ANDOVER, Mass., Oct. 19, 2011 (GLOBE NEWSWIRE) -- MKS Instruments, Inc. (Nasdaq:MKSI), a global provider of technologies that enable advanced processes and improve productivity, today reports third quarter 2011 financial results.
Third Quarter Financial Results
Sales were $194.5 million, down 12.1% from $221.3 million in the third quarter of 2010 and down 13.4% from $224.5 million in the second quarter of 2011.
Third quarter net income was $30.4 million, or $0.57 per diluted share, compared to net income of $38.6 million in the third quarter of 2010, or $0.76 per diluted share, and $38.6 million in the second quarter of 2011, or $0.73 per diluted share.
Non-GAAP net earnings were $30.6 million, or $0.58 per diluted share, compared to $36.8 million, or $0.72 per diluted share, in the third quarter of 2010 and a record $38.8 million, or $0.73 per diluted share, in the second quarter of 2011.
Cash and investments, net of short-term borrowings, were $533.8 million at the end of the quarter, while stockholders' equity, net of intangible assets and goodwill, was $831.2 million at quarter end.
Leo Berlinghieri, Chief Executive Officer and President, said, "Order levels began to decline in May and continued to decline until the middle of the third quarter. However, since then, orders have remained fairly stable. In conditions like these, our proven strategy is to remain nimble, aggressively identify and pursue new opportunities while simultaneously controlling costs.
"Based upon recent business levels and general business outlook, we estimate that our fourth quarter sales may range from $145 to $165 million and at this volume, our non-GAAP net earnings could range from $0.18 to $0.31 per diluted share."
Conference Call Details
A conference call with management will be held on Thursday, October 20, 2011 at 8:30 a.m. (Eastern Time). To participate in the conference call, please dial (877) 212-6076 for domestic callers and (707) 287-9331 for international callers, and an operator will connect you. Participants will need to provide the operator with the Conference ID of 11366013, which has been reserved for this call. A live and archived webcast of the call will also be available on the company's website at www.mksinst.com. ;
Use of Non-GAAP Financial Results
Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude discontinued operations, amortization of acquired intangible assets, costs associated with acquisitions and disposition related charges, and certain adjustments to income tax rates. These non-GAAP measures are not in accordance with Accounting Principles Generally Accepted in the United States of America (GAAP). MKS' management believes the presentation of these non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results.
About MKS Instruments
MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measure, control, power, monitor and analyze critical parameters of advanced manufacturing processes to improve process performance and productivity. Our products are derived from our core competencies in pressure measurement and control, materials delivery, gas composition analysis, control and information technology, power and reactive gas generation, and vacuum technology. Our primary served markets are manufacturers of capital equipment for semiconductor devices, and for other thin film applications including flat panel displays, solar cells, light emitting diodes, data storage media, and other advanced coatings. We also leverage our technology in other markets with advanced manufacturing applications including medical equipment, pharmaceutical manufacturing, energy generation, and environmental monitoring.
Forward-Looking Statements
This release contains projections or other forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27 of the Securities Act, and Section 21E of the Securities Exchange Act regarding MKS' future growth and the future financial performance of MKS. These projections or statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the projections or other forward-looking statements are the fluctuations in capital spending in the semiconductor industry, and other advanced manufacturing markets, fluctuations in net sales to MKS' major customers, potential fluctuations in quarterly results, the challenges, risks and costs involved with integrating the operations of MKS and any acquired companies, dependence on new product development, rapid technological and market change, acquisition strategy, manufacturing and sourcing risks, volatility of stock price, international operations, financial risk management, and future growth subject to risks. Readers are referred to MKS' filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, for a discussion of these and other important risk factors concerning MKS and its operations. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
| MKS Instruments, Inc. | |||
| Unaudited Consolidated Statements of Operations | |||
| (In thousands, except per share data) | |||
| Three Months Ended (Note 1) | |||
|
September 30, 2011 |
September 30, 2010 |
June 30, 2011 |
|
| Net revenues | $ 194,508 | $ 221,323 | $ 224,487 |
| Cost of revenues | 106,830 | 122,820 | 119,499 |
| Gross profit | 87,678 | 98,503 | 104,988 |
| Research and development | 14,331 | 15,070 | 15,582 |
| Selling, general and administrative | 31,984 | 28,247 | 31,851 |
| Amortization of intangible assets | 251 | 250 | 250 |
| Income from operations | 41,112 | 54,936 | 57,305 |
| Interest income, net | 272 | 35 | 309 |
| Income from continuing operations before income taxes | 41,384 | 54,971 | 57,614 |
| Provision for income taxes | 11,011 | 18,370 | 19,013 |
| Income from continuing operations | 30,373 | 36,601 | 38,601 |
| Income from discontinued operations, net of taxes | -- | 2,035 | -- |
| Net income | $ 30,373 | $ 38,636 | $ 38,601 |
| Basic income per share: | |||
| Continuing operations | $ 0.58 | $ 0.73 | $ 0.74 |
| Discontinued operations | -- | 0.04 | -- |
| Net income | $ 0.58 | $ 0.77 | $ 0.74 |
| Diluted income per share: | |||
| Continuing operations | $ 0.57 | $ 0.72 | $ 0.73 |
| Discontinued operations | -- | 0.04 | -- |
| Net income | $ 0.57 | $ 0.76 | $ 0.73 |
| Cash dividends per common share | $ 0.15 | $ -- | $ 0.15 |
| Weighted average shares outstanding: | |||
| Basic | 52,456 | 50,226 | 52,346 |
| Diluted | 52,992 | 50,994 | 52,906 |
| The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results: | |||
| Income from continuing operations | $ 30,373 | $ 36,601 | $ 38,601 |
| Adjustments (net of tax, if applicable): | |||
| Amortization of acquired intangible assets | 251 | 250 | 250 |
| Proforma tax adjustments | (67) | (66) | (65) |
| Non-GAAP net earnings (Note 2) | $ 30,557 | $ 36,785 | $ 38,786 |
| Non-GAAP net earnings per share (Note 2) | $ 0.58 | $ 0.72 | $ 0.73 |
| Weighted average shares outstanding | 52,992 | 50,994 | 52,906 |
| Note 1: During 2010, the Company sold two product lines that no longer met the Company's long-term strategic objectives. The results of operations of the two product lines have been classified as discontinued operations in the consolidated statements of operations for the prior year period provided. | |||
| Note 2: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude results of discontinued operations, amortization of acquired intangible assets, acquisition and disposition related charges and special items, net of applicable income taxes. | |||
| MKS Instruments, Inc. | ||
| Unaudited Consolidated Statements of Operations | ||
| (In thousands, except per share data) | ||
|
Nine Months Ended September 30, (Note 1) |
||
| 2011 | 2010 | |
| Net revenues | $ 650,846 | $ 634,136 |
| Cost of revenues | 351,819 | 352,819 |
| Gross profit | 299,027 | 281,317 |
| Research and development | 46,809 | 46,899 |
| Selling, general and administrative | 96,542 | 86,961 |
| Amortization of intangible assets | 751 | 1,033 |
| Gain on sale of asset | -- | (682) |
| Income from operations | 154,925 | 147,106 |
| Interest income, net | 852 | 614 |
| Income from continuing operations before income taxes | 155,777 | 147,720 |
| Provision for income taxes | 48,760 | 48,977 |
| Income from continuing operations | 107,017 | 98,743 |
| Income from discontinued operations, net of taxes | -- | 7,895 |
| Net income | $ 107,017 | $ 106,638 |
| Basic income per share: | ||
| Continuing operations | $ 2.06 | $ 1.98 |
| Discontinued operations | -- | 0.16 |
| Net income | $ 2.06 | $ 2.13 |
| Diluted income per share: | ||
| Continuing operations | $ 2.03 | $ 1.94 |
| Discontinued operations | -- | 0.16 |
| Net income | $ 2.03 | $ 2.10 |
| Cash dividends per common share | $ 0.45 | $ -- |
| Weighted average shares outstanding: | ||
| Basic | 52,070 | 49,965 |
| Diluted | 52,761 | 50,821 |
| The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS' operating results: | ||
| Income from continuing operations | $ 107,017 | $ 98,743 |
| Adjustments (net of tax, if applicable): | ||
| Amortization of acquired intangible assets | 751 | 1,033 |
| Gain on sale of asset (Note 2) | -- | (682) |
| Proforma tax adjustments | (197) | (48) |
| Non-GAAP net earnings (Note 3) | $ 107,571 | $ 99,046 |
| Non-GAAP net earnings per share (Note 3) | $ 2.04 | $ 1.95 |
| Weighted average shares outstanding | 52,761 | 50,821 |
| Note 1: During 2010, the Company sold two product lines that no longer met the Company's long-term strategic objectives. The results of operations of the two product lines have been classified as discontinued operations in the consolidated statements of operations for the prior year period provided. | ||
| Note 2: The nine month period ended September 30, 2010 includes a $682 gain on the sale of a vacated facility. | ||
| Note 3: The Non-GAAP net earnings and Non-GAAP net earnings per share amounts exclude results of discontinued operations, amortization of acquired intangible assets, acquisition and disposition related charges and special items, net of applicable income taxes. | ||
| MKS Instruments, Inc. | ||
| Unaudited Consolidated Balance Sheet | ||
| (In thousands) | ||
|
September 30, 2011 |
December 31, 2010 |
|
| ASSETS | ||
| Cash and short-term investments | $ 525,839 | $ 431,933 |
| Trade accounts receivable, net | 125,517 | 138,181 |
| Inventories | 161,059 | 156,429 |
| Other current assets | 37,913 | 26,352 |
| Total current assets | 850,328 | 752,895 |
| Property, plant and equipment, net | 69,891 | 68,976 |
| Goodwill | 140,084 | 140,020 |
| Intangible assets, net | 1,307 | 1,743 |
| Long-term marketable securities | 9,260 | -- |
| Other assets | 16,842 | 18,779 |
| Total assets | $ 1,087,712 | $ 982,413 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Short-term borrowings | $ 1,302 | $ -- |
| Accounts payable | 22,572 | 36,427 |
| Accrued expenses and other liabilities | 59,057 | 73,259 |
| Total current liabilities | 82,931 | 109,686 |
| Other liabilities | 32,169 | 25,688 |
| Stockholders' equity: | ||
| Common stock | 113 | 113 |
| Additional paid-in capital | 703,405 | 663,792 |
| Retained earnings | 254,701 | 171,356 |
| Other stockholders' equity | 14,393 | 11,778 |
| Total stockholders' equity | 972,612 | 847,039 |
| Total liabilities and stockholders' equity | $ 1,087,712 | $ 982,413 |