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Cymer Reports Third Quarter 2009 Operating Results

SAN DIEGO, Oct. 20 /PRNewswire-FirstCall/ -- 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 third quarter ended September 30, 2009.

For the third quarter of 2009:

  • net income totaled $10,785,000 equal to $0.36 per share (diluted), compared to net income of $5,331,000, equal to $0.18 per share (diluted), in the third quarter of 2008 and net income of $525,000, equal to $0.02 per share (diluted), in the second quarter of 2009.
  • revenue totaled $92,328,000 compared to revenue of $110,619,000 in the third quarter of 2008, and revenue of $62,433,000 in the second quarter of 2009.

Commenting on third quarter results, Bob Akins, Cymer's chief executive officer, said, "Demand for our XLR immersion lithography light sources and Installed Base Products rose sharply during the quarter. The higher level of demand was driven by increased investment from the foundry and memory sectors in support of transitions to the 5x nanometer node and below. Our leaner, more efficient business operations contributed to the company's strong third quarter financial performance while preserving our ability to continue to strategically invest in extreme ultraviolet (EUV) development and TCZ commercialization."

In the third quarter of 2009, the company shipped twelve light sources of which eleven were XLR, and installed fourteen light sources at chipmaker locations, of which ten were argon fluoride (ArF) immersion. The company reported gross profit of $44.5 million for the third quarter of 2009, yielding a 48.2 percent gross margin. Operational efficiencies, change in product mix, lower OnPulse start-up expenses, and improved manufacturing and field absorption contributed to the higher gross margin. Total operating expenses, which include research and development and selling, general and administrative expenses, were $29.1 million for the third quarter of 2009. Total operating income was $15.4 million or 16.7 percent of revenue. The third quarter effective tax rate was 35.4 percent.

As of September 30, 2009, cash and investments totaled $158 million, which increased $9 million from June 30, 2009.

Deep ultraviolet (DUV) bookings for the third quarter of 2009 totaled $99.0 million, resulting in a book-to-bill ratio of 1.07. All of the light source systems bookings in the third quarter were ArF immersion light sources. The company ended the quarter with a DUV backlog of approximately $41.2 million, with ArF immersion light sources comprising approximately 95 percent of the value of systems in backlog.

Corporate Outlook

Commenting on the outlook, Akins stated, "We have made good progress in 2009 positioning the company for growth. Our DUV product portfolio, led by the XLR600ix has earned its market leading position with its flexible power and improved optical stability aimed at enabling chipmakers' most advanced ArF immersion needs. Our Installed Base Products, led by OnPulse, are helping chipmakers increase productivity and lower their cost of operations and we are focused on continuing to add more light sources under coverage. In the third quarter, we responded to increased demand that resulted in third quarter revenue increasing almost fifty percent, as compared to the prior quarter. In the fourth quarter, we anticipate maintaining this increased level of demand for light sources and Installed Base Products."

Based on information available at this time, Cymer is providing the following guidance for the fourth quarter of 2009:

  • Revenue to be comparable to the revenue reported for the third quarter 2009.
  • Gross margin to be approximately 47 to 48 percent.
  • R&D expenses to be approximately $17.0 million dollars.
  • SG&A expenses to be approximately $12.0 million dollars.
  • The fourth quarter effective tax rate to be approximately 39 to 41 percent. This rate may vary significantly depending on the actual extent of the profit before tax.

Cymer's management will hold a conference call at 2:00 pm (PDT) today, October 20, 2009, to discuss third quarter 2009 operating results and fourth quarter 2009 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 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 chipmaker transitions to smaller geometries and the company's continuing investment in EUV development and TCZ commercialization 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 achieve forecasted savings from its cost reduction actions; 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, OnPulse, XLR, 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.              Three Months Ended         Nine Months Ended
                                September 30,              September 30,
                             2009         2008          2009          2008
                        -----------------------------------------------------
    Total revenues      $92,328,000  $110,619,000  $211,260,000  $358,562,000

    Net income (loss)   $10,785,000    $5,331,000     ($177,000)  $32,556,000
    Diluted earnings
     (loss) per share         $0.36         $0.18        ($0.01)        $1.07
    Weighted average
     common shares
     outstanding -
     diluted             30,138,000    29,779,000    29,697,000    32,952,000




    CYMER, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
    (In thousands, except per share data)
    --------------------------------------------------------------------


                                       For the three       For the nine
                                        months ended       months ended
                                       September 30,       September 30,
                                       ---------------------------------
                                       2009      2008      2009      2008
    REVENUES:
      Product sales                  $92,110  $110,169  $210,724  $356,762
      Product sales -
       related party                     218       450       536     1,800
                                      ------   -------   -------   -------
        Total revenues                92,328   110,619   211,260   358,562
                                      ------   -------   -------   -------

    COST OF REVENUES                  47,827    58,715   121,096   186,132
                                      ------   -------   -------   -------

    GROSS PROFIT                      44,501    51,904    90,164   172,430
                                      ------   -------   -------   -------

    OPERATING EXPENSES:
      Research and development        17,258    24,334    49,986    71,272
      Sales and marketing              4,674     5,853    12,584    18,366
      General and administrative       7,165     7,997    20,839    27,090
      Restructuring                        -         -     8,407         -
                                      ------   -------   -------   -------

        Total operating expenses      29,097    38,184    91,816   116,728
                                      ------   -------   -------   -------

    OPERATING INCOME (LOSS)           15,404    13,720    (1,652)   55,702
                                      ------   -------   -------   -------

    OTHER INCOME (EXPENSE):
      Foreign currency
       exchange loss                     (10)   (6,359)   (1,488)   (6,428)
      Write-down of investment          (291)     (270)     (291)   (5,103)
      Interest and other income          322     2,014     1,343     7,722
      Interest and other expense         (68)   (1,645)     (921)   (4,943)
                                      ------   -------   -------   -------

        Total other expense - net        (47)   (6,260)   (1,357)   (8,752)
                                      ------   -------   -------   -------

    INCOME (LOSS) BEFORE INCOME TAX
     PROVISION (BENEFIT)              15,357     7,460    (3,009)   46,950
                                      ------   -------   -------   -------

    INCOME TAX PROVISION
     (BENEFIT)                         5,429     2,612      (632)   16,433
                                      ------   -------   -------   -------

    NET INCOME (LOSS)                  9,928     4,848    (2,377)   30,517
                                      ------   -------   -------   -------
      Net loss attributable to
       noncontrolling interest           857       483     2,200     2,039
                                      ------   -------   -------   -------
    NET INCOME (LOSS) ATTRIBUTABLE
     TO CYMER, INC.                  $10,785    $5,331     ($177)  $32,556
                                      ======    ======    ======    ======

    EARNINGS (LOSS) PER SHARE:
      Basic earnings
       (loss) per share                $0.36     $0.18    ($0.01)    $1.08
                                      ======    ======    ======    ======
      Weighted average common
       shares outstanding-basic       29,762    29,665    29,697    30,034
                                      ======    ======    ======    ======

      Diluted earnings
       (loss) per share                $0.36     $0.18    ($0.01)    $1.07(a)
                                      ======    ======    ======    ======
      Weighted average common
       shares outstanding-diluted     30,138    29,779    29,697    32,952(a)
                                      ======    ======    ======    ======


    (a)  As a result of applying the if-converted method for calculating
         diluted earnings per share for the nine month period ended
         September 30, 2008, shares have been adjusted assuming conversion of
         our 3.5% convertible subordinated notes, and net income has been
         adjusted for an add back of related interest expense, net of tax.
         Shares have been adjusted by 2.8 million and net income has been
         adjusted by $2.7 million for the nine month period ended
         September 30, 2008.




    CYMER, INC.
    CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
    (In thousands, except share data)
    -------------------------------------------------------------------------


                                                  September 30,  December 31,
                                                  ---------------------------
                                                        2009          2008
    ASSETS

    CURRENT ASSETS:
      Cash and cash equivalents                      $111,590      $252,391
      Restricted cash                                   1,200             -
      Short-term investments                           46,702        30,900
      Accounts receivable - net                        77,837        64,296
      Accounts receivable - related party                 583           818
      Inventories                                     179,668       194,746
      Deferred and prepaid income taxes                45,955        46,886
      Income taxes receivable                           5,152             -
      Prepaid expenses and other assets                 8,690         9,344
                                                      -------       -------

        Total current assets                          477,377       599,381

    PROPERTY AND EQUIPMENT - NET                      102,749       114,390
    LONG-TERM INVESTMENTS                                   -         9,456
    DEFERRED INCOME TAXES                              28,481        29,168
    GOODWILL                                            8,833         8,833
    INTANGIBLE ASSETS - NET                             8,497         9,898
    OTHER ASSETS                                        6,143         6,318
                                                      -------       -------

    TOTAL ASSETS                                     $632,080      $777,444
                                                      =======       =======

    LIABILITIES

    CURRENT LIABILITIES:
      Accounts payable                                $16,388       $15,003
      Accounts payable - related party                  3,324         4,108
      Accrued warranty                                 17,400        23,565
      Accrued payroll and benefits                     14,649        12,682
      Accrued patents, royalties and other fees         4,235         3,795
      Convertible subordinated notes                        -       140,722
      Accrued income taxes                              9,059         1,085
      Deferred revenue                                 19,449        15,344
      Accrued and other current liabilities             2,376         8,278
                                                      -------       -------

        Total current liabilities                      86,880       224,582

    ACCRUED INCOME TAXES                                9,695        18,447
    DEFERRED REVENUE                                      312             -
    OTHER LIABILITIES                                   8,033        11,791
                                                      -------       -------

        Total liabilities                             104,920       254,820
                                                      =======       =======

    COMMITMENTS AND CONTINGENCIES

    EQUITY

    Cymer, Inc. STOCKHOLDERS' EQUITY:
      Preferred stock - authorized 5,000,000
       shares; $.001 par value;
       no shares issued or outstanding                     -             -
      Common stock - authorized 100,000,000                43            42
       shares; $.001 par value;
       42,657,000 shares issued and
       29,805,000 shares outstanding at
       September 30, 2009; 42,461,000
       shares issued and 29,609,000
       shares outstanding at
       December 31, 2008
      Additional paid-in capital                      593,471       586,539
      Treasury stock at cost                         (473,580)     (473,580)
       (12,852,000 common shares)
       at September 30, 2009 and
       December 31, 2008
      Accumulated other comprehensive loss             (6,819)       (5,999)
      Retained earnings                               410,597       410,774
                                                      -------       -------
        Total Cymer, Inc. stockholders' equity        523,712       517,776
      Noncontrolling interest                           3,448         4,848
                                                      -------       -------
      Total equity                                    527,160       522,624
                                                      -------       -------
    TOTAL LIABILITIES AND EQUITY                     $632,080      $777,444
                                                      =======       =======




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

                                                      For the nine months
                                                       ended September 30,
                                                      --------------------
                                                         2009       2008

    OPERATING ACTIVITIES:
      Net income (loss) attributable to Cymer, Inc.      ($177)   $32,556
      Adjustments to reconcile net income (loss)
       to net cash provided by (used in)
       operating activities:
        Depreciation and amortization                   16,661     20,198
        Stock-based compensation                         3,769      4,525
        Bad debt expense                                   893        (54)
        Noncontrolling interest                         (2,200)    (2,039)
        Provision for deferred income taxes                632     (3,615)
        (Gain) loss on disposal or impairment
         of property and equipment                       1,881        (11)
        Write-down of investments                          291      5,103
        Change in assets and liabilities:
          Restricted cash                               (1,200)         -
          Accounts receivable                          (13,920)    13,027
          Accounts receivable - related party              235        468
          Income taxes receivable                       (5,036)   (13,741)
          Inventories                                   15,417    (56,090)
          Prepaid expenses and other assets                654     (5,231)
          Accounts payable                               1,416     (3,718)
          Accounts payable - related party                (784)    (3,072)
          Accrued and other liabilities                (13,419)   (13,058)
          Deferred revenue                               4,516      5,309
          Income taxes payable and
           accrued income taxes                           (586)    (9,104)
                                                      --------   --------

            Net cash provided by (used in)
             operating activities                        9,043    (28,547)
                                                      --------   --------

    INVESTING ACTIVITIES:
      Acquisition of property and equipment             (6,318)   (19,174)
      Purchases of investments                         (39,138)   (90,309)
      Proceeds from sold or matured investments         32,363     81,184
                                                      --------   --------

            Net cash used in
             investing activities                      (13,093)   (28,299)
                                                      --------   --------

    FINANCING ACTIVITIES:
      Proceeds from issuance of common stock             3,771      1,752
      Cash investment in joint venture
       received from minority shareholder                  800      2,000
      Repayment of convertible subordinated note      (140,722)         -
      Excess tax benefits from
       stock option exercises                              199         37
      Repurchase of common stock into treasury               -    (22,876)
                                                      --------    -------

            Net cash used in
             financing activities                     (135,952)   (19,087)
                                                      --------    -------

    EFFECT OF EXCHANGE RATE
     CHANGES ON CASH AND CASH EQUIVALENTS                 (799)    (7,020)
                                                      --------   --------

    NET DECREASE IN CASH AND CASH EQUIVALENTS         (140,801)   (82,953)
    CASH AND CASH EQUIVALENTS AT
     BEGINNING OF THE PERIOD                           252,391    305,707
                                                      --------   --------

    CASH AND CASH EQUIVALENTS AT
     END OF THE PERIOD                                $111,590   $222,754
                                                      ========   ========



    SUPPLEMENTAL DISCLOSURE OF
     CASH FLOW INFORMATION:
      Interest paid                                     $2,702     $5,336
                                                      ========   ========
      Income taxes paid                                $10,157    $43,888
                                                      ========   ========

    NONCASH OPERATING AND
     FINANCING ACTIVITIES:
      In transit funds from the
       issuance of common stock                           $194          -
                                                      ========   ========

SOURCE Cymer, Inc.

investor relations,
Paul Bowman,
Interim CFO and V.P.,
Investor Relations
of Cymer, Inc.,
+1-858-385-5312,
pbowman@cymer.com;
or
media,
Kelly Hamor
of Formula,
+1-619-234-0345,
Hamor@formulapr.com,
for 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.