SOURCE: Varian Semiconductor

Varian Semiconductor

January 27, 2011 16:15 ET

Varian Semiconductor Equipment Associates Reports Fiscal 2011 First Quarter Results

GLOUCESTER, MA--(Marketwire - January 27, 2011) - Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: VSEA) today announced results for its fiscal year 2011 first quarter ended December 31, 2010.

Revenue for the first quarter of fiscal year 2011 totaled $282.6 million, compared to revenue of $141.3 million for the same period a year ago. Varian Semiconductor recorded net income of $71.9 million, or $0.95 per diluted share during the first quarter of fiscal year 2011, compared to net income of $16.6 million, or $0.22 per diluted share for the same period a year ago. The tax rate for the first quarter of fiscal year 2011 was 10%. The quarter's tax rate was reduced by 4% due to discrete items, including the retroactive benefit of the R&D tax credit. The quarter's tax rate was also lower due to the current quarter's benefit of the R&D tax credit and a higher projected mix of international sales.

Gary Dickerson, chief executive officer of Varian Semiconductor, said, "Since our last earnings conference call, we have seen a steadily increasing business demand for tools by our customers. We are optimistic about Varian's 2011 business opportunities, some of which are reflected in our second quarter guidance."

Bob Halliday, chief financial officer, provided forward guidance for the second quarter of fiscal year 2011, "In the first quarter of fiscal year 2011, we reported our highest-ever quarterly operating margins, net income and earnings per share. Our earnings per share of $0.95 and our revenues of $282.6 million exceeded our guidance. Second quarter revenue is expected to be between $315.0 and $325.0 million and earnings per share are anticipated to range from $1.02 to $1.07."

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 13 times over the last 14 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 customer demand, business opportunities, guidance for second quarter fiscal 2011 revenue, earnings per diluted share, financial performance 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; market adoption of Varian Semiconductor's new products, such as the Solion implant product; 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 1, 2010 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 INCOME
                 (In thousands, except per share amounts)


                                                     Three Months Ended
                                                  ------------------------
                                                  December 31,  January 1,
                                                      2010         2010
                                                  -----------  -----------
                                                        (unaudited)
Revenue
  Product                                         $   259,568  $   127,461
  Service                                              23,013       13,807
                                                  -----------  -----------
     Total revenue                                    282,581      141,268

Cost of revenue                                       143,631       72,581
                                                  -----------  -----------
Gross profit                                          138,950       68,687
                                                  -----------  -----------
Operating expenses
  Research, development and engineering                26,624       21,728
  Marketing, general and administrative                33,517       26,103
                                                  -----------  -----------
     Total operating expenses                          60,141       47,831
                                                  -----------  -----------
     Operating income                                  78,809       20,856

Interest income, net                                      703          865
Other expense, net                                        (18)        (504)
                                                  -----------  -----------
Income before income taxes                             79,494       21,217
Provision for income taxes                              7,640        4,595
                                                  -----------  -----------
Net income                                        $    71,854  $    16,622
                                                  ===========  ===========

Weighted average shares outstanding - basic            74,265       73,700
Weighted average shares outstanding - diluted          75,358       74,753

     Net income per share - basic                 $      0.97  $      0.23
     Net income per share - diluted               $      0.95  $      0.22




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

                                                December 31,   October 1,
                                                    2010          2010
                                                ------------  ------------
                                                (unaudited)
                    ASSETS
Current assets
   Cash and cash equivalents                    $    275,081  $    235,450
   Short-term investments                             54,191        60,871
   Accounts receivable, net                          212,024       223,960
   Inventories                                       188,856       190,538
   Deferred income taxes                              19,751        20,955
   Other current assets                               26,533        21,428
                                                ------------  ------------
         Total current assets                        776,436       753,202

   Long-term investments                             122,213       101,332
   Property, plant and equipment, net                 70,034        68,140
   Long-term deferred income taxes                     4,363         4,363
   Other assets                                       15,122        15,173
                                                ------------  ------------
               Total assets                     $    988,168  $    942,210
                                                ============  ============

     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Current portion of long-term debt            $        683  $        668
   Accounts payable                                   43,154        53,529
   Accrued expenses                                   32,484        46,071
   Income taxes payable                                9,038         7,476
   Product warranty                                   10,708         8,627
   Deferred revenue                                   38,134        46,707
                                                ------------  ------------
         Total current liabilities                   134,201       163,078

   Long-term accrued expenses and other
    long-term liabilities                             84,812        80,206
   Long-term debt                                        748           924
                                                ------------  ------------
               Total liabilities                     219,761       244,208

Stockholders' equity
   Common stock                                          965           958
   Capital in excess of par value                    670,237       654,458
   Less: Cost of treasury stock                     (751,710)     (732,859)
   Retained earnings                                 847,489       775,635
   Accumulated other comprehensive income
    (loss)                                             1,426          (190)
                                                ------------  ------------
         Total stockholders' equity                  768,407       698,002
                                                ------------  ------------
               Total liabilities and
                stockholders' equity            $    988,168  $    942,210
                                                ============  ============

Contact Information

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