SAN DIEGO--(BUSINESS WIRE)--July 19, 2005--Cymer, Inc.
(Nasdaq:CYMI), the world's leading supplier of deep ultraviolet (DUV)
light sources used in semiconductor manufacturing, today announced
operating results for the second quarter ended June 30, 2005. Second
quarter total revenue and gross margin exceeded Cymer's April 19, 2005
guidance. Highlights of the second quarter included higher than
expected non-systems revenue, as well as generation of $34,479,000 in
cash from operations, and the successful execution of the company's
stock and convertible note repurchase programs. Additionally, Cymer
announced earlier today the formation of the TCZ joint venture with
Carl Zeiss SMT, AG, to provide production tools to the flat panel
display manufacturing industry.
For the second quarter of 2005, net income totaled $11,015,000,
equal to $0.30 per share (diluted), compared to net income of
$10,201,000, equal to $0.27 per share (diluted), in the second quarter
of 2004, and to net income of $5,385,000, equal to $0.14 per share
(diluted), in the first quarter of 2005.
Total revenue for the second quarter of 2005 rose to $96,392,000
compared to total revenue of $94,907,000 posted in the second quarter
of 2004, and increased 14 percent sequentially over $84,810,000 in
total revenue in the first quarter of 2005.
For the first six months of 2005, net income totaled $16,400,000,
equal to earnings of $0.45 per share (diluted) compared to net income
of $17,357,000, equal to earnings of $0.46 per share (diluted), in the
first six months of 2004. Total revenue for the first six months of
2005 was $181,202,000, compared to $182,828,000 in total revenue
recorded in the first six months of 2004.
Other Income (Expense) in the second quarter and first half of
2005 was positively impacted by a gain on debt extinguishment of
$2,220,000 related to the repurchase of approximately $60 million of
the company's convertible subordinated notes during the second quarter
of 2005. On a net income basis, the gain amounted to approximately
$0.06 per share (diluted) for the second quarter.
Commenting on the second quarter, Bob Akins, Cymer's chief
executive officer, said, "We are pleased that second quarter 2005
operating results came in ahead of our expectations, and with the
continuing robust acceptance of our product offerings. Our market
leadership position at 193nm continued with strong shipments of our
XL Series products in the quarter -- a total of 26 systems. We
received multiple purchase orders for the XLA 200, our third
generation dual chamber MOPA ArF light source, and received our first
purchase orders for the XLA 300, the fourth generation in this product
line that we introduced last week at SEMICON West, and which is
scheduled to begin shipping in the final quarter of this year.
"We recognized revenue on 56 light sources in the second quarter
of 2005 compared to 48 light sources in the first quarter of this
year," Akins continued. "Cymer installed 77 new light sources in the
second quarter compared to 67 light sources in the first quarter of
2005.
"With chipmakers focused on filling out 90nm production lines and
preparing for the ramp up of 65nm production which will occur in 2006
or 2007 for most manufacturers, technology buys remained the main
driver of system demand in the second quarter. Our second quarter
average selling price (ASP) was $941,000 on a currency adjusted
basis," Akins stated. "The quarterly average utilization of our light
sources at chipmakers in the second quarter increased nearly 5 percent
over the previous quarter's average utilization, and drove non-systems
product revenue, which consists of consumables and spare parts,
upgrades, and service, to $41,000,000, for the second quarter, equal
to 43 percent of total revenue."
Nancy Baker, Cymer's chief financial officer, stated, "Product
gross margin in the second quarter of 2005 was 40 percent compared to
37 percent in the first quarter of 2005. Cymer recorded operating
income of $8,925,000, or 9 percent of revenue in the second quarter of
2005, compared to operating income of $5,077,000, or 6 percent of
revenue, in the first quarter of 2005," Baker continued. "Second
quarter 2005 bookings totaled $96,368,000, resulting in a second
quarter 2005 book-to-bill ratio of 1.0. The 2005 second quarter-end
backlog totaled $75,751,000."
Cymer generated $34,479,000 in cash from operations in the second
quarter of 2005 compared to $44,473,000 in the first quarter of 2005,
and cash generated from operations in the first six months of 2005
totaled $78,952,000. Cash and cash equivalents and short- and
long-term investments totaled $342,332,000 at June 30, 2005.
Baker stated, "Capital spending for the second quarter of 2005
totaled $2,669,000 compared to $5,180,000 in the first quarter of
2005. Our free cash flow for the second quarter, calculated as the net
cash provided by operating activities less our acquisition of property
and equipment, was $31,810,000, and for the first six months of 2005,
free cash flow totaled $71,103,000. In addition to our repurchase of
approximately $60 million worth of our convertible notes during the
second quarter, we also repurchased approximately 1.7 million shares
of Cymer's common stock in the open market for a total of
approximately $41.7 million."
Corporate Outlook
Commenting on Cymer's outlook, Akins noted, "At SEMICON West last
week, the overall tone of the show was mixed, with some equipment
companies indicating that their business had leveled off and that they
expected orders to improve late this year. Though chipmakers for the
most part continue to make strategic purchases for their 300mm fabs to
fill out their 90nm production lines, and prepare for the coming
transition to the 65nm node, certain segments have slowed as they
install equipment ordered in recent quarters. Specific to Cymer, while
the second quarter pickup in our light source utilization rates is
encouraging, until overall fab utilization increases from its current
level in the high 80 percent range and is sustained at levels well
above 90 percent we would expect business to remain at or near its
current levels."
Based on information available at this time, Cymer is currently
providing the following guidance for the third quarter of 2005, which
includes expectations for the financial impact of the recently
announced joint venture:
-- We currently estimate that total product revenue in the third
quarter of 2005 should be flat to down approximately five
percent compared to second quarter 2005 revenue.
-- We are forecasting that foreign currency adjusted ASPs should
be approximately $940,000.
-- We expect that gross margin should be between 38 and 40
percent.
-- We anticipate that R&D expenses should be between $16.5
million and $17.5 million.
-- We expect SG&A expenses to be between $13.0 million and $13.5
million.
-- We currently estimate the third quarter 2005 annualized
effective tax rate to be approximately 9 percent. U.S. GAAP
requirements prevent recognizing certain expected tax benefits
until the quarter in which they occur. With the realization of
anticipated discrete fourth quarter events, we expect that our
annual effective tax rate will return to approximately 0
percent for 2005 by year-end.
Cymer's management will hold a conference call at 2:00 pm (PDT)
today, July 19, 2005, to discuss second quarter 2005 results and third
quarter 2005 guidance, and to answer questions regarding the formation
of the TCZ joint venture announced today. This press release, the
conference call and accompanying slides may be accessed on 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 expectations for the
ramp-up of 65nm production, and the statements under the caption
"Corporate Outlook" above, including implications regarding the
financial impact of the formation of the joint venture with Carl Zeiss
SMT, AG. 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; the
timing of customer orders, shipments and acceptances; delays or
cancellations by customers of their orders; cyclicality in the market
for semiconductor manufacturing equipment; the rate at which
semiconductor manufacturers take delivery of photolithography tools
from the company's customers; 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 company's ability to secure
adequate supplies of critical components for its advanced products;
and the company's ability to manage its expense levels and
unanticipated expenses. 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.
About Cymer
Cymer, Inc. is the world's leading supplier of DUV illumination
sources, the essential light source for DUV photolithography systems.
DUV lithography is a key enabling technology, which has allowed the
semiconductor industry to meet the exacting specifications and
manufacturing requirements for volume production of today's advanced
semiconductor chips. Further information on Cymer may be obtained from
the Company's SEC filings, the Internet at www.cymer.com or by
contacting the company directly.
Cymer, Inc. Three Months Ended June 30, Six Months Ended June 30,
2004 2005 2004 2005
------------ ------------- ------------ -------------
Total revenues $94,907,000 $96,392,000 $182,828,000 $181,202,000
Net income $10,201,000 $11,015,000 $17,357,000 $16,400,000
Basic earnings
per share $0.28 $0.31 $0.47 $0.45
Diluted earnings
per share $0.27 $0.30 $0.46 $0.45
Weighted average
common shares
outstanding -
diluted 37,673,000 36,166,000 37,846,000 36,695,000
CYMER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
----------------------------------------------------------------------
For the three months For the six months
ended June 30, ended June 30,
-------------------- -------------------
2004 2005 2004 2005
REVENUES:
Product sales $94,722 $95,797 $182,593 $180,406
Other 185 595 235 796
----------- -------- --------- ---------
Total revenues 94,907 96,392 182,828 181,202
----------- -------- --------- ---------
COST AND EXPENSES:
Cost of product sales 49,975 57,731 102,143 110,762
Research and development 14,832 16,937 27,202 31,541
Sales and marketing 5,879 6,777 11,702 12,551
General and administrative 8,154 6,022 14,769 12,326
Amortization of
intangibles 40 -- 80 20
----------- -------- --------- ---------
Total costs and expenses 78,880 87,467 155,896 167,200
----------- -------- --------- ---------
OPERATING INCOME 16,027 8,925 26,932 14,002
----------- -------- --------- ---------
OTHER INCOME (EXPENSE):
Foreign currency exchange
loss - net (399) (573) (345) (767)
Gain on debt
extinguishment -- 2,220 -- 2,220
Interest and other income 1,603 2,597 3,499 4,998
Interest and other expense (2,511) (1,776) (5,067) (3,903)
----------- -------- --------- ---------
Total other income
(expense) - net (1,307) 2,468 (1,913) 2,548
----------- -------- --------- ---------
INCOME BEFORE INCOME TAX
PROVISION AND MINORITY
INTEREST 14,720 11,393 25,019 16,550
----------- -------- --------- ---------
INCOME TAX PROVISION 3,386 912 5,754 912
MINORITY INTEREST (1,133) 534 (1,908) 762
----------- -------- --------- ---------
NET INCOME $10,201 $11,015 $17,357 $16,400
=========== ======== ========= =========
EARNINGS PER SHARE:
Basic earnings per share $0.28 $0.31 $0.47 $0.45
=========== ======== ========= =========
Weighted average common
shares outstanding-basic 36,735 35,841 36,661 36,360
=========== ======== ========= =========
Diluted earnings per share $0.27 $0.30 $0.46 $0.45
=========== ======== ========= =========
Weighted average common
shares outstanding-
diluted 37,673 36,166 37,846 36,695
=========== ======== ========= =========
CYMER, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
----------------------------------------------------------------------
December 31, June 30,
--------------- --------------
2004 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $114,246 $149,049
Short-term investments 175,866 134,473
Accounts receivable - net 110,680 71,032
Foreign currency forward exchange
contracts -- 2,060
Inventories 110,022 90,350
Deferred income taxes 7,470 7,585
Prepaid expenses and other assets 5,726 5,085
--------------- --------------
Total current assets 524,010 459,634
PROPERTY AND EQUIPMENT - NET 123,548 118,606
LONG TERM INVESTMENTS 84,561 58,810
DEFERRED INCOME TAXES 67,722 67,134
GOODWILL - NET 8,358 8,358
INTANGIBLE ASSETS - NET 10,394 9,188
OTHER ASSETS 7,185 6,600
--------------- --------------
TOTAL ASSETS $825,778 $728,330
=============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $13,949 $13,590
Accrued warranty and installation 28,546 27,712
Accrued payroll and benefits 16,284 12,796
Accrued patents, royalties and other
fees 6,318 6,210
Foreign currency forward exchange
contracts 1,901 --
Income taxes payable 10,397 10,478
Unearned income 6,152 4,428
Accrued and other current
liabilities 4,456 3,734
--------------- --------------
Total current liabilities 88,003 78,948
CONVERTIBLE SUBORDINATED NOTES 200,753 140,722
DEFERRED INCOME TAXES 6,237 6,237
OTHER LIABILITIES 7,282 8,137
--------------- --------------
Total liabilities 302,275 234,044
--------------- --------------
MINORITY INTEREST 6,183 5,421
--------------- --------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock - authorized
5,000,000 shares; $.001 par value,
no shares issued or outstanding -- --
Common stock - authorized
100,000,000 shares; $.001 par
value, issued and outstanding
36,993,000 and 37,191,000 shares 37 37
Additional paid-in capital 378,414 382,928
Treasury stock at cost (1,943,000
common shares) -- (50,000)
Unearned compensation (16) --
Accumulated other comprehensive loss (4,455) (3,840)
Retained earnings 143,340 159,740
--------------- --------------
Total stockholders' equity 517,320 488,865
--------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $825,778 $728,330
=============== ==============
CYMER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
----------------------------------------------------------------------
For the six months
ended June 30,
----------------------------
2004 2005
OPERATING ACTIVITIES:
Net income $17,357 $16,400
Adjustments to reconcile net income to
net cash provided by operating
activities:
Gain on debt extinguishment -- (2,220)
Depreciation and amortization 13,949 14,440
Non-cash stock based compensation 261 360
Amortization of unearned
compensation 67 16
Minority interest 1,908 (762)
Provision for deferred income taxes (490) 46
Loss on disposal or impairment of
property and equipment 58 35
Change in assets and liabilities:
Accounts receivable - net (26,009) 39,648
Foreign currency forward exchange
contracts (2,127) (2,677)
Inventories (17,776) 19,672
Prepaid expenses and other assets (2,126) (277)
Accounts payable 3,466 (359)
Accrued and other liabilities 13,998 (5,451)
Income taxes payable 4,290 81
------------- -------------
Net cash provided by operating
activities 6,826 78,952
------------- -------------
INVESTING ACTIVITIES:
Acquisition of property and equipment (8,140) (7,849)
Purchases of investments (195,602) (201,673)
Proceeds from sold or matured
investments 189,441 268,200
Acquisition of patents (5,990) --
Acquisition of minority interest (2,000) --
------------- -------------
Net cash provided by (used in)
investing activities (22,291) 58,678
------------- -------------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 10,410 4,154
Redemption of convertible subordinated
notes - (57,336)
Payments on capital lease obligations (24) (20)
Purchase of treasury stock - (50,000)
------------- -------------
Net cash provided by (used in)
financing activities 10,386 (103,202)
------------- -------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (1,847) 375
------------- -------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS (6,926) 34,803
CASH AND CASH EQUIVALENTS AT BEGINNING
OF THE PERIOD 110,632 114,246
----------------------------
CASH AND CASH EQUIVALENTS AT END OF THE
PERIOD $103,706 $149,049
============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $4,482 $4,324
============= =============
Income taxes paid, net $2,159 $1,569
============= =============
CONTACT: Cymer, Inc.
Terry Slavin, 858-385-5232 (Investor Relations Contact)
tslavin@cymer.com
Meggan Powers, 858-385-6327 (Media Contact)
mpowers@cymer.com
SOURCE: Cymer, Inc.
