MIDDLEFIELD, CT--(Marketwire - May 5, 2011) - Zygo Corporation (NASDAQ: ZIGO) today
announced its financial results for the third quarter of fiscal 2011, ended
March 31, 2011.
Third quarter fiscal 2011 net revenues of $40.2 million increased 58% from
$25.4 million recorded for the third quarter in the prior fiscal year.
Net earnings from continuing operations attributable to Zygo during the
quarter increased to $4.5 million, or $0.24 per diluted share, compared
with a net loss from continuing operations attributable to Zygo in the same
quarter of the prior fiscal year of $2.5 million, or $0.15 per diluted
share. After adjusting the prior year quarter for one-time charges, the
reported net earnings from continuing operations attributable to Zygo were
$0.8 million, or $0.04 per diluted share. A reconciliation between GAAP
(Accounting Principles Generally Accepted in the United States of America)
operating results and non-GAAP operating results is provided following the
financial statements that are part of this release.
Bookings of $41.7 million for the third quarter of fiscal 2011 increased
53% over the prior year quarter. Bookings for the Metrology Solutions
Division accounted for 58% of the bookings received, and the Optical
Systems Division contributed 42%. Backlog rose to $60.5 million at March
31, 2011, compared with $43.9 million at March 31, 2010.
Highlights in the quarter included:
-- A $3.0 million continuation order for laser fusion amplifiers from
Commissariat à l'énergie Atomique (CEA) in France.
-- Continued strong bookings from China for large metrology systems for
optical component testing.
-- Increasing bookings for our Optical Systems Division, including Extreme
Precision Optics, Large Optical Components and Laser Fusion Optics.
Year-to-date fiscal 2011 net revenues were $107.4 million, 48% higher than
comparable fiscal 2010 year-to-date net revenues of $72.8 million.
Year-to-date net earnings from continuing operations attributable to Zygo
were $12.9 million, or $0.71 per diluted share, compared with a net loss
from continuing operations attributable to Zygo of $7.7 million, or $0.45
loss per diluted share, for the first nine months of fiscal 2010.
Year-to-date net earnings from continuing operations attributable to Zygo
in fiscal 2011, excluding the gain on acquisition recorded in the second
quarter, was $0.60 per diluted share, compared with a net loss from
continuing operations attributable to Zygo of $0.16 per diluted share in
the first nine months of fiscal 2010, excluding one-time charges.
Dr. Chris Koliopoulos, President and Chief Executive Officer of Zygo
Corporation, stated, "We are pleased with the development and growth of our
core businesses. With increased activity in both the Metrology and Optics
segments, we continue to grow revenue with positive book-to-bill ratios and
have increased backlog to the highest level in over two years. The
business is executing well on its mandates, with revenues and operating
earnings, net of one-time charges, increasing for four consecutive
quarters, and gross margins, net of one-time charges, increasing for seven
consecutive quarters and consistently in the mid-40% range. Our attention
to gross margin improvement has driven gross margins and operating margins
to the highest levels in nearly ten years."
John Jordan, Chief Financial Officer of Zygo Corporation, commenting on the
third quarter results, said, "The Company has been a strong cash generator
during the quarter and fiscal year. We generated $12.8 million of cash
from continuing operations, which increased cash, cash equivalents and
short-term marketable securities from $47.5 million at June 30, 2010 to
$53.3 million at March 31, 2011, after a cash payment for the acquisition
of assets associated with the Richmond operation of $7.1 million. The
Richmond operation has been fully integrated into our Optical Systems
Division, and is contributing to both revenues and earnings."
With concern over the recent tragic disaster in Japan, Dr. Koliopoulos
added, "We have been in close contact with our customers and suppliers in
Japan and have been monitoring the situation. To date, there have not been
any notable effects on our business due to the tragic events in that
region, and we have no reason to believe that the events there will have a
negative impact on our business."
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, bio-medical,
scientific and industrial markets.
Note: Zygo's teleconference to discuss the results of the third quarter of
fiscal 2011 will be held at 5 PM Eastern Time on May 5, 2011 and can be
accessed by dialing 800-621-6658. 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.
Forward-Looking Statements
All statements other than statements of historical fact included in this
news release regarding financial performance, condition and operations, and
the business strategy, plans, anticipated revenues, bookings, market
acceptance, growth rates, market opportunities, and objectives of
management of the Company for future operations are forward-looking
statements. Forward-looking statements 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 revenues
to our major customers; manufacturing and supplier risks; risks of booking
cancellations, push-outs and de-bookings; dependence on timing and market
acceptance of new product development; rapid technological and market
change; risks in international operations; risks related to the
reorganization of our business; dependence on proprietary technology and
key personnel; length of the revenues cycle; environmental regulations;
investment portfolio returns; fluctuations in our stock price; the risk
that anticipated growth opportunities may be smaller than anticipated or
may not be realized; risks related to business acquisitions, including the
acquisition of substantially all the assets of ASML US, Inc.'s Richmond,
California facility, and integration of the business and employees; the
risk related to the Company's recent changes to senior management; and the
risks associated with the recovery from the recent earthquake, tsunami and
nuclear disaster in Japan and its impact on our customers, suppliers, and
operations. 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, 2010, filed with the
Securities and Exchange Commission on September 13, 2010.
Zygo Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(Thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------- --------------------
2011 2010 2011 2010
--------- --------- --------- ---------
Net revenues $ 40,235 $ 25,439 $ 107,440 $ 72,845
Cost of goods sold 21,371 13,962 57,479 43,241
--------- --------- --------- ---------
Gross profit 18,864 11,477 49,961 29,604
--------- --------- --------- ---------
Selling, general, and
administrative expenses 9,418 7,972 24,886 23,113
Research, development, and
engineering expenses 3,739 3,546 10,872 11,089
Impairment of goodwill - 2,003 - 2,003
--------- --------- --------- ---------
Operating profit (loss) 5,707 (2,044) 14,203 (6,601)
--------- --------- --------- ---------
Other income (expense)
Gain on acquisition - - 1,289 -
Miscellaneous income
(expense), net (153) (96) 71 62
--------- --------- --------- ---------
Total other income
(expense) (153) (96) 1,360 62
--------- --------- --------- ---------
Earnings (loss) from continuing
operations before income
taxes, including noncontrolling
interest 5,554 (2,140) 15,563 (6,539)
Income tax expense (720) (131) (1,474) (505)
--------- --------- --------- ---------
Net earnings (loss) from
continuing operations 4,834 (2,271) 14,089 (7,044)
Net earnings (loss) from
discontinued operations, net
of tax - (193) 91 (2,667)
--------- --------- --------- ---------
Net earnings (loss) including
noncontrolling interest 4,834 (2,464) 14,180 (9,711)
Less: Net earnings attributable
to noncontrolling interest 361 232 1,205 677
--------- --------- --------- ---------
Net earnings (loss)
attributable to Zygo
Corporation $ 4,473 $ (2,696) $ 12,975 $ (10,388)
========= ========= ========= =========
Basic - Earnings (loss) per
share attributable to Zygo
Corporation
Continuing operations $ 0.25 $ (0.15) $ 0.73 $ (0.45)
Discontinued operations - (0.01) 0.01 (0.16)
--------- --------- --------- ---------
Net earnings (loss) per
share $ 0.25 $ (0.16) $ 0.74 $ (0.61)
========= ========= ========= =========
Diluted - Earnings (loss) per
share attributable to Zygo
Corporation
Continuing operations $ 0.24 $ (0.15) $ 0.71 $ (0.45)
Discontinued operations - (0.01) 0.01 (0.16)
--------- --------- --------- ---------
Net earnings (loss) per
share $ 0.24 $ (0.16) $ 0.72 $ (0.61)
========= ========= ========= =========
Weighted average shares
outstanding
Basic shares 17,693 17,342 17,600 17,091
========= ========= ========= =========
Diluted shares 18,304 17,342 18,056 17,091
========= ========= ========= =========
Amounts Attributable to Zygo
Corporation
Net earnings (loss) from
continuing operations
attributable to Zygo
Corporation $ 4,473 $ (2,503) $ 12,884 $ (7,721)
Discontinued operations,
net of tax - (193) 91 (2,667)
--------- --------- --------- ---------
Net earnings (loss)
attributable to Zygo
Corporation $ 4,473 $ (2,696) $ 12,975 $ (10,388)
========= ========= ========= =========
Zygo Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(Thousands)
March 31, June 30,
2011 2010
--------- ---------
Assets
Current assets:
Cash and cash equivalents $ 52,341 $ 46,536
Marketable securities 1,000 1,000
Receivables, net 30,819 19,948
Inventories 27,707 25,220
Prepaid expenses and other current assets 1,702 1,643
Income tax receivable - 1,050
Current assets of discontinued operations - 17
--------- ---------
Total current assets 113,569 95,414
Marketable securities 1,027 922
Property, plant, and equipment, net 31,633 23,029
Intangible assets, net 5,664 5,387
Other assets - 413
--------- ---------
Total assets $ 151,893 $ 125,165
========= =========
Liabilities and Equity
Current liabilities:
Accounts payable $ 8,104 $ 8,426
Accrued expenses 17,640 14,064
Income tax payable 1,116 152
Current liabilities of discontinued operations 281 287
--------- ---------
Total current liabilities 27,141 22,929
Other long-term liabilities 4,667 1,359
Long-term liabilities of discontinued operations - 281
Commitments and contingencies - -
Total stockholders' equity - Zygo Corporation 117,190 98,403
Noncontrolling interest 2,895 2,193
--------- ---------
Total equity 120,085 100,596
--------- ---------
Total liabilities and equity $ 151,893 $ 125,165
========= =========
Zygo Corporation and Subsidiaries
Reported Results to Non-GAAP Results
(Unaudited)
(Thousands, except per share amounts)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------ ------------------
2011 2010 2011 2010
-------- -------- -------- --------
GAAP operating profit (loss) (as
reported) $ 5,707 $ (2,044) $ 14,203 $ (6,601)
-------- -------- -------- --------
Adjustments to operating expenses
Zemetrics acquisition:
Impairment of goodwill - 2,003 - 2,003
Zemetrics acquisition costs
(SG&A) - 377 - 457
II-VI related costs (SG&A) - 736 - 736
CEO retirement and search
costs (SG&A) - 112 - 929
Severence charges (SG&A) - 37 - 472
Severence charges (RD&E) - - - 377
Property lease expense (SG&A) - - - 19
-------- -------- -------- --------
Total non-GAAP adjustments to
operating expenses - 3,265 - 4,993
-------- -------- -------- --------
Non-GAAP operating profit (loss),
as adjusted $ 5,707 $ 1,221 $ 14,203 $ (1,608)
======== ======== ======== ========
GAAP other income (expense) (as
reported) $ (153) $ (96) $ 1,360 $ 62
Adjustment to other income:
Richmond acquisition gain - - (1,289) -
-------- -------- -------- --------
Total non-GAAP other income
(expense) $ (153) $ (96) $ 71 $ 62
======== ======== ======== ========
Net earnings attributable to
noncontrolling interest (as
reported) 361 232 1,205 677
GAAP income tax expense (as
reported) (720) (131) (1,474) (505)
Adjustment to income taxes:
Valuation allowance *1 - - (725) -
-------- -------- -------- --------
Total non-GAAP income tax expense $ (720) $ (131) $ (2,199) $ (505)
======== ======== ======== ========
Non-GAAP net earnings (loss) -
continuing operations as
adjusted $ 4,473 $ 762 $ 10,870 $ (2,728)
======== ======== ======== ========
GAAP earnings (loss) per diluted
share - continuing operations
(as reported) $ 0.24 ($ 0.15) $ 0.71 ($ 0.45)
Non-GAAP net earnings (loss) per
diluted share - continuing
operations as adjusted $ 0.24 $ 0.04 $ 0.60 ($ 0.16)
*1 The Company's reported results for fiscal 2011 and 2010 include a full
valuation allowance on its deferred tax assets. Accordingly, for purposes
of computing non-GAAP net earnings (loss), as adjusted, the Company has
assumed no tax benefit would be recorded in fiscal 2011 and 2010. The
adjustment in fiscal 2011 reflects the removal of the tax benefit
associated with the change in the valuation allowance due to the effect of
the Richmond acquisition.
Non-GAAP operating profit (loss), as adjusted, non-GAAP net earnings
(loss), as adjusted, and non-GAAP net earnings (loss) per share, as
adjusted, are operating performance measures defined by the Company and
used by the Company's management to evaluate its operating activities and a
reconciliation of such amounts to reported results is presented above.
These non-GAAP financial measures are not intended to replace reported
amounts of operating profit (loss), net earnings (loss), or net earnings
(loss) per share, which respectively are the most directly comparable GAAP
financial measures. The Company believes that providing such a
reconciliation is useful to users of the financial statements, since it
excludes certain significant and unusual charges in the Company's results,
thus enhancing comparability of the Company's results between periods
presented. These non-GAAP measures are not alternatives to the most
directly comparable reported measures under GAAP and should not be
considered as alternatives to operating profit (loss), net earnings (loss),
and net earnings (loss) per share, or any other measure of consolidated
operating results under GAAP.