SOURCE: Zygo Corporation

January 25, 2007 16:00 ET

Zygo Announces Continued Sales Growth in Q2 of Fiscal 2007

MIDDLEFIELD, CT -- (MARKET WIRE) -- January 25, 2007 -- Zygo Corporation (NASDAQ: ZIGO) today announced net sales of $44.7 million and net earnings of $3.7 million, or $0.20 per diluted share, for the second quarter of fiscal 2007 as compared with net sales of $43.6 million and net earnings of $3.7 million, or $0.20 per diluted share, for the second quarter of fiscal 2006. Net sales, excluding development services, rose 13%, or $5.1 million, to $43.1 million in the second quarter of fiscal 2007 from $38.0 million in the prior year period. This increase in net sales of products more than offset anticipated declines in development services revenue and was driven by sales from both the Company's Optics and Metrology Divisions. In conjunction with the management changes previously announced, the Company will report its segments based on its Metrology and Optics Divisions.

For the first six months of fiscal 2007, the Company recorded net sales of $85.8 million and net earnings of $7.4 million, or $0.40 per diluted share, as compared with net sales of $77.9 million and net earnings of $5.9 million, or $0.32 per diluted share, from the prior year period. Net sales, excluding development services, rose 20%, or $13.6 million, to $81.9 million in the first half of fiscal 2007 as compared with the prior year period.

Orders for the second quarter of fiscal 2007 were $49.7 million, resulting in a book-to-bill of 1.11. The Metrology Division accounted for 74% of the orders received, with the Optics Division accounting for the remaining 26%. This increased the Company's backlog to a record $92.4 million. Stage metrology lithography orders, which were significantly higher in the first two quarters of fiscal 2007 as compared with the first two quarters of fiscal 2006, contributed to the record backlog. For fiscal 2007, the Company expects these lithography orders to be $45-$50 million, similar to stage metrology lithography orders in fiscal 2006.

Bruce Robinson, ZYGO's Chairman and CEO, stated, "I am very pleased with the second quarter and first half performance of the Company. We continued to experience sales and earnings growth, even as we increased investment in our semiconductor initiatives and core technologies."

Significant achievements accomplished during the quarter included:

--  A gross profit of 44%, significantly above our gross profit for Q2 of
    fiscal 2006 of 39% and our targeted goal of 40%.
--  An order from a second customer for our in-line semiconductor tool.
--  A strengthening of our management team with the addition of Jim
    Northup and John Stack as Presidents of our two divisions, Metrology and
    Optics, respectively.
--  Two new product introductions, the NewView™ 600 and VeriFire
    Asphere™.
    

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 second quarter of fiscal 2007 will be held at 6 PM Eastern Standard Time on January 25, 2007 and can be accessed by dialing 800-732-9509. 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 growth rates, 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 and timing 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, 2006.


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

(Thousands of dollars, except per share amounts)

                                    Three Months Ended   Six Months Ended
                                    ------------------  ------------------
                                       December 31,        December 31,
                                    ------------------  ------------------
                                      2006      2005      2006      2005
                                    --------  --------  --------  --------
Net sales
     Products                       $ 43,088  $ 37,997  $ 81,909  $ 68,365
     Development services              1,594     5,611     3,880     9,572
                                    --------  --------  --------  --------
                                      44,682    43,608    85,789    77,937
                                    --------  --------  --------  --------
Cost of goods sold
     Products                         23,708    22,367    45,451    40,638
     Development services              1,207     4,049     2,780     6,954
                                    --------  --------  --------  --------
                                      24,915    26,416    48,231    47,592
                                    --------  --------  --------  --------
     Gross profit                     19,767    17,192    37,558    30,345

Selling, general, and
 administrative expenses               8,733     8,159    16,258    14,527
Research, development, and
 engineering expenses                  5,461     3,428    10,585     6,968
                                    --------  --------  --------  --------
     Operating profit                  5,573     5,605    10,715     8,850
                                    --------  --------  --------  --------

Other income
     Interest income                     703       411     1,428       828
     Miscellaneous income
      (expense), net                     (15)       84        30       207
                                    --------  --------  --------  --------
     Total other income                  688       495     1,458     1,035
                                    --------  --------  --------  --------
     Earnings before income taxes
        and minority interest          6,261     6,100    12,173     9,885

Income taxes                          (2,191)   (2,060)   (4,260)   (3,502)
Minority interest                       (356)     (360)     (547)     (510)
                                    --------  --------  --------  --------
     Net earnings                   $  3,714  $  3,680  $  7,366  $  5,873
                                    ========  ========  ========  ========

Basic  - Earnings per share         $   0.20  $   0.20  $   0.41  $   0.33
                                    ========  ========  ========  ========
Diluted - Earnings per share        $   0.20  $   0.20  $   0.40  $   0.32
                                    ========  ========  ========  ========




                     Zygo Corporation and Subsidiaries
                   Condensed Consolidated Balance Sheets
                                (Unaudited)


(Thousands of dollars)                  December 31, 2006   June 30, 2006
                                        ----------------- -----------------
Assets
Current assets:
     Cash and cash equivalents          $          18,980 $          20,318
     Marketable securities                         26,106            21,415
     Receivables, net                              30,272            33,759
     Inventories                                   44,300            38,082
     Prepaid expenses                               2,312             2,106
     Deferred income taxes                         12,105            11,959
                                        ----------------- -----------------
          Total current assets                    134,075           127,639

Marketable securities                              20,811            23,743
Property, plant, and equipment, net                34,325            32,631
Deferred income taxes                              12,313            15,433
Intangible assets, net                              6,016             5,925
Other assets                                          616               812
                                        ----------------- -----------------
Total assets                            $         208,156 $         206,183
                                        ================= =================


Liabilities and Stockholders' Equity
Current liabilities:
     Payables                           $          10,803 $          13,987
     Accrued expenses                              25,126            29,734
     Income taxes payable                           1,978             2,004
                                        ----------------- -----------------
          Total current liabilities                37,907            45,725

Other long-term liabilities                           496               101
Minority interest                                   1,967             1,419
Stockholders' equity                              167,786           158,938
                                        ----------------- -----------------
Total liabilities and stockholders'
 equity                                 $         208,156 $         206,183
                                        ================= =================

Contact Information

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