SOURCE: Zygo Corporation

August 16, 2007 16:00 ET

ZYGO Announces Fiscal 2007 Q4 and Full Year Results; Board Authorizes Stock Repurchase Program of up to $25 Million

MIDDLEFIELD, CT--(Marketwire - August 16, 2007) - Zygo Corporation (NASDAQ: ZIGO) today announced net sales of $46.5 million and net earnings of $3.8 million, or $0.20 per diluted share, for the fourth quarter of fiscal 2007. Compared with the same period in fiscal 2006, net sales decreased by $0.7 million and net earnings decreased by $0.7 million, or $0.04 per diluted share. Earnings per diluted share for the fourth quarter of fiscal 2006 were positively impacted by $0.03 due to the recognition of one-time tax benefits related to prior year foreign trading income.

For fiscal 2007, the Company recorded net sales of $181.0 million and net earnings of $15.1 million, or $0.81 per diluted share, as compared with fiscal 2006 net sales of $168.1 million and net earnings of $14.5 million, or $0.79 per diluted share. Fiscal 2007 net sales increased 8% over fiscal 2006, as an increase in product sales of $28.8 million (19%) more than offset a decrease of $15.9 million related to the finalization of a major development services contract. This increase in product sales resulted from a strong performance across the Company's product lines. Earnings per diluted share for fiscal 2006 were positively impacted by $0.07 due to the recognition of one-time tax benefits related to prior year foreign trading income.

Bruce Robinson, ZYGO's Chairman and CEO, stated, "We are pleased with our fiscal 2007 financial results, including Company records for sales and earnings, with both the Metrology and Optics Divisions making significant contributions to our success this year. Fiscal 2007 began as a challenging year. However, continued strength in optics, semiconductor, and medical component sales more than offset the completion of the development services contract."

Highlights for the year included:

--  Record revenues of $181.0 million, which included product sales growth
    of 19% over the prior year.
--  Gross profit of 43% of sales was the highest since fiscal 2001.
--  An increase in EPS to $0.81, as we more than covered a $6.1 million
    increase in RD&E expenses.
--  Shipment of our first Back End Of Line ("BEOL") semiconductor tool
    anticipated to be accepted by the customer in early fiscal 2008.
    

Orders for the fourth quarter of fiscal 2007 were $36.1 million. Orders from the Company's Metrology Division accounted for 57% of the orders received, with the Optics Division accounting for the remaining 43%. For the full year, orders were $172.5 million, a decrease of 5% over fiscal 2006. As we have previously disclosed, orders for our lithography OEM products have experienced a sharp decline and we anticipate that this will continue through the remainder of calendar 2007. We have also seen push-outs and cancellations in the semiconductor capital equipment sector.

Commenting on fiscal 2008 expectations, Mr. Robinson said, "We expect fiscal 2008 revenues to be approximately equivalent to fiscal 2007 levels. This reflects growth in other areas of the Company offsetting the downturn in the semiconductor market. We further anticipate fiscal 2008 sales and earnings to be skewed toward the second half of the year when we believe we will see a strengthening in orders and shipments of semiconductor and display systems."

The Company also announced that its Board of Directors authorized the repurchase of up to $25.0 million of the Company's outstanding common stock. The repurchases will occur from time to time as market conditions warrant through transactions in the open market. The Company expects that the initial share repurchases will be effected pursuant to a plan in conformity with Rule 10b5-1 under the Securities Exchange Act of 1934. This rule allows public companies to adopt written, pre-arranged stock trading plans when they do not have material, non-public information in their possession. The adoption of this stock trading plan will allow the Company to repurchase its shares during periods when it otherwise might be prevented from doing so under insider trading laws or because of self-imposed trading blackout periods.

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 fourth quarter of fiscal 2007 will be held at 6 PM Eastern Time on August 16, 2007 and can be accessed by dialing 800-926-4420. 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 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, 2006.

                   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,
                                --------------------  --------------------
                                  2007       2006       2007       2006
                                ---------  ---------  ---------  ---------
Net sales
     Products                   $  46,544  $  41,898  $ 176,937  $ 148,123
     Development services               -      5,254      4,051     20,014
                                ---------  ---------  ---------  ---------
                                   46,544     47,152    180,988    168,137
                                ---------  ---------  ---------  ---------
Cost of goods sold
     Products                      27,330     24,542    100,835     88,119
     Development services               -      3,631      2,970     14,247
                                ---------  ---------  ---------  ---------
                                   27,330     28,173    103,805    102,366
                                ---------  ---------  ---------  ---------
     Gross profit                  19,214     18,979     77,183     65,771

Selling, general, and
 administrative expenses            8,201      8,616     32,876     31,125
Research, development, and
 engineering expenses               5,399      4,994     22,038     15,901
                                ---------  ---------  ---------  ---------
     Operating profit               5,614      5,369     22,269     18,745
                                ---------  ---------  ---------  ---------

Other income
     Interest income                  816        617      2,990      2,119
     Miscellaneous income
      (expense), net                 (187)        93         (9)       262
                                ---------  ---------  ---------  ---------
     Total other income               629        710      2,981      2,381
                                ---------  ---------  ---------  ---------
     Earnings before income
      taxes and minority
      interest                      6,243      6,079     25,250     21,126

Income taxes                       (2,229)    (1,386)    (9,132)    (5,849)
Minority interest                    (204)      (178)      (976)      (792)
                                ---------  ---------  ---------  ---------
     Net earnings               $   3,810  $   4,515  $  15,142  $  14,485
                                =========  =========  =========  =========

Basic  - Earnings per share     $    0.21  $    0.25  $    0.83  $    0.80
                                =========  =========  =========  =========
Diluted - Earnings per share    $    0.20  $    0.24  $    0.81  $    0.79
                                =========  =========  =========  =========

Weighted average shares
 outstanding:
     Basic                         18,217     18,103     18,156     18,054
                                =========  =========  =========  =========
     Diluted                       18,677     18,503     18,601     18,367
                                =========  =========  =========  =========





                       Zygo Corporation and Subsidiaries
                     Condensed Consolidated Balance Sheets
                                  (Unaudited)



                                                        June 30,  June 30,
(Thousands of dollars)                                    2007      2006
                                                        --------- -------- 
Assets
Current assets:
     Cash and cash equivalents                          $  17,826 $  20,318
     Marketable securities                                 29,453    21,415
     Receivables, net                                      32,476    33,759
     Inventories                                           43,048    38,082
     Prepaid expenses                                       2,240     2,106
     Deferred income taxes                                 15,077    11,959
                                                        --------- ---------
          Total current assets                            140,120   127,639

Marketable securities                                      22,879    23,743
Property, plant, and equipment, net                        36,349    32,631
Deferred income taxes                                       5,700    15,433
Intangible assets, net                                      6,110     5,925
Other assets                                                  436       812
                                                        --------- ---------
Total assets                                            $ 211,594 $ 206,183
                                                        ========= =========


Liabilities and Stockholders' Equity
Current liabilities:
     Payables                                           $   8,720 $  13,987
     Accrued expenses                                      22,463    29,734
     Income taxes payable                                   1,103     2,004
                                                        --------- ---------
          Total current liabilities                        32,286    45,725

Other long-term liabilities                                   555       101
Minority interest                                             976     1,419
Stockholders' equity                                      177,777   158,938
                                                        --------- ---------
Total liabilities and stockholders' equity              $ 211,594 $ 206,183
                                                        ========= =========

Contact Information

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