Photon Dynamics Reports Second Quarter Results

Apr 18, 2001, 01:00 ET from Photon Dynamics, Inc.

    SAN JOSE, Calif., April 18 /PRNewswire/ -- Photon Dynamics, Inc.
 (Nasdaq:   PHTN), a leading supplier of integrated yield management solutions
 for the display, electronics and other selected markets, today reported
 financial results for the second quarter of fiscal 2001.  The results of prior
 periods have been restated to include the financial statements of Image
 Processing Systems Inc. (IPS), which was acquired in December 2000 in a
 transaction accounted for as a pooling of interests.
     Revenue for the second quarter of fiscal 2001 decreased 10 percent to
 $21.2 million compared to $23.6 million, as restated, for the second quarter
 of fiscal 2000.  Net income for the current quarter was $1.8 million, or
 $0.13 per diluted share, compared to net income of $3.3 million, or $0.25 per
 diluted share, as restated, for the same quarter a year ago.
     For the first six months of fiscal 2001, revenue increased 17 percent to
 $50.4 million compared to $43.1 million, as restated, for the comparable
 period of fiscal 2000.  Net income for the first six months of fiscal 2001 was
 $6.9 million, or $0.51 per diluted share, compared to net income of
 $5.7 million, or $0.46 per diluted share, as restated, for the same period a
 year ago, excluding non-recurring acquisition expenses in both periods.
 Including the effect of non-recurring acquisition expenses, net income for the
 first six months of fiscal 2001 was $4.6 million, or $0.34 per diluted share,
 compared to net income of $4.9 million, or $0.40 per diluted share for the
 same period a year ago.
     "The cautious spending and delayed investments due to the economic
 downturn have resulted in what we believe to be the bottom of bookings for
 fiscal 2001," stated Mr. Vincent Sollitto, president and CEO of Photon
 Dynamics, Inc.
     "Bookings for the second quarter of fiscal 2001 declined to $5 million,
 and as a result, the company posted a backlog of $32 million.  Nevertheless,
 we remain optimistic about the long-term prospects of the display and
 electronics industries and hence will continue to invest in R&D accordingly,"
 added Mr. Sollitto.
     The company was cash flow positive for the quarter due to operating
 activities.  The balance sheet as of March 31, 2001, reflects $101 million in
 cash and related investments, after the purchase of a new 22,000-square-foot
 corporate headquarters and training facility.  "The formal training and demo
 facility will be used to train both customers and employees on leading-edge
 yield management techniques across all of our product lines.  This purchase
 reinforces our commitment to expand our infrastructure and support our
 worldwide customer base," concluded Mr. Sollitto.
     Photon Dynamics will be presenting in New York City at the Display
 Industry Investors Conference on April 24; Merrill Lynch Conference on May 4;
 CIBC World Markets Conference on May 15, and exhibiting its products at
 Semicon Singapore on May 8 in Singapore; Nepcon East on May 15 in Boston,
 Mass.; SID on June 3 in San Jose, Calif.; and FPD Expo on June 20 in Taiwan.
 
     Earnings Conference Call
     A conference call is scheduled for 1:30 p.m. PDT, April 18, 2001.  The
 dial-in number for the conference call is (800) 982-3654 or (703) 871-3021.
 A replay of the call will be available on the company's website and by phone
 for ten days at (888) 266-2081 or (703) 925-2533.  The confirmation code for
 both calls is 5-101-727.  For future earnings announcements and conference
 call information, please refer to our website regularly.
 
     About Photon Dynamics Inc.
     Photon Dynamics is a leading global supplier of integrated yield
 management solutions for the display, electronics and other selected markets.
 Founded in 1986, the company currently has approximately 340 employees with
 Corporate headquarters in San Jose, Calif., sales offices and customer support
 services in Aliso Viejo and San Jose, Calif.; Beijing, China; Eindhoven, The
 Netherlands; Hsinchu and Taipei, Taiwan; Markham, Ontario, Canada; Seoul,
 Korea; and Tokyo, Japan.  For more information about Photon Dynamics, visit
 the company's web site at www.photondynamics.com.
 
     Safe Harbor Statement
     To the extent that any of the statements contained herein are forward-
 looking, such statements are based on current expectations only on the date of
 this press release and involve a number of uncertainties and risks.  Such
 uncertainties and risks include, but are not limited to, risks related to the
 growth in the flat panel display (FPD), electronics, glass, and cathode ray
 tube (CRT) markets, market acceptance of the company's products, the
 development of new products, the enhancement of existing products,
 manufacturing delays, dependence on principal customers, competitive pricing
 pressures, product volume and mix, global economic conditions, and in
 particular, economic conditions in Asia, dependence on international
 operations, availability of key components, timing of orders received,
 fluctuations in foreign exchange rates, and the introduction of competing
 products having technological and/or pricing advantages.  As a result, Photon
 Dynamics' and the combined company's operating results may fluctuate,
 especially when measured on a quarterly basis, and actual results may differ
 substantially from expectations.  For further information, refer to Photon
 Dynamics' most recent reports filed with the Securities and Exchange
 Commission on Forms 10-K, 10-Q, S-3, and 8-K.  Photon Dynamics undertakes no
 obligation to update or revise any forward-looking statements, whether as a
 result of new developments or otherwise.
 
 
                           (Financial Tables Follow)
 
 
                             Photon Dynamics, Inc.
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
 
 
                                                 March 31,     September 30,
                                                    2001            2000
                            Assets
      Current assets:
        Cash, cash equivalents and investments    $100,887       $102,726
        Accounts receivable, net                    24,472         24,828
        Inventories                                 14,937         16,523
        Other current assets                         1,514          2,510
      Total current assets                         141,810        146,587
 
      Land, property and equipment, net             12,931          4,111
 
      Other assets                                   2,179          2,056
      Total assets                                $156,920       $152,754
 
          Liabilities and Shareholders' Equity
      Current liabilities:
        Accounts payable                            $7,311         $6,622
        Other current liabilities                   11,706         12,039
        Deferred revenue and customer deposits         708          1,884
      Total current liabilities                     19,725         20,545
 
      Other liabilities                                382            409
 
      Shareholders' equity:
        Common stock                               160,433        159,723
        Accumulated deficit                        (23,338)       (27,926)
        Accumulated other comprehensive income        (282)             3
      Total shareholders' equity                   136,813        131,800
      Total liabilities and shareholders' equity  $156,920       $152,754
 
 
                             Photon Dynamics, Inc.
                Condensed Consolidated Statements of Operations
                    (In thousands, except per share amounts)
 
 
                                     Three Months Ended     Six Months Ended
                                          March 31,             March 31,
                                      2001       2000       2001       2000
 
      Revenue                        $21,157    $23,610   $ 50,439   $43,093
 
      Cost of revenue                 11,774     13,330     27,564    23,490
 
      Gross margin                     9,383     10,280     22,875    19,603
 
      Operating expenses:
        Research and development       4,636      3,044      9,135     5,786
        Selling, general
         and administrative            4,381      4,154      9,375     7,872
        Non-recurring acquisition
         charges                          --         --      2,325       860
      Total operating expenses         9,017      7,198     20,835    14,518
      Income from operations             366      3,082      2,040     5,085
 
      Interest income                  1,580        918      3,327     1,034
      Interest expense and other          (3)         1        (70)     (114)
      Income before income taxes       1,943      4,001      5,297     6,005
 
      Provision for income taxes         191        730        709     1,120
 
      Net income                      $1,752     $3,271     $4,588   $ 4,885
 
 
      Basic earnings per share         $0.14      $0.28     $0 .35    $ 0.44
      Diluted earnings per share       $0.13      $0.25     $0 .34    $ 0.40
 
      Shares used in computing
       basic earnings per share       12,972     11,646     12,968    11,095
      Shares used in computing
       diluted earnings per share     13,659     13,054     13,669    12,361
 
 
     For further information, please contact So-Yeon Jeong, Investor Relations
 Manager of Photon Dynamics, Inc., 408-360-3033, soyeonj@photondynamics.com; or
 Pat Rarus of Hilary Kaye Associates, Inc., 714-426-0444, prarus@hkamarcom.com,
 for Photon Dynamics, Inc.
 
 

SOURCE Photon Dynamics, Inc.
    SAN JOSE, Calif., April 18 /PRNewswire/ -- Photon Dynamics, Inc.
 (Nasdaq:   PHTN), a leading supplier of integrated yield management solutions
 for the display, electronics and other selected markets, today reported
 financial results for the second quarter of fiscal 2001.  The results of prior
 periods have been restated to include the financial statements of Image
 Processing Systems Inc. (IPS), which was acquired in December 2000 in a
 transaction accounted for as a pooling of interests.
     Revenue for the second quarter of fiscal 2001 decreased 10 percent to
 $21.2 million compared to $23.6 million, as restated, for the second quarter
 of fiscal 2000.  Net income for the current quarter was $1.8 million, or
 $0.13 per diluted share, compared to net income of $3.3 million, or $0.25 per
 diluted share, as restated, for the same quarter a year ago.
     For the first six months of fiscal 2001, revenue increased 17 percent to
 $50.4 million compared to $43.1 million, as restated, for the comparable
 period of fiscal 2000.  Net income for the first six months of fiscal 2001 was
 $6.9 million, or $0.51 per diluted share, compared to net income of
 $5.7 million, or $0.46 per diluted share, as restated, for the same period a
 year ago, excluding non-recurring acquisition expenses in both periods.
 Including the effect of non-recurring acquisition expenses, net income for the
 first six months of fiscal 2001 was $4.6 million, or $0.34 per diluted share,
 compared to net income of $4.9 million, or $0.40 per diluted share for the
 same period a year ago.
     "The cautious spending and delayed investments due to the economic
 downturn have resulted in what we believe to be the bottom of bookings for
 fiscal 2001," stated Mr. Vincent Sollitto, president and CEO of Photon
 Dynamics, Inc.
     "Bookings for the second quarter of fiscal 2001 declined to $5 million,
 and as a result, the company posted a backlog of $32 million.  Nevertheless,
 we remain optimistic about the long-term prospects of the display and
 electronics industries and hence will continue to invest in R&D accordingly,"
 added Mr. Sollitto.
     The company was cash flow positive for the quarter due to operating
 activities.  The balance sheet as of March 31, 2001, reflects $101 million in
 cash and related investments, after the purchase of a new 22,000-square-foot
 corporate headquarters and training facility.  "The formal training and demo
 facility will be used to train both customers and employees on leading-edge
 yield management techniques across all of our product lines.  This purchase
 reinforces our commitment to expand our infrastructure and support our
 worldwide customer base," concluded Mr. Sollitto.
     Photon Dynamics will be presenting in New York City at the Display
 Industry Investors Conference on April 24; Merrill Lynch Conference on May 4;
 CIBC World Markets Conference on May 15, and exhibiting its products at
 Semicon Singapore on May 8 in Singapore; Nepcon East on May 15 in Boston,
 Mass.; SID on June 3 in San Jose, Calif.; and FPD Expo on June 20 in Taiwan.
 
     Earnings Conference Call
     A conference call is scheduled for 1:30 p.m. PDT, April 18, 2001.  The
 dial-in number for the conference call is (800) 982-3654 or (703) 871-3021.
 A replay of the call will be available on the company's website and by phone
 for ten days at (888) 266-2081 or (703) 925-2533.  The confirmation code for
 both calls is 5-101-727.  For future earnings announcements and conference
 call information, please refer to our website regularly.
 
     About Photon Dynamics Inc.
     Photon Dynamics is a leading global supplier of integrated yield
 management solutions for the display, electronics and other selected markets.
 Founded in 1986, the company currently has approximately 340 employees with
 Corporate headquarters in San Jose, Calif., sales offices and customer support
 services in Aliso Viejo and San Jose, Calif.; Beijing, China; Eindhoven, The
 Netherlands; Hsinchu and Taipei, Taiwan; Markham, Ontario, Canada; Seoul,
 Korea; and Tokyo, Japan.  For more information about Photon Dynamics, visit
 the company's web site at www.photondynamics.com.
 
     Safe Harbor Statement
     To the extent that any of the statements contained herein are forward-
 looking, such statements are based on current expectations only on the date of
 this press release and involve a number of uncertainties and risks.  Such
 uncertainties and risks include, but are not limited to, risks related to the
 growth in the flat panel display (FPD), electronics, glass, and cathode ray
 tube (CRT) markets, market acceptance of the company's products, the
 development of new products, the enhancement of existing products,
 manufacturing delays, dependence on principal customers, competitive pricing
 pressures, product volume and mix, global economic conditions, and in
 particular, economic conditions in Asia, dependence on international
 operations, availability of key components, timing of orders received,
 fluctuations in foreign exchange rates, and the introduction of competing
 products having technological and/or pricing advantages.  As a result, Photon
 Dynamics' and the combined company's operating results may fluctuate,
 especially when measured on a quarterly basis, and actual results may differ
 substantially from expectations.  For further information, refer to Photon
 Dynamics' most recent reports filed with the Securities and Exchange
 Commission on Forms 10-K, 10-Q, S-3, and 8-K.  Photon Dynamics undertakes no
 obligation to update or revise any forward-looking statements, whether as a
 result of new developments or otherwise.
 
 
                           (Financial Tables Follow)
 
 
                             Photon Dynamics, Inc.
                     Condensed Consolidated Balance Sheets
                                 (In thousands)
 
 
 
                                                 March 31,     September 30,
                                                    2001            2000
                            Assets
      Current assets:
        Cash, cash equivalents and investments    $100,887       $102,726
        Accounts receivable, net                    24,472         24,828
        Inventories                                 14,937         16,523
        Other current assets                         1,514          2,510
      Total current assets                         141,810        146,587
 
      Land, property and equipment, net             12,931          4,111
 
      Other assets                                   2,179          2,056
      Total assets                                $156,920       $152,754
 
          Liabilities and Shareholders' Equity
      Current liabilities:
        Accounts payable                            $7,311         $6,622
        Other current liabilities                   11,706         12,039
        Deferred revenue and customer deposits         708          1,884
      Total current liabilities                     19,725         20,545
 
      Other liabilities                                382            409
 
      Shareholders' equity:
        Common stock                               160,433        159,723
        Accumulated deficit                        (23,338)       (27,926)
        Accumulated other comprehensive income        (282)             3
      Total shareholders' equity                   136,813        131,800
      Total liabilities and shareholders' equity  $156,920       $152,754
 
 
                             Photon Dynamics, Inc.
                Condensed Consolidated Statements of Operations
                    (In thousands, except per share amounts)
 
 
                                     Three Months Ended     Six Months Ended
                                          March 31,             March 31,
                                      2001       2000       2001       2000
 
      Revenue                        $21,157    $23,610   $ 50,439   $43,093
 
      Cost of revenue                 11,774     13,330     27,564    23,490
 
      Gross margin                     9,383     10,280     22,875    19,603
 
      Operating expenses:
        Research and development       4,636      3,044      9,135     5,786
        Selling, general
         and administrative            4,381      4,154      9,375     7,872
        Non-recurring acquisition
         charges                          --         --      2,325       860
      Total operating expenses         9,017      7,198     20,835    14,518
      Income from operations             366      3,082      2,040     5,085
 
      Interest income                  1,580        918      3,327     1,034
      Interest expense and other          (3)         1        (70)     (114)
      Income before income taxes       1,943      4,001      5,297     6,005
 
      Provision for income taxes         191        730        709     1,120
 
      Net income                      $1,752     $3,271     $4,588   $ 4,885
 
 
      Basic earnings per share         $0.14      $0.28     $0 .35    $ 0.44
      Diluted earnings per share       $0.13      $0.25     $0 .34    $ 0.40
 
      Shares used in computing
       basic earnings per share       12,972     11,646     12,968    11,095
      Shares used in computing
       diluted earnings per share     13,659     13,054     13,669    12,361
 
 
     For further information, please contact So-Yeon Jeong, Investor Relations
 Manager of Photon Dynamics, Inc., 408-360-3033, soyeonj@photondynamics.com; or
 Pat Rarus of Hilary Kaye Associates, Inc., 714-426-0444, prarus@hkamarcom.com,
 for Photon Dynamics, Inc.
 
 SOURCE  Photon Dynamics, Inc.