SOURCE: Varian Semiconductor

Varian Semiconductor

July 28, 2011 16:15 ET

Varian Semiconductor Equipment Associates Reports Fiscal Year 2011 Third Quarter Results

GLOUCESTER, MA--(Marketwire - Jul 28, 2011) - Varian Semiconductor Equipment Associates, Inc. ("Varian Semiconductor") (NASDAQ: VSEA) today announced results for its fiscal year 2011 third quarter ended July 1, 2011.

Revenue for the third quarter of fiscal year 2011 totaled $328.4 million, compared to revenue of $227.7 million for the same period a year ago. Varian Semiconductor recorded net income of $67.4 million, or $0.87 per diluted share during the third quarter of fiscal year 2011, compared to net income of $45.2 million, or $0.60 per diluted share for the same period a year ago. The third quarter of fiscal year 2011 included $3.8 million in expenses associated with the pending merger between Varian Semiconductor and Applied Materials, Inc. The third quarter also included $9.6 million in additional tax expense, as Varian Semiconductor nears completion of an IRS examination. In total, these items reduced earnings per share by $0.16 per share. The additional tax expense will not affect previously communicated tax rate guidance for future quarters.

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 14 times over the last 15 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 tax rate guidance for future quarters 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 that could cause actual results to differ materially from those projected or implied by such statements, including, but not limited to: the ability of Varian Semiconductor and Applied Materials, Inc. to consummate the pending merger in a timely manner or at all, 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 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.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
July 1, July 2, July 1, July 2,
2011 2010 2011 2010
Revenue
Product $ 302,081 $ 209,919 $ 874,745 $ 528,662
Service 26,357 17,810 66,295 44,292
Total revenue 328,438 227,729 941,040 572,954
Cost of revenue 166,645 116,115 478,526 292,813
Gross profit 161,793 111,614 462,514 280,141
Operating expenses
Research, development and engineering 31,386 25,782 87,797 71,856
Marketing, general and administrative 41,519 31,229 111,796 89,282
Restructuring - 380 - 380
Total operating expenses 72,905 57,391 199,593 161,518
Operating income 88,888 54,223 262,921 118,623
Interest income, net 823 1,044 2,306 2,811
Other expense, net (349 ) (98 ) (749 ) (1,062 )
Income before income taxes 89,362 55,169 264,478 120,372
Income tax provision 21,967 10,001 42,886 19,989
Net income $ 67,395 $ 45,168 $ 221,592 $ 100,383
Weighted average shares outstanding – basic 75,960 74,680 75,212 74,262
Weighted average shares outstanding – diluted 77,063 75,590 76,423 75,237
Net income per share – basic $ 0.89 $ 0.60 $ 2.95 $ 1.35
Net income per share – diluted $ 0.87 $ 0.60 $ 2.90 $ 1.33
VARIAN SEMICONDUCTOR EQUIPMENT ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
July 1, October 1,
2011 2010
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 491,063 $ 235,450
Short-term investments 64,979 60,871
Accounts receivable, net 222,830 223,960
Inventories 226,311 190,538
Deferred income taxes 13,945 20,955
Other current assets 52,390 21,428
Total current assets 1,071,518 753,202
Long-term investments 123,884 101,332
Property, plant and equipment, net 77,981 68,140
Deferred income taxes 5,364 4,363
Other assets 16,296 15,173
Total assets $ 1,295,043 $ 942,210
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 46,574 $ 53,529
Accrued expenses and other current liabilities 51,416 46,739
Deferred revenue 73,478 46,707
Income taxes payable 42,373 7,476
Product warranty 12,925 8,627
Total current liabilities 226,766 163,078
Long-term accrued expenses and other long-term liabilities 73,786 81,130
Total liabilities 300,552 244,208
Stockholders' equity
Common stock 997 958
Capital in excess of par value 779,757 654,458
Less: Cost of treasury stock (784,897 ) (732,859 )
Retained earnings 997,227 775,635
Accumulated other comprehensive income (loss) 1,407 (190 )
Total stockholders' equity 994,491 698,002
Total liabilities and stockholders' equity $ 1,295,043 $ 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