SOURCE: Varian Semiconductor

Varian Semiconductor

April 29, 2010 16:25 ET

Varian Semiconductor Equipment Associates Reports Fiscal 2010 Second Quarter Results

GLOUCESTER, MA--(Marketwire - April 29, 2010) - Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: VSEA) today announced results for its fiscal year 2010 second quarter ended April 2, 2010.

Revenue for the second quarter of fiscal year 2010 totaled $204.0 million, compared to revenue of $63.8 million for the same period a year ago. Varian Semiconductor recorded net income of $38.6 million, or $0.51 per diluted share during the second quarter of fiscal year 2010, compared to a net loss of $19.6 million, or $0.27 per diluted share for the same period a year ago.

Gary Dickerson, Varian Semiconductor's chief executive officer, said, "Recently released third party market share data reports that Varian Semiconductor increased its overall market share by greater than ten percentage points in 2009. Varian Semiconductor gained market share in every segment of the ion implant market. Our share gains reflect the innovation and value that we bring to our current customer base. Those same benefits and core competencies project very well to new customers and markets. We remain optimistic about overall business conditions and our emerging opportunities. Those opportunities are much closer today because of our sustained investments last year and the extraordinary efforts of our employees."

Bob Halliday, chief financial officer, provided forward guidance for the third quarter of fiscal year 2010, "Our second quarter revenues of $204.0 million exceeded our guidance of $186.0 to $196.0 million as we aggressively ramped our efforts to meet customer delivery requirements. Third quarter revenue is expected to be between $220.0 and $230.0 million and earnings per diluted share are anticipated to range from $0.55 to $0.60."

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 third 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)
                               (unaudited)

                       Fiscal Three Months Ended  Fiscal Six Months Ended
                        ------------------------  ------------------------
                          April 2,     April 3,     April 2,     April 3,
                            2010         2009         2010         2009
                        -----------  -----------  -----------  -----------

Revenue
  Product               $   191,282  $    48,958  $   318,743  $   140,986
  Service                    12,675       14,796       26,482       30,209
                        -----------  -----------  -----------  -----------
    Total revenue           203,957       63,754      345,225      171,195

Cost of revenue             104,117       42,493      176,698      110,031
                        -----------  -----------  -----------  -----------
Gross profit                 99,840       21,261      168,527       61,164
                        -----------  -----------  -----------  -----------

Operating expenses
  Research, development
   and engineering           24,346       18,990       46,074       41,070
  Marketing, general
   and administrative        31,950       24,090       58,053       50,850
  Restructuring                   -        2,051            -        8,300
                        -----------  -----------  -----------  -----------
    Total operating
      expenses               56,296       45,131      104,127      100,220
                        -----------  -----------  -----------  -----------
    Operating income
     (loss)                  43,544      (23,870)      64,400      (39,056)

Interest income, net            902          754        1,767        2,469
Other expense, net             (460)        (445)        (964)        (527)
                        -----------  -----------  -----------  -----------
Income (loss) before
 income taxes                43,986      (23,561)      65,203      (37,114)
Provision for (benefit
 from) income taxes           5,393       (3,937)       9,988       (3,932)
                        -----------  -----------  -----------  -----------
Net income (loss)       $    38,593  $   (19,624) $    55,215  $   (33,182)
                        ===========  ===========  ===========  ===========


Weighted average shares
 outstanding - basic         74,407       73,054       74,053       72,885
Weighted average shares
 outstanding - diluted       75,331       73,054       75,048       72,885

   Net income (loss)
    per share - basic   $      0.52  $     (0.27) $      0.75  $     (0.46)
   Net income (loss)
    per share - diluted $      0.51  $     (0.27) $      0.74  $     (0.46)



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

                                                     April 2,   October 2,
                                                       2010        2009
                                                    ----------  ----------
                                                    (unaudited)
                         ASSETS
Current assets
  Cash and cash equivalents                         $  242,148  $  192,148
  Short-term investments                                50,811      44,043
  Accounts receivable, net                             141,231     115,002
  Inventories                                          128,387     100,764
  Deferred income taxes                                 19,005      19,601
  Other current assets                                  20,945      22,188
                                                    ----------  ----------
     Total current assets                              602,527     493,746

  Long-term investments                                108,521      86,439
  Property, plant and equipment, net                    70,003      65,785
  Long-term deferred income taxes                        7,031       5,325
  Other assets                                          15,002      14,944
                                                    ----------  ----------
        Total assets                                $  803,084  $  666,239
                                                    ==========  ==========

           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
  Current portion of long-term debt                 $      639  $      610
  Accounts payable                                      52,947      26,449
  Accrued expenses                                      32,910      22,812
  Income taxes payable                                   3,118       1,820
  Product warranty                                       5,688       3,943
  Deferred revenue                                      36,135      27,098
                                                    ----------  ----------
     Total current liabilities                         131,437      82,732

  Long-term accrued expenses and other
   long-term liabilities                                73,551      66,285
  Long-term debt                                         1,266       1,592
                                                    ----------  ----------
        Total liabilities                              206,254     150,609

Stockholders' equity
  Common stock                                             954         945
  Capital in excess of par value                       637,763     612,930
  Less: Cost of treasury stock                        (714,877)   (714,877)
  Retained earnings                                    671,266     616,051
  Accumulated other comprehensive income                 1,724         581
                                                    ----------  ----------
     Total stockholders' equity                        596,830     515,630
                                                    ----------  ----------
        Total liabilities and stockholders'
         equity                                     $  803,084  $  666,239
                                                    ==========  ==========

Contact Information

  • Contacts:
    Bob Halliday
    Executive Vice President and
    Chief Financial Officer
    978.282.7597

    Tom Baker
    Vice President, Finance
    978.282.2301