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 Press Release Asyst
Technologies Reports Second Quarter Results
FREMONT, Calif., Oct. 24, 2002 – Asyst Technologies, Inc., (Nasdaq NM: ASYT), a leading provider of integrated automation solutions that maximize the productivity of semiconductor manufacturing, today announced financial results for its second fiscal quarter ended Sept. 30, 2002. Results were in line with company guidance. Net sales from continuing operations were $72.3 million, a 39% increase over $51.9 million in the prior sequential quarter. Gross margin from continuing operations was 39%, compared with 32% in the first fiscal quarter. Pro forma net income from continuing operations was $631,000, or $.02 per diluted share. GAAP net loss from continuing operations, which includes $11.6 million of one-time charges and a $62.7 million write-off to the company’s deferred tax asset, was $(75,960,000), or $(2.03) per diluted share. GAAP net loss of $(78,053,000), or $(2.08) per diluted share, includes the results of the company’s AMP and SemiFab subsidiaries, which have been reclassified as discontinued operations based on the company’s intention to sell these businesses. “We believe that Asyst’s rate of sales growth in the second fiscal quarter was significantly higher than that of our direct competitors and the general industry,” said Steve Schwartz, president and CEO. “We attribute our relative strength to three primary factors. First, we have continued to be aggressive in product development throughout this downturn, with new products introduced in every major product division over the past nine months. These products in aggregate represented approximately 20% of product sales in the quarter. Second, we believe we have increased market share in several product categories. Third, we have clear market leadership in Asia, particularly in China, which again was a bright spot for equipment spending in the quarter.” Mr.
Schwartz continued, “Despite some encouraging market indicators,
such as unit shipments of chips, the semiconductor industry continues
to suffer from overcapacity, which is leading us to build a conservative
operating plan. Fortunately, we are well positioned with new
products, a renewed management team, and sufficient capital resources
to sustain our investments in next-generation product development.
We also are committed to leveraging our Asyst-Shinko AMHS joint
venture, which we believe will be somewhat insulated from the
industry downturn because of long-lead-time installations that
already are underway or committed.” The company incurred a non-cash write off of $62.7 million of its deferred tax assets, which represent tax benefits accumulated through historical pre-tax losses. This is in accordance with GAAP, which in assessing the amount of such a valuation adjustment gives substantially more weight to recent losses than to forecast future profitability. The company will still be able to realize the tax benefit of historical pre-tax losses, both from a cash and an accounting perspective, upon achieving taxable income. The company also recognized $11.6 million of one-time charges, primarily related to the write-down of the value of land held for sale ($7.1 million), previously announced charges related to its outsourcing of manufacturing ($2.3 million), and other non-cash restructuring charges ($2.2 million). Cash impact of the charges is $3.0 million, which will be disbursed over the next several quarters. As previously announced, the company’s outsourced manufacturing strategy will result in significantly lower fixed manufacturing costs through consolidation from three manufacturing floors to one, reduced manufacturing headcount and less inventory burden. By making manufacturing costs more variable, management believes that Asyst can sustain break-even operations in the next downturn. Potential Land Sale, New Credit Facility The company has a signed purchase agreement to sell its land held for sale in Fremont, Calif. for approximately $19 million, net of commissions. The transaction is expected to close by the end of December. Earlier this month, the company announced that it has established a $25 million credit facility through Comerica. The renewable two-year facility carries a variable interest rate of six-month LIBOR + 3.75%, which currently equals approximately 5.6% annually. Availability of the facility is dependent upon compliance with certain covenants, including maintaining a minimum cash balance. Following funding of its purchase of 51% of Asyst-Shinko Inc., the company has approximately $58 million of cash and short-term investments. Assuming closing of the land sale and current expectations for neutral-to-positive cash burn in its third fiscal quarter ending December, the company expects to have approximately $75-$80 million of cash and short-term investments at December 31, 2002. Of the company’s long-term debt of $91 million as of Sept. 30, 2002, $86 million relates to the company’s 5.75% convertible debentures due 2008, convertible into common stock at $15.18 per share. Approximately $5 million is long-term asset-based debt held by Asyst Japan Inc. Short-term debt of $19.4 million is low-interest, asset-based revolving debt held by Asyst Japan Inc. This short-term debt is expected to stay at approximately current levels. The company’s long-term debt will increase by approximately $25 million as a result of drawing down the new credit facility. Outlook For its third fiscal quarter ending December 2002, the company expects to consolidate the results of Asyst-Shinko Inc. Consistent with prior guidance, Asyst-Shinko is expected to achieve quarterly revenue of approximately $25 million and operating profit in the mid-single-digit range, excluding a non-cash charge for in-process research and development. Excluding Asyst-Shinko, the company expects to achieve net sales of approximately $50-55 million, which implies a rate of decline that is roughly consistent with guidance being provided across the industry. Gross margin is expected to decline to the 30% range. This reflects the under-absorption of overhead at the lower sales level as well as accelerated depreciation on manufacturing assets that will have reduced lives as a result of the transition of manufacturing to Solectron. The company expects to begin to see benefits from the Solectron partnership by the middle of calendar 2003, after transition to Solectron facilities has begun. Through the
outsourcing strategy, the previously announced planned divestiture
of two manufacturing subsidiaries, and a hiring freeze, the company
has reduced headcount in continuing operations from 1,250 to
about 850. The company plans to implement measures to further
reduce operating expenses. Additional actions will depend on
the outlook for the March quarter and beyond. Based on this guidance,
the company expects to have neutral-to-positive operating cash
flow for the December quarter as it benefits from reductions
in accounts receivable. The company’s ongoing objective
during this downturn is to push the breakeven level toward the
$60 million range, and to manage cash burn to an average level
of $5 million per quarter.
Pro Forma Adjustments: Pro forma adjustments include the impact of amortized acquisition-related stock-based compensation, the amortization of acquired intangible assets, in-process research and development costs of acquired businesses, write-off of deferred tax asset, restructuring charges, and discontinued operations.
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
Sept 30, June 30, March 31,
2002 2002 2002
--------- --------- ----------
ASSETS
Current assets:
Cash and cash
equivalents $ 61,567 $ 64,658 $ 74,738
Restricted cash
equivalents and
short-term
investments 4,228 4,158 5,052
Short-term
investments 14,000 14,000 5,000
Accounts
receivable, net 50,553 40,545 29,715
Inventories 34,378 40,420 45,110
Deferred tax
asset - 33,937 33,906
Prepaid expenses
and other current
assets 10,397 15,272 15,006
--------------- --------------- --------------
Total current
assets 175,123 212,990 208,527
--------------- --------------- --------------
Long-term assets:
Property and
equipment, net 36,171 39,162 38,366
Deferred tax
asset - 33,265 30,294
Intangible
assets, net 40,140 41,982 35,048
Other assets, net 21,742 30,589 32,180
--------------- --------------- --------------
Total long-
term assets 98,053 144,998 135,888
--------------- --------------- --------------
$ 273,176 $ 357,988 $ 344,415
=============== =============== ==============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Short-term loans $ 19,389 $ 19,964 $ 16,707
Current portion of
long-term debt and
finance leases 1,669 1,880 2,130
Accounts payable 13,583 16,919 10,246
Accrued
liabilities and
other 37,037 34,063 47,859
Deferred revenue 6,360 7,555 4,476
--------------- --------------- --------------
Total current
liabilities 78,038 80,381 81,418
--------------- --------------- --------------
Long-term liabilities:
Long-term debt and
finance leases, net
of current portion 91,071 91,238 91,265
Other long-term
liabilities 46 6,520 6,795
--------------- --------------- --------------
Total long-term
liabilities 91,117 97,758 98,060
--------------- --------------- --------------
Shareholders' equity:
Common Stock 325,965 322,686 294,316
Retained earnings
(deficit) (221,944) (142,837) (129,379)
--------------- --------------- --------------
Total
shareholders'
equity 104,021 179,849 164,937
--------------- --------------- --------------
$ 273,176 $ 357,988 $ 344,415
=============== =============== ==============
ASYST TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
Sept 30, Sept 30, Sept 30, Sept 30,
2002 2001 2002 2001
--------- --------- --------- ---------
Net sales $ 72,319 $ 48,494 $124,183 $111,830
Cost of sales 44,150 34,394 79,459 80,352
--------- --------- --------- ---------
Gross profit 28,169 14,100 44,724 31,478
--------- --------- --------- ---------
Operating expenses:
Research and development 10,058 10,034 20,350 21,052
Selling, general and
administrative 17,346 20,280 33,884 41,976
Amortization of acquired
intangible assets 1,916 2,423 3,566 3,650
Non-recurring charges 11,621 1,669 11,621 20,321
In-process research and
development costs of
acquired business (418) - 2,084 2,000
---------------------------------------- --------- --------- ---------
Total operating
expenses 40,523 34,406 71,505 88,999
--------- --------- --------- ---------
Operating income (loss) (12,354) (20,306) (26,781) (57,521)
Other income (expense), net (945) (844) (2,650) (939)
--------- --------- --------- ---------
Income (loss) before provision
(benefit) for income taxes (13,299) (21,150) (29,431) (58,460)
Provision (benefit) for income
taxes 62,661 (6,672) 58,628 (19,289)
--------- --------- --------- ---------
Net income (loss) Continuing
Operations $(75,960) $(14,478) $(88,059) $(39,171)
========= ========= ========= =========
Discontinued Operations,
net of income tax (2,093) (3,863) (3,453) (6,725)
--------- --------- --------- ---------
Net income (loss) $(78,053) $(18,341) $(91,512) $(45,896)
========= ========= ========= =========
Basic earnings (loss) per
share:
Continuing Operations $ (2.03) $ (0.41) $ (2.38) $ (1.12)
Discontinued Operations $ (0.05) $ (0.11) $ (0.09) $ (0.19)
--------- --------- --------- ---------
Total basic earnings (loss)
per share $ (2.08) $ (0.52) $ (2.47) $ (1.31)
========= ========= ========= =========
Diluted earnings (loss)
per share:
Continuing Operations $ (2.03) $ (0.41) $ (2.38) $ (1.12)
Discontinued Operations $ (0.05) $ (0.11) $ (0.09) $ (0.19)
--------- --------- --------- ---------
Total diluted earnings (loss)
per share $ (2.08) $ (0.52) $ (2.47) $ (1.31)
========= ========= ========= =========
Shares used in the per share
calculation:
Basic 37,452 35,286 37,009 35,147
========= ========= ========= =========
Diluted 37,452 35,286 37,009 35,147
========= ========= ========= =========
ASYST TECHNOLOGIES, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except per share data)
Three Months Pro Pro
Ended Forma Forma
Sept 30, Adjustments Results
2002
------------ ------------ --------
Net sales $ 72,319 $ - $72,319
Cost of sales 44,150 (76) 44,073
------------ ------------ --------
CONTACT: Investor Contact
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