Cymer Reports First Quarter 2012 Operating Results

SAN DIEGO, April 24, 2012 /PRNewswire/ -- Cymer, Inc. (Nasdaq: CYMI), the world's leading supplier of light sources used by chipmakers to manufacture advanced semiconductor devices, today announced operating results for the first quarter ended March 31, 2012.

(Logo:  http://photos.prnewswire.com/prnh/20090406/LA94420LOGO)

For the first quarter of 2012:

  • net income totaled $21.5 million, equal to $0.68 per share (diluted), compared to net income of $28.8 million, equal to $0.94 per share (diluted) in the first quarter of 2011 and net income of $12.5 million, equal to $0.40 per share (diluted), in the fourth quarter of 2011. 
  • revenue totaled $150.5 million compared to revenue of $154.4 million in the first quarter of 2011, and revenue of $152.9 million in the fourth quarter of 2011.

Commenting on results, Bob Akins, Cymer's chief executive officer, said, "First quarter revenue exceeded our expectations as we received customer acceptance on the remaining three extreme ultraviolet (EUV) 3100 sources.  We believe this pull-forward of acceptance is another acknowledgement of our continued progress towards successful EUV development.  Our deep ultraviolet (DUV) light source competitiveness remained strong and we continued to demonstrate high responsiveness to favorable changes in customer demand.  DUV pulse utilization, while seasonally lower in January, began to rise in February as anticipated and increased throughout March.  As a result, OnPulse revenue remained strong driven by the mix of higher value ArF pulses and installed base growth.  In the first quarter, we also recognized two tax benefits which resulted in a favorable tax rate."

In the first quarter of 2012, the company shipped 26 DUV light sources, of which 17 were ArF immersion and 9 were KrF, and the company installed 47 DUV light sources at chipmaker locations.  Gross profit was $75.5 million for the first quarter of 2012, yielding a 50.2 percent gross margin.  Total operating expenses, which include research and development and selling and administrative expenses, were $58.8 million.  Total operating income was $16.7 million or 11.1 percent of revenue.  A tax benefit related to a foreign subsidiary and an agreement with the Internal Revenue Service to close out a prior period tax audit benefited the company's first quarter effective tax rate.  The first quarter effective tax provision was a benefit of $4.8 million.   

DUV and Installed Base Products (IBP) bookings for the first quarter of 2012 totaled $135.8 million, resulting in a book-to-bill ratio of 1.06.   Sixty-nine percent of the DUV bookings were ArF immersion, 28 percent were KrF, and three percent were ArF Dry.  The company ended the quarter with a DUV backlog of approximately $56.2 million.

As of March 31, 2012, cash and investments totaled approximately $348 million.

Company Outlook 
Commenting on the outlook for the second quarter of 2012, Akins stated, "We have demonstrated technology feasibility of our EUV source utilizing prepulse, and our confidence has grown in its power scalability.  We are aggressively accelerating commercialization of the initial production 3300 sources which requires a significant increase in our EUV RD&E investment. This investment is in direct support of growing industry demand and fulfillment of our 3300 source order from ASML for production ready EUV lithography tools.  In the second quarter, we expect Installed Base Products revenue to rise driven primarily by higher DUV pulse utilization, increased ArF pulses, OnPulse enhancements, and installed base growth. We anticipate shipping a slightly higher number of DUV light sources as compared to the first quarter.  We also expect to recognize revenue on two TCZ crystallization tools."

Based on information available at this time, Cymer is providing the following guidance for the second quarter of 2012:

  • Revenue to be approximately $151 million
  • Gross margin to be approximately 50 percent.
  • R&D expenses to be approximately $58 million.
  • SG&A expenses to be approximately $16.5 million.
  • The effective tax rate to be zero percent.

Cymer's management will hold a conference call at 2:00 pm (PDT) today, April 24, 2012, to discuss first quarter operating results and second quarter 2012 guidance.  This press release, the conference call and accompanying slides may be accessed on the investor relations page of the company's Web site at www.cymer.com.

Forward Looking Statements 
Statements in this press release that are not strictly historical in nature are forward-looking statements.  These statements include, but are not limited to statements regarding the development and performance of the company's EUV source technology, the company's development of and manufacturing capability for its silicon crystallization tool for the display industry, expectations for DUV pulses and growth in Installed Base Products revenue, and the statements under the caption "Company Outlook" above.  These statements are predictions based on current information and expectations and involve a number of risks and uncertainties.  In addition, statements regarding backlog and book-to-bill ratios should not be read as predictions or projections of future performance.  Actual events or results may differ materially from those projected in any of such statements due to various factors, including but not limited to: the risk that the company's EUV sources, which are still under development and not capable of supporting the commercial production of integrated circuits, may not meet customer specifications or may have reliability or performance problems; the risk that commercial EUV systems may not be introduced by the company on time, or at all; the risk that a competitor's EUV or other source may be selected over the company's EUV source; the demand for semiconductors in general, and, in particular, for leading-edge devices with smaller geometries; cyclicality in the market for semiconductor manufacturing equipment; the timing of customer orders, shipments and acceptances; delays or cancellations by customers of their orders; the performance and market acceptance of the company's new products or technologies; new and enhanced product offerings by competitors; the company's ability to meet its production and product development schedules; the rate at which semiconductor manufacturers adopt new technologies and purchase and take delivery of photolithography tools from the company's customers; the company's ability to secure adequate supplies of critical components for its advanced products; the company's ability to manage its expense levels and unanticipated expenses; the company's ability to achieve its forecasted gross margin which includes its ability to absorb manufacturing costs; the company's ability to align its cost structure with forecasted business levels; the company's ability to manage its foreign currency exposure; the performance and conditions in the United States and world financial markets; the policies and actions of the United States and other governments; and general economic conditions.  For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other subsequent filings with the Securities and Exchange Commission (SEC).  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  All forward-looking statements are qualified in their entirety by this cautionary statement, and the company undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this press release.

About Cymer
Cymer, Inc. (Nasdaq: CYMI) is the market leader in developing light sources, used by chipmakers worldwide to pattern advanced semiconductor chips, and is pioneering a new silicon crystallization tool for the display industry. Cymer's light sources have been widely adopted by the world's top chipmakers and the company's installed base comprises approximately 3,750 systems. Continuing its legacy of leadership, Cymer is currently pioneering the industry's transition to EUV lithography, the next viable step on the technology roadmap for the creation of smaller, faster chips. The company is headquartered in San Diego, Calif., and supports its customers from numerous offices around the globe. Cymer maintains a Web site to which it regularly posts press releases, SEC filings, and additional information about Cymer.  Interested persons can also subscribe to automated e-mail alerts or RSS feeds. Please visit www.cymer.com.

Cymer and all other Cymer product or service names used herein are either registered trademarks or trademarks of Cymer, Inc. Any other marks mentioned herein are the property of their respective holders.

CYMER, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands, except per share data)


Three Months Ended


March 31,


2012


2011

Revenue

$ 150,498


$ 154,399

Cost of revenue

74,997


74,886

Gross profit

75,501


79,513





Operating expenses:




   Research and development

42,315


27,779

   Sales and marketing

6,491


6,034

   General and administrative

10,021


10,043

     Total operating expenses

58,827


43,856

Operating income 

16,674


35,657

Other income (expense):




   Foreign currency exchange (loss) gain 

(263)


784

   Interest income

380


146

   Interest expense

(254)


(133)

   Other income 

154


1

Total other income

17


798

Income before income taxes

16,691


36,455

Income tax (benefit) expense 

(4,840)


7,656

Net income 

$   21,531


$   28,799

Earnings per share:




   Basic

$       0.70


$       0.95

   Diluted

$       0.68


$       0.94

Weighted average shares outstanding:




   Basic

30,814


30,197

   Diluted

31,443


30,765



CYMER, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)






March 31,


December 31, 


2012


2011

ASSETS




Current assets:




   Cash and cash equivalents

$146,096


$125,027

   Restricted cash

$6,036


5,903

   Short-term investments

114,037


124,712

   Accounts receivable, net 

126,890


123,970

   Inventories

221,213


221,740

   Deferred income taxes

26,521


26,963

   Other current assets

39,717


35,601

     Total current assets

680,510


663,916

Long-term investments

87,755


73,811

Property, plant and equipment, net 

125,017


119,015

Deferred income taxes

31,922


34,591

Goodwill

16,972


16,792

Intangible assets, net 

9,638


9,928

Other assets

11,580


9,691

Total assets

$963,394


$927,744

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




   Accounts payable

$45,017


$38,876

   Deferred revenue

85,162


56,546

   Deferred income taxes

175


171

   Other current liabilities

28,550


49,619

     Total current liabilities

158,904


145,212

Deferred revenue

5,181


5,871

Deferred income taxes

1,484


1,463

Other liabilities

21,430


27,255

     Total liabilities

186,999


179,801

Stockholders' equity:




   Preferred stock 

-


-

   Common stock 

44


44

   Additional paid-in capital

669,404


658,755

   Treasury stock 

(492,890)


(492,890)

   Accumulated other comprehensive loss

(15,646)


(11,918)

   Retained earnings

615,483


593,952

   Total stockholders' equity

776,395


747,943

Total liabilities and stockholders' equity

$963,394


$927,744



CYMER, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)






Three Months Ended


March 31,


2012


2011

Operating activities:




   Net income

$ 21,531


$ 28,799

   Adjustments to reconcile net income to net cash provided by




operating activities:




      Depreciation, amortization and accretion

5,796


4,219

      Stock-based compensation

5,791


3,256

      Bad debt expense (recoveries)

345


(199)

      Excess tax benefits from stock option exercises

(1,547)


(3,709)

      Provision for deferred income taxes

4,014


6,906

      Loss on disposal or impairment of property, plant and equipment

154


11

      Change in assets and liabilities:




         Restricted cash

(133)


0

         Accounts receivable

(3,488)


(16,553)

         Inventories

(1,494)


(1,280)

         Other assets

(6,410)


5,365

         Accounts payable

4,988


2,179

         Deferred revenue

26,042


15,110

         Other liabilities

(23,999)


(31,992)

            Net cash provided by operating activities

31,590


12,112

Investing activities:




   Acquisition of property, plant and equipment

(9,287)


(4,311)

   Purchases of investments

(107,012)


(50,417)

   Proceeds from sold or matured investments

104,046


44,363

            Net cash used in investing activities

(12,253)


(10,365)

Financing activities:




   Proceeds from issuance of common stock

3,399


13,550

   Excess tax benefits from stock option exercises

1,547


3,709

   Install payments related to prior acquisition

(3,000)


-

   Payments under capital lease obligations

(104)


(17)

            Net cash provided by financing activities

1,842


17,242

Effect of exchange rate changes on cash and cash equivalents

(110)


(39)

Net increase in cash and cash equivalents

21,069


18,950

Cash and cash equivalents at beginning of the period

125,027


154,312

Cash and cash equivalents at end of the period

$ 146,096


$ 173,262

SOURCE Cymer, Inc.



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