SOURCE: Varian Semiconductor

Varian Semiconductor

October 29, 2009 16:30 ET

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

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
                                                  ===========  ===========


Contact Information

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

    Tom Baker
    Vice President, Finance
    978.282.2301