SAN DIEGO--(BUSINESS WIRE)--April 18, 2006--Cymer, Inc.
(Nasdaq:CYMI), the world's leading supplier of excimer laser light
sources used in semiconductor manufacturing, today announced operating
results for the first quarter ended March 31, 2006. First quarter
revenue and gross margin exceeded the company's January 31, 2006
guidance, and Cymer achieved record quarterly bookings.
For the first quarter of 2006, net income rose to $20,603,000,
equal to $0.52 per share (diluted), a 283 percent increase over net
income of $5,385,000, equal to $0.14 per share (diluted), in the first
quarter of 2005, and an 18 percent increase over net income of
$17,468,000, equal to $0.48 per share (diluted), in the fourth quarter
of 2005. Included in the first quarter 2006 net income are the effects
of stock option expensing which became effective January 1, 2006. In
addition, first quarter 2006 diluted earnings per share were
calculated by applying the "if-converted" method associated with the
company's convertible subordinated notes outstanding, as their effect
was dilutive in the first quarter of 2006, whereas their effect was
anti-dilutive in the first and fourth quarters of 2005.
Revenue for the first quarter of 2006 climbed to $127,117,000, a
50 percent increase over revenue of $84,810,000 in the first quarter
of 2005, and a 24 percent increase over revenue of $102,793,000 in the
fourth quarter of 2005.
Commenting on the first quarter of 2006, Bob Akins, Cymer's chief
executive officer, said, "We continued successfully executing our
initiatives to increase operating efficiencies and improve financial
performance to grow shareholder value, evidenced in our gross margin
increasing to 46 percent. We realized a 67 percent
quarter-over-quarter increase in operating income on a 24 percent
quarter-over-quarter increase in revenue, clearly demonstrating the
operating leverage in our business model.
"We recognized revenue on 70 light sources in the first quarter,
up 46 percent over the prior quarter," Akins continued. "During the
first quarter, we were pleased to see that demand for our krypton
fluoride (KrF) light sources grew more than we had anticipated. We
also experienced continued strong shipments of our XLA Series of argon
fluoride (ArF) products, with approximately 17 percent of system
shipments being our most advanced XLA 200 and XLA 300 models. Our XLA
300 is targeted at high volume immersion production and we are
currently installing the first unit of this model at a major
chipmaker. While only 37 percent of light sources recognized for
revenue in the first quarter were XLA Series models, due to their
higher average selling price (ASP), they constituted 59 percent of
systems revenue."
With the product mix more heavily weighted toward KrF light
sources, Cymer's first quarter 2006 ASP declined to $970,000 on a
currency adjusted basis. The quarterly average utilization of the
company's light sources at chipmakers in the first quarter increased
slightly over the previous quarter's level. This drove non-systems
product revenue, which consists of consumables and spare parts,
upgrades, and service, to $59,021,000 for the first quarter, equal to
46 percent of total revenue.
First quarter 2006 bookings rose to $135,575,000, the highest
quarterly level in Cymer's history and a 13 percent increase over
bookings of $119,819,000 in the prior quarter. The first quarter 2006
book-to-bill ratio was 1.07, and the quarter-end backlog totaled
$99,299,000.
Cymer recorded operating income of $24,273,000, or 19 percent of
revenue in the first quarter of 2006, compared to operating income of
$14,493,000, or 14 percent of revenue, in the fourth quarter of 2005.
Nancy Baker, Cymer's chief financial officer, stated, "Cymer
generated $869,000 in cash from operations in the first quarter of
2006 and incurred capital spending of $3,661,000, resulting in
negative free cash flow of $2,792,000. Free cash flow is calculated as
the net cash provided by operating activities less the acquisition of
property and equipment. The quarter's negative free cash flow is
primarily attributable to high account receivable balances resulting
from back-end loaded shipments during the quarter, front-end loaded
inventory levels to support forecasted growing demand, and the impact
of classifying excess tax benefits from stock option exercises in
financing activities rather than operating activities, in accordance
with SFAS 123R. The receivable and inventory activities are primarily
the result of ramping operations to meet 2006 growing demand.
Therefore, Cymer expects to generate a significant amount of cash from
operations in the second quarter and the remainder of 2006 as revenue
and profitability continue to grow and inventory turns increase."
Corporate Outlook
Commenting on Cymer's outlook, Akins noted, "The growth
opportunities we see for semiconductor equipment in general and for
lithography in particular are based on strong continuing demand for
consumer electronics. Medium-term growth opportunities are promising
because of the large number of multi-year product cycles that are in
early stages of development, including NAND flash-enabled portable
devices, new video game platforms, and mobile broadband internet use,
to name a few. Fab utilization was in the low to mid-90 percent range
in the first quarter, and is expected to remain high in the near to
medium term. A number of chipmakers have recently announced their
intentions to increase their capital spending substantially either in
2006, or in both 2006 and 2007. Chipmakers' order patterns are
remaining rational and disciplined relative to their lithography tool
purchases, and we believe DUV lithography will grow even faster than
lithography overall as more wafer layers must transition to DUV
production."
Based on information available at this time, Cymer is currently
providing the following guidance for the second quarter of 2006:
-- We currently estimate that total revenue in the second quarter
of 2006 should be up between 5 and 10 percent over first
quarter 2006 revenue.
-- We are forecasting that foreign currency adjusted ASPs should
be relatively flat with the $970,000 reported for the first
quarter of 2006. Growth in demand for lower priced, capacity
related KrF light sources is offsetting ASP growth that would
otherwise result from strong demand for our XLA Series of
light sources.
-- We expect that gross margin should be between 48 and 49
percent.
-- We anticipate that R&D expenses should be between $18.5
million and $19.5 million.
-- We expect SG&A expenses to be between $17.0 million and $17.5
million.
-- Our 2006 estimated annual effective tax rate is expected to be
approximately 34 percent, which is higher than our previous
estimate due to an increase in our currently forecasted growth
rate for 2006 and the associated rise in pre-tax income, as
well as the expiration of the federal research credit which
Congress has yet to renew for 2006.
Cymer's management will hold a conference call at 2:00 pm (PDT)
today, April 18, 2006, to discuss first quarter 2006 results and
second quarter 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 future cash generation and
inventory turns increasing, 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 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 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 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. 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. is the world's leading supplier of DUV laser
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.
Free Cash Flow Reconciliation
-----------------------------
Cash provided by operating activities $ 869,000
Less acquisition of property and equipment $3,661,000
------------
Free cash flow ($2,792,000)
============
Cymer, Inc. Three months ended March 31,
2005 2006
----------------------------
Total revenues $84,810,000 $127,117,000
Net income $5,385,000 $20,603,000
Diluted earnings per share $0.14 $0.52
Weighted average common and common
equivalent shares outstanding (diluted) 37,230,000 41,126,000
CYMER, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
----------------------------------------------------------------------
For the three months
ended March 31,
--------------------
2005 2006
REVENUES:
Product sales $84,609 $124,902
Product sales - related party - 2,154
Other 201 61
---------- ---------
Total revenues 84,810 127,117
---------- ---------
COST AND EXPENSES:
Cost of product sales 53,031 68,691
Research and development 14,624 18,124
Sales and marketing 5,774 6,849
General and administrative 6,304 9,180
---------- ---------
Total costs and expenses 79,733 102,844
---------- ---------
OPERATING INCOME 5,077 24,273
---------- ---------
OTHER INCOME (EXPENSE):
Foreign currency exchange gain (loss) - net (194) 619
Interest and other income 2,401 6,986
Interest and other expense (2,127) (1,402)
---------- ---------
Total other income - net 80 6,203
---------- ---------
INCOME BEFORE INCOME TAX PROVISION
AND MINORITY INTEREST 5,157 30,476
---------- ---------
INCOME TAX PROVISION - 10,554
MINORITY INTEREST 228 681
---------- ---------
NET INCOME $5,385 $20,603
========== =========
EARNINGS PER SHARE:
Basic earnings per share $0.15 $0.55
========== =========
Weighted average common shares
outstanding-basic 36,884 37,278
========== =========
Diluted earnings per share $0.14 $0.52 (a)
========== =========
Weighted average common shares
outstanding-diluted 37,230 41,126 (a)
========== =========
(a) As a result of applying the if-converted method for calculating
diluted earnings per share, shares have been adjusted by an
additional 2.8 million assuming conversion of our 3.5% convertible
subordinated notes, and net income has been adjusted by $873,000
for an add back of related interest expense, net of tax.
CYMER, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands, except share data)
----------------------------------------------------------------------
December 31, March 31,
----------------------
2005 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $233,745 $269,937
Short-term investments 130,204 151,213
Accounts receivable - net 89,818 111,571
Accounts receivable - related party 588 2,789
Foreign currency forward exchange contracts 1,776 276
Inventories 89,046 101,252
Deferred income taxes 33,338 33,855
Prepaid expenses and other assets 6,497 5,963
----------- ----------
Total current assets 585,012 676,856
PROPERTY AND EQUIPMENT - NET 117,251 115,252
LONG TERM INVESTMENTS 29,395 29,369
DEFERRED INCOME TAXES 34,429 29,603
GOODWILL - NET 8,358 8,833
INTANGIBLE ASSETS - NET 10,474 9,839
OTHER ASSETS 6,457 6,116
----------- ----------
TOTAL ASSETS $791,376 $875,868
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $17,710 $23,911
Accounts payable - related party $4,975 $4,157
Accrued warranty and installation 30,775 31,666
Accrued payroll and benefits 12,461 14,003
Accrued patents, royalties and other fees 7,180 6,214
Income taxes payable 7,268 1,135
Unearned income 1,726 1,782
Accrued and other current liabilities 3,247 2,130
----------- ----------
Total current liabilities 85,342 84,998
CONVERTIBLE SUBORDINATED NOTES 140,722 140,722
OTHER LIABILITIES 10,582 12,478
----------- ----------
Total liabilities 236,646 238,198
----------- ----------
MINORITY INTEREST 16,276 9,046
----------- ----------
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
38,036,000 and 39,869,000 shares 38 40
Additional paid-in capital 407,549 474,312
Treasury stock at cost (1,943,000 common
shares) (50,000) (50,000)
Accumulated other comprehensive loss (9,025) (6,223)
Retained earnings 189,892 210,495
----------- ----------
Total stockholders' equity 538,454 628,624
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $791,376 $875,868
=========== ==========
CYMER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In thousands)
----------------------------------------------------------------------
For the three months
ended March 31
--------------------
2005 2006
OPERATING ACTIVITIES:
Net income $5,385 $20,603
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 7,264 6,484
Non-cash stock based compensation 152 2,519
Amortization of unearned compensation 16 -
Minority interest (228) (681)
Provision for deferred income taxes 89 4,230
Loss on disposal or impairment of property
and equipment 2 6
Change in assets and liabilities:
Accounts receivable - net 30,988 (21,753)
Accounts receivable - related party - (2,201)
Foreign currency forward exchange
contracts (1,898) 1,636
Inventories 7,361 (12,206)
Prepaid expenses and other assets 160 680
Accounts payable 891 6,201
Accounts payable - related party - (818)
Accrued and other liabilities (5,194) 2,246
Unearned income 774 56
Income taxes payable (1,289) (6,133)
----------- ---------
Net cash provided by operating
activities 44,473 869
----------- ---------
INVESTING ACTIVITIES:
Acquisition of property and equipment (5,180) (3,661)
Purchases of investments (141,521) (54,484)
Proceeds from sold or matured investments 133,719 33,572
Acquisition of minority interest - (7,024)
----------- ---------
Net cash used in investing activities (12,982) (31,597)
----------- ---------
FINANCING ACTIVITIES:
Proceeds from issuance of common stock 1,557 54,090
Excess tax benefits from equity-based
compensation plans - 10,154
Payments on capital lease obligations (12) -
Purchase of treasury stock (8,287) -
----------- ---------
Net cash provided by (used in)
financing activities (6,742) 64,244
----------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 484 2,676
----------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 25,233 36,192
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE
PERIOD 114,246 233,745
---------------------
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD $139,479 $269,937
=========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid $3,627 $2,522
=========== =========
Income taxes paid, net $1,356 $1,536
=========== =========
CONTACT: Cymer, Inc.
Investor Relations Contact:
Terry Slavin, 858-385-5232
tslavin@cymer.com
or
Media Contact:
Meggan Powers, 858-385-6327
mpowers@cymer.com
SOURCE: Cymer, Inc.
