SOURCE: Zygo Corporation

August 25, 2005 16:00 ET

ZYGO Announces Fiscal 2005 Q4 and Full Year Earnings -- Record Sales in Q4 and Full Year Fuels Earnings Growth

MIDDLEFIELD, CT -- (MARKET WIRE) -- August 25, 2005 -- Zygo Corporation (NASDAQ: ZIGO), a worldwide supplier in optical metrology instruments, precision optics, and electro-optical design and manufacturing services, serving customers in the semiconductor capital equipment and industrial markets, today announced earnings from continuing operations for the fourth quarter of fiscal 2005 of $3.9 million, or $0.22 per diluted share, as compared with earnings from continuing operations of $3.0 million, or $0.17 per diluted share, for the same period in fiscal 2004.

For fiscal 2005, the Company recorded earnings from continuing operations of $10.2 million, or $0.56 per diluted share, as compared with earnings from continuing operations of $4.2 million, or $0.23 per diluted share, for fiscal 2004.

Net sales for the fourth quarter of fiscal 2005 increased 24% to $44.9 million as compared with the prior year fourth quarter. Net sales for fiscal 2005 increased 22% to $142.2 million as compared with fiscal 2004. Backlog at June 30, 2005 totaled $66.6 million which decreased by $2.3 million, or 3%, from March 31, 2005 and increased $11.7 million, or 21%, from June 30, 2004.

Orders for the fourth quarter of fiscal 2005 were $42.5 million as compared with $42.1 million for the fourth quarter of fiscal 2004. Orders from the Company's semiconductor segment accounted for 48% of the orders received, with the industrial segment accounting for 52% of the orders.

"Fiscal 2005 has been a very good year for the Company," said Bruce Robinson, ZYGO Chairman and Chief Executive. "The financial results that we have delivered and the improvement over last year speak for themselves. Just as satisfying to us has been the continued progress we have made with our two main initiatives in the semiconductor market. Our flat panel display products are experiencing increasing acceptance and we are growing this area of our business in various countries with an expanded product offering. In addition, our entry into the back end sector of semiconductor packaging continues to gather momentum. An added plus is our industrial product offerings, which continue to meet customer acceptance and provide us with a strong complement to our semiconductor segment," Mr. Robinson stated.

For fiscal 2005, the Company recorded net earnings of $9.8 million, or $0.54 per diluted share, which included a loss from discontinued operations of $0.4 million, or $0.02 per diluted share. This compares with a net loss of $3.4 million, or $0.19 per diluted share, for fiscal 2004, which included a loss from discontinued operations of $7.7 million, or $0.42 per diluted share. The Company recorded net earnings of $3.9 million, or $0.21 per diluted share, for the fourth quarter of fiscal 2005 as compared with a net loss of $1.9 million, or $0.10 per diluted share, for the fourth quarter of fiscal 2004. Charges for discontinued operations in the fourth quarter of fiscal 2005 related to the allocation of tax expense between continuing operations and discontinued operations. There were no operating expense charges related to the discontinued operations in this period and no charges are expected in future periods.

Highlights for the fourth quarter of fiscal 2005 included:

--  The Company received its first order for its next generation advanced
    one drop fill process (ODF) control system for the flat panel display
    market. This system simultaneously integrates precision measurements from
    both the Thin Film Transistor (TFT) and color filter substrates to optimize
    volume control of the liquid crystal fill process.
    
--  ZYGO continued its success in the high energy laser market by
    receiving an order (industrial segment) in excess of $6.0 million for a
    major laser program in Europe.
    
--  Orders continued to rebound in the Company's lithography business.
    
Mr. Robinson concluded by stating, "Progress in the fourth quarter was consistent with what we have seen throughout the year. We are investing in areas that we believe will give us growth as we pursue new markets with different applications to meet the demands of the marketplace. We expect to continue with these strategies and others in the coming fiscal year."

Note: ZYGO's teleconference to discuss the results of the fourth quarter of fiscal 2005 will be held at 6 PM Eastern Daylight Time on August 25, 2005, and can be accessed by dialing 800-633-8486. 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 new product development, rapid technological and market change, risks in international operations, dependence on proprietary technology and key personnel, length of the sales cycle, and environmental regulations. 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, 2004.


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

(Thousands, except per share amounts)

                            Three Months Ended   Twelve Months Ended
                            June 30,   June 30,   June 30,   June 30,
                              2005       2004       2005       2004
                           ---------  ---------  ---------  ---------
Net sales
  Products                 $  38,892  $  33,590  $ 126,550  $ 100,585
  Development services         6,003      2,718     15,617     16,057
                           ---------  ---------  ---------  ---------
                              44,895     36,308    142,167    116,642
                           ---------  ---------  ---------  ---------
Cost of goods sold
  Products                    23,877     18,996     76,882     61,044
  Development services         4,372      1,813     11,138     12,533
                           ---------  ---------  ---------  ---------
                              28,249     20,809     88,020     73,577
                           ---------  ---------  ---------  ---------
  Gross profit                16,646     15,499     54,147     43,065

Selling, general, and
 administrative expenses       7,982      7,793     24,862     24,595
Research, development, and
 engineering expenses          2,688      3,667     13,377     13,011
                           ---------  ---------  ---------  ---------
  Operating profit             5,976      4,039     15,908      5,459
                           ---------  ---------  ---------  ---------

Other income:
  Interest income                343        157        885        795
  Miscellaneous income
   (expense), net                (81)       (44)         1        169
                           ---------  ---------  ---------  ---------
  Total other income             262        113        886        964
                           ---------  ---------  ---------  ---------
  Earnings from continuing
   operations before
   income taxes and
   minority interest           6,238      4,152     16,794      6,423

Income tax expense            (2,235)    (1,000)    (5,856)    (1,863)
Minority interest                (78)      (137)      (762)      (312)
                           ---------  ---------  ---------  ---------
  Earnings from continuing
   operations                  3,925      3,015     10,176      4,248
                           ---------  ---------  ---------  ---------

Discontinued TeraOptix
 operations, net of tax          (32)       (42)      (242)    (1,263)
Charges and adjustments
 on the disposal of
 TeraOptix, net of tax           (17)    (4,872)      (124)    (6,392)
                           ---------  ---------  ---------  ---------
  Loss from discontinued
   operations                    (49)    (4,914)      (366)    (7,655)
                           ---------  ---------  ---------  ---------
Net earnings (loss)        $   3,876  $  (1,899) $   9,810  $  (3,407)
                           =========  =========  =========  =========

Basic - Earnings (loss)
 per share:
  Continuing operations    $    0.22  $    0.17  $    0.57  $    0.24
  Discontinued operations  $       -  $   (0.28) $   (0.02) $   (0.43)
                           ---------  ---------  ---------  ---------
  Net earnings (loss)      $    0.22  $   (0.11) $    0.55  $   (0.19)
                           =========  =========  =========  =========

Diluted - Earnings (loss)
 per share:
  Continuing operations    $    0.22  $    0.17  $    0.56  $    0.23
  Discontinued operations  $   (0.01) $   (0.27) $   (0.02) $   (0.42)
                           ---------  ---------  ---------  ---------
  Net earnings (loss)      $    0.21  $   (0.10) $    0.54  $   (0.19)
                           =========  =========  =========  =========

Weighted average shares
 outstanding:
  Basic                       17,976     17,877     17,950     17,802
                           =========  =========  =========  =========
  Diluted                     18,146     18,187     18,140     18,221
                           =========  =========  =========  =========



                     Zygo Corporation and Subsidiaries
                   Condensed Consolidated Balance Sheets
                                (Unaudited)

(Thousands of dollars)                  June 30, 2005     June 30, 2004
                                        -------------     -------------
Assets
Current assets:
    Cash and cash equivalents          $     20,949       $      9,162
    Marketable securities                    17,242             16,728
    Receivables, net                         28,125             26,338
    Inventories                              33,727             21,547
    Prepaid expenses                          2,140              1,915
    Deferred income taxes                     8,895              3,999
    Assets from discontinued unit
     held for sale                                -              2,012
                                       ------------       ------------
             Total current assets           111,078             81,701

Marketable securities                        18,711              8,503
Property, plant, and equipment, net          31,420             27,433
Deferred income taxes                        21,476             31,738
Intangible assets, net                        5,638              4,999
Other assets                                  1,017              1,078
                                       ------------       ------------
Total assets                           $    189,340       $    155,452
                                       ============       ============


Liabilities and Stockholders' Equity
Current liabilities:
    Payables                           $     13,510       $     10,384
    Accrued expenses                         32,804             10,798
    Income taxes payable                      1,510              2,038
                                       ------------       ------------
             Total current liabilities       47,824             23,220

Other long-term liabilities                      96                350
Minority interest                             1,249              1,238
Stockholders' equity                        140,171            130,644
                                       ------------       ------------
Total liabilities and stockholders'
 equity                                $    189,340       $    155,452
                                       ============       ============

Contact Information

  • Walter Shephard
    Vice President, Finance, Chief Financial Officer, and Treasurer
    Voice: 860-704-3955
    Email Contact