December 31,
                                          ---------      ------------
                                               2010              2009
    ASSETS

    Current assets:
       Cash and cash equivalents           $116,919          $118,381
       Restricted cash                        2,261             1,200
       Short-term investments                52,332            62,895
       Accounts receivable - net            101,367            76,792
       Accounts receivable -related
        party                                     -               732
       Inventories                          188,561           185,077
       Deferred and prepaid income
        taxes                                49,935            45,689
       Prepaid expenses and other
        assets                               11,707            12,121
                                             ------            ------

         Total current assets               523,082           502,887

    Property and equipment-net              106,333           106,755
    Long-term investments                         -             5,167
    Deferred income taxes                    27,762            26,998
    Goodwill                                  8,833             8,833
    Intangible assets-net                     8,156             8,327
    Other assets                              5,679             5,951
                                              -----             -----

    Total assets                           $679,845          $664,918
                                           ========          ========

    LIABILITIES
    Current liabilities:
       Accounts payable                     $31,023           $21,756
       Accounts payable -related
        party                                     -             9,284
       Accrued warranty                      16,240            16,640
       Accrued payroll and benefits          14,068            16,434
       Deferred and accrued income
        taxes                                10,632            12,363
       Deferred revenue                      21,997            22,339
       Accrued and other current
        liabilities                           8,979             4,807
                                              -----             -----

         Total current liabilities          102,939           103,623
    Accrued income taxes                     10,414            11,562
    Deferred revenue                            837               525
    Other liabilities                         7,009             7,570
                                              -----             -----

         Total liabilities                  121,199           123,280
                                            =======           =======

    EQUITY
    Cymer, Inc. stockholders'
     equity:
       Preferred stock                            -                 -
       Common stock                              43                43
       Additional paid-in capital           602,579           598,314
       Treasury stock at cost             (473,580)          (473,580)
       Accumulated other comprehensive
        loss                                 (9,151)           (8,280)
       Retained earnings                    438,755           422,750
                                            =======           =======
         Total Cymer, Inc. stockholders'
          equity                            558,646           539,247
       Noncontrolling interest                    -             2,391
                                                ===             =====
       Total equity                         558,646           541,638
                                            -------           -------

    Total liabilities and equity           $679,845          $664,918
                                           ========          ========



    CYMER, INC.
    CONSOLIDATED STATEMENTS OF CASH
     FLOWS
    (In thousands)
    (unaudited)
    -----------


                                                         Three Months
                                                       Ended March 31,
                                                       ---------------
                                                       2010           2009

    Operating activities:
       Net income (loss)                            $15,857       ($12,096)
       Adjustments to reconcile net
        income (loss) to net cash
         used in operating activities:
         Depreciation and amortization                4,988          6,180
         Stock-based compensation                     2,304            837
         Bad debt expense                              (412)         1,049
         Excess tax benefits from stock
          option exercises                             (502)            (5)
         Provision for deferred income
          taxes                                      (4,585)         1,155
         Loss on disposal or impairment of
          property and equipment                         61            583
         Change in assets and liabilities:
           Restricted cash                           (1,061)             -
           Accounts receivable                     (23,907)         12,393
           Accounts receivable -related
            party                                       732            214
           Inventories                               (3,518)        10,642
           Prepaid expenses and other assets            662          1,808
           Income taxes receivable                        -        (11,707)
           Accounts payable                          11,119         (6,932)
           Accounts payable -related party           (9,284)          (846)
           Accrued expenses and other
            liabilities                                (550)       (10,277)
           Deferred revenue                             (30)          (598)
           Income taxes payable and accrued
            income taxes                             (2,919)        (1,511)
                                                     ------         ------

              Net cash used in operating
               activities                          (11,045)         (9,111)
                                                    -------         ------

    Investing activities:
       Acquisition of property and
        equipment                                    (6,737)        (1,002)
       Purchases of investments                      (7,697)        (1,517)
       Proceeds from sold or matured
        investments                                  23,389         13,605
                                                     ------         ------

              Net cash provided by investing
               activities                             8,955         11,086
                                                      -----         ------

    Financing activities:
       Proceeds from issuance of common
        stock                                           942            296
       Acquisition of non-controlling
        interest in subsidiary                         (728)             -
       Repayment of convertible
        subordinated note                                 -       (140,722)
       Excess tax benefits from stock
        option exercises                                502              5
                                                        ---            ---

              Net cash provided by (used in)
               financing activities                     716       (140,421)
                                                        ---       --------

    Effect of exchange rate changes on
     cash and cash equivalents
                                                        (88)        (2,830)
                                                        ---         ------

    Net decrease in cash and cash
     equivalents                                     (1,462)      (141,276)
    Cash and cash equivalents at
     beginning of the period                        118,381        252,391
                                                    -------        -------

    Cash and cash equivalents at end
     of the period                                 $116,919       $111,115
                                                   ========       ========



    Supplemental disclosure of cash
     flow information
       Interest paid                                    $59         $2,568
                                                        ===         ======
       Income taxes paid                            $10,992         $5,381
                                                    =======         ======



SOURCE Cymer, Inc.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Cymer, Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.