SOURCE: Varian Semiconductor

Varian Semiconductor

January 28, 2010 16:20 ET

Varian Semiconductor Equipment Associates Reports Fiscal 2010 First Quarter Results

GLOUCESTER, MA--(Marketwire - January 28, 2010) - Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: VSEA) today announced results for its fiscal year 2010 first quarter ended January 1, 2010.

Revenue for the first quarter of fiscal year 2010 totaled $141.3 million, compared to revenue of $107.4 million for the same period a year ago. Varian Semiconductor recorded net income of $16.6 million, or $0.22 per diluted share during the first quarter of fiscal year 2010, compared to net loss of $13.6 million, or $0.19 per diluted share for the same period a year ago.

Gary Dickerson, Varian Semiconductor's chief executive officer, said, "In 2010, we are anticipating a recovery in our core business combined with noteworthy progress on our growth initiatives."

Bob Halliday, chief financial officer, provided forward guidance for the second quarter of fiscal year 2010, "Our first quarter gross margin of 48.6% exceeded our guidance of 46.4%. Second quarter revenue is expected to be between $186 and $196 million. Earnings per diluted share are anticipated to range from $0.38 to $0.43."

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 Varian Semiconductor's guidance for second quarter fiscal 2010 revenue, earnings per diluted share, market share, expected product plans, financial performance, market conditions, 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 Annual Report on Form 10-K for the fiscal year ended October 2, 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
                                                      --------------------
                                                      January 1, January 2,
                                                        2010       2009
                                                      ---------  ---------
                                                          (unaudited)
Revenue
  Product                                             $ 127,461  $  92,028
  Service                                                13,807     15,413
                                                      ---------  ---------
    Total revenue                                       141,268    107,441
Cost of revenue                                          72,581     67,538
                                                      ---------  ---------
Gross profit                                             68,687     39,903
                                                      ---------  ---------
Operating expenses
   Research, development and engineering                 21,728     22,080
   Marketing, general and administrative                 26,103     26,760
   Restructuring                                              -      6,249
                                                      ---------  ---------
    Total operating expenses                             47,831     55,089
                                                      ---------  ---------
    Operating income (loss)                              20,856    (15,186)
Interest income, net                                        865      1,715
Other expense, net                                         (504)       (82)
                                                      ---------  ---------
Income (loss) before income taxes                        21,217    (13,553)
Provision for income taxes                                4,595          5
                                                      ---------  ---------
Net income (loss)                                     $  16,622  $ (13,558)
                                                      =========  =========

Weighted average shares outstanding - basic              73,700     72,715
Weighted average shares outstanding - diluted            74,753     72,715
    Net income (loss) per share - basic               $    0.23  $   (0.19)
    Net income (loss) per share - diluted             $    0.22  $   (0.19)




              VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                              (In thousands)

                                                    January 1,  October 2,
                                                       2010        2009
                                                    ----------  ----------
                                                   (unaudited)
                             ASSETS
Current assets
  Cash and cash equivalents                         $  230,048  $  192,148
  Short-term investments                                45,670      44,043
  Accounts receivable, net                              92,489     115,002
  Inventories                                          112,198     100,764
  Deferred income taxes                                 18,511      19,601
  Other current assets                                  22,595      22,188
                                                    ----------  ----------
        Total current assets                           521,511     493,746
  Long-term investments                                103,192      86,439
  Property, plant and equipment, net                    64,367      65,785
  Long-term deferred income taxes                        6,845       5,325
  Other assets                                          14,953      14,944
                                                    ----------  ----------
              Total assets                          $  710,868  $  666,239
                                                    ==========  ==========

             LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Current portion of long-term debt                 $      624  $      610
  Accounts payable                                      30,656      26,449
  Accrued expenses                                      24,032      22,812
  Income taxes payable                                   2,557       1,820
  Product warranty                                       3,932       3,943
  Deferred revenue                                      29,239      27,098
                                                    ----------  ----------
        Total current liabilities                       91,040      82,732
  Long-term accrued expenses and other liabilities      71,175      66,285
  Long-term debt                                         1,431       1,592
                                                    ----------  ----------
              Total liabilities                        163,646     150,609
                                                    ----------  ----------

Stockholders' equity
  Common stock                                             951         945
  Capital in excess of par value                       627,583     612,930
  Less: Cost of treasury stock                        (714,877)   (714,877)
  Retained earnings                                    632,673     616,051
  Accumulated other comprehensive income                   892         581
                                                    ----------  ----------
        Total stockholders' equity                     547,222     515,630
                                                    ----------  ----------
              Total liabilities and stockholders'
               equity                               $  710,868  $  666,239
                                                    ==========  ==========

Contact Information

  • Contacts:
    Bob Halliday
    Executive Vice President and
    Chief Financial Officer
    978.282.7597
    or
    Tom Baker
    Vice President, Finance
    978.282.2301