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Varian Semiconductor Equipment Associates Reports Fiscal Year 2009 and Fourth Quarter Results

^{Published on 2009-10-29 13:45:14 - Market Wire}
 

GLOUCESTER, MA--(Marketwire - October 29, 2009) - Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: [ VSEA ]) today announced results for its fiscal year 2009 and fourth quarter ended October 2, 2009.

Revenue for the fourth quarter of fiscal year 2009 totaled $117.5 million, compared to revenue of $142.1 million for the same period a year ago. Varian Semiconductor recorded net income of $7.6 million, or $0.10 per diluted share during the fourth quarter of fiscal year 2009, compared to net income of $1.8 million, or $0.02 per diluted share for the same period a year ago.

Revenue for fiscal year 2009 totaled $362.1 million, compared to revenue of $834.1 million for fiscal year 2008. Varian Semiconductor recorded a net loss of $38.0 million, or $0.53 per diluted share for fiscal year 2009, compared to net income of $99.5 million, or $1.33 per diluted share for fiscal year 2008.

Gary Dickerson, Varian Semiconductor's chief executive officer, said, "We have built significant market share gains during the last several years that have enabled us to hit the ground running coming out of this downturn. Additionally, by continuing to invest in high-value enabling technology, we anticipate successfully penetrating new markets in the next fiscal year that can provide us with significant growth opportunities."

Bob Halliday, chief financial officer, provided forward guidance for the first quarter of fiscal year 2010, "Our fourth quarter gross margin of 45.4% exceeded both our guidance of 43% to 44% and our past performance at this point in a recovery. We project this trend of increasing gross margin to continue into the first quarter of fiscal year 2010. First quarter revenue is expected to be between $134 and $144 million. Earnings per diluted share are anticipated to range from $0.15 to $0.20."

During the quarter ended October 2, 2009, Varian Semiconductor identified certain instances dating back to fiscal year 1999 in which deferred income taxes were not properly recorded in its financial statements. These adjustments individually and in the aggregate are not material to Varian Semiconductor's financial statements for all periods impacted. Varian Semiconductor has revised its historical financial statements to properly reflect these adjustments.

Varian Semiconductor will hold a conference call, broadcast over the Internet, at 5:30 p.m. eastern time today to discuss Varian Semiconductor's operating results and outlook. Access to the call is available through the investor relations page on Varian Semiconductor's website at www.vsea.com. Replays will be available via the website for two weeks after the call.

About Varian Semiconductor Equipment Associates, Inc.

Varian Semiconductor is a leading supplier of ion implantation equipment used in the fabrication of semiconductor chips. Varian Semiconductor's products are used by chip manufacturers worldwide to produce high-performance semiconductor devices. Customers have made Varian Semiconductor the market leader in ion implant because of its architecturally superior products that lower their costs and improve their productivity.

Varian Semiconductor provides support, training, and after-market products and services that help its customers to obtain high utilization and productivity, reduce operating costs, and extend capital productivity of customer investments through multiple product generations. Varian Semiconductor has ranked #1 in the VLSI Research Customer Satisfaction Survey 12 times over the last 13 years. Varian Semiconductor operates globally and is headquartered in Gloucester, Massachusetts. More information can be found on Varian Semiconductor's web site at www.vsea.com. The information contained in Varian Semiconductor's website is not incorporated by reference into this release, and the website address is included in this release as an inactive textual reference only.

Note: This press release contains forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. For this purpose, statements concerning the industry outlook, Varian Semiconductor's guidance for first quarter fiscal 2010 revenue, earnings per share, market share, expected product plans, financial performance, market conditions, Varian Semiconductor's investment in new product and application development, and any statements using the terms "believes," "anticipates," "will," "expects," "plans" or similar expressions, are forward-looking statements. The forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: volatility in the semiconductor equipment industry; intense competition in the semiconductor equipment industry; Varian Semiconductor's dependence on a small number of customers; fluctuations in Varian Semiconductor's quarterly operating results; Varian Semiconductor's transition to new products; Varian Semiconductor's exposure to risks of operating internationally; uncertain protection of Varian Semiconductor's patent and other proprietary rights; Varian Semiconductor's reliance on a limited group of suppliers; Varian Semiconductor's ability to manage potential growth, decline and strategic transactions; Varian Semiconductor's reliance on one primary manufacturing facility; and Varian Semiconductor's dependence on certain key personnel. These and other important risk factors that may affect actual results are discussed in detail under the caption "Risk Factors" in Varian Semiconductor's Quarterly Report on Form 10-Q for the quarter ended July 3, 2009 and in other reports filed by Varian Semiconductor with the Securities and Exchange Commission. Varian Semiconductor cannot guarantee any future results, levels of activity, performance or achievement. Varian Semiconductor undertakes no obligation to update any of the forward-looking statements after the date of this release.

 VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Fiscal Three Months Ended Fiscal Year Ended ====================== ====================== October 2, October 3, October 2, October 3, 2009 2008 2009 2008 ========== ========== ========== ========== Revenue Product $ 105,549 $ 122,874 $ 309,230 $ 752,629 Service 11,951 19,188 52,764 81,371 Royalty 8 2 87 61 ---------- ---------- ---------- ---------- Total revenue 117,508 142,064 362,081 834,061 Cost of revenue 64,165 77,684 219,413 438,295 ---------- ---------- ---------- ---------- Gross profit 53,343 64,380 142,668 395,766 ---------- ---------- ---------- ---------- Operating expenses Research, development and engineering 19,889 26,771 80,063 111,240 Marketing, general and administrative 23,193 33,155 96,193 130,672 Restructuring 187 961 9,159 1,607 ---------- ---------- ---------- ---------- Total operating expenses 43,269 60,887 185,415 243,519 ---------- ---------- ---------- ---------- Operating income (loss) 10,074 3,493 (42,747) 152,247 Interest income, net 842 2,145 4,354 8,781 Other expense, net (344) (389) (1,088) (117) ---------- ---------- ---------- ---------- Income (loss) before income taxes 10,572 5,249 (39,481) 160,911 Provision for (benefit from) income taxes 2,933 3,498 (1,483) 61,395 ---------- ---------- ---------- ---------- Net income (loss) $ 7,639 $ 1,751 $ (37,998) $ 99,516 ========== ========== ========== ========== Weighted average shares outstanding - basic 72,682 71,751 72,321 73,318 Weighted average shares outstanding - diluted 73,844 72,794 72,321 74,719 Net income (loss) per share - basic $ 0.11 $ 0.02 $ (0.53) $ 1.36 Net income (loss) per share - diluted $ 0.10 $ 0.02 $ (0.53) $ 1.33 VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) October 2, October 3, 2009 2008 =========== =========== ASSETS Current assets Cash and cash equivalents $ 192,148 $ 139,679 Short-term investments 44,043 68,996 Accounts receivable, net 115,002 128,904 Inventories 100,764 165,201 Deferred tax assets 19,601 28,599 Other current assets 22,188 24,447 ----------- ----------- Total current assets 493,746 555,826 Long-term investments 86,439 69,491 Property, plant and equipment, net 65,785 66,636 Long-term deferred tax assets 5,325 - Other assets 14,944 14,889 ----------- ----------- Total assets $ 666,239 $ 706,842 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ 610 $ 558 Accounts payable 26,449 29,072 Accrued expenses 22,812 41,745 Income taxes payable 1,820 4,103 Product warranty 3,943 7,661 Deferred revenue 27,098 32,285 ----------- ----------- Total current liabilities 82,732 115,424 Long-term accrued expenses and other liabilities 66,285 65,064 Long-term deferred tax liabilities - 3,951 Long-term debt 1,592 2,203 ----------- ----------- Total liabilities 150,609 186,642 ----------- ----------- Stockholders' equity Common stock 945 935 Capital in excess of par value 612,930 582,270 Less: Cost of treasury stock (714,877) (714,877) Retained earnings 616,051 654,049 Accumulated other comprehensive income (loss) 581 (2,177) ----------- ----------- Total stockholders' equity 515,630 520,200 ----------- ----------- Total liabilities and stockholders' equity $ 666,239 $ 706,842 =========== ===========