SOURCE: Zygo Corporation

October 25, 2007 16:00 ET

Zygo Announces First Quarter Fiscal 2008 Results

MIDDLEFIELD, CT--(Marketwire - October 25, 2007) - Zygo Corporation (NASDAQ: ZIGO) today announced net sales of $31.7 million and net loss of $0.9 million, or $0.05 per diluted share, for the first quarter of fiscal 2008 as compared with net sales of $41.1 million and net earnings of $3.7 million, or $0.20 per diluted share, for the first quarter of fiscal 2007.

Sales for the first quarter of fiscal 2008 were adversely affected by delays in customers' acceptance of several large systems (approximately $4.0 million) and delays in shipments of certain products due to late deliveries of key parts from suppliers (approximately $1.5 million). Earnings were further affected by unabsorbed factory costs due to low sales volume.

Orders for the first quarter of fiscal 2008 were $36.5 million. Orders from the Company's Metrology Division accounted for 60% of the orders received, with the Optics Division accounting for the remaining 40%. We continue to experience a decreased level of orders for our lithography OEM products and anticipate this trend to continue through the second quarter of fiscal 2008. We also have experienced push-outs of orders in the semiconductor capital equipment sector.

Bruce Robinson, ZYGO's Chairman and CEO, stated, "We are now expecting fiscal 2008 revenues to be approximately 5%-10% below the $181.0 million of sales achieved in fiscal 2007. This reflects growth in certain areas of the Company, partially offsetting the downturn in the lithography and semiconductor markets. We continue to anticipate fiscal 2008 sales and earnings to be skewed toward the second half of the year when we expect we will see a strengthening in orders and shipments."

Mr. Robinson continued, "Total orders increased slightly over the prior quarter, despite pressures in the lithography market. Our Optics Division continues to expand its customer base, as evidenced by the receipt in the quarter of an order from a new customer to produce long-range night vision surveillance systems. In addition, orders for our core metrology instruments were strong in the first quarter. We continue to invest in the semiconductor segment and remain committed to our belief that, based on our technology, our in-line systems will find acceptance in the market."

Zygo Corporation is a worldwide supplier of optical metrology instruments, precision optics, and electro-optical design and manufacturing services, serving customers in the semiconductor capital equipment and industrial markets.

Note: ZYGO's teleconference to discuss the results of the first quarter of fiscal 2008 will be held at 6 PM Eastern Time on October 25, 2007 and can be accessed by dialing 800-951-1214. This call is web cast live on ZYGO's web site at www.zygo.com. The call may also be accessed for 30 days following the teleconference.

All statements other than statements of historical fact included in this news release regarding our financial position, business strategy, plans, anticipated sales, orders, and growth rates, market opportunities, and objectives of management of the Company for future operations are forward-looking statements. Forward-looking statements are intended to provide management's current expectations or plans for the future operating and financial performance of the Company based upon information currently available and assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "anticipate," "believe," "estimate," "expect," "intend," "plans," "strategy," "project," and other words of similar meaning in connection with a discussion of future operating or financial performance. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements are fluctuations in capital spending of our customers, fluctuations in net sales to our major customer, manufacturing and supplier risks, dependence on timing and market acceptance of new product development, rapid technological and market change, risks in international operations, dependence on proprietary technology and key personnel, length of the sales cycle, environmental regulations, and fluctuations in our stock price. Zygo Corporation undertakes no obligation to publicly update or revise forward-looking statements to reflect events or circumstances after the date of this news release. Further information on potential factors that could affect Zygo Corporation's business is described in our reports on file with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended June 30, 2007.

                   Zygo Corporation and Subsidiaries
           Condensed Consolidated Statements of Operations
                             (Unaudited)

(Thousands, except per share amounts)

                                                    Three Months Ended
                                                       September 30,
                                                --------------------------
                                                    2007          2006
                                                ------------  ------------

Net sales                                       $     31,714  $     41,107
Cost of goods sold                                    20,662        23,316
                                                ------------  ------------
  Gross profit                                        11,052        17,791
                                                ------------  ------------

Selling, general, and administrative expenses          7,425         7,525
Research, development, and engineering expenses        5,642         5,124
                                                ------------  ------------
     Operating profit (loss)                          (2,015)        5,142
                                                ------------  ------------

Other income
     Interest income                                     811           725
     Miscellaneous income, net                           202            45
                                                ------------  ------------
     Total other income                                1,013           770
                                                ------------  ------------
     Earnings (loss) before income taxes
      and minority interest                           (1,002)        5,912

Income taxes                                             361        (2,069)
Minority interest                                       (303)         (191)
                                                ------------  ------------
     Net earnings (loss)                        $       (944) $      3,652
                                                ============  ============

Basic  - Earnings (loss) per share              $      (0.05) $       0.20
                                                ============  ============
Diluted - Earnings (loss) per share             $      (0.05) $       0.20
                                                ============  ============

Weighted average shares outstanding:
     Basic                                            18,193        18,118
                                                ============  ============
     Diluted                                          18,193        18,445
                                                ============  ============



                   Zygo Corporation and Subsidiaries
                 Condensed Consolidated Balance Sheets
                               (Unaudited)



                                             September 30,      June 30,
(Thousands of dollars)                           2007             2007
                                            --------------- ---------------
Assets
Current assets:
     Cash and cash equivalents              $        19,578 $        17,826
     Marketable securities                           21,835          29,453
     Receivables, net                                30,909          32,476
     Inventories                                     43,534          43,048
     Prepaid expenses                                 2,453           2,240
     Deferred income taxes                           15,275          15,077
                                            --------------- ---------------
          Total current assets                      133,584         140,120

Marketable securities                                20,904          22,879
Property, plant, and equipment, net                  36,423          36,349
Deferred income taxes                                 6,406           5,700
Intangible assets, net                                6,247           6,110
Other assets                                          1,017             436
                                            --------------- ---------------
Total assets                                $       204,581 $       211,594
                                            =============== ===============


Liabilities and Stockholders' Equity
Current liabilities:
     Payables                               $         6,488 $         8,720
     Accrued expenses                                21,093          22,463
     Income taxes payable                               610           1,103
                                            --------------- ---------------
          Total current liabilities                  28,191          32,286

Other long-term liabilities                           2,577             555
Minority interest                                     1,279             976
Stockholders' equity                                172,534         177,777
                                            --------------- ---------------

Total liabilities and stockholders' equity  $       204,581 $       211,594
                                            =============== ===============


Contact Information

  • For Further Information Call:
    Walter A. Shephard
    Vice President Finance, CFO, and Treasurer
    Voice: 860-704-3955
    Email Contact