Cymer Reports Fourth Quarter and 2010 Operating Results

Feb 02, 2011, 16:25 ET from Cymer, Inc.

SAN DIEGO, Feb. 2, 2011 /PRNewswire/ -- Cymer, Inc. (Nasdaq: CYMI), the world's leading supplier of light sources used by chipmakers to create advanced semiconductor chips, today announced operating results for the fourth quarter and year ended December 31, 2010.

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For the fourth quarter of 2010:

  • net income totaled $32.9 million, equal to $1.08 per share (diluted), compared to net income of $12.2 million, equal to $0.40 per share (diluted) in the fourth quarter of 2009 and net income of $20.9 million, equal to $0.70 per share (diluted), in the third quarter of 2010.  
  • revenue totaled $146.9 million compared to revenue of $96.4 million in the fourth quarter of 2009, and revenue of $141.7 million in the third quarter of 2010.

For the year ended December 31, 2010:

  • net income totaled $91.0 million equal to $3.02 per share (diluted), compared to net income of $12.0 million, equal to $0.40 per share (diluted) for the year ended December 31, 2009.  
  • revenue totaled $534.2 million compared to revenue of $307.7 million in the prior year.

Commenting on results, Bob Akins, Cymer's chief executive officer, said, "2010 was a year of significant accomplishment and growth for Cymer.  The demonstrated performance and reliability of our deep ultraviolet (DUV) light sources were instrumental in winning chipmaker selections and strengthened our competitive position. We also increased our OnPulse value and coverage, while adding advanced performance enhancements on ArF immersion and KrF sources. Our continued focus on operational execution and cost structure improvements, coupled with improved manufacturing absorption contributed to strong margin performance. During 2010, we shipped four extreme ultraviolet (EUV) 3100 sources and installed a second TCZ tool at a second Asian customer.  I want to take this time to thank Cymer employees for their dedication and significant achievements in 2010. Their commitment to the success of our customers and their drive towards continued technology leadership further positions Cymer as the leader of lithography light source solutions and an innovator of display fabrication equipment."

In the fourth quarter of 2010, the company shipped 35 light sources, of which 26 were ArF immersion, eight were KrF, and one was ArF dry, and the company installed 47 light sources at chipmaker locations.  Gross profit was $78.0 million for the fourth quarter of 2010, yielding a 53.1 percent gross margin.  Total operating expenses, which include research and development and selling and administrative expenses, were $40.9 million.  Total operating income was $37.1 million or 25.3 percent of revenue.  With the reinstatement of the R&D tax credit in late December, our full year effective tax rate was 25 percent, which resulted in a fourth quarter effective tax rate of 11 percent.  

DUV bookings for the fourth quarter of 2010 totaled $153.2 million, resulting in a book-to-bill ratio of 1.04.   Eighty-three percent of the DUV bookings in the fourth quarter were ArF immersion, 13 percent were KrF, and four percent were ArF dry.   The company ended the quarter with a DUV backlog of $63.6 million, with ArF immersion light sources comprising approximately 80 percent of the value of sources in backlog.

For the full year 2010, the company shipped 124 light sources, of which 87 were ArF immersion, 35 were KrF, and two were ArF dry. The company reported gross profit of $272.8 million for the full year 2010, yielding a 51.1 percent gross margin. Total operating expenses for the year of $151.7 million includes research and development, selling and administrative and restructuring expenses. Total operating income was $121.1 million or 22.7 percent of revenue.  

As of December 31, 2010, cash and investments totaled approximately $217 million, an increase of $31 million from December 31, 2009.  

Company Outlook  

Commenting on the outlook, Akins stated, "We believe we are well positioned for growth in 2011.  Our attention to light source reliability, customer productivity, and cost of operations have resulted in several recent key light source selections from chipmakers, some of whom have recently announced significant increases to their 2011 capex plans.  We believe this increase in capex investment will translate into continued growth as the year proceeds.  We are continuing to invest in EUV and will be highly focused on the development of our EUV 3300 sources. In TCZ, we are focused on ramping our manufacturing capability to fulfill recently received orders."

Based on information available at this time, Cymer is providing the following guidance for the first quarter of 2011:

  • Revenue to be approximately $150 million.
  • Gross margin to be approximately 50 percent.
  • R&D expenses to be approximately $27 million.
  • SG&A expenses to be approximately $16.5 million.
  • The effective tax rate to be approximately 22 percent.

Cymer's management will hold a conference call at 2:00 pm (PST) today, February 2, 2011, to discuss fourth quarter and 2010 operating results and first quarter 2011 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 company's competitive position, continued technology leadership, the company's positioning, the industry's transition to EUV lithography 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 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 flat panel display industry. Cymer's light sources have been widely adopted by the world's top chipmakers and the company's installed base comprises approximately 3,500 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

Years Ended

December 31,

December 31,

2010

2009

2010

2009

Revenues:

  Product sales

$ 146,854

$ 96,071

$ 534,209

$ 306,795

  Product sales, related party

-

333

-

869

    Total revenues

146,854

96,404

534,209

307,664

Cost of revenues

68,859

50,154

261,442

171,250

Gross profit

77,995

46,250

272,767

136,414

Operating expenses:

  Research and development

25,043

15,823

89,193

65,809

  Sales and marketing

5,464

4,019

22,656

16,603

  General and administrative

10,352

6,730

39,802

27,569

  Restructuring

-

-

-

8,407

    Total operating expenses

40,859

26,572

151,651

118,388

Operating income

37,136

19,678

121,116

18,026

Other income (expense):

  Foreign currency exchange gain (loss)

11

381

(6)

(1,107)

  Impairment of investments

-

-

-

(291)

  Interest income

132

166

524

1,374

  Interest expense

(189)

(108)

(605)

(1,029)

  Other income (expense)

9

-

55

135

Total other income (expense)

(37)

439

(32)

(918)

Income before income taxes

37,099

20,117

121,084

17,108

Income tax expense

4,236

9,021

30,271

8,389

Net income

$   32,863

$ 11,096

$   90,813

$     8,719

  Net loss attributable to noncontrolling interest in subsidiary

-

1,057

148

3,257

Net income attributable to Cymer, Inc.

$   32,863

$ 12,153

$   90,961

$   11,976

Earnings per share:

  Basic

$       1.11

$     0.41

$       3.05

$       0.40

  Diluted

$       1.08

$     0.40

$       3.02

$       0.40

Weighted average shares outstanding:

  Basic

29,710

29,861

29,777

29,738

  Diluted

30,351

30,264

30,124

29,945

CYMER, INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except share data)

December 31,

2010

2009

ASSETS

Current assets:

  Cash and cash equivalents

$154,312

$118,381

  Restricted cash

-

1,200

  Short-term investments

54,964

62,895

  Accounts receivable, net

127,747

76,792

  Accounts receivable, related party

-

732

  Inventories

213,002

185,077

  Deferred income taxes

11,961

31,566

  Other current assets

55,027

26,244

    Total current assets

617,013

502,887

Long-term investments

7,506

5,167

Property, plant and equipment, net

104,705

106,755

Deferred income taxes

35,690

26,998

Goodwill

8,833

8,833

Intangible assets, net

7,645

8,327

Other assets

5,939

5,951

Total assets

$787,331

$664,918

LIABILITIES

Current liabilities:

  Accounts payable

$27,731

$21,756

  Accounts payable, related party

-

9,284

  Deferred revenue

30,593

22,339

  Other current liabilities

68,121

50,244

    Total current liabilities

126,445

103,623

Deferred revenue

690

525

Deferred income taxes

21

18

Other liabilities

21,920

19,114

    Total liabilities

149,076

123,280

EQUITY

Cymer, Inc. stockholders' equity:

  Preferred stock

-

-

  Common stock

43

43

  Additional paid-in capital

620,272

598,314

  Treasury stock

(492,890)

(473,580)

  Accumulated other comprehensive loss

(2,881)

(8,280)

  Retained earnings

513,711

422,750

    Equity attributable to Cymer, Inc.

638,255

539,247

  Noncontrolling interest

-

2,391

  Total equity

638,255

541,638

Total liabilities and equity

$787,331

$664,918

CYMER, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

Years Ended December 31,

2010

2009

Operating activities:

  Net income

$90,813

$8,719

  Adjustments to reconcile net income to net cash provided by

    operating activities:

    Depreciation, amortization and accretion

19,223

21,057

    Stock-based compensation

10,603

5,667

    Bad debt expense

(843)

2

    Excess tax benefits from stock option exercises

(2,087)

(267)

    Provision for deferred income taxes

12,755

(634)

    Loss on disposal or impairment of property and equipment

609

1,881

    Write-down of investments

-

291

    Change in assets and liabilities:

      Restricted cash

1,235

(1,200)

      Accounts receivable

(48,659)

(12,651)

      Accounts receivable, related party

732

86

      Inventories

(30,698)

4,361

      Other assets

(27,947)

(2,684)

      Accounts payable

7,976

5,429

      Accounts payable, related party

(9,284)

3,876

      Deferred revenue

8,665

7,379

      Other liabilities

21,395

(7,053)

         Net cash provided by operating activities

54,488

34,259

Investing activities:

  Acquisition of property and equipment

(15,810)

(7,208)

  Purchases of investments

(100,056)

(94,161)

  Proceeds from sold or matured investments

105,211

65,909

         Net cash used in investing activities

(10,655)

(35,460)

Financing activities:

  Proceeds from issuance of common stock

9,446

6,744

  Purchase of noncontrolling interest

(2,186)

-

  Repayment of convertible subordinated note

-

(140,722)

  Cash investment in joint venture received from minority shareholder

-

800

  Excess tax benefits from stock option exercises

2,087

267

  Repurchase of common stock into treasury

(19,310)

-

         Net cash used in financing activities

(9,963)

(132,911)

Effect of exchange rate changes on cash and cash equivalents

2,061

102

Net increase (decrease) in cash and cash equivalents

35,931

(134,010)

Cash and cash equivalents at beginning of the year

118,381

252,391

Cash and cash equivalents at end of the year

$154,312

$118,381

Supplemental disclosure of cash flow information:

  Interest paid

$405

$2,803

  Income taxes paid

$42,295

$11,232

Supplemental disclosure of non cash operating, investing and financing activities:

Net (decrease) increase in acquisition of property and equipment included in accounts payable

($1,774)

$2,497

Net (decrease) increase in in-transit proceeds from issuance of common stock

($11)

$81

Property and equipment acquired under capital lease obligations

$136

-

SOURCE Cymer, Inc.



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